Lecture 2: Parameters of Globalization

Question 1

What are the 4 major parameters of globalization?

Answer 1

1. Free flow of goods and services between countries due to the reduction in trade barriers
2. Creation of an environment for flow of capital and investment among countries
3. Free flow of technology from one country to another
4. Free movement of labor among countries

Question 2

What are the features of globalization?

Answer 2

1. The business expands throughout the world
2. Goods and services are bought/sold to or from any country of the world
3. Products are planned and developed keeping in mind the markets of the entire world
4. Manufacturing and distribution can be done at any part of the world based on feasibility and viability
5. Outsourcing of goods and services can be done

Question 3

What are the Conditions for globalization?

Answer 3

1. Quotes and tariffs must be removed
2. Freedom must be given to business and industries
3. Bureaucratic hurdles must be removed
4. Rules and regulations of control should be liberalized
5. Money and capital markets should be developed
6. Administrative and Government support is essential

Question 4

Process of Globalization

Answer 4

1. Domestic company exports to foreign countries through dealers and distribution of home country.
2. Domestic company exports to foreign countries directly on its own
3. Domestic company becomes an international company establishing productions and marketing operations in various foreign countries
4. The company replicates a foreign company in the foreign country by having all the facilities R&D, HR, etc.
5. The company becomes a true foreign company by serving the needs of foreign customers just like the host country’s company serves

Question 5

Advantages of Globalization

Answer 5

1. Increase in employment opportunities
2. Education
3. Increase in free trade
4. Faster flow of information
5. Increase in quality of goods and services
6. Decrease in prices of goods and services
7. Reduction in cultural barriers

Question 6

Disadvantages of Globalization

Answer 6

1. Environmental degradation
2. Growing disparity among the rich and the poor
3. Small scale industries face extinction
4. Rapid spread of deadly diseases