THE LOCAL AND INTERNATIONAL BUSINESS

ENVIRONMENT OF THE FIRM

Cultural Intelligence - individual’s ability to favorably receive and adjust to an unfamiliar way
of doing things.

Anthropologist Edward T. Hall noted that the way people approach and deal with time varies
across cultures.

a. Monochronic Cultures – people tend to do one thing at a time and emphasizes

punctuality and sticking out to rules.
b. Polychronic Cultures – more flexible on time; accomplishing many things at once and
also common for these cultures.

Geert Hofstede showed how selected countries ranked on the 5 cultural dimensions he studied;

a. Power Distance – the degree where a society accepts or rejects the unequal distribution
of power among people in organizations and the institutions of society.
Example:
Usage of “madam” or “sir” Local (high power distance)
Nickname in Foreign (low power distance)
b. Uncertainty Avoidance – the society is uncomfortable with risk, change, and situational
uncertainty.

Example:

Introduction of new products is easier in Foreign

Introduction of new products is harder in Local

c. Individualism-Collectivism – the society emphasizes individual accomplishments versus

collective accomplishments.
Example:
Employees prefer to work without the help of others (Foreign)
Preference for group or team work (Local)
 d. Masculinity-Femininity – the society values assertiveness and feelings of material
success versus concern for relationships.
Example:
Pushes and lets go of what they really want to say even it hurts other
people (foreign)
Keeps quiet and accept defeat (Local)
e. Time Orientation – society emphasizes short term thinking versus greater concern for
the future or long term thinking.
Example:
Risk-takers with short term thinking (Foreign)
Not risk takers and long term thinking (Local)

Politicolegal Environment – laws and political climate of different countries.

PHASES OF ECONOMIC DEVELOPMENT

Sustainable Economic Development

- Ensures that the present needs of a particular generation are met in full without
endangering the ability of future generations to also fully meet their own needs.

Economic Development

- Total process which includes not only economic growth but also the cultural, social,
political and spiritual aspects of the country’s growth.

Economic Development Phases

- Distinct stages involved in the total process.

 FORMS OF BUSINESS ORGANIZATIONS
A business organization form may change along with the changing times and demands they
present. It may be traditional or open/flexible form.

Organization – collection of people working together to achieve a common purpose.

Business Organization – achieve a common purpose in relation to mission, vision, goals and
objectives sharing a common organizational culture.

Organizational Culture – set of beliefs and values shared by the members.

Changing Business Organization forms:

a. Simple
 Few departments
 Centralized authority
 Wide span of control
 Few formal rules and regulations
 Easy to manage
 Change of forms follows as the company expands its operations
b. Functional
 Group together those similar or related specialized duties
c. Divisional
 Made up of separate business units
 Each division has its own functional organization
 Semiautonomous or semi independent
d. Profit
 Maintaining the stability through income generation and profit making activities
e. Non profit
 Providing service to clients without expecting monetary gains or financial
benefits for their endeavors.
f. Open/Flexible
 Formed to meet today’s changing work environment

Other forms:

a. Team structures
 Madeup of work teams
 Popular in collectivist culture
 Small but focused
 b. Matrix Project business structure
 Assigns specialists or experts to work together unto one project
c. Boundaryless
 Flexible or unstructured
 Eliminates boundaries
 No barriers to information flow
 Completion of work is fast
d. Virtual
 Small group
 Full time workers
 Outside experts are hired
 Physically dispersed and usually communicate electronically
e. Project business structure
 Flexible
 Projects may be long or short term
 Members disband if the project is done
 Continuously work on projects

PLANNING
What is planning?

- It is the first management function

- Crucial and essential part of management
- It is important
- Process that is intended to use to achieve

Reasons:

a. Provides direction to all of the organization’s human resource

b. Reduces uncertainty
c. Minimizing wastes
d. Establishing goals and achievements may be used in controlling

Goals Vs. Plans

Goals - target or desired ends

Plans - are the actions or means