BUSINESS

ENVIORNMENT
ASSIGNMENT 2
Globalisation -
Concept and its measurement

Submitted To: Submitted By:

Dr. Anupreet Kaur Mavi Mahak Sharma
UIAMS Roll No. 23027
Panjab University RM – 2nd Sem.
Globalisation has been defined as the process of rapid integration of countries and happenings
through greater foreign trade and foreign investment. It is the process of international integration
arising from the interchange of world views, products, ideas and other aspects of culture.

FACTORS AIDING GLOBALISATION

1) Technology: has reduced the speed of communication manifolds. The phenomenon of social
media in the recent world has made distance insignificant.

The integration of technology in India has transformed jobs which required specialized skills and
lacked decision-making skills to extensively-defined jobs with higher accountability that require
new skills, such as numerical, analytical, communication and interactive skills. As a result of
this, more job opportunities are created for people.

2) LPG Reforms: The 1991 reforms in India have led to greater economic liberalization which
has in turn increased India’s interaction with the rest of the world.

3) Faster Transportation: Improved transport, making global travel easier. For example, there
has been a rapid growth in air-travel, enabling greater movement of people and goods across the
globe.

4) Rise of WTO: The formation of WTO in 1994 led to reduction in tariffs and non-tariff
barriers across the world. It also led to the increase in the free trade agreements among various
countries.

5) Improved mobility of capital: In the past few decades there has been a general reduction in
capital barriers, making it easier for capital to flow between different economies. This has
increased the ability for firms to receive finance. It has also increased the global
interconnectedness of global financial markets.

6) Rise of MNCs: Multinational corporations operating in different geographies have led to a

diffusion of best practices. MNCs source resources from around the globe and sell their products
in global markets leading to greater local interaction.

These factors have helped in economic liberalization and globalisation and have facilitated the
world in becoming a “global village”. Increasing interaction between people of different
countries has led to internationalization of food habits, dress habits, lifestyle and views.

GLOBALISATION IN INDIA

Developed countries have been trying to pursue developing countries to liberalize the trade and
allow more flexibility in business policies to provide equal opportunities to multinational firms
in their domestic market. International Monetary Fund (IMF) and World Bank helped them in
this endeavor. Liberalization began to hold its foot on barren lands of developing countries like
India by means of reduction in excise duties on electronic goods in a fixed time frame.
 Indian government did the same and liberalized the trade and investment due to the pressure
from World Trade Organization. Import duties were cut down phase-wise to allow MNC’s
operate in India on equality basis. As a result globalization has brought to India new
technologies, new products and also the economic opportunities.

Despite bureaucracy, lack of infrastructure and an ambiguous policy framework that adversely
impact MNCs operating in India, MNCs are looking at India in a big way, and are making huge
investments to set up R&D centers in the country. India has made a lead over other growing
economies for IT, business processing, and R&D investments. There have been both positive and
negative impacts of globalisation on social and cultural values in India.

IMPACTS OF GLOBALISATION IN INDIA

I. Economic Impact:

1. Greater Number of Jobs: The advent of foreign companies and growth in economy has led
to job creation. However, these jobs are concentrated more in the services sector and this has led
to rapid growth of service sector creating problems for individuals with low level of education.
The last decade came to be known for its jobless growth as job creation was not proportionate to
the level of economic growth.

2. More choice to consumers: Globalisation has led to a boom in consumer products market.
We have a range of choice in selecting goods unlike the times where there were just a couple of
manufacturers.

3. Higher Disposable Incomes: People in cities working in high paying jobs have greater
income to spend on lifestyle goods. There has been an increase in the demand of products like
meat, egg, pulses, organic food as a result. It has also led to protein inflation.

4. Shrinking Agricultural Sector:  Agriculture now contributes only about 15% to GDP. The
international norms imposed by WTO and other multilateral organizations have reduced
government support to agriculture. Greater integration of global commodities markets leads to
constant fluctuation in prices.

 This has increased the vulnerability of Indian farmers. Farmers are also increasingly
dependent on seeds and fertilizers sold by the MNCs.
 Globalisation does not have any positive impact on agriculture. On the contrary, it has
few detrimental effects as government is always willing to import food grains, sugar etc.
Whenever there is a price increase of these commodities.
 Government never thinks to pay more to farmers so that they produce more food grains
but resorts to imports. On the other hand, subsidies are declining so cost of production is
increasing. Even farms producing fertilizers have to suffer due to imports. There are also threats
like introduction of GM crops, herbicide resistant crops etc.
5. Child Labour: Despite prohibition of child labor by the Indian constitution, over 60 to a 115
million children in India work. While most rural child workers are agricultural laborers, urban
children work in manufacturing, processing, servicing and repairs. Globalisation most directly
exploits an estimated 300,000 Indian children who work in India’s hand-knotted carpet industry,
which exports over $300 million worth of goods a year.

I. Socio-Cultural Impact on Indian Society

Nuclear families are emerging. Divorce rates are rising day by day. Men and women are gaining
equal right to education, to earn, and to speak. ‘Hi’, ‘Hello’ is used to greet people in spite of
Namaskar and Namaste. American festivals like Valentines’ day, Friendship day etc. are
spreading across India.

1. Access to education:
On one hand globalisation has aided in the explosion of information on the web that has helped
in greater awareness among people. It has also led to greater need for specialization and
promotion of higher education in the country. On the flip side the advent of private education,
coaching classes and paid study material has created a gap between the haves and have-nots. It
has become increasingly difficult for an individual to obtain higher education.

2. Growth of cities: It has been estimated that by 2050 more than 50% of India’s population
will live in cities. The boom of services sector and city centric job creation has led to increasing
rural to urban migration.

3. Indian cuisine: is one of the most popular cuisines across the globe. Historically, Indian
spices and herbs were one of the most sought after trade commodities. Pizzas, burgers, Chinese
foods and other Western foods have become quite popular.

4. Clothing: Traditional Indian clothes for women are the saris, suits, etc. and for men,
traditional clothes are the dhoti, kurta. Hindu married women also adorned the red bindi and
sindhur, but now, it is no more a compulsion. Rather, Indo-western clothing, the fusion of
Western and Sub continental fashion is in trend. Wearing jeans, t-shirts, skirts have become
common among Indian girls.

5. Indian Performing Arts: The music of India includes multiples varieties of religious, folk,
popular, pop, and classical music. India’s classical music includes two distinct styles: Carnatic
and Hindustani music. It remains instrumental to the religious inspiration, cultural expression
and pure entertainment. Indian dance too has diverse folk and classical forms.

6. Bharatanatyam, Kathak, Kathakali, Mohiniattam, Kuchipudi, Odissi are popular dance forms
in India. Kalarippayattu or Kalari for short is considered one of the world’s oldest martial art.
 There have been many great practitioners of Indian Martial Arts including Bodhidharma who
supposedly brought Indian martial arts to China
7. The Indian Classical music has gained worldwide recognition but recently, western music is
too becoming very popular in our country. Fusing Indian music along with western music is
encouraged among musicians. More Indian dance shows are held globally. The number of
foreigners who are eager to learn Bharatanatyam is rising. Western dance forms such as Jazz,
Hip hop, Salsa, Ballet have become common among Indian youngsters.

8. Nuclear Families: The increasing migration coupled with financial independence has led to
the breaking of joint families into nuclear ones. The western influence of individualism has led to
an aspirational generation of youth. Concepts of national identity, family, job and tradition are
changing rapidly and significantly.

9. Old Age Vulnerability: The rise of nuclear families has reduced the social security that the
joint family provided. This has led to greater economic, health and emotional vulnerability of old
age individuals.

10. Pervasive Media: There is greater access to news, music, movies, and videos from around
the world. Foreign media houses have increased their presence in India. India is part of the global
launch of Hollywood movies which is very well received here. It has a psychological, social and
cultural influence on our society.

11. McDonaldization: A term denoting the increasing rationalization of the routine tasks of
everyday life. It becomes manifested when a culture adopts the characteristics of a fast-food
restaurant. McDonaldization is a reconceptualization of rationalization, or moving from
traditional to rational modes of thought, and scientific management.

12. Walmartization: A term referring to profound transformations in regional and global

economies through the sheer size, influence, and power of the big-box department store
WalMart. It can be seen with the rise of big businesses which have nearly killed the small
traditional businesses in our society.

II. Psychological Impact on Indian Society

1. Development of Bicultural Identity: The first is the development of a bicultural identity or

perhaps a hybrid identity, which means that part of one’s identity is rooted in the local culture
while another part stems from an awareness of one’s relation to the global world.
The development of global identities is no longer just a part of immigrants and ethnic minorities.
People today especially the young develop an identity that gives them a sense of belonging to a
worldwide culture, which includes an awareness of events, practices, styles and information that
are a part of the global culture. Media such as television and especially the Internet, which allows
for instant communication with any place in the world, play an important part in developing a
global identity.
A good example of bicultural identity is among the educated youth in India who despite being
integrated into the global fast paced technological world, may continue to have deep rooted
traditional Indian values with respect to their personal lives and choices such as preference for an
arranged marriage, caring for parents in their old age.

 Growth of Self-Selected Culture: means people choose to form groups with like-
minded persons who wish to have an identity that is untainted by the global culture and
its values. The values of the global culture, which are based on individualism, free market
economics, and democracy and include freedom, of choice, individual rights, openness to
change, and tolerance of differences are part of western values. For most people
worldwide, what the global culture has to offer is appealing. One of the most vehement
criticisms of globalisation is that it threatens to create one homogeneous worldwide
culture in which all children grow up wanting to be like the latest pop music star, eat Big
Macs, vacation at Disney World, and wear blue jeans, and Nikes.
 Emerging Adulthood: The timing of transitions to adult roles such as work, marriage
and parenthood are occurring at later stages in most parts of the world as the need for
preparing for jobs in an economy that is highly technological and information based is
slowly extending from the late teens to the mid-twenties. Additionally, as the traditional
hierarchies of authority weaken and break down under the pressure of globalisation, the
youth are forced to develop control over their own lives including marriage and
parenthood. The spread of emerging adulthood is related to issues of identity.

 Consumerism: Consumerism has permeated and changed the fabric of contemporary

Indian society. Western fashions are coming to India: the traditional Indian dress is
increasingly being displaced by western dresses especially in urban areas. Media- movies
and serials- set a stage for patterns of behavior, dress codes and jargon. There is a
changing need to consume more and more of everything.

Measurement of Globalisation

Globalisation essentially implies interdependence, connectivity, and integration. The integration

refers to the western capitalist world, values, and principles. There are six frontiers of
globalisation – economic, political, social, cultural, technological and ecological.

The brief explanation of main measurement indices are –

1. KOF Globalisation Index

This index measures the economic, social, political dimensions of globalisation. It is
used in order to monitor changes in the level of globalisation of different countries
over a long period of time. The current KOF Index is present for 195 countries and
covers the period from 1970 to 2016.
 2. Globalisation- Index
It measures economic integration, it tracks the movements of goods and services by
examining the changing share of international trade in each country’s economy and
measures the permeability of national borders through the convergence of domestic
and international prices.
3. A.T. Kearney/ Foreign Policy Globalisation Index
It examines the underlying international trends that reveal whether the world’s
leading nations are becoming or less globally connected. The index value calculated
for each indicator based on its relative position on the scale – with highest actual
value scoring 1.0 and lowest 0.

4. Maastricht Globalisation Index

The quantitative literature on the MGI shows that globalisation contributes positively
to economic and human development, environmental performance, mortality, gender
equality and physical integrity rights.

5. CSGR Globalisation Index

It measures the economic, social and political dimensions of globalisation for
countries on annual basis and combines these into an overall globalisation index or
score and is consistent both over time and across countries.

CONCLUSION - Many attempts have been made to measure globalisation; however none of
them is satisfactory. The composite index prepared by many researchers and institutions are not
perfect in the sense that all factors are not exhaustively studied and the differences in the
institutional, political, economic, social, cultural and technological milieu of countries are not
really comparable on many counts. Many bizarre factors such as number of cross border
telephone calls, international marriages and location of offices of international organizations and
so forth have been suggested by academicians.