These companies adopt the strategy of locating the branches of their companies in other countries and practice the same domestic operations in foreign markets,including the same promotion, price, product etc. Focus on going beyond,domestic ii. Their management remains ethnocentric with a vision to expand internationally. They extend their domestic products,domestic prices and other business practices to foreign countries.
Let us make an in-depth study of the Globalisation: Meaning of Globalisation 2. Arguments in Favour of Globalisation 3. Its important attribute is its increasing degree of openness of domestic economies.
It is associated not only with the increasing cross-border movement of goods and services, capital and technology, information and people but also with an organisation of economic activities which straddles national boundaries.
Its three broad dimensions are international trade, international investment, and international finance. Thus, globalisation brings about changes through these three channels that impart dynamism in the economy.
First is the export earnings. Through liberalisation of tariff and trade, export-oriented industries are required to be developed. Second is the foreign capital flow, mainly via multinational corporations MNCs that bring technology. Third is the deregulation of financial sector so that cross border mobility of resources gets momentum.
In addition, trade policy, exchange rate policy, industrial policy, Domestic stage of globalization. As the process of globalisation strengthens, all producers depend on global networks which establish links from the stage of raw materials to the final stage of delivery and marketing.
Globalisation also refers to the adoption of market-friendly approach, thereby making the economy more open and competitive. It is to be kept in mind that globalisation does not remove planning or state authority in regulation and control of the economy.
Arguments in Favour of Globalisation: At the outset, one must say that globalisation is a controversial issue because it impinges both gains and pains.
We will first put forward the arguments favouring globalisation. Globalisation is expected to promote efficiency, productivity and, hence, higher economic growth rate.
In a controlled and regulated economy, there is no inducement to the industries to become efficient and self-reliant as these are protected from foreign competition through import restrictions and from domestic competition through industrial licensing. Globalisation has one pillar of liberalisation.
Liberalisation and the market principles improve the allocative efficiency of resources. This will increase export earnings, allow the inflow of foreign capital and technology. Industries and farm sector, banking and financial sectors are then exposed to international competition.
Competition enhances efficiency, productivity and ultimately a better economic growth rate is likely to be achieved. As far as consumers are concerned, quality goods at the right price will be delivered.
This helps to bring down prices. Quality improvement and price reduction will then be enjoyed. Foreign capital is attracted.
It augurs the advent of multinational enterprises MNEs who bring modern up-to-date technology in less developed countries. Not only MNCs bring with them modern technology but also it brings investment funds, organisational structure, managerial culture, distribution network, etc.
All these create income and employment in the country. Critics argue that globalisation cannot make any dent on poverty reduction, employment generation, export promotion, foreign direct investment and growth rates of the economy. Critics perceive threat of the global market manifested in terms of falling rate of growth, industrial recession especially in America and some major industrial countries and poor rate of growth of export.
It is feared that globalisation will promote fierce and unhealthy competition. Instead of competition and cooperation, one may argue that MNCs will swallow the domestic producers of poor backward countries overtime.
Ultimately, this will cause concentration of economic and political power into the hands of the foreign business enterprises. Merely opening up the domestic economy without reaching out to foreign markets or helping industries to meet the global challenges has limited the benefits of globalisation without reducing its costs.Business Environment -Stages and Process of Globalization - Notes - Business Management, Study notes for Business Administration.
Agra University. The first stage is the arm’s length service activity of essentially domestic company. Chapter 2 The Globalization of Companies and Industries (value chain disaggregation The stage in globalization in which firms start to disaggregate the production process and focus each activity in Zambrano had transformed Cemex from a domestic company into the world’s third-largest cement firm by investing heavily and .
Globalization gives top managers a lot of challenges, especially in designing organization which fits the needs of globalization. Organization must follow the steps form domestic to global. It helps organization have a sound basis to face with the changing and competitive global environment.
Marketing globalization is a synergistic term combining the promotion and selling of goods and services with an increasingly interdependent and integrated global economy.
the domestic stage. The Impact of Globalization on Africa In Africa, its position in the international system has been considerably weakened by the fact that it has been losing the race for economic development in general, and human development in particular, to other regions, these.
Globalization and its Impacts on the World Economic Development Muhammad Akram Ch.(1), (2) Traditional Stage GDP: Gross Domestic Product- total value of goods and services produced in a country GNP: Gross National Product- market value of all products and services produced in .