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Objective of Session
To define globalization and international business and

show how they affect each other To discuss the major advantages and disadvantages of globalization To understand why companies engage in international business

The Globe
Continents: Asia, Africa, N America, S America,

Europe, Oceania,Antartica..en_continents.gif Continents are landmasses divided by oceans.. Oceans.. Pacific, Atlantic, Indian, Southern (Antarctic), and Arctic Oceans..world-oceans-map.jpg

Globalization
Derived from the word globalize,
which refers to emergence of an international network of social and

economic systems
One of the earliest known usages of the term as the noun was in 1930 in

a publication entitled Towards New Education where it denoted a holistic view of human experience in education Sociologists Martin Albrow and Elizabeth King define globalization as: all those processes by which the people of the world are incorporated into a single world society In The Consequences of Modernity, Anthony Giddens used following definition The intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa

Globalization
Definition:

emergence of interdependent relationships among people from different parts of a world

Set of relationships Between different nations

Globalization related relations Aid to a poor country Fashion show paegent Football match Leisure trip Your SIP

How Globalized are you Globalization_ You're living IT_(360p).flv

Global brands in India

Globalization:
Indian brands in global business

Factors contributing to Globalization

Increased used of technology
Liberalization of cross-border trade and resource

movements Development of services that support international business Growing consumer pressures Increased global competition Changing political situations Expanded cross-national cooperation

The Criticisms of Globalization

Threats to national sovereignty
Growth and environmental stress Growing income inequality

Pros and Cons of Globalization_(360p).flv

Advantages
Access to multiple markets
Collaborative decision making Cultural awareness

Swift spread of information

Tolerance upgradation

Disadvantages of Globalization
Inequality of income
Americanization Socially unequal distribution of world resources

Commodification of labor
Less accountability for rich countries in name of

development Spread of deadly diseases Inhumane use of PoW and child labor Human trafficking

Thus strong control and monitoring required

WTO
WB IMF

UN

WTO: World Trade Organization

WTO replaced GATT as the organization overseeing the

multilateral trading system. Location: Geneva, Switzerland Established: 1 January 1995 as a new avatar of GATT Created by: Uruguay Round negotiations (1986-94) Membership: 157 countries on 24 August 2012 Secretariat staff: 640 Head: Pascal Lamy (Director-General)
Functions:

Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations

World Bank
The World Bank is an international financial

institution that provides loans to developing countries for capital programs The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (as amended effective 16 February 1989), all of its decisions must be guided by a commitment to promote foreign investment, international trade, and facilitate capital investment

IMF
The organization's stated objectives are
to promote international economic

cooperation, international trade, employment, and exchange rate stability, by making financial resources available to member countries to meet balance of payments needs

UN
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international

security, economic development, social progress, human rights, and achievement of world peace. The UN was founded in 1945 after World War II to replace the League of Nations,
to stop wars between countries,

and to provide a platform for dialogue.

It contains multiple subsidiary organizations to carry out

its missions.

Definition of International Business

All commercial transactionsincluding sales, investments, and transportationthat take place between two or more countries

Reasons That Firms Engage in International Business

Expanding sales
Acquiring resources Minimizing risk

Modes of Operation in International Business

Merchandise exports and imports Service exports and imports Tourism and Transportation Service Performance: banking, insurance, engineering, management, interest and dividend Asset Use Investments: FDI(controlling interest) and FII(non

controlling interest)

Types of International Organizations

Collaborative arrangements
Strategic Alliance Multinational Enterprise (MNE)

Collaborative Arrangements
Used to define:
Companies that work as joint ventures, licensing

agreements, management contracts, minority ownership and long term contractual arrangements New alliance

Strategic Alliance
Same as collaborative agreement but often reserved to

refer either to an agreement important to one partner Or an agreement that does not involve joint ownership Joint work but identity apart

Multinational Enterprise (MNE)

It takes a world wide view..
And is willing to consider market and production

locations anywhere in the world.