GLOBALISATION AND CHALLENGES IT POSES TO FINANCIAL MANAGEMENT

GLOBALISATION AND CHALLENGES IT POSES TO FINANCIAL MANAGEMENT

Q1. GLOBALISATION AND CHALLENGES IT POSES TO FINANCIAL MANAGEMENT

GLOBALISATION

Globalisation has transformed the global economy. What globalisation exactly is, we are going to discuss it in our topic (Daft, 2006). There exist a number of definitions equally economic and non-economic on globalisation, but one the most quoted definition of it is “The process through which an increasingly free flow of ideas, people, goods, services and capital leads to the integration of economies and societies” (Kohler, 2002).

It is the process of integration and relations between the people, governments, business, and information technologies (JONES, 2004). It creates a flow on the development of the societies, education, culture and environment and also has impacts on the political systems as well (Daft, 2006). This process has changed the life styles of the societies around the world. The process is not new for anyone, countries and societies are exchanging their products, companies have broaden their businesses to multiple countries, investments are made not only from the corporate sectors but on the governmental levels as well. Many of the countries are interlinked with each other through bridges, trains and silk roads (Daft, 2006).

Drivers of the current wave of globalisation

Latest globalisation wave has been determined through the expansion of the development that has never occurred before (Deal & Kennedy, 2000).

The implementation of more financial policies

Information technology progression

The appearance of low-wage economies

We discuss these drivers of globalisation briefly below

Latest wave of globalisation has been pushed through the standards that have opened the economies domestically as well as internationally (Gill, 1993). The post WW-II era has dramatically changed the authorities that have taken up free-market financial schemes expanding enormously, governments also have conferred spectacular decrease in obstacles to business by reduction of tariff on the manufactured goods after the WW-II (PHATAK &BHAGAT, 2005). Advancement in the technologies have marvellously changed the financial globalisation, progression in data expertise have granted all kinds of financial players, consumers, investors new devices for recognising financial tendencies round the world (PHATAK &BHAGAT, 2005). The emergences of the newly developed countries with the enormous exception have amplified their economies. China is highly populous for its low-wages, and has increased their shares in the global trade and investments in the pas few decades (PHATAK, 2005).

Financial management challenges to Globalisation

The current financial disaster has influenced the economies of the countries throughout the globe. It has badly damaged the economic structures of countries, this has been the most challenging hurdle faced by developing as well as developed countries (Daft, 2006).

The economic part restructures is the most significant constituent of the program in India in the direction of financial liberalization. Recent financial liberalization has unwrapped the doorway to overseas opponent go in our market (MERCHANT, 2008). Deregulation in the pattern of exclusion of exchange reins and defence of the concern rates have made the marketplace more aggressive. The purpose of this study is to examine the challenges faced by the Indian economy in the ...