International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
DRIVING FORCES OF GLOBALISATION
DRIVING FORCES FOR GLOBALISATION
Globalisation occurs because specific managers in specific companies make
decisions that result in increased cross-border flow of capital, goods and
known-how. Managers are increasingly making such decisions because
globalization is becoming more feasible and desirable. The following trends
lie at the core of these developments.
1. An ever-increasing number of countries are embracing the free-market
ideology, Economic policy makers in industrialized and industrializing
nations have shifted from a ‘planning’ mentality to a ‘market’ mentality,
which has been well documented. Since the end of the second world war,
the rising tide of free-market ideology that started with developed
economies has swept up South Korea, Taiwan, Hong Kong, Singapore
and other South East Asian economies, and is now moving into China,
India, Brazil, parts of Africa and central and eastern including Russia. As
per BRIC report, four countries will surpass the developed nations in
terms of growth and prosperity.
2. The economic centre of gravity is shifting from the developed to
developing countries. Economic liberalization promotes competition,
efficiency, innovation, new capital investment and faster economic
growth. Today’s market mechanisms have allowed the developing
economies to start catching up with the advanced economies, so that
China, India, South Korea, Taiwan, Indonesia and Thailand are emerging
as major players in the global market. In fact Taiwan, Hong Kong and
Singapore, which were amongst the world’s poorest countries in the
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