DELHI PUBLIC SCHOOL, BANGALORE NORTH

CLASS:X GLOBALISATION

NOTE BOOK QUESTIONS:

1. Explain any three ways in which multinationals companies have spread their
production and interaction with local producers in various countries across the globe.

ANS: The MNCs are spreading their production across the globe by:
*Setting up partnerships with local companies
*Using the local companies for supplies
*Closely competing with the local companies or buying them up

2. How do MNCs manage the production in other countries?

Ans: In this example the MNC is not only selling its finished products globally, but
more important, the goods and services are produced globally. As a result, production
is organised in increasingly complex ways. The production process is divided into
small parts and spread out across the globe. In the above example, China provides the
advantage of being a cheap manufacturing location. Mexico and Eastern Europe are
useful for their closeness to the markets in the US and Europe. India has highly skilled
engineers who can understand the technical aspects of production. It also has educated
English speaking youth who can provide customer care services. And all this probably
can mean 50-60 per cent cost-savings for the MNC!

3. Write the conditions which should be taken care of by MNCs to set up their production units?

Ans: MNCs set up production where it is close to the markets; where there is skilled
and unskilled labour available at low costs; and where the availability of other factors
of production is assured.

In addition, MNCs might look for government policies that look after their interests.
Having assured themselves of these conditions, MNCs set up factories and offices for
production.

The money that is spent to buy assets such as land, building, machines and other
equipment is called investment. Investment made by MNCs is called foreign
investment. Any investment is made with the hope that these assets will earn profits.

4. Discuss the positive and negative impact of Globalization in India.

OR

“The impact of globalization has not been uniform.‟ Support the statement with suitable
examples.
Ans: globalisation of the Indian economy has come a long way
Globalisation and greater competition among producers - both local and foreign
producers - has been of advantage to consumers, particularly the well-off sections in

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the urban areas. There is greater choice before these consumers who now enjoy
improved quality and lower prices for several products. As a result, these people
today, enjoy much higher standards of living than was possible earlier.
Firstly, MNCs have increased their investments in India over the past 15 years, which
means investing in India has been beneficial for them. MNCs have been interested in
industries such as cell phones, automobiles, electronics, soft drinks, fast food or
services such as banking in urban areas. These products have a large number of well-
off buyers. In these industries and services, new jobs have been created. Also, local
companies supplying raw materials, etc. to these industries have prospered.

Secondly, several of the top Indian companies have been able to benefit from the
increased competition. They have invested in newer technology and production
methods and raised their production standards. Some have gained from successful
collaborations with foreign companies.
For a large number of small producers and workers globalisation has posed major
challenges.
Batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil are some
examples of industries where the small manufacturers have been hit hard due to
competition. Several of the units have shut down rendering many workers jobless.
The small industries in India employ the largest number of workers (20 million) in the
country, next only to agriculture.

5. In what ways has competition affected workers , Indian exporters and foreign MNCs in the
garment industry?
Ans: Large MNCs in the garment industry in Europe and America order their products
from Indian exporters. These large MNCs with worldwide network look for the
cheapest goods in order to maximise their profits.
To get these large orders, Indian garment exporters try hard to cut their own costs. As
cost of raw materials cannot be reduced, exporters try to cut labour costs.
Where earlier a factory used to employ workers on a permanent basis, now they
employ workers only on a temporary basis so that they do not have to pay workers for
the whole year.
Workers also have to put in very long working hours and work night shifts on a
regular basis during the peak season.
Wages are low and workers are forced to work overtime to make both ends meet.
While this competition among the garment exporters has allowed the MNCs to make
large profits, workers are denied their fair share of benefits brought about by
globalisation.

6. “Rapid improvement in technologies has been a major factor that has stimulated the
globalization process.‟ Support the statement.
Ans: Rapid improvement in technology has been one major factor that has stimulated
the globalisation process. For instance, the past fifty years have seen several
improvements in transportation technology. This has made much faster delivery of
goods across long distances possible at lower costs
Even more remarkable have been the developments in information and
communication technology. In recent times, technology in the areas of
telecommunications, computers, Internet has been changing rapidly.

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Telecommunication facilities (telegraph, telephone including mobile phones, fax) are
used to contact one another around the world, to access information instantly, and to
communicate from remote areas.
This has been facilitated by satellite communication devices. As you would be aware,
computers have now entered almost every field of activity.
In the amazing world of internet, where you can obtain and share information on
almost anything you want to know. Internet also allows us to send instant electronic
mail (e-mail) and talk (voice-mail) across the world at negligible costs.

7. Why did the Indian Government put barriers to foreign trade and foreign investment?
Ans: The Indian government, after Independence, had put barriers to foreign trade and
foreign investment.
This was considered necessary to protect the producers within the country from foreign
competition.
Industries were just coming up in the 1950s and 1960s, and competition from imports at
that stage would not have allowed these industries to come up.
Thus, India allowed imports of only essential items such as machinery, fertilisers,
petroleum etc.

8. What are the various ways in which countries can be linked?

Ans: Besides the movements of goods, services, investments and technology, there is
one more way in which the countries can be connected.
This is through the movement of people between countries.
People usually move from one country to another in search of better income, better
jobs or better education.
In the past few decades, however, there has not been much increase in the movement
of people between countries due to various restrictions.

9. “Fair globalisation would create opportunities for all, and also ensure that the
benefits of globalisation are shared better.”Support the statement.

Ans: The government can play a major role in making this possible. Its policies must
protect the interests, not only of the rich and the powerful, but all the people in the
country.
The government can ensure that labour laws are properly implemented and the
workers get their rights.
It can support small producers to improve their performance till the time they become
strong enough to compete.
If necessary, the government can use trade and investment barriers. It can negotiate at
the WTO for ‘fairer rules’. It can also align with other developing countries with
similar interests to fight against the domination of developed countries in the WTO.

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