International Business Management (unit-1) Dr. A. Mohamed Riyazh Khan, Assistant Professor (Se.G) Department of Management Studies,

Globalization is ….. It is a shift towards a more integrated and interdependent world economy. Globalization is the increasing degree of economic interaction among countries and liberalization. A truly globalization views the entire world as a single market.

3 Globalization “The shift toward a more integrated and interdependent world economy.” Markets Production

4 Globalization The movement towards a borderless world and the interdependence of Global economies Refers to the “growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the rapid and widespread diffusion of technology” (IMF, 1997).

Meaning  Doing, or planning to expand, business globally.  Giving up the distinction between the domestic mkt and foreign mkt and developing a global outlook of the business.  Global sourcing  Technology transfer  Global supply chain mgt  Restriction of government movements

6 Globalization of Production “The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor,energy, land and capital).” Companies hope to lower their overall cost structure and/or improve the quality or functionality of their product offering - increasing their competitiveness. Global Products

THE GLOBAL ECONOMY New Competitors Rise of Global Standards Disintegrating Borders The Internet & Information Technology Privatization Growing Trade and Investment Global Products/ Customers KEY FORCES GLOBALIZING THE WORLD ECONOMY

Factor causing globalization 1. Business freedom ( Unnecessary govt restrictions, Import restrictions source of funds) 2. Facilities ( provide infrastructure facilities) 3. Government support (policy making, R&D support, financial reform) 4. Resources ( technology, brand) 5. Competitiveness (low price, quality, service, technology) 6. Orientation (suitable globalization strategy)

Other points of Globalization 1. Human Resource 2. Wide Base 3. Growing Entrepreneurship 4. Growing Domestic Mkt 5. Niche Mkt 6. Economic Liberalization 7. Competition