IMPACT OF

GLOBALIZATION

Presented by:-
omprakash pateriya
M.B.A.
sanghvi institute of management and science
 GROUP MEMBERS

• Gautam Karde
• Omprakash Pateriya
• Pawan Banve
• Prakriti Mathur
• Sunil Sirohi
• Arunesh Tyagi
• Vivek Divedi
• Puran Singh Jadhav
• Shalesh Kumar
• Pravin Mishra
INTRODUCTION ABOUT
GLOBALIZATION
 Meaning of GLOBALIZATION
“The whole world is market and everybody is buyer and
seller.” a “borderless” world as goods, services, cultural
products and ideas travel across borders with relative ease.
• Vasudhaivh kutumbkum (the whole world is a family)
• “ the growing economic interdependence of countries
worldwide through increasing volume and variety of cross-
border transactions in goods and services, free
international capital flows, and more rapid and widespread
diffusion of technology”. According to I.M.F
• Globalization in a literal sense is international
integration .
• refer to the expansion of economies beyond national borders
 Globalisation means

 Worldwide intensive exchange of people,

knowledge, capital, goods and services.
 Globalisation helps in integration of the
world, and allows new ideas and
technological innovation to spread around the
globe.
 Globalisation is much wider than an
economic process and involves all human
relationships and civilizations.
 WHAT IS
GLOBALIZATION?
 The trend toward countries joining together
economically,
 Education
 Society
 Politics and
 Viewing themselves not only through their
national identity but also as part of the
world as a whole.
 Why globalization
• Factors to increase globalization-
1. Industrialization
2. Endless need
3. Worldly problem- Natural 2. Social
4. Communication networks
5. Collapse of communism
6. Growth of economics corporation (WTO,IMF,UNO etc.) free
trade
 Method to measure globalization

• By using trade volume (export-import)

Endogenous variables are also part of e-i

• Non-tarrif barriers ratio

(trade tarrif may vary by year)
Globalization
NEED
FOR
GLOBALIZATION
Technology in developing countries.
It raises life expectancy.
It is reducing poverty
worldwide.
It promotes world peace.
IMPACT OF GLOBALIZATION

 COMMUNICATION
 TRANSPORTATION
 TRADE
 LIBERALISATION
IMPACT
 India’s growth rate in the 1970’s was very low at 3% and
GDP growth in countries like Brazil, Indonesia, Korea, and
Mexico was more than twice that of India.

 Though India’s average annual growth rate almost doubled

in the eighties to 5.9%, it was still lower than the growth
rate in China, Korea and Indonesia. The pick up in GDP
growth has helped improve India’s global position.

 India’s position in the global economy has improved from

the 8th position in 1991 to 4th place in 2001; when GDP is
calculated on a purchasing power parity basis.
 During 1991-92 the first year of Rao’s reforms program, The
Indian economy grew by 0.9%only.

 However the GDP growth accelerated to 5.3 % in 1992-93,

and 6.2% 1993- 94.

 A growth rate of above 8% was an achievement by the

Indian economy during the year 2003-04.

 India is ranked 18th among the world’s leading exporters of

services with a share of 1.3% in world exports

 India’s GDP growth rate can be seen from the following

graph since independence
 Evaluation of L.P.G.
 Opportunities in BPO,KPO,IT etc. sector
 International expansion of Indian companies,
products
 Increase in the manufacturing and export
 It reduces the poverty from 40% to 25%.
 It increased the FDI.
 It increased the competition for domestic
companies.
INDIA’s GDP Growth Rate
WINNERS…
LOSERS…
Globalization
 PROS
 Pros Of Globalization

 With globalization, there is a global market for companies

to trade their products & a wider range of options for
people, to choose from among the products of different
nations.  

 Developing countries benefit a lot from globalization, as

there is a sound flow of money and thus, a decrease in the
currency difference.

 To meet the increasing demands that follow globalization,

there is an increase in the production sector. This gives
loads of options to the manufacturers as well.

 Competition keeps prices relatively low, and as a result,

inflation is less likely to occur.
……CONTD
 The focus is diverted and segregated among all the
nations. No country remains the single power head;
instead there are compartmentalized power sectors. The
decisions at higher levels are meant for the people at large.
 

 Communication among the countries is on the rise, which

allows for better understanding and broader vision.

 As communication increases amongst two countries, there

is interchange of cultures as well. We get to know more
about the other's cultural preferences.

 As we feed to each other's financial needs, the ecological

imbalance is also met . Governments of countries show
concern about each other.
CONS

 Globalization is causing Europeans to lose their jobs as

work is being outsourced to the Asian countries. The
cost of labor in the Asian countries is low as compared
to other countries.

 The high rate of profit for the companies, in Asia, has

resulted in a pressure on the employed Europeans, who
are always under the threat of the business being
outsourced.

 Companies are opening their counterparts in other

countries. This results in transferring the quality of their
product to other countries, thereby increasing the
chances of depreciation in terms of quality.
 ……CONTD
 There are experts who believe that globalization is
the cause for the invasion of communicable diseases
and social degeneration in countries.

 The threat that the corporate would rule the world is

on high, as there is a lot of money invested by them.

 It is often argued that poor countries are exploited by

the richer countries where the work force is taken
advantage of and low wages are implemented.
ADVANTAGES & DISADVANTAGES OF
GLOBALIZATION
 Advantages
Increased free trade between nations
Increased liquidity of capital allowing
investors in developed nations to invest
in developing nations
Corporations have greater flexibility to
operate across borders
Global mass media ties the world
together
Increased flow of communications allows
vital information to be shared between
individuals and corporations around the
world
Disadvantages
Increased flow of skilled and non-skilled
jobs from developed to developing
nations as corporations seek out the
cheapest labor
Increased likelihood of economic
disruptions in one nation effecting all
nations
Corporate influence of nation-states far
exceeds that of civil society organizations
and average individuals
Threat that control of world media by a
handful of corporations will limit cultural
expression
Greater chance of reactions for
globalization being violent in an attempt
to preserve cultural heritage
 Advantages
Greater ease and speed of transportation Greater risk of diseases being
for goods and people
Reduction of cultural barriers increases
the global village effect
Spread of democratic ideals to
developed nations
Reduction of likelihood of war between
developed nations
Increases in environmental protection in
developed nations
Disadvantages
transported unintentionally between
nations
Spread of a materialistic lifestyle and
attitude that sees consumption as the
path to prosperity
International bodies like the World Trade
Organization infringe on national and
individual sovereignty
Increase in the chances of civil war
within developing countries and open
war between developing countries as
they vie for resources
Decreases in environmental integrity as
polluting corporations take advantage of
weak regulatory rules in developing
countries
…..Other Disadvantage of globalization

 Brain-drain
 Pollution
 Exploitation of natural resources
 Economic disruptions by other nations
 Greater chance of reactions for globalization
being violent in an attempt to preserve cultural
heritage. (racial tension)
 Greater risk of diseases.
 Spread of materialistic lifestyle and attitude that
sees consumption as the path to prosperity.
 International bodies like the WTO infringe on
national and individual sovereignty.
 CHALLENGES
 Productivity: Productivity is improved by producing in countries
where production is most efficient. However, this often means
workers in one country lose jobs as their work moves to more
efficient locations.
 Consumers: Consumers benefit from a wider array of
competitively priced goods. However, they have less control over
supplies coming from abroad than over goods produced
domestically.
 Employment: Employment may increase as economic growth and
specialization take hold. However, domestic employment
fluctuates according to foreign conditions (such as economic
crises elsewhere that reduce demand for employment
domestically).
 The Environment: As global consumption increases due to
globalization, more natural resources deplete. Differing
environmental standards across countries create opportunities
for businesses to exploit resources in countries with the least
amount of environmental protection regulation.
 Monetary and Fiscal Conditions: As money moves more freely,
it is better able to seek out the best investment opportunities
on a global scale. However, governments have less control
over the inflow and outflow of funds. Furthermore, capital
seems to be flowing more freely to countries with lower tax
rates and less regulatory restrictions, putting additional
pressures on national fiscal and monetary policies.

 Sovereignty: Globalization may undermine national

sovereignty in two ways: First, contact with other countries
creates more cultural borrowing and may dilute a country's
cultural uniqueness. Second, countries are concerned that
important decisions may be made abroad by foreign owners of
domestically located firms.