Dr. S. Jain
International
Investments:
Cross-border
transfer
of
Dr. S. Jain
International Business: All those business activities which involves cross border transactions of goods, services, and
Global Business: Conduct of business activities in several countries using a highly co-ordinated and single strategy across the world.
Dr. S. Jain
Economic Motives
Profitability Achieving economies of scale Spreading R&D costs
Strategic Motives
Growth
Risk spread
Dr. S. Jain
Licensing
Dr. S. Jain
Infrastructure
Dr. S. Jain
IMPLICATIONS -in international marketing, consumer behaviour may differ from DB -in production, HRM may differ from DB -standard of living/cost/wages may differ, but note: NOT ALL FDI GOES TO LOW WAGE COUNTRIES. -Competent firms are able to take advantage of the above differences by turning them into expanded new opportunities not available from domestic sources.
Dr. S. Jain
Liberalization In general, Liberalization refers to relaxation(s) of government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation. Most often, the term is used to refer to economic liberalization, especially trade liberalization or capital market liberalization. Although economic liberalization is often associated with privatization, the two can be quite separate processes. The economic liberalization in India refers to ongoing economic reforms in India that started on 24 July 1991.
Dr. S. Jain
10
Privatization Privatization means transfer of ownership and/or management of an enterprise from the public sector to the private sector. It also means the withdrawal of the State from an industry or sector, partially or fully. Another dimension of privatization is opening up of an industry that has been reserved for the public sector to the private sector.
Dr. S. Jain
11
Ways of Privatisation
There are different ways of achieving privatisation. One of the important ways of privatisation is divestiture, or privatisation of ownership, through the sale of equity. Another way of privatisation is contracting. Another option for the government is to withdraw from the provision of certain goods and services leaving them wholly or partly to the private sector. Privatisation may also take the form of privatisation of management, using leases and management contracts.
Wednesday, February 13, 2013 Dr. S. Jain 12
The important ways of privatisation are the following: 1. Divestiture 2. Denationalisation 3. Contracting 4. Franchising 5. Government withdrawing 6. Privatisation of management 7. Liquidation
Dr. S. Jain
13
Benefits of Privatisation
Privatisation benefits the society in several ways. Some of them are 1. reduces the fiscal burden 2. enables the government to mop up funds 3. result in better management of the enterprises 4. encourage entrepreneurship
Dr. S. Jain
14
Dr. S. Jain
15
GLOBALISATION-MEANING
Globalisation of the economy means reduction of import duties, removal of Non-Tariff Barriers on trade such as Exchange control, import licensing etc., allowing FDI and FPI, allowing companies to raise capital abroad and grow beyond national boundaries and encourage exports. Both Foreign Trade and Foreign investment volume have grown rapidly over the last few years.
Dr. S. Jain
17
The IMF defines globalizations 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 flows, and also through the more rapid and widespread diffusion of technology.
Dr. S. Jain
18
Dr. S. Jain
19
2 VIEWS on Globalisation
Those stress the Virtues of Import Substitution and limited
Dr. S. Jain
20
GLOBALISATION - PHASES
1870-1914 1914-1945 : First Wave : Retreat to Nationalism
1945-1980
Dr. S. Jain
21
Globalization in different ways Concept of Multinationals MNCs now account for over 33% of world output, and 66% of world trade Capitalist Approach Privatization + Deregulation + Globalization = Turbo-capitalism = Prosperity Homogeneity Price, Product, Quality, Interest Rates Etc.
Dr. S. Jain
23
Main Drivers of Globalization Lowered the cost of Transportation Reduced the cost of Communication Revolution in Information and Communication Technologies Change in political systems
Collapse of Soviet Union Fall of Berlin Wall Chinas Economic Reforms
Wednesday, February 13, 2013 Dr. S. Jain 24
Stages of Globalisation
Ohmae identifies five different stages in the development of a firm into a global corporation. The first stage is the arms length service activity of essentially domestic company which moves into new markets overseas by linking up with local dealers and distributors. In stage two, the company takes over these activities on its own. In the next stage, the domestic based company begins to carry out its own manufacturing, marketing and sales in the key foreign markets. In stage four, the company moves to a full insider position in these markets, supported by a complete business system including R & D and engineering. In the fifth stage, the company moves toward a genuinely global mode of operation.
Wednesday, February 13, 2013 Dr. S. Jain 25
Dr. S. Jain
26
Dr. S. Jain
28
Dr. S. Jain
29
Dr. S. Jain
30