With the continuous influence of globalization to the world economy, country’s these days have generated a lot of initiatives in order to take this opportunity of improving their presence in the world economy. this was also the emergence of many developing markets and recognizing the emergence of once been called as less developed countries into developing countries or emerging countries in the world.
Three of the most noticed countries that perform a lot during this era of global economic change are China, Brazil and India. But, the main focus of this paper is for India, where it has transformed is economy in big ways like incorporating technology, improving political policies, etc. In this paper it will mainly focus on India’s affiliation with international business entities, is it helpful for the Indian economy or not?
With this research, it will provide readers the real outcome of affiliation for India. Before going directly on the subject matter of knowing what the impact of affiliation, it is important first to study first the current economic status of India. What are some of the developments and challenges it face and how the government is doing in order to resolve it. India just like China is two of the most populated country in the world and there is no question that the country is a perfect target for any business.
Foreign Direct Investment (FDI) is the main reason why the country’s economy is in full swing. This does not only give the country economic growth but also a big contributor of reducing economic inequalities and some regional disparities. We all know for a fact that before the start of India’s years of economic development, the country was mainly focusing only on agriculture, since around 75% of its population are living in the rural areas and only 25% lives in the city and towns.
As technology and financial support that comes from these big foreign companies, more work and business opportunities were developed in the country and enough for the professional in the city as well as other aspirants from the country side in changing their mindset of not anymore just looking at farming instead strive hard in their study and landing a better job in the city where more and more opportunities were created since the government has opened up partnership with some known big global industries and companies in the world.
Just like China and other emerging countries, with its local labor cost and not that high cost of living, makes it more enticing for foreign investment, that is why among its neighbouring countries it is only India and China that are very competitive when it comes to labor cost. This has even boosted more the agricultural business of the country and making it more progressive even the years to come. But now, the government is also very careful in limiting western influence when it comes to lifestyle, because this will later on be the problem as cost of living will also rises.
For the government, it is important to only invite investment that will only benefit the country, like in terms of technological gain and assistance in establishing infrastructure in the country which will be a big help in promoting business and commerce in the country. In short, FDI has been the main story for India in their recent success in their economy. With these developments the country will continue to urge and entice more investors to come to their country and invest, provided this will again benefit the country’s economy. (Mishra, G, 2006). Going now to the heart and main focus of this paper regarding affiliation.
Just like as stated earlier, India is new to global standards of business or just starting to learn the global business more, because before the main focus was only to its local economic developments. Affiliation has given the country and its businesses greater access to international market, which means that because of this big companies having been affiliated to them, they have influence and political presence in the global economy. This is beneficial for India in a way that it will enhance its knowledge on how to deal with the global market and only through affiliation it can easily be achieved.
This also helps local businesses to leverage their own business as well. This means that it will also encourage or motivates business in dealing with their business more and not just putting up a business, because competition will be the main key here for these unaffiliated. Secondly it gives these Indian companies with affiliates a perfect site of enhancing their skills and experience in true and real life business processes and technological advancement because only through involvement in a global operation business is where you can apply real life application of skills and knowledge.
And this can be soon to be used by local businesses as well if time already in their hands and strategic learning’s and skills are well setup for them to establish. Because for any company to achieved success in true business, the experience in applying latest business trends, processes and challenges are the key for more stable and more productive business. This was also the main reason why India is very much keen in integrating Information and Communication Technology (ICT) in their entire tertiary curriculum and with that they were now considered as one of the world’s marketable country when it comes to getting IT professionals.
This only means that the country is taking serious on getting the right skills and not just academic prioritization. Last, advantage of affiliation is that with the country’s limited financial support of putting up a huge business that can support its big economic needs either support that may come locally or internationally. Through affiliation, this can be all possible since these financially stable and big corporations have all the right resources and money as well as influential to international loan agencies because of its good standing.
Also through affiliation also helps build well needed infrastructure for India, like helping more and more professionals in getting jobs in the cities, like it is common to most companies that they provide board and logging and even allowances for their workers since it is not that costly for them because of the low cost labor but for these rural side people it is already more than the opportunity that they need and they are more than willing to take it. This has changed the lives of many Indians as it made their way of life changed and it improves a lot. (Khanna, T, & Palepu, K, 1999).
Mahindra is one of the well known global company in India and been recognized in the world. The company is a perfect example of how affiliation happens since its business will not be productive without close affiliation with companies outside India, like known companies like Mitsubishi Car Company. With the company operating globally where it established its known market in South Africa, Europe, US and then in Australia, internationalization has been the main key for this initiative which helps the company increase its market capacity and even help the company boost its revenue.
In terms of respect to diversification and cultural proximity, the company has established code of ethics for its directors, senior managers and employees, where the company stated that the company has committed in providing equal opportunity to all with no reference to religion, sex, caste or any non-job related handicap. This has helped the company to have an exchanged of expertise with other nationalities most specially learning the market in the other territories.
Lastly, in terms of performance, the company does not only focus on the different businesses it serves from its customers, but it also provides reliable support to infrastructure development, corporate social responsibility, environment initiatives like flourishing plants and flowers, in short supporting green project in India. All of these corporate responsibilities will not be possible without close affiliation with either local and international known institutions or organizations.
‘Corporate Governance’, n. d, [Online], Available at Mahindra Corporate Website: http://www. mahindra. com/OurGroup/whatdrives_corporate_goverence. html Khanna, T, & Palepu, K. 1999, Is Group Affiliation Profitable to Emerging Markets? An Analysis of Diversified Indian Business Groups. Mishra, G. 2006, ‘The Present State of India’s Economy’, ZNET, [Online], Available at: http://www. zmag. org/content/showarticle. cfm? ItemID=9817
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