ASSIGNMENT

ON
INTERNATIONAL
BUSINESS

Submitted by-
ANINDA NANDI (MCI15010)
ANKIPOL HAZARIKA (MCI15026)
 ACKNOWLEDGEMENT

We would like to express our sincere gratitude to our course instructor (Dr. Farah Hussain) for
providing us the wonderful opportunity to work on this project and for her guidance, concerns
and suggestions throughout the course of the project. Ma’am, without your help it would not
have been possible for us to complete the project.
 CONTENTS

1) Introduction: Meaning of Globalization

2) Forces of Globalization

3) Dimensions of Globalization

4) Stages of Globalization

5) Impact of Globalization on India

6) Conclusion

7) Bibliography
 Introduction

Globalization refers to the process of integration and interaction amongst government of

different nations, companies and people. This effects the environment, political systems,
economic development as well as prosperity and welfare of societies throughout the world. In
International trade, Globalization refers to the trend of firms buying, selling and distributing
products and services in majority of countries and regions of the world.

In ancient times, traders traveled long distances in order to buy commodities such as salt, spices
and gold, which they would then sell them in their home countries. The Industrial Revolution in
the 19th century brought advances in communication and transportation which has removed
borders and made a surge in cross-border trade and transactions. In the last few decades,
globalization has grown rapidly due to public policy and technology which are considered to be
the two main factors behind the current globalization boom. From the last 20 years, Governments
of different nations throughout the world have integrated a free market economic system with the
help of fiscal policies and trade agreements. This evolution of economic systems led to the
increase of industrialization and financial opportunities all over the world. Governments now
focus on removing trade barriers and also to promote international commerce.

Globalization represents the integration of worldwide international trade, investment, IT and

different cultures. It helps the corporations to gain a competitive advantage from lower operating
costs and it also provides access to new raw materials and additional markets. Also MNCs can
manufacture, buy and sell goods worldwide. For example, a Japanese car manufacturing
company can now manufacture auto parts in various developing countries, and can transport the
parts to another country for assembling and selling the finished cars to some other nation.
Technology has contributed a lot to globalization. Advancements in IT and the availability of
information from across the borders have increased awareness among populations of economic
trends and investment opportunities. Advancement in technology such as digitalization has
simplified and boosted the transfer of financial assets between nations. 

Forces of Globalization
Globalization is driven by several forces, some of the major forces that have contributed a lot in
Globalization are:

(a) Advancement of Technologies: It is one of the most crucial forces of Globalization. After
the 1990’s, the development in Telecommunications and Information Technology (IT) sector has
made improvements in access to information and increase in economic activities. Also, the
advancement of technology and improvement of communication network has facilitated the
exchange of goods and service, resources, ideas etc., irrespective of their geographical location.

Therefore, the advancement in technologies and enhancement in telecommunications have led to

economic globalization.

(b) Reduction in Cross-trade Barriers: All country restricts the movement of goods and
services across its border. It imposes tariffs and quotas on various goods and services which are
imported in its country. Such practices are implemented in order to impose limits on
international business activities.

However Globalization reduces cross trade barriers to enhance free trade to increase the growth
rate of the economy.

(c) Increase in Consumer Demand: It acts also acts a main factor to facilitate Globalization.
With increase in the level of income and standard of living, the demand of consumers for various
products have also increased and also nowadays people are well aware of the products and
services available in different countries, which have forced many organizations to work in
association with foreign players for catering to the needs of the domestic market.
(d) High Competition: High competition constitutes an important driver for Globalization. An
organization generally struggles hard to gain competitive edge in the market. The increase in the
competition in the domestic market has made organizations to go global. They export goods in
foreign markets where they get relatively high prices for their goods. Many organizations have
been able to get larger global market share with the help of mergers and acquisitions, strategic
alliances etc. Therefore, various organizations enter other countries for expanding their market
share.

Dimensions of Globalization

1. Economic

Economic Globalization means the free movement of people, technology, capital, goods and
services internationally. It is about the level of independence of different countries and regions
across the world.

In the 1800s, only people and capital could cross borders with ease in the world economy, but
not goods as because of cross-border trade restrictions. But in the present century, people are not
allowed to cross borders easily, but technologies, capital and goods do. Under the framework of
General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO),
economic globalization has expanded at a much faster speed. Countries have rapidly been
reducing trade barriers and opening up their current and capital accounts.

2. Political

It refers to the amount of political co-operation which exists between different nations. This
cooperation ties in with the belief that associations of multiple nations are better placed than
individual in order to reduce conflict among nations. Various global organizations such as the
World Trade Organization, United Nations (UN), and the European Union (EU) have helped to
increase the level of political globalization.

3. Cultural
Cultural Globalization can be defined as the increased movement of ideas, attitudes, meanings,
Values and cultural products beyond national borders. It involves the formation of shared norms
and knowledge with which people associate their individual and collective cultural identities and
also facilitates increasing interconnectedness among different populations and cultures.

4. Ecological

Ecological globalization refers to various global environmental issues and includes

a) Population growth

b) Access to food

c) Worldwide reduction in bio-diversity

d) Gap between rich and poor

e) Global environment degradation, etc.

Stages of Globalization

1. Stage 1

In the very first stage of globalization, companies generally focus on their domestic markets so
as to develop as well as strengthen their abilities in some core specific areas.

2. Stage 2

In the second stage of globalization, the companies start to look at international markets more
seriously but still the orientation remains mainly on domestic market. In this stage the companies
develop a better understanding of international markets at low risk and that too without
committing large amounts of resources.

3. Stage 3
In the third stage, the commitment of companies towards international market increases as they
begin to take into account the differences across various markets so that it can customize its
products as per the demands of the market. This stage can be considered as Multinational or
Multi-domestic phase of globalization. Different strategies are formed for different markets in
order to maximize the responses from its customers. The company may set up overseas Resource
and Development (R & D) centers and full-fledged country or region specific manufacturing
facilities.

4. Stage 4

In the fourth and final stage of globalization, the transnational corporations start to emerge. In
this stage the company takes into consideration both the similarities as well as the differences of
different markets. Some trade activities are standardized across the globe while others are
customized to fit in accordance with the needs and requirements of individual markets. The firm
tries to combine global efficiencies, local responsiveness and sharing of knowledge across
different subsidiaries. It results in developing of smooth network of subsidiaries across the world
and it is very difficult to identify where the home country or the headquarter is.

Impact of Globalization in India

It began when the government opened the country’s markets to foreign investments in the early
1990’s. The Government of India made drastic changes in its economic policy in the year 1991
which facilitated direct foreign investments in the country as a result of which globalization of
the Indian Industry took place on a major scale.

Globalization of the Indian Industry took place in various sectors such as steel, pharmaceuticals,
chemicals, textiles, petroleum, cement, retail etc.

The major benefit of globalization of India Industry is that it brought in huge amount of foreign
investments into the country especially in the sectors of Business Process Outsourcing,
Pharmaceuticals, petroleum and manufacturing industries. Due to the flow of huge amounts of
foreign direct investments the Indian economy grew quite significantly.

As a result of globalization many foreign companies have set up industries in India, especially in
the pharmaceutical, Business Process Outsourcing (BPO), petroleum, manufacturing, and
chemical sectors and this led to increase in employment opportunities and hence helped in
reducing the level of unemployment and poverty in the country.

The foreign companies also brought in with them highly advanced technology and this has
facilitated to make the Indian Industry more technologically advanced. 

But everything has a positive and negative side. The negative Effect of Globalization on Indian
Industry can be considered as increased competition in the Indian market between the foreign
companies and domestic companies. Since the foreign goods are better and cheap than the Indian
goods, the consumers prefer to buy the foreign goods. This reduced the amount of profit of the
Indian companies. This happened mainly in the pharmaceutical, manufacturing, chemical, and
steel industries.

And also with the arrival of modern technology, the number of labor required also decreased
and this has resulted in many people being removed from their jobs. This happened mainly in the
pharmaceutical, chemical, manufacturing, and cement industries. 

The effects of globalization on Indian Industry have both positive as well as negative results. The
government of India must try to develop and implement such economic policies with regard to
Globalization that are beneficial and not harmful.

Some of the Indian companies which have benefitted due to globalization are-

Infosys
In 1981, seven engineers started Infosys Limited with just $250. It is now India’s one of the
biggest IT Companies. Now it is India’s biggest IT Company and also third largest software firm
n the global market. It has 67 offices and 69 development centers in the United States, India,
China, Australia, Japan, Middle East, and Europe.
Total assets: Rs 38,600 crores (Rs 386 billion)

Assets abroad: Rs 10,100 crores (Rs 101 billion)

Tata Steel
It is among the top ten global steel companies in the world with an annual steel capacity of 28
million tons per annum. It now has project over 50 countries around the world. Its acquisition of
Anglo-Dutch steelmaker Corus in 2006 with $12.9 billion was one of the biggest acquisitions
abroad by an Indian company.

Total assets: Rs 125,800 crores (Rs 1,258 billion)

Assets abroad: Rs 75,700 crores (Rs 757 billion)

 Conclusion

So, in the conclusion we can say that globalization has transformed the world into a single
market where each and every country can sell and purchase different goods and services. It has
led to the integration of world economies and strengthened the relationship among different
countries.

Globalization is of vital importance in today’s world because no country can progress on their
own. It will have to be dependent on other countries for certain products and services.
Globalization is of utmost importance for the under developed and developing nations because it
helps the flow of foreign investment in the nation and also brings job opportunities and advanced
technology.

Although globalization started in India only in the early 1990s but it had a significant effect on
the Indian economy. It led to the boosting of Indian economy and also facilitated the flow of
foreign investment in India and creation of job opportunities for the Indian people.

But globalization also had its negative impact because due to globalization technological
advancement took place and as a result many workers lost their jobs.

So, Government must formulate such policies related to globalization which will be beneficial
for the Indian economy and not harmful.
 Bibliography

https://piie.com/commentary/speeches-papers/globalization-concept-causes-and-consequences

https://www.globalpolicy.org/globalization.html

https://www.researchgate.net/publication/304427636_VARIOUS_DIMENSIONS_OF_GLOBA
LIZATION_AND_THEIR_IMPLICATIONS_FOR_THE_LEADERSHIP_AND_MANAGEME
NT_OF_EDUCATION

http://www.simplynotes.in/mbabba/stages-in-globalization/

https://www.coursehero.com/file/p3hsi5q/Four-stages-of-globalization-1-Domestic-Stage-
Market-potential-is-limited-to/