GLOBALIZATION

AE 315
9/29/2020 : Lecture - Discussion
LEARNING OBJECTIVES

• The process of Globalization

• The various components of Globalization
• The drivers or facilitators of Globalization
• The advantages and disadvantages of Globalization
• The methods and conditions required for
Globalization
GLOBALIZATION DEFINED

• is commonly used as a simple way of describing the spread and connectedness of

production, communication and technologies across the world, which involves the
interlacing of economic and financial activity Globalization gives companies access
to wider markets and helps consumers access a greater variety of goods and
services.
• Globalization involves the diffusion of ideas, practices, technologies and the
intensification of social relations worldwide resulting in integration of distant
localities in such a way that local happenings are shaped by events occurring many
miles away.
 INTRODUCTION
• There has been a fundamental shift in the world economy in the last three decades. We are moving
away from self-contained separate national economies towards a global economy with the help of
cross border trade and investment. Earlier, economies were isolated from each other in the terms of
rules and regulations, cultures, management styles, business environment, distances, languages and
time zones but now, distances are shrinking due to advanced transportation and communication
facilities and declining trade barriers and increasing regional and economically integrated
institutions. The cultural, legal and other differences can be managed well by the help of an integrated
economic system called globalization.
• In today's integrated global economy, a Swedish might talk to his stockbroker (using a handset) with a
Nokia cell phone designed in Finland and assembled in Texas, chip sets produced in Taiwan, and
designed by Indian engineers working for Texas Instruments. He could tell the stockbroker to
purchase shares in Tata Teleservices, an Indian telecommunications company. Globalization helps a
company to create new growth opportunities. Greenfield operations of a company in another country
create a lot of job and income opportunities. Companies can expand their revenues by selling around
the world and reduce their costs by producing in different countries, where inputs, including labor, are
cheap. The global expansion of enterprises has been facilitated by favorable political, legal and
economic trends. On the other hand, the ill effects of globalization can be briefly described the whole
world facing the side effect of fluctuation so of global economy.
DRIVERS OF GLOBALIZATION
 SOME IMPORTANT CHARACTERISTICS OF
GLOBALIZATION ARE AS FOLLOWS:
• Globalization is the global interdependence of economic activities and business
operations across national boundaries. -
• Globalization influences the marketing, production, availability of human resources
and pricing of products and services around the world while often blurring their
source and Identity.
• Globalization includes tremendous growth in interdependent economies worldwide,
reducing barriers to trade and investment.
• Globalizations is a process for developing interconnectedness between organization,
government, and individual worldwide.
 SOME IMPORTANT CHARACTERISTICS OF
GLOBALIZATION ARE AS FOLLOWS:
• Globalization is facilitated by advances in information technology, communications
technology and transport systems to spread the business activities worldwide.
• Globalization introduces qualitative changes in organizations and societies as a result
of new global interactions and parameters.
• Bringing all these characteristics together, we can define globalization as process of
increasing and deepening interactions between individuals, organizations and
governments across the globe, facilitated by advance communications technology,
information technology and the opening of markets to trade and investment with
reducing barriers
• Globalization has different implications for business societies and governments. These
implications are summarized in Table 7.1. Table 71 Globalization and its implications
GLOBALIZATION AND ITS IMPLICATIONS
GLOBALIZATION AND ITS IMPLICATIONS
 GLOBALIZATION IS ALL ENCOMPASSING

• Globalization is an economic phenomenon that includes

trade and investment but it also encompasses some social
and cultural dimensions.
• Globalization is the accelerating interconnectedness among
various countries of the world in all aspect of life - social,
financial, cultural, economic, spiritual and technological. Each
of these areas is deeply influence by globalization.
 GLOBALIZATION PROCESS

•Entry Phase
•Operational Phase
•Global Localization Phase
STAGE 1 – ENTRY PHASE
STAGE 2 – OPERATIONAL PHASE
PHASE 3 – GLOBAL LOCALIZATION PHASE
 COMPONENTS OF GLOBALIZATION

• The Globalization of Markets

• The Globalization of Production
• The Globalization of Investment
• The Globalization of Technology
 COMPONENTS OF GLOBALIZATION

• In today's interdependent global economy, a Swedish might drive to work in car

designed in Germany that was assembled in France from components made in the
United States and Japan, which were fabricated from Korean steel and Malaysian
rubber. This is the world we live in. It is a world where the volume of goods, services
and investment crossing national borders has expanded faster than world output
every year for the past two decades. It is a world where the symbols of material and
popular culture are increasingly global: From Coca Cola and McDonald's to Sony
PlayStations, Nokia cell phones, MTV shows and Disney films. Globalization refers to
the shift towards a more integrated and interdependent world economy. The four
main components of globalization are:
 GLOBALIZATION OF MARKETS
(COMPONENTS OF GLOBALIZATION)