Globalization of Business
I. Discuss the following questions in a group and then answer:
1. What is Globalization? Explain.
Ans: Globalization means “the growing economic interdependence of countries
worldwide through increasing volume and variety of cross-border transactions in
goods and services and international capital flow, and also through the rapid
and wide spreads diffusion of technology.”
Globalization is the increasing
cross-border movement of goods and services. It forms a worldwide market by
obtaining raw materials and other resources from a cheap market.
2. “Globalization is the worldwide economic
movement” substantiate your answer.
Ans: Recently globalization has achieved great progress in the economic growth
in developing countries. The great achievements in technology, communication
and internet communication systems have made a large business unit as global
units. The economic activities of these large business units are not confined
only to the places where they are established but spread all over the world. It
is the increase of cross-border movement of goods and services. It is the
worldwide phenomenon of technical, economic, political and cultural exchanges.
Globalization opens cross-border links in international trade and finance. It
increases the international flow of capital including foreign investments etc.
3. What are the advantages of
Globalization?
Ans: There are many positive impacts (advantages) of globalization. They are:
a) Globalization promotes economic growth.
b) Globalization helps to increase the
standard of living of the people.
c) It increases the G.D.P. of a country.
d) It helps to increase the income of the
people.
e) It promotes specialization. Countries
can begin to specialize in those products that are best at making.
f) It helps to build and improve political
and social links through economic interdependence among different countries.
4. Make a list of the characteristics of
Globalization with examples.
Ans: a) Increases international trade at a faster rate for the growth of the
world economy
b) Increases the international flow of
capital including foreign investment.
c) Globalization creates international
agreements leading to organizations like the WTO and OPEC supporting
globalization.
d) Development of global financial system.
e) Increases the role of international
organizations such as WTO.
f) WIPO IMF that deal with international
transactions.
g) Increases economic practices like
outsourcing by multinational corporations.
h) Creates international cultural exchange.
i) Creates international travel and tourism
j) Spread of local foods such as pizza and
Indian food to other countries.
k) Greater immigration including illegal
immigration.
l) Spreading of multi naturalization and
better individual access to cultural diversity.
m) Development of global telecommunication
infrastructure and greater transfer border data flow
n) Use of technologies such as exchange of
data technology, Internet communication, satellites and cell phones improves.
5. Explain the negative aspects of Globalisation
with examples.
Ans: In order to cut down costs, many firms in developed nations have
outsourced their manufacturing and white collar jobs to Third- world countries
where the cost of labor is low. Globalization has also led to an increase in
activities such as child labour and slavery.
a) Globalization has resulted in a
fiercely- competitive global market with the embarrassment of unethical
practices in business dealings.
b) It is also observed that globalization
helped terrorists and criminals.
c) Globalization has expanded the growth
and development of cities which has been reduced to garbage-dumps where all the
industrial waste is accumulated and pollution levels are sky-high.
d) Fast food chains like McDonalds and KFC
are spreading fast in the developing world. People have started consuming more
junk food. This results in the degradation of health and spread of diseases.
The traditional family attached food habits are being slowly disappearing.
e) Another comment leveled is that the rich
are getting richer and the poor are struggling for a square meal.
f) Some of the deadly viral diseases such
as AIDS and CANCER, Dengue fever etc., Spread all over the world.
g) Globalization has led to environmental
degradation.
The amount of raw materials needed to run
industries and factories is taking a heavy toll on the natural reserves of
planet earth and pollution has severely impacted the quality of air that we
need so much for our survival.
h) The other challenges of globalization
are cheap imports of goods from developing nations could lead to unemployment
in developed countries where the cost of production is high.
i) It leads to Increased competition for
infant industry, and Small scale industries and by dumping’ of goods by certain
countries at below cost price may harm industries in other countries.
6. What are the aims of the World Trade
Organization?
Ans: a) Bringing down the living cost and raise the standard of living of the
member countries.
b) Settling disputes and reduces trade
tension of the member countries
c) Stimulating economic growth and
employment
d) Reducing the cost of doing business
internationally.
e) Encouraging good governance.
f) Contributing to promote peace and
stability of member countries.
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