Globalization of Indian Sector: 10th Economics

Question: State any four drawback of globalization.
Or
Give any three arguments against globalization.

Answer:

1. Globalization has failed to solve the problem of poverty.
2. Globalization and the pressure of competition have substantially changed the lives of the workers. Faced with growing competition, most employers these days prefer to employ workers ‘flexibly’. This means that workers jobs are no longer secure.
3. Only rich and educated class has benefit-ted from globalization.
4. Globalization has widened the gap between the rich and the poor.

Question: Mention any four features of Multinational Corporations.

1. These companies own or control production in more than one nation.
2. Production is organised in increasingly complex ways.
3. The production process is divided into small parts and spread out across the globe.
4. The companies have large size.

Question: Mention any four locational factors of the MNCs.

Answer: It is a company that owns or controls production in more than one country.

Factors:

1. Closeness to the market.
2. Availability of cheap, skilled and unskilled workers.
3. Availability of other factors of production.
4. Favorable government policies.

Question: Mention some of the ways which the MNCs use to spread their production.

Answer:

1. By interacting with the local producers in various countries across the globe.
2. By setting up partnership with local companies.
3. By using the local companies for supplies.
4. By buying local companies.

Question: How have globalization affected the small producers? Explain.

Answer:

1. For a large number of small producers and workers, globalization has posed major challenges.
2. Batteries, capacitors, plastics, toys, tyres, dairy products and vegetable oil are some examples of industries where the small manufactures have been hit hard due to competition.
3. Several of the units have shut down rendering many workers jobless.
4. Many of small companies have been purchased by the MNC.
5. MNCs produce cheap goods so small producers have lost their local market.

Question: What is the importance of trade?

Answer:

1. It creates an opportunity for the producers to reach beyond the domestic markets.
2. Goods and service travel from one country to another.
3. Choice of goods in the market rises.
4. Prices of similar goods in different markets tend to become equal.
5. Different producers compete against each other.

Question: How do Multi-national Companies manage to keep the cost of their goods low? Explain with examples.

Answer:

1. By placing orders to small producers: Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production of small producers around the world.
2. Employing workers on contract: 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.
3. By spreading production activities: MNCs spread their production activities in different parts of the world. For example they design their products in United States or Japan then manufacture it in China where cheap labour is available ad the customer care is carried out through call centres located in India as India provide cheep skilled as well as unskilled workers.