GLOBALIZATION OF BUSINESS
I Key Points
- The period between 1870 and 1913 played a growing trend towards globalization .
- Globalization is the increasing cross –border movement of goods and services.
- World Trade organization has its office to cated at Geneva in Switzerland .
- World Trade organization was established on 1st January 1995.
- At present 149 countries in the world are the member of WTO.
II Expand the following
1. IMF=International Monetary fund
2. WTO= World Trade Organization
3. OPEC= Oil Producing and Exporting Countries.
4. WIPO= World intellectual property organization
5. GDP=Gross Domestic product.
III Multiple Choice question.
1. Which is the only global organization dealing with the rules of trade between nations?
a) I.M.F b)W.T.O c)O.P.E.C d)W.I.P.O
2. The office of world Trade organization is located at
a) New York b) Paris c) Rome d) Geneva
3. When was world Trade organization established ?
a) 2nd May 1990 b) 1st January 1995
c) 10th April 1999 d)15th August 2000
4. countries are the members of WTO Present .
a) 100 b)120 c)149 d)150
5. How often do the members W.T.O meet?
a)One in every two years b)twice in every three years
c)Thrice in a year d)Once in every five years
I. Discuss the following questions in group and then answer.
1. What is Globalization? Explain.
The International Monetary Fund (IMF) has defined globalization as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services and of international capital flow, and also through the more rapid and widespread diffusion of technology‟‟.
2. “Globalization is the world wide economic movement” substantiate your answer.
- Globalization is the increasing cross-border movement of goods and services.
- International flow of capital, technology and information.
- Formation of one worldwide market by obtaining raw materials and other resources from cheap market.
- Production of goods in any region of the world at cheaper cost.
- Globalization creates free trade zone by removing the import and export duties.
- Globalization creates subsidies to the world wide trade organization.
3. What are the advantages of Globalisation? Or What are the positive impacts of Globalization.
- Globalization promotes economic growth and generates a wider range of products and services.
- Globalization helps to Increase the standard of living of the people.
- Globalization has made the availability of the similar type of products all over the world.
- Globalization increases the G.D.P. of a country.
- Globalization has helped in increasing the income of the people
- By buying the products from other countries, customers are offered a much wider choice of goods and services.
- Globalization creates competition for local firms and thus keeps the costs down.
4. Make a list of the characteristics of Globalization.
- Increases international trade at a faster the growth of world economy.
- Increases the international flow of capital including foreign investment.
- Globalization creates international agreements leading to organizations like the WTO and OPEC (oil producing and exporting countries)
- Development of global financial system.
- Increases the role of international organizations such as WTO. WIPO (World intellectual Property Organization), IMF (International Monetary Fund), etc., that deal with international transactions.
- Increases economic practices like outsourcing by multinational corporations.
- Creates international cultural exchange.
- Spreading of multiculturalisation and better individual access to cultural diversity.
- Creates international travel and tourism.
- Greater immigration including illegal immigration .
- Spread of local foods such as Pizza and Indian food to other countries.
- Development of global telecommunication infrastructure and greater transfer- border data flow.
- Using of technologies such as internet communication satellites and cell phones.
5. Explain the negative Effects of Globalization with examples.
- In order to cut down costs, many firms in developed nations have outsourced their manufacturing and white collar jobs to Third-world countries where the cost of labor is low. Globalization has also led to an increase in activities such as child labour and slavery. Globalization has resulted in a fiercely- competitive global market with the embarassment of unethical practices in business dealings.
- It is also observed that glovalization helped terrorists and criminals. At the heart of globalization is an idea that humans, materials, food, funds be allowed to travel freely across borders.
- Globalization has expanded the growth and development of cities which has been reduced to garbage-dumps where all the industrial waste is accumulated and pollution levels are sky-high.
- Fast food chains like McDonalds and KFC are spreading fast in the developing world. People are started consuming more junk food. The result is in the degradation of health and spread of diseases. The traditional family attached food habits are being slowly disappearing.
- Another comment levelled is that the rich are getting richer and the poor are struggling for a square meal.
- On a lighter side, even the deadly viral diseases such as AIDS and CANCER, Dengue fever etc., were transported from the forests across the globe.
- Globalization has led to environmental degradation.
- The amount of raw materials needed to run industries and factories is taking a heavy toll on the natural reserves of planet earth and pollution has severely impacted the quality of air that we need so much for our survival.
- The other challenges of globalization are cheap imports of goods from developing nations could lead to unemployment in developed countries where the cost of production is high.
- Further it leads to Increased competition for infant industry, and by dumping‟ of goods by certain countries at below cost price may harm industries in other countries.
6. What are the aims of World Trade Organization?
- Bringing down the living cost and raise the standard of living of the member countries.
- Settling disputes and reduce trade tension of the member countries.
- Stimulating economic growth and employment.
- Reducing the cost of doing business internationally.
- Encouraging good governance.
- Contributing to promote peace and stability of member countries.
7. What is WTO?
World Trade Organization is the only global organization dealing with the rules of trade between nations
8. When was W T O established? Where its office situated?
WTO was established on 1st January 1995. Its office is situated at Geneva in Switzerland.
9. Mention the major functions of WTO.
- The Major Functions of W.T.O
- Bring into force the trade agreements throughout the world.
- Administring the world trade agreements as a mediator.
- Stress for fre and independent trade throughout the world.
- Solving trade disputes that arise among the nations.
- Striving to reduce the Taxes in international trade.
- Bringing the international trade under legal framework.
- Assistance to under developed nations to get more facilities in international trade.
- Bringing efficiency in production and trade by utilizing resource effectively.