Page 15 - DMGT548_GLOBAL_HRM

Global HRM

Notes Falling barriers to trade and investment: The falling of barriers to international trade enables
firms to view the world as their market. The lowering of barrier to trade and investments also
allows firms to base production at the optimal location for that activity. Thus, a firm might
design a product in one country, produce a component parts in two other countries, assemble
the product in another country and then export the finished product around the world. The
lowering of trade barriers has facilitated the globalisation of production. It has also attracted the
Foreign Direct Investment which is playing an increasing role in the global economy.
Technological innovation: Technological changes have achieved advances in communication,
information processing and transportation technology, including the internet and the World
Wide Web (www). The most important innovation has been development in the microprocessors
after that global communications have been revolutionised by developments in satellite, optical
fibre, and wireless technologies, and now the internet and the www. The rapid growth of the
internet and the associated www is the latest expression of this development. Besides, innovations
have occurred in the field of the transportation technology.
Economic globalisation: Economic globalisation is the increasing economic interdependence of
national economies across the world through a rapid increase in cross-border movement of
goods, service, technology and capital. Whereas the globalisation of business is centred around
the diminution of international trade regulations as well as tariffs, taxes, and other impediments
that suppresses global trade, economic globalisation is the process of increasing economic
integration between countries, leading to the emergence of a global marketplace or a single
world market. Depending on the paradigm, economic globalisation can be viewed as either a
positive or a negative phenomenon.
Economic liberalisation: Economic liberalisation in India is the ongoing economic reforms
in India that started in 1991. As of 2009, about 300 million people—equivalent to the entire
population of the United States—have escaped extreme poverty.

Example: The development of commercial jet aircraft has reduced the time needed to get
from one location to another. Now New York is closer to Tokyo than ever.

Did u know? Economic globalisation comprises the globalisation of production, markets,
competition, technology, and corporations and industries. Current globalisation trends
can be largely accounted for by developed economies integrating with less developed
economies, by means of foreign direct investment, the reduction of trade barriers as well
as other economic reforms and, in many cases, immigration. Measurement of economic
globalisation focuses on variables such as trade, Foreign Direct Investment (FDI), portfolio
investment, and income. However, newer indices attempt to measure globalisation in
more general terms, including variables related to political, social, cultural, and even
environmental aspects of globalisation.

Example: Chinese economic reform began to open China to the globalisation in the
1980s. Scholars find that China has attained a degree of openness that is unprecedented among
large and populous nations, with competition from foreign goods in almost every sector of the
economy. Foreign investment helped to greatly increase quality, knowledge and standards,
especially in heavy industry. China’s experience supports the assertion that globalisation greatly
increases wealth for poor countries. As of 2005–2007, the Port of Shanghai holds the title as
the World’s busiest port.

10 LOVELY PROFESSIONAL UNIVERSITY