Impact Of Globalization On Corporate Governance In India

INTRODUCTION- : Globalization must not be viewed from the restrictive sense as connotes the process of being present worldwide it has bought to the force of diverse issue of the commerce production trade information technology. Globalization can also be seen from different perspective as the growing interdependence and intensity of interaction among nation and about the nation state coming under the pressure from the translation phenomenon.

THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS-:

The impact of globalization extends from human and social or ethical perspective to the

strategic or technological perspective. Thus it has a wide scope and the present work attempts to highlight this impact as consequences of globalization and liberalization.

Due to liberalization of economy, several organizations have taken a number of steps to

improve operational efficiency. In response, public pressure has increased for businesses to take on more social responsibility and operate according to higher levels of ethics. Firms in developed nations now promote-and are often required by law to observe-nondiscriminatory policies for the hiring, treatment, and pay of all employees

However, on the recruitment front, as globalization evolves from being a mere corporate

buzzword to basic economic reality, more and more organizations are realizing that they need managers and workers with skills that conform to the international standards In India, the confederation of Indian Industries (CII) has addressed itself to social and ethical issues and a few organizations have shown concern to these issues including those under study in this project.

Globalization has necessitated certain structural adjustments (restructuring and

diversifications), which as led to cutting off the jobs and recession in the employment scenario. Privatization proved a major thrust to promote global trends. Eventually the trade unions

become concerned about their job loss and potential adverse effects on their group dynamics and their rights. The right to strike which has been restricted or denied in public services is now made available to private enterprises. It is yet to determine the negative effects of privatization on collective bargaining.

Corporate governance: Indian perspective vis-à-vis international perspective -:

The word ‘corporate governance’ has become a buzzword these days because of two factors. The first is that after the collapse of the Soviet Union and the end of the cold war in 1990, it has become the conventional wisdom all over the world that market dynamics must prevail in economic matters. The concept of government controlling the commanding heights of the economy has been given up. This, in turn, has made the market the most decisive factor in settling economic issues

corporate governance and financial regulation in India was generally considered quite poor until the economic reforms of the early 1990s. The Securities and Exchange Board of India (SEBI) was established in 1992 by an act of Parliament, and SEBI was given the job of regulating stock exchanges, brokers, fraudulent trade practices, and other areas of corporate activity.5 as its power grew over the decade, SEBI started to play a much more active role in setting minimum standards for corporate behavior. In addition, a voluntary code of corporate governance was developed by the Confederation of Indian Industry (CII), a group of well-regarded Indian firms

The Murthy Committee reforms expanded on the Birla Committee’s work in several areas. One main focus related to the qualifications for independent director status: a number of specific requirements were added to disqualify material suppliers and customers, recently departed executives, relatives, and other closely-related parties A second set of changes affected the audit committee: it was now required to meet more frequently (four times per year), and members had to satisfy new financial literacy requirements. A third important change mandated CEO and CFO certification of financial reports and internal controls. And a number of additional shareholder disclosures, including expanded discussion of financial results, were added to the Clause 49 requirements. As before, these reforms were phased in gradually; all public firms were not required to comply with the Murthy Committee rules until January 1, 2006

Laws like the Benami Transactions Prohibition Act and the Prevention of Money Laundering Act should be implemented effectively and vigorously. Agencies like the CVC can be used to ensure that corrupt practices are effectively punished because it is the atmosphere, which encourages proper corporate behavior. In India today we have a system where the level of public governance is very poor. There is no fear of punishment at all. In such a situation it is only a saint who will be observing strictly the rules of corpora National seminar on global convergence of commerce education

By: Takhellambam Promosini

CSR in the ERA of globalization – impact on developing countries (INDIA)-:

What is CSR?

CSR can be well understood under the “3 waves of CSR”.

a. Community engagement

b. socially responsible production process

c. socially responsible employee relations

Beyond good intentions some of the benefits that the corporate world reaps are:

1. Understanding and transforming public perception of the company

2. Attracting investment in the firm, sector and overall economy

3. Increased market share and new market penetration

In developing countries like INDIA, business can succeed only if industries maintain good relationships with all their stakeholders. These relationships can be strengthened. It gives the business the right to build or rent facilities, benefit from the tax revenues raised in the form of local services, infrastructure, etc.

Hence business and society are bound by contracts in which they operate. While business is expected to create wealth and provide opportunity for employment, society is expected to provide an environment conducive for business. As business depends on the community in which it operates, society also expects business to make its contribution to the community.

ABSTRACT-: Corporate Social Responsibility is often referred to as Business Responsibility and an organization’s response on environmental, social and economic issues. Positive actions that reduce the negative impact of an organization on these issues can be seen as a way of managing risk.

Business Ethics, being a vital part of Modern Concept of CSR, has been low profile in Business Publication and Business School Curriculum, has suddenly gained status. The word, “ETHICS” was once considered irrelevant by corporate loyalists but now discussion of it is increasingly seen as not only important but also as critical to a company’s success. Till the 1990’s Indian corporate regarded Business Ethics as a mere extension of Philanthropy. Although corporate giants like TATA(s) and BIRLA(s) contributed generously to Philanthropic causes, it was only after the concept GML of Resources (Globalization, Mobilization and Liberalization of Resources) was introduced by Dr. Manmohan Singh (The Then Finance Minister of India) that the Philanthropic Concepts broadened

INTRODUCTION-: The catch word of the world economy is Globalization. Countries like India, which have huge population, high unemployment and generally people are poor is unable to fulfill the expected demand of the diverse fraternity within and outside the parameters of the country. Globalization does not simply mean allowing foreign capital and foreign technology in India. It also means creating Indian companies on a global scale, in terms of both investment and trade.

Globalization has also offered significant possibilities for India’s greater participation in world trade. India does not have a fair share of the world’s reserves in some natural resources

PROBLEMS-: Since July 1991 India has chartered a course which is supposed to take the country from a controlled economy to a market economy. Economic democracy advocates reliance on the free market to stimulate growth. But it is also explicit that market mechanism is inadequate to offer distributive justice.

Recognizing this the East Asian Economies built a frame work of Institutions to increase the opportunities for the less privileged to share in the benefits of growth via support for small and medium enterprises, housing and health services

On analyzing the last few years, it could be easily concluded that the customers and the society at large have developed a different expectation. This different expectation is the social responsibility of the corporate world. The question that arises is whether “CSR is an Old Wine in New Bottle or A Concept that needs to be trickled down the Line

IMPACT OF GLOBLIZATION ON MANAGEMENT EDUCATION IN INDIA -:

Globalization has a multi-dimensional impact on the system of education. It promotes new tools & techniques in this area like E-learning, Flexible learning, Distance Education Programs and Overseas training. Globalization will mean many different things for education. . In the near future it will mean a more competitive and deregulated educational system modeled after free market but with more pressure on it to assure that the next generation of workers are prepared for some amorphous job market of 21st century. The benefits of globalization accrue to the countries with highly skilled human capital and it is a curse for the countries without such specialized human capital.

Indian government and Indian corporate sector has recognized the importance of management education in the changing global scenario. Today under the reforming economic conditions, integration of the Indian economy with world economy presupposes efficiency and competitiveness in the domestic front as well as in the international areas.

Globalization is expected to have a positive influence on the volume quality and spread of knowledge through increased interaction among the various states. The demand for higher education has been growing rapidly with comparatively faster growth in enrolment in higher educational institutions1 than the growth in number of higher educational institutions. The growth rates are doubled among the students enrolled in post-graduate and research, while the number of institutions for post-graduate and research studies has grown at a slower rate in 1990s than in 1980s .Privatization of higher education has emerged in several forms and types in the recent decade in India. One privatization within government higher education institutions take place in the form of introducing self-financing courses within government institutions two, converting government-aided private institutions into private self financing institutions three allowing to expand self-financing private institutions with recognition.

Globalization leads to challenges and threats also. The major concern is to deliver world class education with updated curriculum and practical exposure. This is possible only by attracting talented & experienced persons in to academics. India is witnessing new era in the field of Management Education. Many Corporate groups like Reliance, Nirma, Tata, etc. have promoted Management Institutes. Some reputed foreign universities are also coming to India. But Government should issue some guidelines so that fees structure remains with in certain limit and those who are from economically poor background have same opportunity.

IMPACT OF GLOBLIZATION OF INDIAN ECONOMY -:

At the present they can also said about the tale of two Indian .they have best of time

They have worst of time. There is sparkling prosperity, there is stinking poverty.they have everything by globlization , they have nothing by globlization.

Though some economic reforms were introduced by the Rajiv Gandhi government (1985-89), it was the Narasimha Rao Government that gave a definite shape and start to the new economic reforms of globalization in India. The Government of India affirmed to implement the economic reforms in consultation with the international bank and in accordance of its policies. Successive coalition governments from 1996 to 2004, led by the Janata Dal and BJP, adopted faithfully the economic policy of liberalization. With Manmohan Singh returned to power as the Prime Minister in 2004, the economic policy initiated by him has become the lodestar of the fiscal outlook of the government

THE BRIGHT SIDE OF GLOBLIZATION-:

The rate of growth of the GDP of India has been on the increase from 5.6 per cent during 1980-90 to seven per cent in the 1993-2001 period. In the last four years the annual growth rate of the GDP was impressive at 7.5 per cent (2003-04) 8.5 percent (2004-05) and 9.2 per cent (2006-07). Prime minister Manmohan singh is confident of having a 10 percent growth in the GDP in the eleventh five years plan period. The foreign exchange reseverves were $39 billion (2000-01) $ 107 billion (2003-04) and $180 billion in 2007 .it is expected that india will cross the $200 billion mark soon.

The sectors attracting highest FDI inflows are electrical equipments including computer software and electronics (18 per cent), service sector (13 per cent), telecommunications (10 per cent), transportation industry (nine per cent), etc. In the inflow of FDI, India has surpassed South Korea to become the fourth largest recipient

THE DARK SIDE OF GLOBLIZATION -:

On the other side of the medal, there is a long list of the worst of the times, the foremost casualty being the agriculture sector. Agriculter has been and still remains the backdown of the indian economy .it plays a vital role not only in providing food and nutrition to the people, but also in the supply of raw material to industries and to export trade. In 1951 agriculture provided employment to 72 percent of the population and contribution 59 percent of the GDP . however by 2001 popullation depending upon the agriculture came to58 percent wheras the share of agriculture in the GDP went down . . This has resulted in a lowering the per capita income of the farmers and increasing the rural indebtedness.

The reasons for the deceleration of the growth of agriculture are given in the Economic Survey 2006-07: Low investment, imbalance in fertilizer use, low seeds replacement rate, a distorted incentive system and lo post-harvest value addition continued to be a drag on the sectors performance. With more than half the population directly depending on this sector, low agricultural growth has serious implications for the inclusiveness of growth. during the post-reform period, India has been shining brilliantly with a growing number of billionaires. Nobody has taken note of the sufferings of the family members of those unfortunate hundred thousand farmers

Further, the proportion of people depending in india on agriculture is about 60 percent wheras the same for the UK is 2% USA 2% JAPAN 3% The developed countries, having a low proportion of population in agriculture, have readily adopted globalization which favors more the growth of the manufacturing and service sectors

GROWTH OF UNEMPLOYMENT POVERTY -:

The proportion of the unemployed to the total labor force has been increasing from 2.62 per cent (1993-94) to 2.78 per cent (1999-2000) .In absolute figures, the number of unemployed had been in those years million, 10.51 million and 13.10 million respectively.

In reply to a question, the Minister for Labor and Employment informed the Lok Sabha on March 19, 2007, that the enrolment of the unemployed in the Employment Exchanges in 2006-07 was 79 lakhs against the average of 58 lakhs in the past ten years