MBM-201 SELF STUDY

GLOBALIZATION
(Impact on Business Environment)

SUBMITTED TO :Dr. SUMITA SRIVASTAVA

SUBMITTED BY:AMIT KR. SINGH

ROLL NO:107606

MBA-II Semester

Contents
Contents..................................................................................................................... 2 INTRODUCTION.......................................................................................................... 3 History..................................................................................................................... 3 Modern globalization..............................................................5 Measuring globalization............................................................................................. 7 Effects of globalization...............................................................................................8 Cultural effects .....................................................................................................11 Negative effects....................................................................................................12 Effect on disease..................................................................................................12 Brain drain........................................................................................................... 12 Economic liberalization.........................................................................................13 Effect on Income disparity...................................................................................13 Effect on environmental degradation....................................................................13 Food security.........................................................................................................14 Drug and illicit goods trade...................................................................................14 Sweatshops.......................................................................................................... 15 Impact of globalization on developing countries and India......................................15 Cases of Vietnam and China....................................................................................17 GLOBALISATION AND THE INDIAN ECONOMY...........................................................18 Conclusion................................................................................................................ 20 REFERENCES............................................................................................................ 20

INTRODUCTION
The word global can be defined as being or having to do with a business, operation, system, etc. carried on or extending throughout all or much of the world (a global company , global communications). The process of globalizing something; the expansion of many businesses into markets throughout the world, marked by an increase in international investment, the proliferation of large multinational companies, worldwide economic integration, etc. is called Globalization. Globalization can also be viewed as the increase in global integration and solidarity from economic, social, technological, cultural, political and ecological angles. Globalization basically means that the world is slowly becoming one, instead of divided lands. Most people think that globalization has to do with just business influences. However, its also travel, communication, culture, etc that is affecting the spread of the worlds cultures. Basically, globalization is where goods and services are produced in one part of the world but eventually shared on an international level.

HISTORY
The historical origins of globalization are the subject of on-going debate. Though some scholars situate the origins of globalization in the modern era, others regard it as a phenomenon with a long history. Perhaps the most extreme proponent of a deep historical origin for globalization was Andre Gunder Frank, an economist associated with dependency theory. Frank argued that a form of globalization has been in existence since the rise of trade links between Sumer and the Indus Valley Civilization in the third millennium B.C. Critics of this idea point out that it rests upon an overly-broad definition of globalization. An early form of globalized economics and culture existed during the Hellenistic Age, when commercialized urban centers were focused around the axis of Greek culture over a wide range that stretched from India to Spain, with such cities as Alexandria, Athens, and Antioch at its center. Trade was widespread during that period, and it is the first time the idea of a cosmopolitan culture (from Greek "Cosmopolis", meaning "world city") emerged. Others have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire, and the Han Dynasty. The increasing articulation of commercial links between these powers inspired the development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome. With 300 Greek ships a year sailing between the Greco-Roman world and India, the annual trade may have reached 300,000 tons. The Islamic Golden Age was also an important early stage of globalization, when Jewish and Muslim traders and explorers established a sustained economy across the Old World resulting in a globalization of crops, trade, knowledge and technology. Globally significant crops such as

sugar and cotton became widely cultivated across the Muslim world in this period, while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture. The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China, greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as Marco Polo to journey successfully (and profitably) from one end of Eurasia to the other. The so-called Pax Mongolica of the thirteenth century had several other notable globalizing effects. It witnessed the creation of the first international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the newly unified regions of Central Asia. These pre-modern phases of global or hemispheric exchange are sometimes known as archaic globalization. Up to the sixteenth century, however, even the largest systems of international exchange were limited to the Old World. The Age of Discovery brought a broad change in globalization, being the first period in which Eurasia and Africa engaged in substantial cultural, material and biologic exchange with the New World. It began in the late 15th century, when the two Kingdoms of the Iberian Peninsula Portugal and Castile - sent the first exploratory voyages around the Horn of Africa and to the Americas, "discovered" in 1492 by Christopher Columbus. Shortly before the turn of the 16th century, Portuguese started establishing trading posts (factories) from Africa to Asia and Brazil, to deal with the trade of local products like gold, spices and timber, introducing an international business center under a royal monopoly, the House of India. Global integration continued with the European colonization of the Americas initiating the Columbian Exchange, the enormous widespread exchange of plants, animals, foods, human populations (including slaves), communicable diseases, and culture between the Eastern and Western hemispheres. It was one of the most significant global events concerning ecology, agriculture, and culture in history. New crops that had come from the Americas via the European seafarers in the 16th century significantly contributed to the world's population growth. This phase is sometimes known as proto-globalization. It 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. In the 17th century, globalization became also a private business phenomenon when chartered companies like British East India Company (founded in 1600), often described as the first multinational corporation, as well as the Dutch East India Company (founded in 1602) were established. Because of the large investment and financing needs and high risks involved in international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization. The 19th century witnessed the advent of globalization approaching its modern form. Industrialization allowed cheap production of household items using economies of scale, while rapid population growth created sustained demand for commodities. Globalization in this period
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was decisively shaped by nineteenth-century imperialism. After the Opium Wars and the completion of British conquest of India, vast populations of these regions became ready consumers of European exports. It was in this period that areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. Meanwhile, the conquest of new parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies, and the United States. Said John Maynard Keynes, The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914. The first phase of "modern globalization" began to break down at the beginning of the 20th century, with the first world war. The novelist VM Yeates criticised the financial forces of globalization as a factor in creating World War I. The final death knell for this phase came during the gold standard crisis and Great Depression in the late 1920s and early 1930s. In the middle decades of the twentieth century globalization was largely driven by the global expansion of multinational corporations based in the United States and Europe, and worldwide exchange of new developments in science, technology and products, with most significant inventions of this time having their origins in the Western world according to Encyclopedia Britannica. Worldwide export of western culture went through the new mass media: film, radio and television and recorded music. Development and growth of international transport and telecommunication played a decisive role in modern globalization. In late 2000s, much of the industrialized world entered into a deep recession. Some analysts say the world is going through a period of deglobalization after years of increasing economic integration. Up to 45% of global wealth had been destroyed by the global financial crisis in little less than a year and a half. China has recently become the worlds largest exporter surpassing Germany.

MODERN GLOBALIZATION
Globalization, since World War II, is largely the result of planning by politicians to break down borders hampering trade to increase prosperity and interdependence thereby decreasing the chance of future war. Their work led to the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for international commerce and finance,
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and the founding of several international institutions intended to oversee the processes of globalization. These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade. Since World War II, barriers to international trade have been considerably lowered through international agreements GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included: Promotion of free trade:
elimination of tariffs; creation of free trade zones with small or no tariffs Reduced transportation costs, especially resulting from development of containerization

for ocean shipping.

Reduction or elimination of capital controls Reduction, elimination, or harmonization of subsidies for local businesses

Creation of subsidies for global corporations

Harmonization of intellectual property laws across the majority of states, with more

restrictions
Supranational recognition of intellectual property restrictions (e.g. patents granted by

China would be recognized in the United States) Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity, but largely without success. The Uruguay Round (1986 to 1994) led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade. World exports rose from 8.5% in 1970, to 16.2% of total gross world product in 2001.
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MEASURING GLOBALIZATION
Looking specifically at economic globalization, demonstrates that it can be measured in different ways. These center around the four main economic flows that characterize globalization:
Goods and services, e.g., exports plus imports as a proportion of national income or per

capita of population
Labor/people, e.g., net migration rates; inward or outward migration flows, weighted by

population
Capital, e.g., inward or outward direct investment as a proportion of national income or

per head of population

Technology, e.g., international research & development flows; proportion of populations

(and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband) As globalization is not only an economic phenomenon, a multivariate approach to measuring globalization is the recent index calculated by the Swiss think tank KOF. The index measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal contact, data on information flows, and data on cultural proximity is calculated. Data is available on a yearly basis for 122 countries, as detailed in Dreher, Gaston and Martens (2008). According to the index, the world's most globalized country is Belgium, followed by Austria, Sweden, the United Kingdom and the Netherlands. The least globalized countries according to the KOF-index are Haiti, Myanmar, the Central African Republic and Burundi. A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the Netherlands, Canada and Denmark are the most globalized, while Indonesia, India and Iran are the least globalized among countries listed.

EFFECTS OF GLOBALIZATION
Globalization has various aspects which affect the world in several different ways such as:
Industrial - emergence of worldwide production markets and broader access to a range of

foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries. International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) in the 50 years since 1955. Chinas trade with Africa rose sevenfold during 2000-07 alone.
Financial - emergence of worldwide financial markets and better access to external

financing for borrowers. By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily to support the expanded levels of trade and investment. As these worldwide structures grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidenced by the Financial crisis of 20072010.
Economic - realization of a global common market, based on the freedom of exchange of

goods and capital. The interconnectedness of these markets, however meant that an economic collapse in any one given country could not be contained. Almost all notable worldwide IT companies are now present in India. Four Indians were among the world's top 10 richest in 2008, worth a combined $160 billion. In 2007, China had 415,000 millionaires and India 123,000.
Health Policy - On the global scale, health becomes a commodity. In developing nations

under the demands of Structural Adjustment Programs, health systems are fragmented and privatized. Global health policy makers have shifted during the 1990s from United Nations players to financial institutions. The result of this power transition is an increase in privatization in the health sector. This privatization fragments health policy by crowding it with many players with many private interests. These fragmented policy players emphasize partnerships, specific interventions to combat specific problems (as opposed to comprehensive health strategies). Influenced by global trade and global economy, health policy is directed by technological advances and innovative medical trade. Global priorities, in this situation, are sometimes at odds with national priorities where increased health infrastructure and basic primary care are of more value to the public than privatized care for the wealthy.

Britain is a country of rich diversity. As of 2008, 40% of London's total population was from an ethnic minority group. The latest official figures show that in 2008, 590,000 people arrived to live in the UK whilst 427,000 left, meaning that net inward migration was 163,000.
Political - some use "globalization" to mean the creation of a world government which

regulates the relationships among governments and guarantees the rights arising from social and economic globalization. Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of The United States own economy, the People's Republic of China has experienced some tremendous growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power.
Informational - increase in information flows between geographically remote locations.

Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.
Language - the most popular language is Mandarin (845 million speakers) followed by

Spanish (329 million speakers) and English (328 million speakers). About 35% of the world's mail, telexes, and cables are in English. Approximately 40% of the world's radio programs are in English. About 50% of all Internet traffic uses English. and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition.
Ecological - the advent of global environmental challenges that might be solved with

Competition - Survival in the new global business market calls for improved productivity

international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Since many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution. On the other hand, economic development historically required a "dirty" industrial stage, and it is argued that developing countries should not, via regulation, be prohibited from increasing their standard of living.

 Cultural - growth of cross-cultural contacts; advent of new categories of consciousness

and identities which embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture". Some bemoan the resulting consumerism and loss of languages. Also see Transformation of culture.

Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood and, to a lesser extent, Bollywood movies). Some consider such "imported" culture a danger, since it may supplant the local culture, causing reduction in diversity or even assimilation. Others consider multiculturalism to promote peace and understanding between peoples. A third position gaining popularity is the notion that multiculturalism to a new form of monoculture in which no distinctions exist and everyone just shift between various lifestyles in terms of music, cloth and other aspects once more firmly attached to a single culture. Thus not mere cultural assimilation as mentioned above but the obliteration of culture as we know it today. Greater international travel and tourism. WHO estimates that up to 500,000 people are on planes at any one time. In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% as compared to 2007. Greater immigration, including illegal immigration. The IOM estimates there are more than 200 million migrants around the world today. Newly available data show that remittance flows to developing countries reached $328 billion in 2008. Spread of local consumer products (e.g., food) to other countries (often adapted to their culture). Worldwide fads and pop culture such as Pokmon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or Television, leaving out a substantial segment of the Earth's population. Worldwide sporting events such as FIFA World Cup and the Olympic Games. Incorporation of multinational corporations in to new media. As the sponsors of the AllBlacks rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete. global public policy, including humanitarian aid and developmental efforts.

Social - development of the system of non-governmental organisations as main agents of

Technical

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Development of a Global Information System, global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones Increase in the number of standards applied globally; e.g., copyright laws, patents and world trade agreements.

Legal/Ethical

The creation of the international criminal court and international justice movements. Crime importation and raising awareness of global crime-fighting efforts and cooperation. The emergence of Global administrative law.

Religious

The spread and increased interrelations of various religious groups, ideas, and practices and their ideas of the meanings and values of particular spaces.

CULTURAL EFFECTS
Globalization has had an impact on different cultures around the world. "Culture" is defined as patterns of human activity and the symbols that give these activities significance. Culture is what people eat, how they dress, beliefs they hold, and activities they practice. Globalization has joined different cultures and made it into something different. As Erla Zwingle, from the National Geographic article titled Globalization states, When cultures receive outside influences, they ignore some and adopt others, and then almost immediately start to transform them. One classic culture aspect is food. Someone in America can be eating Japanese noodles for lunch while someone in Sydney, Australia is eating classic Italian meatballs. India is known for its curry and exotic spices. France is known for its cheeses. America is known for its burgers and fries. McDonalds is an American company which is now a global enterprise with 31,000 locations worldwide. This company is just one example of food causing cultural influence on the global scale.
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Another common practice brought about by globalization is the usage of Chinese symbol in tattoos. These tattoos are popular with todays youth despite the lack of social acceptance of tattoos in China. Also, there is a lack of comprehension in the meaning of Chinese characters that people get, making this an example of cultural appropriation. The internet breaks down cultural boundaries across the world by enabling easy, near-instantaneous communication between people anywhere in a variety of digital forms and media. The Internet is associated with the process of cultural globalization because it allows interaction and communication between people with very different lifestyles and from very different cultures. Photo sharing websites allow interaction even where language would otherwise be a barrier.

NEGATIVE EFFECTS
Globalization has been one of the most hotly debated topics in international economics over the past few years. Globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation. In the Midwestern United States, globalization has eaten away at its competitive edge in industry and agriculture, lowering the quality of life in locations that have not adapted to the change.

EFFECT ON DISEASE
Globalization, the flow of information, goods, capital and people across political and geographic boundaries, has also helped to spread some of the deadliest infectious diseases known to humans. Starting in Asia, the Black Death killed at least one-third of Europe's population in the 14th century. Modern modes of transportation allow more people and products to travel around the world at a faster pace, they also open the airways to the transcontinental movement of infectious disease vectors. One example of this occurring is AIDS/HIV. Approximately 1.1 million persons are living with HIV/AIDS in the United States, and AIDS remains the leading cause of death among African American women between ages 25 and 34. Due to immigration, approximately 500,000 people in the United States are believed to be infected with Chagas disease. In 2006, the tuberculosis (TB) rate among foreign-born persons in the United States was 9.5 times that of U.S.-born persons.

BRAIN DRAIN
Opportunities in richer countries drives talent away from poorer countries, leading to brain drains. Brain drain has cost the African continent over $4.1 billion in the employment of 150,000 expatriate professionals annually. Indian students going abroad for their higher studies costs India a foreign exchange outflow of $10 billion annually.

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ECONOMIC LIBERALIZATION
The World today is so interconnected that the collapse of the subprime mortgage market in the U.S. has led to a global financial crisis and recession on a scale not seen since the Great Depression. Government deregulation and failed regulation of Wall Street's investment banks were important contributors to the subprime mortgage crisis. A flood of consumer goods such as televisions, radios, bicycles, and textiles into the United States, Europe, and Japan has helped fuel the economic expansion of Asian tiger economies in recent decades. However, Chinese textile and clothing exports have recently encountered criticism from Europe, the United States and some African countries. In South Africa, some 300,000 textile workers have lost their jobs due to the influx of Chinese goods. A total of 3.2 million one in six U.S. factory jobs have disappeared since the start of 2000.

EFFECT ON INCOME DISPARITY

A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people possess more financial assets than the poorest 10% of the world's population, combined. The combined wealth of the 10 million millionaires grew to nearly $41 trillion in 2008. In 2001, 46.4% of people in sub-Saharan Africa were living in extreme poverty. Nearly half of all Indian children are undernourished.

EFFECT ON ENVIRONMENTAL DEGRADATION

The removal of forest to make way for cattle ranching was the leading cause of deforestation in the Brazilian Amazon from the mid 1960s. Recently, soybeans have become one of the most important contributors to deforestation in the Brazilian Amazon. The Worldwatch Institute said the booming economies of China and India are planetary powers that are shaping the global biosphere. In 2007, China has overtaken the United States as the world's biggest producer of CO2. At present rates, tropical rainforests in Indonesia would be logged out in 10 years, Papua New Guinea in 13 to 16 years. A major source of deforestation is the logging industry, driven spectacularly by China and Japan. Thriving economies such as China and India are quickly becoming large oil consumers. China has seen oil consumption grow by 8% yearly since 2002, doubling from 19962006. Crude oil prices in the last several years have steadily risen from about $25 a barrel in August 2003 to over $140 a barrel in July 2008. State of the World 2006 report said the two countries' high economic growth hid a reality of severe pollution. The report states: The world's ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan, Europe and the United States as well as the aspirations of the rest of the world in a sustainable way

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Without more recycling, zinc could be used up by 2037, both indium and hafnium could run out by 2017, and terbium could be gone before 2012. It said that if China and India were to consume as much resources per capita as United States or Japan in 2030 together they would require a full planet Earth to meet their needs. In the longterm these effects can lead to increased conflict over dwindling resources and in the worst case a Malthusian catastrophe.

FOOD SECURITY
The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices. From 1950 to 1984, as the Green Revolution transformed agriculture around the world, grain production increased by over 250%. The world population has grown by about 4 billion since the beginning of the Green Revolution and most believe that, without the Revolution, there would be greater famine and malnutrition than the UN presently documents (approximately 850 million people suffering from chronic malnutrition in 2005). It is becoming increasingly difficult to maintain food security in a world beset by a confluence of "peak" phenomena, namely peak oil, peak water, peak phosphorus, peak grain and peak fish. Growing populations, falling energy sources and food shortages will create the "perfect storm" by 2030, according to the UK government chief scientist. He said food reserves are at a 50-year low but the world requires 50% more energy, food and water by 2030. The world will have to produce 70% more food by 2050 to feed a projected extra 2.3 billion people and as incomes rise, the United Nations' Food and Agriculture Organisation (FAO) warned. Social scientists have warned of the possibility that global civilization is due for a period of contraction and economic re-localization, due to the decline in fossil fuels and resulting crisis in transportation and food production. One paper even suggested that the future might even bring about a restoration of sustainable local economic activities based on hunting and gathering, shifting horticulture, and pastoralism. The journal Science published a four-year study in November 2006, which predicted that, at prevailing trends, the world would run out of wild-caught seafood in 2048.

DRUG AND ILLICIT GOODS TRADE

The United Nations Office on Drugs and Crime (UNODC) issued a report that the global drug trade generates more than $320 billion a year in revenues. Worldwide, the UN estimates there are more than 50 million regular users of heroin, cocaine and synthetic drugs. The international trade of endangered species is second only to drug trafficking. Traditional Chinese medicine often incorporates ingredients from all parts of plants, the leaf, stem, flower, root, and also ingredients from animals and minerals. The use of parts of endangered species (such as seahorses, rhinoceros horns, saiga antelope horns, and tiger bones and claws) has created controversy and resulted in a black market of poachers who hunt restricted animals. In 2003, 29% of open sea fisheries were in a state of collapse.

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SWEATSHOPS
It can be said that globalization is the door that opens up an otherwise resource-poor country to the international market. Where a country has little material or physical product harvested or mined from its own soil, large corporations see an opportunity to take advantage of the export poverty of such a nation. Where the majority of the earliest occurrences of economic globalization are recorded as being the expansion of businesses and corporate growth, in many poorer nations globalization is actually the result of the foreign businesses investing in the country to take advantage of the lower wage rate: even though investing, by increasing the Capital Stock of the country, increases their wage rate. One example used by anti-globalization protestors is the use of sweatshops by manufacturers. According to Global Exchange these Sweat Shops are widely used by sports shoe manufacturers and mentions one company in particular Nike. There are factories set up in the poor countries where employees agree to work for low wages. Then if labour laws alter in those countries and stricter rules govern the manufacturing process the factories are closed down and relocated to other nations with more conservative, laissez-faire economic policies. There are several agencies that have been set up worldwide specifically designed to focus on anti-sweatshop campaigns and education of such. In the USA, the National Labor Committee has proposed a number of bills as part of the The Decent Working Conditions and Fair Competition Act, which have thus far failed in Congress. The legislation would legally require companies to respect human and worker rights by prohibiting the import, sale, or export of sweatshop goods. Specifically, these core standards include no child labor, no forced labor, freedom of association, right to organize and bargain collectively, as well as the right to decent working conditions. Tiziana Terranova has stated that globalization has brought a culture of "free labour". In a digital sense, it is where the individuals (contributing capital) exploits and eventually "exhausts the means through which labour can sustain itself". For example, in the area of digital media (animations, hosting chat rooms, designing games), where it is often less glamourous than it may sound. In the gaming industry, a Chinese Gold Market has been established.

IMPACT OF GLOBALIZATION ON DEVELOPING COUNTRIES AND INDIA

IMPACT ON INDIA
India opened its economy in early nineteen century; it followed a major crisis which led the economy near to defaulting on loans. After a long time passed, there has been a steady liberalization with the current account transactions. Numbers of new sectors were opened for the
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portfolio and foreign direct investments in roads, telecoms, airports, insurance and many other major sectors. The Indian tariff rates reduced rapidly over the decade from an average of 72.5% in 1991-1992 to 24.6% in 1996-97. Tariff went up slowly in late nineties and became 35.1% in 2001-02. Global comparisons describe India as a fastest growing country after China. Trade and investment are two of the very important reason of progress leading in lowering the rates of poverty and global inequality over the decades. The proportion of the world population living in poverty is continually declining. There are five major areas where India has to keep on concentrating in order to achieve this goal and those areas are: Technological entrepreneurship New business openings for small and medium enterprises Quality management importance Prospects in rural areas Privatization of financial institutions.

GDP GROWTH RATE

The economy of India is passing through a difficult situation. Output and demand conditions were highly affected by the poor performance in agriculture during the last two years. The economy globally recorded an output growth of 2.4%. The performance in the first quarter of the financial year is around 5.8% and in the second quarter is around 6.1%.

EXPORT AND IMPORT

The export of India in year 2001-02 extended to 32,572 and import extended to 38,362 million approximately. Indian companies became respectable companies in International market. Agriculture exports rose to 18% of the total annual export of the country. The largest contributor in the previous years to the total agricultural exports is the marine product which accounts to be the total of one fifth portion of the agricultural products. Oil seeds, rice, coffee, and tea are other prominent products which accounts in total of the agricultural products of 5 to 10%

A COMPARISON OF OTHER DEVELOPING COUNTRIES WITH INDIA

Indias share of world exports increased from .05% to .07% over the last 2 decades and Chinas share has tripled to almost 4% over the same period.
Indias share of the global trade is exactly similar to that of the Philippines, an economy

which is 6 times smaller according to estimation of IMF.

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 FDI flows into India have averaged around 0.5% of GDP against 5% for China and 5.5%

for Brazil over the past decade. FDI inflows to China now exceeds by US $ 50 billion annually. It is US $ 4billion only in the case of India.

CASES OF VIETNAM AND CHINA

The Vietnams economy was shaken due to the Vietnam war which took place in 1955 and continued till 1975. The country had to suffer from a huge damage and the institutions that came in power also failed in focusing properly on the priorities and helping the economy in making a quick recovery.

VIETNAM AND ASEAN

Vietnam then joined Association of South East Asian Nations in 1995 in order to make the economic development of the economy. In 1992, The Free Trade Agreement was passed in order to increase the competitive advantage as a result of which Vietnams agriculture and aqua culture increased to ASEAN markets.

CHINA BACK IN BUSINESS

Similar to Vietnam, China also developed its economy through privatization and globalization under the communist government.

GLOBALIZATION AND CHINAS RURAL VILLAGES

China had put a lot of emphasis on the development of its agricultural sector. But the reasons for the failure were similar to that of the Vietnam which included lack of incentives and innovation, and also that the regions were unsuitable for agriculture.

MANAGING WORKER UNREST IN THE URBAN SECTOR

In urban areas the unrest of the workers grew. The communist government could not provide the workers everything from food and shelter to medical care, child care that was promised to them. The government had to give up its responsibility. It allowed some state owned enterprises to go under or to be privatized either by Chinese or by International Investors. Privatization and Globalization fixed the incentive problem by forcing the workers to earn some income and the increase in competition provided more efforts to boost efficiency and efforts. Poor managementwas also improved.

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GLOBALISATION AND THE INDIAN ECONOMY

India was a traditionally managed protected economy for many years after independence. The socialist zeal that had led to the independence movement continued to power the initiatives taken by the government, and led to a spate of growth in national and state level public sector undertakings. The world around, however was undergoing a change in a different direction. Capitalism had taken root in the western world, the communist countries were disintegrating post perestroika, and the buzz was about free market economy and several neighboring Asian countries were unleashing their economies. India experienced its first spate of economic liberalization in the year 1991-92 when Dr. Manmohan Singh, our current Prime Minister was the Minister of Finance. What began as first tentative steps, gathered an irreversible momentum and liberalization, privatization and globalization had begun. In the fourteen years since, Indian industry has been going through a process of adjustment to the new emerging contexts. Having gone through forming and storming processes that saw voluntary retirement schemes for manpower reduction, business process re-engineering, equity restructuring, etc, Indian companies are now in the first stage of an economic boom that is expected to last the next five years or more.

INDIAN COMPANIES GET READY TO GO GLOBAL

A recent phenomenon that is seen today is the process of companies of Indian origin going global in their operations. There can be a lot of room for discussion as to what really makes a company claim that it is of Indian origin, as there are many corporates with Indian roots but having some degree of Foreign Direct Investment, many MNCs of non-Indian origin having been in India long enough to be considered Indian (Hindustan Lever Limited) and so on. Similarly, the decoding of the term going global also has multifarious definitions. The term could include companies that add a significant export component to their revenues, or companies that acquire foreign organizations, or companies that set up manufacturing units abroad, or companies that market their brands in foreign soil against foreign competition, or companies that trade internationally in commodities, or companies looking for globally placed supply chains, and so on. For the purposes of this article and study, we will consider a loosely held definition of Indian companies going global, which includes all the above definitions.

STRATEGIES DEPLOYED IN THE GLOBALISATION PROCESS

Indian companies are following many strategies which enable them to meet the competition and thrive on a global scale. They can be placed in the following categories: 1. Seeking partnerships in the form of mergers, acquisitions, joint ventures, strategic alliances with foreign partners. Videocon, a leading company in the white goods sector now has access to R&D facilities of companies it acquired across the globe. Such acquisitions have also enabled
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the company to have direct access to distribution channels and brand equity of the company in the local market. Similarly, Essel after merging with Propack have become a world leader in packaging. When Tatas acquired Tetley they became become one of the leading players in the global tea market. 2. Expanding the scope of operations by getting into related products or services. An apt example here would be that of the service companies that are moving up the value chain to offer other high-end solutions and by getting into products and Business Process Outsourcing (BPO) services to Knowledge Process Outsourcing (KPO) services. Some of the IT service firms are getting into consultancy to offer end to end solutions that provide greater value to the client. Such add-ons in the service provided also facilitate higher operating margins. Some of the IT business majors have also concentrated on the lower end of the value chain like business process outsourcing to expand operations across the globe. 3. Entering niche markets with high degree of specialization. Another strategy that companies are adopting these days to foray into the global markets is getting into the niche products. This is especially true for the software companies as is evident from the various examples of Indian companies that have specialized in certain software product categories and have created a place in the global markets. One such company is Impulsesoft Pvt Ltd which is one of the few Indian companies wholly focussed on building wireless/Bluetooth OEM products and solutions PCs, Notebooks, PDAs and cellphones for OEMs Similarly, Integra Microsystems Pvt Ltd with its WAP server product Jataayu, has placed itself among the few companies in the world to develop a WAP server. Talisma Corporation, the parent company of Aditi Technologies has already been able to establish itself in the global eCRM market. Non-IT areas see companies like Bharat Forge, Shehanaz Hussein etc. carving a niche for themselves. 4. Searching for new markets in countries hitherto unexplored. Indian companies have been focusing too much on the western world. But there are many opportunities for expansion in nearshore locations like China, Malaysia, Singapore, Phillipines, Dubai etc. Some Indian companies have started looking beyond the US and UK and are entering the developing countries that are yet untapped. Ajanta Quartz is one such example. It completely shifted its manufacturing base to China that has allowed it to produce their products at a much cheaper rate now. Also to expand globally, Ajanta Quartz decided to enter the untapped markets of Africa and South America. Now its major revenues come from these regions. 5. Global supply chaining. Today many Indian manufacturers have adopted the practice of global supply chaining. The entire world is a source of raw materials, components, finished goods. Like the old fashioned nomads, corporates now traverse the globe in their quest for optimizing their manufacturing costs. The logistics and supply chain management skills called for in optimizing the costs are now being learned and applied. Asian Paints has been one of the pioneers among Indian companies to implement global supply chain practices and show results in terms of cost reductions. Asian Paints prowess in managing the complexities of such practices is commendable and has been recognized by the Indian Institute of Materials Management. Continuous use of IT has enabled companies to use global supply chaining to reduce costs and increase service levels.

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6. Seeking infusion of foreign direct investment. etc. With convertibility laws coming into the country, India is now seeing infusion of capital from overseas. Such capital is sought in the form of global fund raising through financial instruments, investment of foreign companies in Indian equity, joint ventures and partnerships, and so on.

CONCLUSION
Globalization means the integration of the economies of the world through uninhibited trade and financial flows which are through exchange of technology and knowledge. It has provided developing countries with a greater access to the markets and technology of the developing countries which has lead to a high living standard and a greater productivity. We come across the impact of globalization on developing countries in the above stated articles which not only shows good but also bad impact of globalization on the countries especially developing countries. Globalization has increased the risks involved with it. We study the impact of mobile phones on the world on countries of low income and developing countries. Communication on mobile has grown rapidly in low income countries as compared to the high income countries. Africa lacks in economic development against the rest of the world but uses more communication than any other country. India and Brazil are the biggest user of the web. They have double audience for you tube as compared to any other country which shows the impact of globalization. Now some web companies that depended on the advertising are relaxing and enjoying he growth of web in developing countries. The basic goal has become to privatization of the financial institutions. Once the economy of India passed through very difficult stages. But now, Indian companies became respectable countries in International market. Agriculture went to 18% increase of the total annual export of the country. China and Vietnam also developed its economy through privatization and globalization. Thus, Globalization has played a very important roles in every developed and developing countries but mainly in developing countries. Though Globalization is very good for developing countries but in few places it has bad effects on those countries as well.

REFERENCES
www.google.co.in

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www.scribd.com www.clusty.com www.answer.com Google books on Globalization

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