1. Nature of Globalisation
 It is a conglomerate of multiple units located in different
parts of the globe but all linked by common ownership.
 Multiple units draw on a common pool of resources such
as money, credit, information, patents, trademarks &
control systems.
 The units respond to some common strategy.
 Product presence is in different markets of the world.
 Human resources are highly diverse.
 Transactions involving intellectual properties such a
copyrights, patents, trademarks and process
technologies across the globe.

2. Dimensions of Globalisation
 Doing or planning to expand, business globally.
 Giving up the distinction between domestic and
foreign market and developing a global outlook of the business.
 Locating the production and other physical facilities considering global
business dynamics, irrespective of national consideration.
 Creating product development and production planning on global
market considerations.
 Global sourcing of factors of production i.e. raw materials,components,
machinery / technology, finance etc. are obtained from the best source
anywhere in the world.
 Global orientation of organisation structure and management culture.

3. Reasons for globalisation
 Rapid shrinking of time and distance across the globe.
 Domestic markets are no longer adequately rich.
 Companies go global to find political stability,which is
relatively good in other countries.
 To get technological and managerial know-how.
 To reduce high transportation costs.
 To be close to raw materials and to the markets for their
finished products.
 The creation of WTO is stimulating increased cross
border trade.

4. Stages of Globalisation
 First stage is the arm’s length service activity of an essentially
domestic company which moves into new market overseas by
linking up with local dealers and distributors.
 In stage two the company takes over these activities on its own.
 In stage three the domestic based company begins to carry out its
own manufacturing, marketing and sales in key foreign markets.
 In stage four the company moves to a full insider position in these
markets supported by a complete business system including R&D
and engineering. However the headquarter mentality continues to
dominate.
 In stage five the company moves towards a genuinely global mode
of operation. In this stage global localisation happens i.e. the
company serves local customers in markets around the globe
responding to their needs. This requires an Organisational transition
i.e. the company must denationalise it’s operations and create a
system of values shared by global managers

5. Merits of globalisation
 Global competition & imports keep a lid on prices,so
inflation is less likely to derail economic growth.
 An open economy spurs innovation with fresh ideas from
abroad.
 Export jobs often pay more than other jobs.
 Unfettered capital flow keeps interest rates low.
 Living standards go up faster.
 Productivity grows more quickly when countries produce
goods & services in which they have have a comparative
advantage.

6. Demerits of globalisation
 Several people lose jobs when companies import cheap
labour or shift production abroad.
 Workers face pay cut demands from employers,which
often threaten to export jobs.
 Unregulated globalisation can cause serious problem to
developing nations.
 High foreign stake in industries where it is not
necessarily needed could affect domestic enterprise.
 Sovereignty is at stake.
 Loss of control over economy.
 Changing economic priority.

7. Assessing Corporate Globality
 Globalisation of capital
 Globalisation of supply chain
 Globalisation of corporate mindset
 Globalisation of market presence

8. Benefits from MNCs to
host countries
 Transfer of technology, capital & entrepreneurship to the
host country.
 Improvement of host countries, balance of payments.
 Creation of local jobs and career opportunities.
 Improved competition in the local economy and better
utilisation of available resources.
 Greater availability of products for local consumers.
 Greater access to high quality managerial talent that
tends to be scarce in host countries particularly
developing ones.
 Encouragement to world economic unity and through
that, political and economic integration- all resulting in
world harmony.

9. Benefits from MNCs to
home countries
 Acquisition of raw materials from abroad, often
from steadier supply and at lower prices than
can be found domestically.
 Technologies and management expertise
acquired from competing in global markets.
 Export of components and finished goods for
assembly or distribution in foreign markets.
 Inflow of income from overseas profits, royalties,
licensing fee and management contracts.
 Job and career opportunity at home and abroad
in connection with overseas operation.

10. Criticism of MNCs
 Sovereignty is at stake
 Lose of control over economy.
 Changing economic priority