STRATEGIC MANAGEMENT REPORTING

CHAPTER 3: CHALLENGES IN THE INTERNAL ENVIRONMENT

INTERNAL ENVIRONMENT- of an organization refers to the immediate surroundings and factors within the
organization itself that have a direct impact on its operations, strategies, and performance.
- It represents the internal conditions and variables that influence how an organization conducts itself
towards success.
- The main factors in the internal environment are; customers, suppliers, competitors, shareholders,
and employees.

GOVERNMENT: THE BUSINESS CARETAKER

Just like a caretaker takes care of a house, the government takes care of businesses by making sure they
operate safely, fairly, and with the potential for success.
‘the following are the reasons of why the government is often viewed as the business caretaker.’
1. Provides the needed infrastructure
A. Physically in the form of roads, bridges, electricity, and water services
B. Technologically through information technology infrastructure and communication facilities
- Example, Internet Access: Just like homes, businesses need the internet to connect to the digital
world. Governments make sure there's good internet access across the country, so businesses can
use it for tasks like selling products online. Governments support digital payment systems to make
it easier for businesses to receive payments electronically. This is similar to using a credit card
instead of cash.
C. economically by providing availability of loans, banking services, low interest rates, and tax
incentives.
D. socially through housing, welfare, waste management policies, community services, and
societal responsibilities;
- The government creates rules and systems for handling trash and pollution.
- The government can provide services like public transportation, parks, and healthcare.
- Businesses have a responsibility to be good citizens in their communities. The government can
encourage this by setting rules and expectations for ethical behavior.
E. politically in terms of peace, security, stability, and governance.
- the government helps businesses politically by keeping the peace, providing security, offering
stability, and ensuring good governance. This creates a safe and predictable environment where
businesses can operate and grow smoothly.
2. Creates an atmosphere of fair and robust competition among industry and company players,
monitors and regulates monopolies and oligopolies, and eliminates unfair and illegitimate practices.
- The government creates a fair and competitive business environment by keeping an eye on big,
powerful companies, making sure they don't take over everything and ensuring that everyone plays
by the rules.
 - Monopoly and oligopoly are two types of market structures in business. Both market structures can
have significant implications for consumers, including pricing, product quality, and choices available
in the market.
- Monopoly- occurs when a single company or entity dominates and controls an entire industry or
market. In a monopoly there is only one seller, and consumer have no alternative options for the
products or services offered. This lack of competition can lead to higher prices, lower quality, and
reduced consumer choice.
- Oligopoly- is a market structure in which a small number of large companies or firms control the
majority of the market share in an industry. Unlike a monopoly, there are multiple sellers in an
oligopoly, but they have significant market power and can influence prices and competition through
their actions.
- mahalaga na mayroong patas na kompetisyon sa negosyo upang mapanatili ang kalidad, presyo, at
pagpipilian para sa mga mamimili.
3. Formulates business policies, implements business operating guidelines, and regulate in food,
manufacturing, construction, and other service industries, ensures quality of the conduct of
business activities such as payment of taxes, health and safety practices and products and services,
and mandates minimum wages of employees, and their fair just treatment.
- Formulating Business Policies: Research and Planning: The government studies the needs and
challenges of different industries. For example, in the food industry, they look into food safety and
quality.
- Taxation: Governments collect taxes from businesses to fund public services. They mandate that
businesses pay their taxes correctly and on time.
- Governments set minimum wage levels to ensure that employees earn a fair income.
Culture: A Communal Convergence
The Philippines has its own culture-a culture that was greatly influenced by diverse cultures: Chinese,
Japanese, Spanish, and American. Through many years of national growth and development, this culture
has been shaped by environmental variables happening within and outside the country and until today,
continues to change, mature and transform. Such evolution has nurtured in the Filipino certain distinct
beliefs, traditions and practices, which are either a pride to the country or otherwise. Worth mentioning
are the following:
1. The trait of hospitality-Filipinos are generally warm people. They are cordial, friendly and
accommodating. Their doors are open to relatives and friends, most especially during town
celebrations called "fiestas." (Filipinos are known for being very welcoming and friendly.)
2. The practice of bayanihan- Filipinos, most especially those in the provinces, are generally helpful.
This practice creates an atmosphere of unity and concern among the townspeople. (For example, if
one family needs to move their house to a new location, everyone in the village might pitch in to
carry the house together. Teamwork makes the dreamwork.)
3. Filipinos generally take care of their parents, old relatives, and siblings- They work hard to send
their brothers and sisters to school. Because of this priority, some set aside their own personal lives.
In addition to this, most Filipinos take care of their aging grandparents and parents. They do not
send them to homes for the aged, which is the usual practice in developed countries.
4. Pakikisama and utang na loob- Many Filipinos prioritize friendship to the point of sometimes
sacrificing principles. Some develop bad habits like smoking, drinking, taking drugs, and breaking
 laws due to pakikisama. Furthermore, they tend to remember the good things done to them by
people in the past, wishing that someday they can repay them. These nagging feelings of
indebtedness can be abused. (Filipinos really like being friends and helping each other, but
sometimes they can feel like they owe too much to others, and that can be used in the wrong way
by some people.)
5. The habits of ningas kugon, mañana, and Filipino time- Some Filipinos excitedly begin something
without finishing what they have started. This explains why a celebrated and urgent political, social,
or economic issue dies a natural death. Filipinos sometimes tend to procrastinate tasks and
responsibilities. They seem to work better when they cram. They are generally late when it comes
to meetings and appointments, something of an "easy life" attitude. (Some Filipinos have a habit of
starting things enthusiastically but not finishing them. This is why important issues in politics,
society, or the economy often lose attention and aren't solved. Filipinos can also be procrastinators,
which means they delay doing tasks and responsibilities. They sometimes work better when they
have a lot to do in a short time, like when they cram for an exam. They also tend to be late for
meetings and appointments because they have a more relaxed attitude towards time and life in
general, preferring an "easy-going" approach.)
6. The attitudes of crab mentality and bahala na. Some Filipinos are not happy with the good fortunes
of others. They have a subconscious tendency to bring down their own fellow citizens. This is
prevalent here and among Filipinos overseas. Moreover, some Filipinos leave their life to the natural
course of events. There seems to be no sense of urgency. (Some Filipinos don't like it when others
succeed and might try to pull them down. This is called "crab mentality." They also have an attitude
called "bahala na," which means leaving things to fate and not feeling a sense of urgency. They go
with the flow and don't worry too much about planning.)
7. The virtue of resiliency. The Filipinos are a flexible people. Despite the difficulties in their personal
and social lives, they can easily adjust and bounce back. They are born survivors. (Filipinos are
resilient. Even when facing tough times, they can adapt and recover quickly.)
8. The idea of kanya-kanya. Filipinos, on the other hand, tend to be individualistic. At times, they are
selfish and are indifferent to the plight of others. Filipinos can be individualistic and sometimes
selfish, meaning they focus on themselves and may not always care about others.
9. The consciousness of being politically involved. As often noted, Filipinos are highly politicized. They
are up-to-date with the latest political issues. The ordinary Filipino in barbershops, the vendors
along the walkways, and the drivers on the streets generally talk about politics. The ordinary Filipino
housewife is not exempted. Somehow, everyone has his own political views, leanings, and biases.
Filipinos are very interested in politics.

One can see that culture plays an important role in the growth of any country. In a sense, the positive
values that are characteristic of Filipinos have helped the nation to move forward toward development. On
the other hand, the negative values of the Filipinos have, to a certain extent, retarded the progress of the
Philippines. It is hoped that positive Filipino values be further reinforced and enhanced while negative
Filipino values be restrained, if not eliminated.

Stakeholders: The Business Investors

Stakeholders in business are like investors. Some actively participate in the business to make a profit, while
others invest quietly. They are valuable for the country because they create opportunities for trade, start
businesses, pay taxes, and stimulate the economy. Without them, the economy wouldn't thrive.
Stakeholders include owners, employees, the government, and the community, all of whom benefit from
the business's success.