8 Most FAQ’s of Globalisation Chapter in Class 10th Social (TS/AP)

8 Marks

LAQ-1 : In what ways is an MNC different from other companies?

Introduction

In the business world, two primary types of companies are Multinational Companies (MNCs) and local companies. Each has distinct characteristics and operational scopes.

What is an MNC (Multinational Company)?

1. Working in Many Places: MNCs operate offices or factories in multiple countries.
2. Money Matters: Invest in businesses across various countries.
3. Offices Everywhere: Establish presence in different parts of the world.
4. Big Wallets: Generally have substantial financial resources.
5. Selling and Buying: Engage in international trade, selling and buying across borders.
6. Getting Stuff: Acquire resources globally, often at more competitive prices.
7. Examples: Well-known MNCs include Adidas, Amazon, and Coca Cola.

What are Local Companies?

1. Staying Home: Operate primarily within their home country.
2. Money Stays Home: Investments and expenditures are mostly domestic.
3. Offices Close By: Offices or shops are limited to their own country.
4. Money Matters: Tend to have smaller financial resources compared to MNCs.
5. Selling and Buying: Conduct trade mainly within their own country.
6. Getting Stuff: Source most resources domestically, which can sometimes be costlier.
7. Examples: Local stores or brands, like certain milk or grocery brands.

Summary

In essence, Multinational Companies (MNCs) operate across multiple countries with significant financial strength, while local companies primarily focus on their home country, often with more limited resources. This guide outlines the basic differences between large international businesses and those operating solely in one country.

---

LAQ-2 : Distinguish between foreign trade and foreign investment.

Introduction

In the realm of international business, there are two main avenues through which countries interact: foreign trade and foreign investment. Each has distinct characteristics and impacts on global commerce.

What is Foreign Trade?

1. Trading Globally: Involves buying or selling goods and services to other countries.
2. Moving Stuff: Entails transporting products or services from one country to another.
3. Buying and Selling: Comprises both imports (what a country buys) and exports (what it sells).
4. Benefits for Buyers and Sellers: Enables businesses to reach broader markets and allows consumers to access diverse products, often at competitive prices.
5. Making Money: Engaging in trade with multiple countries can lead to increased revenue and market expansion.
6. Bringing Countries Together: Facilitates stronger connections between nations through mutual commerce.

What is Foreign Investment?

1. Putting Money in Another Place: Involves investing in assets like buildings or equipment in another country.
2. Moving Money: Focuses on the transfer of capital, rather than physical goods, across borders.
3. Different Ways to Invest: Includes direct investments in businesses (Foreign Direct Investment, FDI) or buying stocks in foreign companies.
4. Why Invest?: Aims to introduce new technology, capital, and resources to the local businesses in the host country.
5. Planning for the Future: The primary objective is long-term financial gain.
6. Boosting the Local Economy: Foreign investments can significantly enhance the economic growth of the host country.

Summary

In simple terms, foreign trade is about countries engaging in the exchange of goods and services, while foreign investment involves investing capital in business ventures or assets in another country. Both play pivotal roles in how countries interact and cooperate in the global business landscape.

---

LAQ-3 : What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers? (OR) Why Indian government removed barriers or foreign trade and investment.

Introduction

The Indian government’s stance on foreign trade and investment has undergone significant changes since independence. Initially, barriers were established to shield the economy, but in 1991, a paradigm shift occurred, leading to the removal of these barriers.

Reasons for Putting Barriers to Foreign Trade and Investment

1. Protecting Domestic Industries in the 1950s and 1960s:
   To safeguard nascent industries against strong foreign competition, the government implemented barriers.
2. Control of Essential Goods:
   Limited importation to crucial goods like petroleum, machinery, and fertilizers, managing what entered the country.

Reasons for Removing Barriers to Foreign Trade and Investment in 1991

1. Improving Indian Producers:
   Belief that competition with foreign companies would enhance the quality of Indian products.
2. Policy Changes:
   The government altered regulations to enable Indian companies to compete internationally.
3. Support from International Organizations:
   Global support facilitated this transition.
4. Free Trading and Foreign Companies:
   Opening up to foreign businesses by reducing barriers, promoting free trade.

Summary

The approach of the Indian government towards foreign trade and investment evolved from a protectionist outlook to one of openness and competition. Initially, the focus was on shielding domestic industries from international competition. However, by 1991, with the aim of spurring improvement and competitiveness in Indian businesses and under the encouragement of global entities, barriers were dismantled. This shift marked a significant turn in India’s economic policy and global integration.

---

LAQ-4 : “The impact of globalisation has not been uniform.” Explain this is statement. (OR) Explain the impact of globalisation on Indian companies.

Introduction

Globalization is the process of increasing interdependence and interaction between countries. In India, globalization has brought varying changes, benefiting some groups while posing challenges for others.

1. Benefits for Urban Consumers: Urban consumers, especially the wealthy, have gained access to a wider range of high-quality products at often cheaper prices, enhancing their standard of living.
2. Challenges for Small Producers and Workers: Small-scale producers and less skilled workers have struggled due to intense competition from larger global companies, leading to potential job losses and reduced profits.
3. Gains for Local Companies and Employment: Some local companies providing materials to larger industries, which have established themselves due to globalization, have experienced significant growth, leading to more job opportunities in the area.
4. Improvements in Indian Companies:
   • Many top Indian companies have embraced modern technology and improved production methods.
   • Partnerships with foreign businesses have brought new ideas and investment, enhancing efficiency and modernization.
5. Boost in IT and Service Sectors: The IT sector in India has particularly benefited, with growth in areas like call centers and specialized work for foreign companies, such as magazine production.

Summary

Globalization has led to multifaceted changes in India, impacting different groups and sectors in varied ways. While urban consumers and large companies have generally benefited, small producers and certain workers have faced challenges. However, sectors like IT have witnessed substantial growth, indicating the complex and varied effects of globalization across the Indian society and economy.

---

LAQ-5 : Locate the following in the map of world.

1.China

2.Japan

3.Brazil

4.South Africa

Introduction

Geographical knowledge is essential for understanding global dynamics. Identifying countries on the world map is a fundamental skill. Here’s a guide to locating China, Japan, Brazil, and South Africa on the world map.

1. China:
   • Location: Situated in Eastern Asia.
   • Notable Features: Borders 14 countries, including India, Russia, and Mongolia.
2. Japan:
   • Location: An island nation located in the Pacific Ocean, to the east of China and Korea.
   • Notable Features: Comprises four main islands – Honshu, Hokkaido, Kyushu, and Shikoku.
3. Brazil:
   • Location: Occupies a large area in South America.
   • Notable Features: Known for the Amazon River and rainforest, and shares borders with all South American countries except Chile and Ecuador.
4. South Africa:
   • Location: Located in the southernmost part of Africa.
   • Notable Features: Known for its diverse geography, including the Kalahari Desert and Cape of Good Hope.

Summary

Identifying China, Japan, Brazil, and South Africa on the world map provides insight into their geographical positioning and neighboring features. Understanding their locations helps in comprehending global political, cultural, and economic contexts.

---

LAQ-6 : Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?

Introduction

Developed countries often advocate for the liberalization of trade and investment in developing nations. Understanding their motives and what developing countries should seek in return is crucial for balanced global economic relations.

Why Developed Countries Want Liberalization

1. Access to New Markets: Desire to import and export goods and services freely.
2. Cost Benefits: Developing countries provide opportunities for setting up branches or factories at lower costs.
3. Cheap Resources: Workforce and resources in developing countries are often less expensive.
4. Higher Profits: Reduced production costs can result in increased profits.
5. Expansion: Opportunity to expand businesses into new regions.

What Developing Countries Should Ask For

1. Job Creation: Demand that global companies provide employment opportunities for local people.
2. Tech Transfer: Seek access to modern technologies and training.
3. Fairness: Ensure all trade practices are just and transparent.
4. Developmental Support: Investments that aid in improving the economy, such as boosting GDP, and enhancing education.

Summary

While developed countries have clear motivations for promoting trade and investment liberalization in developing nations, it is crucial for the latter to ensure tangible benefits in return. Developing countries should focus on securing technology transfers, job creation, fair trade practices, and investments that contribute to overall economic development, ensuring mutual benefit in global economic interactions.

---

LAQ-7 : Explain the role of WTO in promoting Globalisation.

Introduction

The World Trade Organization (WTO) is pivotal in facilitating the advancement of globalization, fostering closer ties among countries through trade and commerce.

Understanding Globalization

Globalization involves countries becoming increasingly interconnected, sharing goods, services, and ideas at an unprecedented rate.

WTO’s Central Role

1. Driving Global Business & Trade: The WTO is committed to enhancing international trade and global business activities.
2. Problem-Solving Platform: Provides a forum for countries to resolve trade disputes and form new trade agreements.
3. Guiding Principles: Emphasizes principles such as non-discrimination (treating all members equally), reciprocity (making trade mutually advantageous), and transparent trade policies.
4. Promoting Trade Agreements: Facilitates the negotiation and finalization of trade deals, leading to smoother and more open global trade.

Summary

The WTO significantly contributes to the expansion of globalization by offering a framework and set of principles that encourage free, transparent, and fair trade. Its objectives and platforms enable countries to engage in more connected and efficient economic interactions on a global scale.

---

LAQ-8 : Read the following paragraphs and answer the questions that follow.

In recent years, the central and state governments in India have been taking special steps to attract foreign companies to invest in India. Industrial zones, called Special Economic Zones (SEZS), are being set up. SEZs are to have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities. Companies who set up production units in the SEZS do not have to pay taxes for an initial period of five years. Government has also allowed flexibility in the labour laws to attract foreign investment. Instead of hiring workers on a regular basis, companies hire workers ‘flexibly’ for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company. However, foreign companies are demanding further flexibility in labour laws.

1.What are world class facilities?

2.What are foreign companies demanding?

3.Why did government allow flexibility in the labour laws?

4.What are industrial zones called?

5.’Why are the state and central governments in India taking special steps.

Introduction

The provided text discusses the efforts of the Indian central and state governments to attract foreign investment, highlighting the role of Special Economic Zones (SEZs) and their features.

Key Details:

1. World Class Facilities:
   ‘World class facilities’ refer to high-standard infrastructure and amenities like electricity, water, roads, transport, storage, and recreational and educational facilities.
2. Foreign Companies’ Demands:
   Foreign companies are demanding further flexibility in labor laws.
3. Government’s Flexibility in Labour Laws:
   The government allowed flexibility in labor laws to attract foreign investment and reduce labor costs for companies, enabling them to hire workers ‘flexibly’ for short periods.
4. Industrial Zones:
   Industrial zones are referred to as Special Economic Zones (SEZs).
5. Government’s Special Steps:
   The central and state governments in India are taking special steps to attract foreign investment, part of which involves establishing SEZs with various incentives, like tax exemptions for initial years.

Summary

The Indian government is proactively creating Special Economic Zones with world-class facilities and flexible labor laws to attract foreign investment. This includes offering tax exemptions and the option for companies to hire workers flexibly. Foreign companies are seeking further relaxation in these labor laws. These efforts are made to strengthen India’s position as a desirable destination for foreign companies and boost economic growth.