Globalization in detail and international business..role of global manager

1. Yashraj Tahilramani (38-A)
Naina Sharma (31-A)
Globalization

2. Flow of Presentation
1) International Business
2) What is Globalization
3) Types of Globalization
4) Benefits of Globalization
5) Challenges of Globalization
6) Causes of Globalization
7) Effects of Globalization
8) Global Institution
9) Global Manager
10) Stages in Globalization
11)Ways to Sell Internationally
12) Global India

3. International Business

4. International Business Players
Business that has
direct investments
abroad in multiple
countries
Small companies and
individuals becoming
increasingly active in
international trade and
investment
Adopts a global
perspective and engages
in international business
from or near its inception
Multinational
Corporation
Small Businesses
and Entrepreneurs
Born Global Firm

5. Globalization
Trend toward greater economic, cultural, political and
technological interdependence among national institutions and
economies
Globalization of markets
Convergence in buyer
preferences in markets
around the world
Globalization of production
Dispersal of production
activities worldwide to
minimize costs or maximize
quality

6. Globalization Involves Us All
We experience international
transactions daily
Imports and exports reach
even remote areas
Technology and e-biz
promote trade
Consumers and companies
pull markets closer

7. Globalization of Markets
• “Merging of historically distinct and separate national markets into one
huge global marketplace.”
– Facilitated by offering standardized products:
• Citicorp
• Coca-Cola
• Sony PlayStation
• McDonalds
– Does not have to be a big company to participate:
• Over 200,00 U.S. companies with less than 100 employees
had foreign sales in 2000.

8. 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”

9. Benefits of Globalization
Globalization
of markets
Globalization
of production
• Reduces marketing costs
• New market opportunities
• Levels income stream
• Access lower-cost labor
• Access technical expertise
• Access production inputs

10. Challenges to Business
Physical
security
Digital
security
Reputational
risk
Examine company
vulnerability and
create a disaster
recovery plan
Guard proprietary
information and
confidential
communications
Require ethical and
lawful behavior from
all employees and
business partners

11. Causes of Globalisation:
1. Improved Communications
• The development of communication
technologies such as internet, email and mobile
phones have been vital to the growth of
globalisation because they help MNCs to
operate throughout the world.
• The development of satellite TV channels such
as Sky and CNN have also provided worldwide
marketing avenues for the concept and
products of globalisation.

12. Causes of Globalisation
2. Improved Transport
• The development of refrigerated and
container transport, bulk shipping and
improved air transport has allowed the easy
mass movement of goods throughout the
world. This assists globalisation.

13. Causes of Globalisation:
3. Free Trade Agreements
• MNCs and rich capitalist countries have always
promoted global free trade as a way of
increasing their own wealth and influence.
• International organisations such as the World
Trade Organisation and the IMF also promote
free trade.

14. Causes of Globalisation:
4. Global Banking
• Modern communication technologies allow vast
amounts of capital to flow freely and instantly
throughout the world.
• The equivalent of up to $US1.3 trillion is traded each
day through international stock exchanges in cities
such as New York, London and Tokyo.

15. Causes of Globalisation:
5. The Growth of MNCs
• The rapid growth of big MNCs such as Microsoft, McDonalds
and Nike is a cause as well as a consequence of globalisation.
• The investment of MNCs in farms, mines and factories across
the world is a major part of globalisation.
• Globalisation allows MNCs to produce goods and services and
to sell products on a massive scale throughout the world.

16. The Effects of Globalisation:
1. Changed Food Supply
• Food supply is no longer tied to the seasons.
We can buy food anywhere in the world at any
time of the year.

17. The Effects of Globalisation:
2. Division of Labour
• Because MNCs search for the cheapest
locations to manufacture and assemble
components, production processes may be
moved from developed to developing
countries where costs are lower.

18. The Effects of Globalisation:
3. Less Job Security
• In the global economy jobs are becoming more
temporary and insecure.
• A survey of Indian workers showed that people now
hold 5 to 7 jobs over their working life.

19. The Effects of Globalisation:
4. Damage to the Environment
• More trade means more
transport which uses more fossil
fuels and causes pollution.
• Climate change is a serious
threat to our future.

20. The Effects of Globalisation:
5. Cultural Impact
• Websites such as YouTube connect people
across the planet. As the world becomes more
unified, diverse cultures are being ignored.
MNCs can create a monoculture as they
remove local competition and thereby force
local firms to close.
Replacing

21. The Effects of Globalisation
6. Increase in anti-Globalisation Protests
• There is a growing awareness of the negative
impacts of globalisation. People have begun to
realise that globalisation can be challenged by
communities supporting each other in
business and society and through public
protest and political lobbying.

22. Global Institutions
Institutions are needed to
– help manage, regulate, and police the global
marketplace
– promote the establishment of multinational treaties
to govern the global business system
Examples include
– General Agreement on Tariffs and Trade (GATT)
– World Trade Organization (WTO)
– International Monetary Fund (IMF)
– World Bank
– United Nations (UN)

23. Global Institutions
The World Trade Organization (WTO)
(like its predecessor GATT)
– polices the world trading system
– makes sure that nation-states adhere to the
rules laid down in trade treaties
– promotes lower barriers to trade and
investment
– As of 2009, 153 member nations collectively
accounted for 97% of world trade
The International Monetary Fund (IMF)
(1944) maintains order in the international
monetary system

24. Global Manager
• The global manager has to play multidimensional
role by combining his technical skill, people skill
and soft skill. The manager must have
combination of hard as well as soft skills. He must
be able to organize, analyze and motivate people
at international level.

25. Roles of Global Manager
• IN THE CAPACITY OF COUNTRY MANAGER.
The global manager has to deal with clients, legal
bodies, immigration authorities on behalf of his office.
• IN THE CAPACITY OF FUNCTIONAL MANAGER.
The global manager has to select right technique, right
resources, software projects to compete at
international level.
• IN THE CAPACITY OF BUSINESS LEADER.
The global manager has to make changes in the
organization keeping in mind
the trend of World and requirement of outsourcing.

26. Roles of Global Manager
Decision-maker
Negotiator Innovator

27. STAGES IN GLOBALISATION
Contacting
dealers and
distributors
Reducing
intermediaries
Replicate
domestic
market activity

28. Ways to sell in International market
Direct
Export
Indirect
Export
Licensing Franchising

29. Ways to sell in International market
Contracting Manufacturing Joint Venture

30. Bill Gates, Chairman and Chief Software
Architect Microsoft Corporation
(b-1955):
“…after the Chinese, South Indians are the smartest people
in the world.”

31. Indians abroad
A snapshot of Indians leading Global businesses
The Co-founder of Sun Microsystems (Vinod Khosla),
Creator of Pentium Chip (Vinod Dahm),
Founder and creator of Hotmail (Sabeer Bhatia),
Chief Executive of McKinsey & Co. (Rajat Gupta)
President and CFO of Pepsi Cola (Indra Nooyi)
President of United Airlines (Rono Dutta)
GM of Hewlett Packard (Rajiv Gupta)
President and CEO of US Airways (Rakesh Gangwal)
Chief Executive of CitiBank (Victor Menezes),
Chief Executives of Standard Chartered Bank (Rana Talwar)
Chief Executive officer of Vodafone (Arun Sarin)
President of AT & T-Bell Labs (Arun Netravali)
Vice-Chairman and founder of Juniper Networks (Pradeep Sindhu)
Founder of Bose Audio (Amar Bose)
Founder, chip designer Cirrus Logic (Suhas Patil )
Chairman and CEO of Computer Associates (Sanjay Kumar)
Head of (HPC WorldWide) of Unilever Plc. (Keki Dadiseth)
Chief Executive Officer of HSBC (Aman Mehta)
Director and member of Executive Board of Goldman Sachs (Girish Reddy)
Chief Economist of the International Monetary Fund (Raghuram Rajan)
Former CTO of Novell Networks (Kanwal Rekhi)

32. Indians in the USA
Statistics that show:
38% of doctors in the USA,
12% of scientists in the USA,
36% of NASA scientists,
34% of Microsoft employees,
28% of IBM employees,
17% of INTEL scientists,
13% of XEROX employees,
… are Indians.

33. Attractive location across all broad sectors

34. Manganese
Natural Factor Endowment
2nd largest reserves (160 Mn T)
Chromium 3rd largest reserves (57 Mn T)
Coal 4th largest reserves (248 Bn T)
Bauxite 4th largest reserves (2.4 Bn T)
Iron Ore 5th largest reserves (13 Bn T)
Milk
Largest producer at 91 Mn T p.a.
Sugarcane Largest producer at 234 Mn T p.a.
Tea Largest producer at 850 Mn Kgs. p.a.
Fruit Second largest producer at 47.5 Mn T p.a.
Vegetables Second largest producer at 90 Mn T p.a.
Wheat Second largest producer at 72 Mn T p.a.
Rice Second largest producer at 85 Mn T p.a.

35. Leading the Pack
7
7.8
7.5
10.5
12
11.8
11.5
11.5
18
Return on Equity (%)
India
Australia
Malaysia
China
Korea
Taiwan
Singapore
Philippines
Japan
Source: JP Morgan