GLOBALISATION

There is much more general acceptance now that globalization is a reality that is effecting fundamental changes in the world.

PREFACE
Virtually all fields of human endeavor are affected by growing worldwide interconnection. This project outlines challenges and opportunities with this interconnection, and it considers important question about globalization. And operating premise is that organizational leaders and employees can better manage chaotic global interconnection by recognizing, analyzing and addressing shifts occurring in six major global environments: industries and business, the natural environment, culture, economics, politics, and technology. During this project I had to refer many books to the basic information about the term globalization. I got to study many reality facts related to globalization and how globalization is helping Indian economy to boost. According to me I think globalization can transfer the developing economy of India into a developed economy.

INDEX
SR NO.
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TOPIC
INTRODUCTION CHARACTERISTICS OF GLOBALIZATION GLOBALIZATION OF INDIAN BUSINESS ESSENTIAL CONDITION FOR GLOBALIZATION SOURCES OF GLOBALIZATION GLOBALIZATION OF SIX ENVIRONMENT OBSTACLES OF GLOBALIZATION CONCLUSION

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11 19

INTRODUCTION

Globalization is a process whereby worldwide interconnection in virtually every sphere of activity is growing. Some of these interconnection lead to integration worldwide; these project is about how globalization affects organization, and it concentrates on six sphere of activity where global interconnection are occurring. These are: global business and industry activities; the natural environment; global culture; global politics; and global economics; and global technologies.

Worldwide interconnection occurs within single spheres of activity such as economics to create tighter links within the global economy. These links are reflected in relation ship between foreign direct investment, capital, and labor but globalization is more than direct and discrete linkages. Multiple relationship interconnect different environment when global activities occurring in one sphere interact with activities in other spheres.

CHARACTERISTICS OF GLOBALIZATION

Globalization is characterized by: growing worldwide connection; rapid, discontinuous change; growing numbers and diversity of participant; and greater managerial complexity. Each of these is explored below.

Growing worldwide interconnection Growing worldwide interconnection is one characteristic of globalization. For e.g. proximity to vibrant market, a transportation infrastructure, and abundant natural resources draw a people, nation, or region into global trade and other activities.

Rapid, Discontinuous change A second characteristics of globalization is that this process has occurred rapidly but not at steady pace. But the regression line would follow an upward slope, but the regression line would not be a smooth one. Discontinuities in the pace of change make it difficult for organization and individuals to anticipate, Interpret, or plan for the future. Another source of discontinuity is events that have global importance

Travel the world at different speeds and with differential effects. Accordingly, interconnection can affect nation, industries, business and individual at different times and in different ways.

Increased number and Diversity of participant A third characteristic of globalization is growth in the number and diversity of actors involved in global activities. For e.g. participant in global business activities now include many small-to-medium sized enterprises as well as the large ones.

Growing complexity Finally the one world characterization of globalization exposes most of us to many more people and ideas whose perspectives on globalization differ. Domestic question that once seemed simple answer become more complex when we realize that other worldwide have different simple answer to same question. Complexity increases when there are different answers to same question, and it gives rise to new question about values and preferences.

GLOBALIZATION OF INDIAN BUSINESS

Indians economic integration with the rest of the world was very limited because of the restrictive economic policies followed unit 1991. Indian firms confined themselves, by and large, to the home market. Foreign investment by Indian firms was very insignificant. With the new economic policy ushered in 1991, there has, however, been a change. Globalization has in fact become a buzz-world with Indian firm now and many are expanding their overseas business by different strategies. This section takes a look at the hurdles to and prospects for globalization of Indian business and different globalization strategies. The Indian business, however, suffer from a number of disadvantage in respect of globalization of business. Not only that the government lacks a positive orientation in some respect but also the government policy and procedures in India are among the most complex, confusing and cumbersome in the world. Another problem is that the high Cost / inadequacy of many vital inputs and other factors like raw material and intermediates, power, finance, infrastructure

facilities like port etc. tent to reduce the international competitiveness of the Indian business. There are also problems related to technology, small size and lack of experience of firm, poor quality, lack of R&D efforts etc.

Although Indian has several handicaps, there are also a number of favorable factor for globalization of Indian business. These include the human recourses; growing entrepreneurships; growing domestic market; the growing of foreign market opening more and more large number of non resident Indians who are recourse etc. If the Indian firms have the facilities to obtain higher technology in the world, they are not equal footing with the foreign firm in many respects. An if the Indian firms can muster some edge even the foreign firms in respect of labors cost, productivity, product quality/feature etc. that could be competitive advantages.

ESSENTIAL CONDITION FOR GLOBALIZATION

There are some essential conditions for satisfied on the part of domestic economy as well as the firm for successful globalization of the business. Business Freedom: There should not be unnecessary Government restriction which come on way of globalization, like import restriction & finance or other factor from abroad, foreign investment etc. that why the economic liberalization is regarded as a first step towards facilitating globalization. Facilities: The extents to which an enterprise can develop globally from home country base depend on the facilities available like the infrastructure facilities. Government Support: Unnecessary government interference is a hindrance to globalization, government may encourage to globalization. It support by policy and procedure reform, development of common facilities like infrastructural facilities, R&D support, finance, market.

Resources: Resources is the one of the most important factor which decides the ability of the firm to

globalize resourceful companies may find easier to thrust in the global market. Resources include finance, R&D facilities, technology, human resources etc. some small scale companies may get successes in international market due to other advantages. Competitiveness: The competitive advantage of the company is very important determinants of success in global business. A firm may derive competitive advantages from any one or more of the factor such as low cost and price, product quality, technological superiority, marketing strength etc.

Sources of globalization: six interconnecting Spheres

Businesses and other organization operate in an increasingly interconnected world. These interconnections occur at three levels in figure. At the centre of these figures the organization whose leaders integrate people, processes and structures to shape outcome in an global world.

Outcomes also depend on activities that occur outside the firm as shown in the figure these activities are organized around six major global environment: 1) business and industry; 2) the natural environment; 3) the economy; 4) political activities; 5) technology particularly information technology; and 6) culture .

Globalization of the natural environment

Few need to be convinced that sustaining the natural environment is important to every ones future. Examinations of these environments include a look at the global commons of air, water, and space. Raw materials of every type also are very important parts of what can be thought of as the earths natural environment. Nations may have greater and lesser deposit of raw materials such as wood, rubber, minerals, etc. but as one world there is finite amount of these resources available demand for natural resources varies. For e.g. 20% of cost for the commercial airline industry come from fuel. Thus oil price fluctuations have a significant impact on this industry. Three other aspect of the natural environment demonstrates the global significance of the environment. First, it is increasingly evident that species bio-diversity so important to all life is diminishing. Second, globalization of disease such as aids, malaria. Finally, human disasters can also have a global impact and demonstrate global interconnection. Additionally all these elements of the global natural environment interconnect with business, with the economy, and with the other global environments.

GLOBALIZATION OF POLITICAL ENVIRONMENT

The world today is organized principally around nationstates that operate within different political infrastructure. At the heart of virtually every political system is the need to balance between individual and collective interests. The shift from command to market principles in many nations and the propensity of nation to privatize state-owned enterprises indicates that many governments believe free market can help them achieve the individual balance. But this is difficult to do on a worldwide scale because every government has created different rules, standards, and regulation to address issues like taxes, tariffs, and business activities. On a worldwide scale, creating a common and global good society involves many more than governmental actors in the political environment. Intergovernmental organization, nongovernmental organization, businesses, and members of global gangs, pirates and terrorist organization also shape global political environment. Role of government: Governments play many roles, but their primary responsibility is to manage public policy to balance individual & collective interest of the governed. Governments play many roles such as providing goods & services that benefit the nation as a whole, for e.g. healthcare, education, economic, and mobilizing defense mechanism. Governments finance their activities by collecting taxes; they create laws to outline responsibilities & maintain social order.

Globalization of culture

A principal challenge of globalization today focuses on the tension between the cultures of nation-states and an emerging global culture. Because culture is known to shape meaning and create values as well as lead to common habits, many worry that cultural globalization will result in a homogenous world culture that drives out individual variation. Products ranging from cola beverages to denim blue jeans, autos, and television are consumed throughout the world. English increasingly is a global language business; some food habits are converging; and businesses activities are increasingly are viewed as modes of distributing information and other resources around the world. Most of todays cultural challenges are mediated by nation whose citizen learn, share, and appreciate and interrelated set of values, beliefs, and behaviors. Virtually every aspect of a particular national culture develops to support it. Economic and political system reflects national beliefs about how to manage resources, and national cultures traditionally are powerful influence on people and organization. They help define who you are, and they define what is expected of you.

GLOBALISATION OF AGRICULTURE:

 Indias 60% is engaged in agriculture. Agriculture contributes around 54% in the Indian economy. Agriculture is primary occupation. When the globalization was not come in India that time agriculture having no scope, every farmer use to produce the commodity for it self and its family. Because they did not have sufficient facilities like water supply, land, no electricity, no modern technology, hybrid seeds, poorly developed transportation modes; to transfer the commodity from one place to another. The quality of commodity was good, but quantity was less. Since, India adopted the policy of globalization, agriculture and industrialization was given great importance. Due to globalization India brought in the new technology hybrid crops, fertilizer from the foreign counties due to which there was an increased in the pre capita in the agriculture sector. The more effect is shown in agriculture sector states are PUNJAB & HARYANA, because one of the important advantage is that they get many more river in the area, so they can cultivate more than tow crops in a year and the government provide other facility like machinery, fertilizers, pesticides and agriculture loan.

GLOBALIZATION OF TECHNNOLOGIES

International business expansion emphasizes a product or process life-cycle that extends the life of a technological change .Technological breakthroughs in medicine, in television broadcasting, and in most other fields of endeavor combine to make the world a smaller place where in-person or electronic access to people and other resources around the world is most as great as to next-door neighbors .This access to information, opportunity, products, and markets is an argument for a global technological revolution. The global technological environment often focuses on those process and product with greatest global impact, but there is a propensity to examine product more than processes. Microwave cooking and virtual reality video games are all e.g. of product development due to technological breakthroughs. Certainly one of the most profound technological has been the introduction of telecommunications to link the whole world, a computer that facilitates those links. In addition to very visible products and services, it is important to recognize that less evident work processes are also part of technological environment.

GLOBALIZATION OF ECONOMICS

Many trace the roots of globalization to many events that shape an increasingly interconnected global economy. Interconnection between elements of the global economy such as trade, labor, and currency have an implication for world development as well as organization operating in a global economy. Government and not-for-profit organization contribute to GDP. Indian embarked upon process of reforms in 1990 when its balance of payment position was very critical. The county has foreign exchange reserves lasting only 2 week. Several steps were taken to manage this situation, which brought down the ratio of the current account deficit to GDP, from an unsustainable level of 3.2%to 0.8% in 1994-1995. The is include strategies to promote export varies liberalization measures in connection with industries and trade practices, introduction of a new import export traffic policy in 1991 and emphasis on exports of high value added products. The current account also showed structural changed in terms of sharp reduction indebt creating flows and an increased resource to non-debt creating foreign investment flows.

OBSTACLES TO GLOBALIZATION

The Indian business suffers from many disadvantages in respect of globalization of business. The important problems are following: Government Policy & Procedures: Government policy procedure in India is among the most complex, confusing and cumbersome in the world. Even after the much publicized liberalization, they do not present a very conducive situation. Government policy and the bureaucratic culture in India in this respect are not that encouraging. High Cost: High cost of many vital input and factors like raw material and intermediates, power, finance, infrastructure facilities like port etc. tent reduce the international competitiveness of the Indian business. Poor Infrastructure: Infrastructure in India is very inadequate and insufficient and they for very costly this is the serious problem affecting the growth and competitiveness. Resistance to Change:

There are several socio-political factors which resist change and this comes in the way of modernization, rationalization and efficiency improvement. Technological resist due to fear of unemployment. The extend labors employed by Indian industry is alarming because of labors of production is low and this may come in offsets the advantages of cheap labors. Poor quality image: Due to various reasons, the quality of many Indian products is poor. Even when the quality is good, the poor quality image, India has become a handicap. Supply problem: Due the various reason like low production, infrastructure like power, port facilities. Small Size: Because of the small size and the low level of resources, in many cases Indian firms are not able to compete with the giants of other counties. Even the

largest Indian companies are small compared to the multinational giants. Limited R&D and marketing Research: Marketing research and R&D in other areas are vital inputs for development of international business. However, these are poor in Indian business. Expenditure on R&D in Indian is less than one percentage of the GNC while it is two to three percent in most of the developed counties. In 199495, Indians per capital R&D expenditure was less than $3 when it was between $100 and $825 for most of the developed nation. Growing competition: The competition is growing not only from the firm in the developed countries but also from the developing country firms. Indeed, the growing competition from the developing country firms is a serious challenge to Indians International business. Trade Barriers: Although the tariff barriers to trade have been progressively reduced thanks to the GATT/WTO, the non-tariff barriers have been increasing, particularly in the developed counties.

Conclusion:
After adopting the policy of globalization, India has to go through many changes in many sectors. Such as political, industrial, agricultural, etc.

Leather and Leather products:

This is one of the important sectors from exports point of view for India. The country achieved significant. There has been migration of industry form develop country to developing countries. However, developed countries after investing heavily in china are now looking to India for developing their production base due to cost economy factor. For India, competition comes mainly from china, Indonesia, Thailand, Malaysia. Agriculture Product India is one of the biggest manufactures of spices. India export spices to almost more than 28 to countries. Globalization has capacity to rise employment increasing the per capita income of people.

Gems and Jewellery:

This is a traditional industry in India well known for its craftsmanship and the art of producing jewellery and cutting, shaping and policing of Gem stone. India is reported to be one of the worlds largest centers for cut and polished diamonds, accounting for about 45% of international diamond producing in value in term and 70% in term of carats.

Textiles and Clothing:

The withdrawal of MFA is supposed to open new opportunities for India, whose shear in total world export of textile and garment has been 2.4%valued at US $2.18.