Introduction

• Globalisation means integrating the economy of a country

with the world economy.

• In India, the process of globalisation picked up with the

policy reforms of 1991.

• Globalisation refers to growing economic interdependence

among countries in the world with regard to technology,
capital, information, goods, services, etc.
Managing Business in the Globalization Era

Global strategies adopted by business enterprises may include:

• Global conception of markets

•Multi-regional integration strategy

•Changes in external organisation of multinational firms

•Changes in internal organisation

 Main organisations for facilitating
Globalisation
I. International Monetary Fund (IMF)
II. The World Bank or International Bank for
Reconstruction and Development (IBRD)
III. World Trade Organization (WTO)
International Monetary Fund
• Established during the Second World War in 1946.
• Primary purpose-to strengthen the process of
globalization
• Services include –
(i) Promotion of international cooperation on finance,
(ii)Encourage stability in exchange rates & orderly systems for
exchanging money between countries
(iii)Provide temporary assistance for countries suffering balance
of payment problems, etc.
 The World Bank
World Bank is an organization affiliated with United Nation
and designed to finance productive project that further the
economic development of member nation.
World Bank headquarters are in Washington, D.C.

United Nation Monetary and Financial Conference at

Bretton Wood, in July 1944, the bank officially began
operations in June 1946.

Although, its loans were made for post-World War II

reconstruction, by 1949 the emphasis had shifted to loans
for the purpose of economic development.
Cont…
Current membership: 184 member countries
Shareholder: The five largest shareholder of the
Bank are USA, Japan, Germany, Great Britin and
France. India is the sixth largest contributor.
Total Capital: $171 billion
World Bank Group: It consists of International
Development Association (IDA), International
Finance Corporation (IFC), Multi-Lateral Investment
Guarantee Agency (MIGA), and International Center
for settlement of Investment Disputes (ICSID).
 Objective of World Bank
1. Protecting the environment.
2. Investing in basic health and education programmes.
3. Promoting social development.
4. Assistance and encouragement to private business.
5. Promoting reforms which will create stable microeconomic
environment.
6. Strengthening the ability of the government to deliver
quality services.
7. Establishing peace time economy.
8. Maintaining equilibrium in the balance of payments.
 Function of World Bank
1. To promote foreign investment and credit by
providing guarantee of repayment to the private
investors.
2. To assist its member countries by facilitating the
investment of capital for productive purposes.
3. To promote the long- term balance growth of
international trade and equilibrium in balance of
payment situation.
4. To settle disputes by ICSID office (International
Centre for Settlement of Investment Disputes).
 World bank and India
India has been allotted a permanent sent on the Board of
Executive Director of the Bank.

India has the privilege of presiding the annual general

meeting of the Board.

India is the largest borrower of the world bank. The loan

from World Bank has helped India in the development of
coal industry, road construction irrigation project, water
supply and sanitation, off-petrol and refineries, power
project of Domodar Valley Corporation, etc.
 World Trade Organisation(WTO)
The General Agreement Tariffs Trade(GATT) WAS
established in Geneva to pursue the objective of free in
order to help in the growth and development of all
member countries.

In 1947, 23 countries signed GATT.

India was one of the founder member of GATT.
In 1994, 118 countries were member of GATT.

The main purpose of ensure competition in commodity

trade by removal of trade barriers. The first seven round of
negotiation conducted under GATT aimed on imports
imposed by member countries.
Cont…
A preparatory committee was set-up by GATT which in turn
set-up the World Trade Organisation (WTO) IN 1995.

The WTO acts as a permanent watchdog of international

trade.

GATT was converted from a provisional agreement into a

formal international organisation called World Trade
Organisation (WTO) with effect from January 1, 1995.

It is directed by the ministerial conference that meets a

least once every two years and its regular business is seen
by the General council.
 Features of WTO
1. 150 member countries membership.
2. It is the main organ of implementing the Multilateral Trade
Agreements.
3. It has a much wider scope than its predecessor GATT.
4. The representatives of the members and all officials of
the WTO enjoy international privileges.
5. Single voting right.
[Link] is a full fledged international organization in its own right.
[Link] WTO administers a unified package of agreements
to
which all member are committed.
8. It is the forum for negotiations among its members,
whereby member nations discuss issues related to the
MATs and associated legal instruments.
 Function of WTO
1. It provides the forum for negotiations among its members
concerning their multilateral trade relations.
2. It facilitate the administration and
operation of implementation the multilateral
agreements. objective of the trade
3. It administers the “trade review mechanism”.
4. It administers the “understanding rules and
procedures governing the settlement disputes”.
Cont…
6. It is watchdog of international trade. It examines the
trade Regimes of individual members.

7. Trade disputes that cannot be solved through bilateral talks

are forwarded to the WTO dispute settlement “court”.

8. It is management consultant for world trade. Its economists

keep a close watch on the activities of the global economy
and provide studies on the main issues of the day.
 Fair Globalization need for policy
framework
ILO report states The economy is becoming
increasing “ while social and political
institutions global, largely local, national or
regional.” remain

The rules of world trade largely favor the rich and

powerful countries and more often work against or
ignore the interest of poor or weak countries.
Cont…

Good political government based on a democratic

political system, respect for human rights, rules of
law and social equity.
An effective state that ensures high and stable
economic growth, provide public services,
protection, raises capabilities of the people through
universal access to education and promotes gender
equity.
Strong representative organizations of works and
employers are essential for fruitful social dialogue.
 Objectives fulfill by globalization
1. Macro-economic and employment
generation policy
2. Improving the productivity of employment
3. Balanced regional development
4. Social sector
5. Employment guarantee programme
6. Raising the productivity in informal sector
7. Promotion of skill development
8. Organizations of working poor