Globalization is a process of growing interdependence between people of all
nations. A buzzword of the 21st century, the term "globalization" acquired
considerable force during the 1990s. The phenomenon of globalization has
captured world attention in many spheres the information superhighways;
international trade; telecommunication; and the Internet. This research deals
with “the impacts of globalization on business strategies
” and I have
covered globalization and business strategies in ancient period.
The word globalization evolved from the word globe which is derived from the
middle Latin French word Globus
which is in use since 15th century which
means a spherical representation of earth. Globalization is nothing but a tool.
The word globalization is in use since 1930. Globalization is nothing but an act
or process or state of being globalized.
During 1900’s there was a need of a
tool in order to establish a free market by which a country can sell and buy
anything from any countries without any restriction for instance ASUS laptop
which is a product manufactured in china by a Chinese company a person in India
can buy it without any difficulties only because of globalization. best e.g.
during 1990 before globalization happened in India a person has to pay 200
percentage of import duty for buying a reebok shoe which resulted with grey
market and black market these are the modes by which a person smuggles goods of
other country illegally in order to avoid import duty and other regulations in
order to prevent this and to adopt the policy of globalization “ economic
liberalisation “ was initiated in India by former prime minister P.V. Narashima
Rao and by former prime minister and finance minister Dr. Manmohan singh in the
year 1991 to make India a fully globally economic state. So that a foreign
country can make use of natural resources or man power or technology in which it
lacks and we can make use of other country’s natural resources or technology in
which India lacks.
Generally, globalization means amalgamation of all the countries economy
into a single economy so that anyone can travel to any country to sell or buy
product, provide services, start a business etc best example is BPO which has
flourished only because of globalization. globalization generally comprises of
trade or good and services, business, capital, labor, culture, language,
technology etc. internet is one of the important factor for driving
globalization. Cyberspace came into play and it enhanced usage of internet which
led a person to do a business via virtual space. So, a physical presence of a
person is not required to do a business and globalization flourished because of
Commerce is an activity of buying and selling of goods or commodities
especially in a large scale and it also involves transportation from one place
to another. It is nothing but a dealing between people. The word commerce is
derived from the Latin word “commercium” and the word commerce is in use since
1537. commerce is in existence since the start of human civilization and since
the usage of barter system ( buying and selling goods for goods before the
creation of currencies ). Commerce is nothing but all the transaction of a
single product in an economy and transaction includes both the purchase and sale
of that product for e.g. If a person buys or sells a mango is called transaction
whereas commerce is all the transaction related to both the sale and purchase of
mango in an economy. Generally, commerce comes only under the purview of
distribution process of the goods and services and it doesn’t deal with the
manufacturing and production process. Commerce is the backbone of industry and
business because it helps an industry or business entity to eliminate hindrance
of person, place, time, finance, risks and information.
Business is nothing but a commercial activity or mercantile activity done
by a person to make money and to live by the way of manufacturing or producing
or selling or buying goods and services. the word business is derived from
middle English word “bisynesse” and the word business is in use since
14th century. E-BUSINESS is nothing but a business done via internet or intranet
or extranet or web or some combination of these. generally, e-business means
doing business via electronic means which not only deals with exchange of goods
and services but also deals with other business activities such as accounting,
finance, supply chain management, human resource management, customer
relationship management etc. e-business scope is wider in nature and even
e-business comes under the purview of e-commerce.
Globalization And Business Strategies In Ancient Period:
India is known for its natural resources. Textile and spices are the main
products which were exported by India. India was the one among those developed
nation during ancient period.
During ancient period trade and commerce flourished in India during CHOLA
DYNASTY (சொழ அரசர்குலம்). CHOLA DYNASTY is known for their trade and commerce,
navy and army strength and especially their judicial system and their national
and international business strategies. Even they framed laws for collecting and
governing taxes. They collected land and trade taxes for collecting taxes they
created a council which has members who will be appointed as the head of the
village (கிராமம் - gramam) and town (நகரம் - nagaram) to collect taxes.
comes to business strategies chola rulers created main cities or head cities (தலை நகரம் –
thalai nagaram) where big markets were built and all the products will be sold.
The three main cities of chola empire are Kanchipuram, Madurai And
And they segregated each and every city based on the natural resources for
instance Kanchipuram for silk, Thuthukudi for salt. And they opened market in
those cities from where people can buy things. When it comes to international
trade, they travelled almost every part of the world to do trade. They are known
for their navy strength.
Each and every empire were afraid of strong CHOLA’s
navy troops and they conquered most of the places in south east Asia. They trade
with African empires, French empires, Chinese empires etc. especially they had a
good trade relationship with Chinese king “ SONG CHAO “ and French king “ROBERT”
whose resemblance were sculpted in THANJAVUR BIG TEMPLE.
For instance, black
rice (கருப்பு கவுனி – karuppu kavani) which origin is still a question china
claims that black rice paddy has originated from it. Whichever place be its
origin it has existed for ages only because of trade and it is getting extinct
in India. In order to maintain trade with Chinese dynasties chola kings captured
all the island in the sea trade routes and they appointed puppet kings to those
island e.g., Khmer Dynasty King – Suriyavarman
who built ANGKOR WAT temple (
largest temple in the world ) in Cambodia was a puppet king appointed by CHOLA
king to rule Cambodia. This how the trade and commerce flourished during ancient
period and this shows how globalization played a major role during those ancient
Factors Responsible For Globalization
Liberalisation Policiesmany countries adopted the policies of
liberalization which resulted with the removal of restriction on
international trade and commerce. It paved the way for globalization
Technological Revolutionnew technologies were invented and were used
which made transportation and communication easy as a result of it as a
result of it times and space barriers were removed and trade and commerce
became easy as the cost of transportation and communication became low.
New Forms Of Industrial Organisationincrease in new technologies and
its usage resulted with usage of new techniques by industries and fall of
production cost because of the advancement of technologies made industries to
focus on customer relationship. Then a confusion arose among the firms and
industries i.e. whether to invest in FDI – Foreign Direct Investment or foreign
trade in order to participate in international sector.
Countries Adopted Then many countries started to adopt
Liberalization and Globalization which resulted with sudden economic growth
of those countries which set an example to other countries and so other
countries also started to globalize their economies
International Several international institutions such as WTO, IMF, world bank and other UN agencies have created an international
environment in which globalization will flourish.
Export Promotion reduction in duties , tariffs, reduced restrictions
and procedures in trade helped in flourishing globalization.
Freedom To Repatriation: In general repatriate means sending back refugees back to their own country
but according to business repatriation means converting other country's
currencies into our country's currency for instance a Indian is doing
business in us, then he will convert the dollars he earned into Indian
Encouraging Open Competition:
so any company from our country can compete with other country's company
Advantages Of Globalization:
Increase In Foreign by means of joint ventures, mergers,
franchise, turn key projects etc. E.g., BAJAJ AUTO owns 48% share of KTM.
Reduction In Brain DrainIt is nothing but educated brainy citizens
will migrate to other countries to work which can be reduced by the means of
globalization as result of it a country doesn’t have to lose its most
educated and talented workers to other countries. e.g., Indian citizens are
migrating to USA to work in NASA. Globalization increases employment
opportunities in the home country and utilize man power efficiently.
Expansion Of MarketGlobalization operation of business will move from
local to national and national to international market. E.g., TATA INDUSTRIES,
APPLE in India etc.
Technological DevelopmentIncrease in usage and invention of new
technologies made trade and commerce easy and so under developed and
developing countries depended on new advanced technologies used by
developing countries by getting royalty or purchase of technology or by
technological collaboration. It was achieved by underdeveloped and
developing countries by the means of globalization.
Loss Of Domestic Units As a result of globalization foreign companies
and industries entered domestic market which resulted with decline in demand
of domestic products which in turn vanishes the domestic business E.g., KALIMARK is
a cold beverage company which lost its brand value because foreign companies
like COCA COLA and PEPSI entered the domestic market which made KALIMARK lose
Increase In InequalitiesThe under developed and developing countries
were affected because of inequalities and preferences by developed
countries. E.g., UKRAINE gas line issue – Russia cut off the gas line to
Ukraine (developing country) for its debts and decided to construct
international sea gas pipeline to GERMANY and recently PRESIDENT JOE BIDEN waived sanctions
against company constructing the gas pipelines between RUSSIA and GERMANY This
shows the inequalities and it widens gap between rich and poor.
Exploitation Of Natural Resources The developing and under developed
countries natural resources were exploited by developed nation for instance
many foriegn manufacturing companies are working in India and the products made in
those companies are exported to other nations. E.g., cocacola industries in
India exports the product to Thailand, Singapore etc. here only our water
resource is being used.
Dominance Of Foreign InstitutionAs result of globalization economic
Power shifts to international organizations which is a threat to national
sovereignty because everything is decided and controlled by them.
A strategy is always used by a company to achieve its goals. Strategies are
nothing but an action or a process which helps a person to achieve his goal in
ease. In order to achieve an objective a business entity or a firm uses
strategies. For instance, advertisement is a strategy to establish a
communication between a company and consumer or a strategy used to introduce a
product in a market.
Impact Of Globalization On Business Strategies:
Generally, impacts can be classified into positive impact and negative
Rebranding: It is a strategy followed by most of the MNC’S all around
the world. If a product produced by the company fails in a country means it will
be sold with different name or with different brand name. E.g., TATA NANO car
was a failure in India so the company made some upgrade to the car and
introduced the car as a smart car in INDONESIA and the company also announced
TATA NANO will come back to India after breaking records in other countries.
Product And Pricing: product and its price is altered in accordance
with the international market. Product will be customized based on a country’s
need. E.g., SONY PlayStation smoothness and weight of the product differs from
country to country. Japan’s PlayStation is heavier and it will be smooth at the
same time china made PlayStation is weightless and makes sound while playing.
When it comes to pricing based on the countries economy standard it will be
Market Conversion: after globalization many of the companies started to
convert from domestic to international market well established companies started
to enter international market. E.g., TATA STEEL INDUSTRIES, TCS, INFOSYS, HCL
- Production cost:
Globalization helps a company to reduce its production cost. If a foreign
company opens a manufacturing industry in a country with rich natural
resources and man power the production cost of the product manufactured in
that unit will be less because the foreign company can buy raw materials at
low cost and labor cost will be low. E.g., DELL manufacturing unit in India
, APPLE manufacturing unit etc.
if a product is outdated in a country and it is declined
by the domestic market that same market can be sold in other countries e.g.,
during this bs4 issue the manufactured vehicles were exported to other
Miss Use Of Natural Resources Of Other Country: Generally, a foreign company will focus on cost reduction Foreign countries
introduced genetically modified crops so that people in India can use those
crops and foreign countries can use of original pure organic crops
cultivated in India. Recently on January -01-2021 India proposed crops which
were imported to India should poses non GM ( genetically modified )
certificate which was opposed by US, AUSTRALIA, BRAZIL and other countries
Loss To Domestic Companies: Due to globalization domestic companies
started to enter into domestic market which resulted with loss to domestic
companies. E.g., KALIMARK faced a huge loss because of COCA COLA and PEPSI.
Deceiving Foreign Companies: company will promise one thing to a
country and will exploit the resources and it will never giveback anything in
Inequalities: Inequalities are still prevailing in this world.
Developed countries are still treating under developed countries with
inequality. E.g., UKRAINE gas line issue – Russia cut off the gas line to
Ukraine (developing country) for its debt and decided to construct international
sea gas pipeline to GERMANY and recently PRESIDENT JOE BIDEN waived sanctions
against company constructing the gas pipelines between RUSSIA and GERMANY. This
shows the inequalities and it widens gap between rich and poor.
Technology Transfer: when it comes to technology transfer globalization
plays a major role. The countries which lacks in technology will do technology
transfer with other countries. In this patent plays a major role. E.g., India
has to depend on other countries for military technologies like jet, tankers
etc. those days. The country will sell the products but it will not transfer
license for manufacturing the same in India.
Environmental Issues: the foreign companies not only exploit the
natural resources but also creates environmental pollution issues. E.g., COCA
COLA contaminated water and polluted the environment via south Indian plant from
which beverages were exported to foreign countries. already water crisis is
prevailing in India
Still few theorists, professors and economist believe that globalization is
a failure why because few countries had reduced duty only for few products which
shows the selfish activity of a country and we can clearly witness and
understand that only powerful nations i.e., economically well established nation
is ruling the world by not letting developing countries to become a developed
country and still India is not a truly a globally economic state. Globalization
is a tool which can be used in both positive and negative aspects and only way
to prevent the usage of globalization in a negative aspect is by bringing
awareness regarding globalization and its impacts among the citizens of India.
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