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Indian Economy

Notes In many goods, product adaptation is essential to meet the local conditions or preferences.
Sometimes adaptation is mandatory because of the government’s regulations, Local
Standards (as Electrical), Measurement Standards and Product Standards and Systems.
Sometimes product modification is done only to make it fit for specific distribution channel.
Like in India, Coca Cola is distributed in glass bottles that are reused. On the other hand,
they use Tin cans in USA, which are not recollected from the outlet.
Product adaptation increases the cost. Sometimes, when the product is new to the market,
the issue of adaptation and standardisation become crucial. Sales volumes do not justify
the adaptation and the standard product doesn’t suit the local requirement. This happened
a few years back when the electric shaver came to the Indian market.
But organisations have to choose a trade-off between standardisation and product
adaptation. Besides, globalisation has influenced all aspects of organisations: Sales
Promotion, Research, Market Research, Distribution Strategies, Product Development
Strategies, etc.
After the implementation of GATT (General Agreement on Trade and Tariffs) and the
clause of free movement of labour in most of the regional trade agreements, HR policies
have seen a significant change. More and more organisations are adopting international
HR standards because:

1. Job-hopping may increase after new opportunities will be available.
2. When an MNC follows international standards in a new territory, the local industry
also learns and follows international HR standards and follows international HR
standards.
3. Because of free movement of capital and goods, competition increases. Because of
FDI and imports in this situation, a business unit can survive only by providing a
world-class product. And to provide world-class products, it must have HR practices
of international standards and it has to invest in its nourishment.
4. When the cost of HR is a significant cost of production as in case of the software or
service industry, the new trend is to shift the location of the unit where HR is
available in abundance. This is the reason that more and more software companies
are coming to India.
Source: Business Environment, Dr Vivek Mittal, Excel Books

11.2 Emerging Technology

This section emphasises on the emerging technology as a result of globalisation. Given below
are the emerging technologies:
1. You must understand that by signing the WTO over 150 nations agreed to either decrease
or to eliminate tariffs and to remove non-tariff barriers. This led to a free flow of factors of
production that is machines, capital, labour, and raw material. Therefore, the world is
becoming borderless as far as trade is involved and organisations have wide opportunities
with relation to new market, new sources of raw material and human resource and capital.

2. While the speed of eliminating trade barriers is slow at the WTO and confronts various
bottlenecks at several times, regional groupings have attained remarkable success in not
only in decreasing tariff internationally, but in removing them at least at the regional
level.
There are no trade barriers in NAFTA countries Canada, USA, and Mexico. The EU has
gone one step ahead and introduced a single currency, the Euro, which is adopted in most

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