Profs. Shruti Jain and Shweta Dixit write...
The authors can be contacted at: shruti.jain@niilm.com, sdixit@niilm.com
The
increasing pace of ICT development, the shifting markets with the changes in
global consumer tastes and preferences, emergence of global brands and MNCs and
their worldwide operations, the process of continuous upgradation of the
industrial economies, and the liberalization policies pursued by the developing
nations are among the forces which are transforming the global economy and its
trading pattern.
The internationalization of the world economy has been rapid during the last two
decades. Besides trade, there is now a greater and multiple flow of capital,
labour, information, technology and organisation of the production process
itself across borders.
As
a result of Globalization, the opportunities for World Trade Expansion have
been greater than ever. Children in Pakistan wear Levi’s, the Chinese have
satellite Television; the American housewives stretch their budgets by
purchasing less expensive goods imported from china and register a complain
about their microwaves in a call center in India. Business from all over the
Globe has crossed the national borders and invaded global Markets. An average Indian
citizen nowadays start his daily routine using Colgate Palmolive, has corn
flakes from Kellogg’s as Breakfast, drives a Santro, or a Volkswagen; spends a day on Samsung galaxy
tab, IBM computer and Hitachi Air conditioner, and evening is to be spent with
a Sony T.V. So every activity is having a glimpse of globalization. Fueled by
Information technology and rapid strides of liberalization made by nations, International
Business is no more a strategic choice with organizations, it is an integral
part of their business to sustain a competitive position in the market place.
We
seem to be witnessing the globalization of markets and production. With regard
to the globalization of markets and production, we are moving away from an
economic system in which national markets are distinct entities, isolated from
each other by trade barriers of distance, time, and culture, and toward a
system in which national markets are merging into one huge global marketplace.
The
tastes and preferences of consumers in different nations are beginning to
coverage on some global norm. Thus, in many industries it is no longer
meaningful to talk about the “German Market,’’ ‘the American market,” or the
“Japanese market”; there is only the “global market”. The global acceptance of
Coca-Cola, Levi’s jeans, Apple I-pads, and McDonald’s hamburgers, and continuously
increasing facebook users exemplifies this trend.
Today, globalization involves numerous features, but the following
three seem to be the main engine driving global economic integration:
a. Internationalization of
production accompanied by changes in the structure of production
b. Expansion of
international trade and services
c. Widening and deepening
of international capital flows
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