glbn.flv
Objective of Session
 To understand the globe
 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
 Definition: A process of
‘emergence of interdependent relationships among
people from different parts of the world’
 Set of relationships
 Between different nations
 Globalization related relations…
 Aid to a poor country
 Fashion show pageant
 Football match
 Leisure trip
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
Basis/Country
category
High
Income Upper
countries
Income
Middle Lower
Income
Middle Low
income
countries
GDP (current US$) $49.72 Tn
17.43 tn
4.824 tn
$504.4 billion
GNI per capita, $38182
Atlas
method
(current US$)
Population (Total) 1.302 bn (total)
6977
1913
$588
2391
2.507 bn
846.5 million
Urban population 80
(% of total)
61
39
28
Life expectancy at 79
birth
74
66
61
Primary
100
completion
rate,
total (% of relevant
age group)
98
91
67
CO2
emissions 11.6
(metric tons per
capita)
Number
of 74
countries
5.4
1.6
.3
56
48
36
Advantages
 Access to multiple markets
 Collaborative decision making
 Cultural awareness
 Swift spread of information
 Tolerance enhancement
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
Definition of International Business
All commercial transactions—including sales,
investments, and transportation—that 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)
The data… 2012-13
 Approx figures in Rs Bn
 GDP 55000
 X goods: 17000
Imports: 27000 approx
 Balance of trade: -10000
 Services Export: 12000
Imports: 6000
 Bal: about : -4000 Bn Current account balance
 FI: net 3000 approx
 So Balance of Payment : - 1000 bn approx…
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.