INTRODUCTION TO GLOBALISATION

Globalisation is the process of international integration arising from the

interchange of world views, products, ideas, and other aspects of culture.

Put in simple terms, globalisation refers to processes that increase world-

wide exchanges of national and cultural resources. Advances in

transportation and telecommunications infrastructure, including the rise of

the telegraph and its posterity the Internet, are major factors in

globalisation, generating further interdependence of economic and

cultural activities.

Globalisation is the process of international integration arising from the

interchange of world views, products, ideas, and other aspects of culture.

Put in simple terms, globalisation refers to processes that increase world-

wide exchanges of national and cultural resources. Advances in

transportation and telecommunications infrastructure, including the rise of

the telegraph and its posterity the Internet, are major factors in

globalisation, generating further interdependence of economic and

cultural activities.

MEANING

• The term globalisation is derived from the word globalise, which refers

to the emergence of an international network of social and economic

systems. One of the earliest known usages of the term as a noun was in

a 1930 publication entitled, Towards New Education, where it denoted a

holistic view of human experience in education. A related term,

corporate giants, was coined by Charles Taze Russell in 1897 to refer to

the largely national trusts and other large enterprises of the time. By the

1960s, both terms began to be used as synonyms by economists and

other social scientists. It then reached the mainstream press in the later

half of the 1980s.

DEFINITIONS

Swedish journalist Thomas Larsson, in his book The Race to the Top: The

Real Story of Globalisation, states that globalisation: is the process of

world shrinkage, of distances getting shorter, things moving closer. It

pertains to the increasing ease with which somebody on one side of the

world can interact, to mutual benefit, with somebody on the other side

of the world.

Sociologists Martin Albrow and Elizabeth King define globalisation as:

...all those processes by which the peoples of the world are

incorporated into a single world society.

Obsidian Trade in the Neolithic

(6000-3000 BC)

When did GlobaliSation begin?

Economic globalisation is as old as history, a reflection of the human drive to seek new horizons.

The Silk Road: a series of trade routes 8,000 km long connecting China, Asia Minor and The Mediterranean. Parts were opened up about 5000 BC. Connections between China and Europe established with Alexander the Great c. 330 BC

Marco Polo 1271-1295

The first era of globalization (in the sense that it encompassed the globe) began during the 19th century with the rapid growth of international trade between the European imperial powers

It was Marco Polo and Christopher Columbus’s occupation

This process was severely interrupted from World War I through the depression of the 1930s and World War II until it restarted again, but slowly, in the 1950s.

The pace has picked up in recent decades.

Several driving forces:

1. Improvements in information technology

2. Trade liberalization

3. Capital flows

4. Cheap travel

5. Less rigorous immigration policies

6. Marketing

Proto-globalisation or 'early modern globalisation' is a period of the

history of globalisation roughly spanning the years between 1600 and

1800. First introduced by historians A. G. Hopkins and Christopher Bayly,

the term describes the phase of increasing trade links and cultural

exchange that characterized the period immediately preceding the advent

of so-called 'modern globalisation' in the 19th century.

Proto-globalisation was characterized by the rise of maritime European

empires, in the 16th and 17th centuries, first the Portuguese and Spanish

Empires, and later the Dutch and British Empires.

Proto-globalisation

Modern

During the 19th century, globalisation approached its modern form as a

result of the industrial revolution. Industrialization allowed standardized

production of household items using economies of scale while rapid

population growth created sustained demand for commodities.

Globalisation in this period was decisively shaped by nineteenth-century

imperialism. In the 19th century, steamships reduced the cost of

international transport significantly and railroads made inland transport

cheaper. The transport revolution occurred some time between 1820

and 1850.

After the Second World War, work by politicians led to the Bretton Woods

conference, an agreement by major governments to lay down the

framework for international monetary policy, commerce and finance, and

the founding of several international institutions intended to facilitate

economic growth multiple rounds of trade opening simplified and lowered

trade barriers. Initially, the General Agreement on Tariffs and Trade

(GATT), led to a series of agreements to remove trade restrictions. GATT's

successor was the World Trade Organization (WTO), which created an

institution to manage the trading system.

VARIOUS ASPECTS OF GLOBALISATION

Global business organization

International trade

International tourism

International sports

Sociocultural globalisation

Internet

Population growth

Global health

Global natural environment

Global workforce

International migration

Global Business Organisation

With improvements in transportation and communication,

international business grew rapidly after the beginning of the 20th

century. International business includes all commercial transactions

(private sales, investments, logistics, and transportation) that take

place between two or more regions, countries and nations beyond

their political boundaries. This lead to the formation of MNC’s.

Well known MNCs include fast food companies such as McDonald's

and Yum Brands, vehicle manufacturers such as General Motors, Ford

Motor Company and Toyota, consumer electronics companies like

Samsung, LG and Sony.

International trade

International trade is the exchange of capital, goods, and services across

international borders or territories. In most countries, such trade

represents a significant share of gross domestic product (GDP).

Industrialization, advanced transportation, multinational corporations, and

outsourcing all have a major impact on world trade. The growth of

international trade is a fundamental component of globalisation.

International tourism

Tourism is travel for recreational, leisure or business purposes. The World

Tourism Organization defines tourists as people "travelling to and staying in

places outside their usual environment for not more than one consecutive

year for leisure, business and other purposes".

There are many forms of tourism such as agro tourism, birth tourism,

culinary tourism, cultural tourism, eco- tourism, extreme tourism, geo

tourism, heritage tourism, medical tourism, nautical tourism, pop-culture

tourism, religious tourism, slum tourism, war tourism, and wildlife tourism.

International sports

Modern international sports events can be big business for as well as

influencing the political, economical, and other cultural aspects of countries

around the world. Especially with politics and sports, sports can affect

countries, their identities, and in consequence, the world.

The ancient Olympic Games were a series of competitions held between

representatives of several city-states and kingdoms from Ancient Greece,

which featured mainly athletic but also combat and chariot racing events.

Sociocultural Globalisation

Cultural globalisation has increased cross-cultural contacts but may be

accompanied by a decrease in the uniqueness of once-isolated communities.

For example, sushi is available in Germany as well as Japan but Euro-Disney

outdraws the city of Paris, potentially reducing demand for "authentic"

French pastry.

Internet

Both a product of globalisation as well as a catalyst, the Internet connects

computer users around the world.

According to research firm IDC, the size of total worldwide e-commerce,

when global business-to-business and -consumer transactions are added

together, will equate to US$16 trillion in 2013.

Global Workforce

Global workforce refers to the international labour pool of workers,

including those employed by multinational companies and connected

through a global system of networking and production, immigrant

workers, transient migrant workers, telecommuting workers, and those in

contingent work and other precarious employment. As of 2012, the global

labour pool consisted of approximately 3 billion workers, around 200

million unemployed.

Dimensions of Globalisation

Theodore Levitt (1983) was one of the first academics to write about globalisation.

Economic Globalisation

The economic dimension of globalisation is the one most often mentioned in the media. It is associated with massive amounts of financial capital traded daily on the different stock markets around the globe as well as with global trade, developments often captured under the label “New Economy.”

In order to monitor the world economy, three economic institutions were created:The International Monetary Fund (IMF) would oversee the international monetary system;

The International Bank for Reconstruction and Development (IBRD later renamed the World Bank would provide loans for European reconstruction but later expanded its activities to the developing world;

The General Agreement on Tariffs and Trade (GATT, renamed the World Trade Organization in 1992) would oversee multilateral trade agreements. For about thirty years, this system remained in place and provided economic stability and prosperity to Western nations.

Political Globalisation

Over the years, the power of the state has expanded in many different

domains of life. Globalisation signals the end of sovereignty because a

state can only be sovereign if it can exercise authority over a given

territory. For several reasons, such an exercise of power is no longer

possible. Post industrial economies rely on data and communication

technologies that make borders irrelevant.

Simply put, there was a clear distinction between the domestic domain,

where the authority of the state was absolute, and the international

domain where states were expected to follow minimal rules.

Technological GlobalisationNew technologies have always played a crucial role in the processes of

economic and social globalisation. Aeroplanes, computers and satellite-

based communications make possible an ever-expanding degree of

information exchange, commodity trade and individual contact across the

globe.

The concept of the globalisation of technology is rather difficult in that it

seeks to describe and explain how the process of economic and social

globalisation is not only affected by, but is also itself affecting, the

production, distribution and transfer of technology.

• “World Wide Web” has exploded in last 10 years

• Computers can move money around world “finance capital”

• Silicon Valley is 9th largest economy in world.

Cultural GlobalisationCultural globalisation simply means the extensiveness, intensiveness,

velocity and impact of cultural flows – transmission of symbols, ideas,

artistic and consumption products – on a global scale. Technologies of

transportation and communication facilitate cultural diffusion and an

emerging global consciousness. And as our globalisation theorem shows,

symbolic exchanges are the ones most easily globalised. Culture is

therefore essential to the understanding of globalisation.

Cultural Imperialism = Dominance of one culture over others

Hollywood movies, McDonald’s, Disneyland, Starbucks

Dominance of the English language and invasion of other languages.

Ideological Globalisation

In addition to being an objective transformation of human relations,

globalisation also produces a way of looking at the world in specific terms,

that is, an ideology. According to Steger (2003: 93), an ideology is “a

system of widely shared ideas, patterned beliefs, guiding norms and

values, and ideals accepted as truth by a particular group of people.”

What kinds of things cross international borders?

• Trade – goods and services.– You can buy a TV from China, car from Japan, clothes from Indonesia

or Italy.

– You can hire someone from India to write software or answer your telephone

• Capital – money, investment– You can put your savings into a bank in Zurich.

– You can buy stock in SONY, a Japanese company

• People – immigrants, refugees, tourists– Immigrants come to Calgary from Asia, Africa, S. America, Europe

– You can easily travel to Europe, Asia, S. America

• Communication– You can easily call or email people around the world

• Culture (art, music, cuisine)– You can hear music from Brazil, South Africa, India

– Nearby restaurants: Chinese, Thai, Ethiopian, Indian

• Ideas

Is Globalisation a Good/Bad Thing? Positive Aspects• Increase in standard of living.• Global competition encourages

creativity and innovation.• Governments are able to better

work together towards common goals.

• Greater access to foreign culture in the form of movies, music, food, clothing, and more.

• Increases economic prosperity and opportunity.

Negative Aspects• Outsourcing, while it provides

jobs to a population in one country, takes away those jobs from another country, leaving many without opportunities.

• Increased environmental damage.• Erosion of traditional culture.• Terrorists now globally

interconnected and empowered with knowledge.

• Direct consequences for the safety of people and the environment.

STEPS TOWARDS GLOBALISATION (Reforms)

Major measures initiated as a part of the liberalisation and globalisation

strategy in the early nineties included the following:

• Devaluation: The first step towards globalisation was taken with the

announcement of the devaluation of Indian currency by 18-19 per cent

against major currencies in the international foreign exchange market. In

fact, this measure was taken in order to resolve the BOP crisis.

• Disinvestment: In order to make the process of globalisation smooth,

privatisation and liberalisation policies are moving along as well. Under

the privatisation scheme, most of the public sector undertakings have

been/ are being sold to private sector.

• Dismantling of The Industrial Licensing Regime: At present, only six industries are

under compulsory licensing mainly on accounting of environmental safety and

strategic considerations. A significantly amended locational policy in tune with the

liberalized licensing policy is in place. No industrial approval is required from the

government for locations not falling within 25 kms of the periphery of cities having a

population of more than one million.

• Allowing Foreign Direct Investment (FDI) across a wide spectrum of industries and

encouraging non-debt flows. The Department has put in place a liberal and

transparent foreign investment regime where most activities are opened to foreign

investment on automatic route without any limit on the extent of foreign ownership.

Society

• A society, or a human society, is a group of people involved with each

other through persistent relations, or a large social grouping sharing the

same geographical or social territory, subject to the same political

authority and dominant cultural expectations. Human societies are

characterized by patterns of relationships (social relations) between

individuals who share a distinctive culture and institutions; a given

society may be described as the sum total of such relationships among

its constituent members.

Meaning

The term "society" came from the Latin word societas, which in turn was

derived from the noun socius ("comrade, friend, ally"; adjectival form

socialis) used to describe a bond or interaction among parties that are

friendly, or at least civil. Without an article, the term can refer to the

entirety of humanity (also: "society in general", "society at large", etc.),

although those who are unfriendly or uncivil to the remainder of society

in this sense may be deemed to be "antisocial".

Adam Smith wrote that a society "may subsist among different men, as

among different merchants, from a sense of its utility without any

mutual love or affection, only they refrain from doing injury to each

other."

Conceptions of society

• In anthropology Human societies are most often organized according to their primary

means of subsistence. Social scientists have identified hunter-gatherer

societies, nomadic pastoral societies, horticulturalist or simple farming

societies, and intensive agricultural societies, also called civilizations.

• In political science Societies may also be organized according to their political structure. In

order of increasing size and complexity, there are bands, tribes,

chiefdoms, and state societies. These structures may have varying

degrees of political power, depending on the cultural, geographical, and

historical environments that these societies must contend with.

• In sociology Sociologist Gerhard Lenski differentiates societies based on their level of

technology, communication, and economy:• hunters and gatherers,• simple agricultural,• advanced agricultural,• industrial, and • special (e.g. fishing societies or maritime societies).

TYPES OF SOCIETIES

• Pre-industrial societies• Industrial societies• Post-industrial societies• Western society• Information society• Knowledge society

CONCLUSION• Globalisation as we know that it refers to the interconnection of the

various economies of the world. The globalisation is similar to the other trends of the international business i.e., it is having positive and negative impacts on its constituents.

• In the present era the globalisation is affecting international business trends such as through culture, education, lifestyle, media & film industry etc. All the dimensions of the globalisation whether political, social, cultural, economical or technological are having variety of affects on business, individuals, economies etc.

• In the sector of FDI- Foreign Direct Investment it created a lot of highlights for the approval of FDI in Retail. Nowadays, due to the adverse affects of the globalisation the value of Rupee is becoming weaker than that of the value of Dollar.