TheThe PHILIPPINESPHILIPPINESInternational Business Training

Kevin DavisKevin JohnsonShaun Pederson

Todd Souza

MGT 459Arizona State University

April 2003

▪▪ OVERVIEW ▪▪

FACTSHOLIDAYSECONOMIC FACTSHEATH CONCERNSEMPLOYEE PROTECTIONTIMELARGEST BUSINESSESARTISTIC & CULTURAL CONTRIBUTORSFILIPINO MANAGEMENT STYLESORGANIZATIONAL CHARTDOING BUSINESS IN THE PHILIPPINESDINING, ENTERTAINMENT, & DRESSCULTURAL SYMBOLS, VALUES, ETIQUETTE, RITUALS & SOCIAL CUSTOMSGIFT GIVINGBUSINESS LAWS, RULES, & ETHICSESSENTIAL CONCERNS AFFECTING RELOCATION

▪ GENERAL INFORMATION ▪

Official NameRepublic of the Philippines

Official LanguagesTagalog, English

Religion86%+ Roman Catholic6% Nationalized Christian2% Protestant Denominations4% Muslim

Government SystemRepublicDemocracy modeled on the U.S. systemPresident’s Term Limited to 6 Years

Population2000: 76,498,735 persons

Population Growth Rate2.36 annually between 1995 and 2000

Natural ResourcesTimber, Petroleum, Nickel, Cobalt, Silver, Gold, Salt, Copper, Rice

Major CitiesQuezon City: 2.17 MillionManila: 1.58 MillionCaloocan City: 1.18 Million

▪ HOLIDAYS ▪

New Year’s DayJanuary 1

Holy WeekBataan Day

April 9Labor Day

May 1Independence Day

June 12National Heroes’ Day

Last Sunday of August

All Saints’ DayNovember 1

Bonifacio DayNovember 30

Christmas DayDecember 25

Rizal DayDecember 30

The Government may declare other special or non-working holidays such as during general elections, or periods of calamity.

▪ ECONOMIC FACTS ▪

GDPQ4 ‘02: P1138.930 billion

GNPQ4 ’02: P1211.108 billion

Inflation RateCurrent Rate: 2.9%

UnemploymentJan. 2002: 10.3%Jan. 2003: 10.6%

Balance of Trade (Feb. 2003)

Exports: $2.723 billionImports: $2.817 billionDeficit = $93.25 million

Median Family Income2000: PhP88, 782.00

Currency Exchange RateCurrency Exchange Rate1 USD = 52.975 1 USD = 52.975 PhPPhP

▪ HEALTH CONSIDERATIONS ▪

WaterDon’t Drink It!Bottled Water Available

Food“If you can’t boil it, cook it, or peel it—Forget it!”

DiseasesHighest per capita incidence of tuberculosis in the worldVaccinationsVaccinationsNo Bare Feet!No Bare Feet!

WeatherAverage Yearly Temperature = 27°C (82°F)Two Seasons: Dry & WetTyphoons

EmergenciesDirectory Assistance: 114Police: 166 or 167Fire: 160

Medical CarePersonal HygieneAdequate CareLower Costs

▪ EMPLOYEE PROTECTION ▪

CrimeCrime Rates: (per 100,000)

1990: 2282001: 98.8

TerrorismSensible CautionPresident Gloria Macapagal-Arroyo’s Statement

Workplace ViolenceLow workplace violence

▪ TIME ▪

Time ZonesUTC/GMT +8 hours15 hours ahead of Phoenix

Punctuality“Bahala Na”

Work Week8 hours a day – 5 days a weekHours of Operations

▪ LARGEST BUSINESSES ▪

San Miguel Corp.Largest publicly listed food, beverage and packaging company in the Philippines.

NestleMagnolia co-brand ice cream.

PLDTCountry’s principal supplier of domestic and international telecommunications services.

▪ ARTISTIC & CULTURAL CONTRIBUTORS ▪

Imelda Marcosb. July 2, 1929Politics (President Ferdinand Marcos)3,000 pairs of shoes500 bras200 girdles1 bulletproof bra

Lea SalongaWorld-renowned Actress & SingerAladdin & MulanMiss SaigonLes Miserables

Agapito FloresFlorescent Light Bulb

▪ FILIPINO MANAGEMENT STYLES ▪

Planning/OrganizingBusiness travelers are expected to be on time for all appointmentsProducing “instant results” is not a part of Filipino business culture.Best times for appointments. Business hours Government office hours During social events, keep in mind the general rule that the more important the guests, the later they will arrive

▪ FILIPINO MANAGEMENT STYLES ▪

StaffingFamily ties are very strong and can even affect businesses.High respect given to age. Nepotism is a characteristic of business in the Philippines.

LeadingLeadingEmployee's fear to express disagreement to their managers Employee's fear to express disagreement to their managers In these cultures inequalities are expected and desiredIn these cultures inequalities are expected and desiredMight makes right, skillsMight makes right, skills--wealthwealth--powerpower--status go together status go together There is relatively strong congruence between how managers There is relatively strong congruence between how managers behave and what workers expect from them. behave and what workers expect from them.

▪ FILIPINO MANAGEMENT STYLES ▪

ControllingHigh Power Distance - masculinity is a prevailing value Filipinos believe that human interaction and contact form the basis of a successful business relationship.Personal relationships mean everything; things can’t simply be handled by fax and telephone.

Problem SolvingThe scientific method

▪ FILIPINO MANAGEMENT STYLES ▪

Negotiation Business in the Philippines develops through socializing“Loss of face”Making only positive comments is a good place to startIn general, they are open to new ideas and concepts, but they will not easily change their assumptions, opinions. Filipinos must get to know you before engaging in business of any kind Ensure that there is some preliminary “small talk”Find out who the “key players” are in the organization.Filipino businesspeople try to avoid confrontations Don't assume that smiling among Filipinos is an indication of amusement or approval. Producing “instant results” is not a part of Filipino business culture. The pace of business negotiations in the Philippines is much slower than in U.S.There is never a sense that the individual has the authority to have “the final say”

▪ FILIPINO MANAGEMENT STYLES ▪

CommunicationWelcome Topics of Conversation

Filipino culture and customsFamilyFiestasSports, especially basketball

Topics to AvoidPoliticsCorruptionForeign aidReligionCriticizing a Filipino

▪ FILIPINO MANAGEMENT STYLES ▪

Communication (continued)First Name or Title?

Addressed with a title and surname. People without a professional title should be addressed in English, with courtesy titles such as “Mr.”, “Mrs.” or “Miss”, followed by their surnames.When you do not know a person's last name, confer respect by using the terms “Sir” or “Ma'am.”Most Filipinos have nicknames.

Business CardsNot necessary to translateExchange tends to be informal

▪ FILIPINO MANAGEMENT STYLES ▪

MotivationMotivate by achievement, esteem, and belongingness.

Decision MakingWithout the necessary introductions, you'll find it difficult gaining access to the key decision-makers.A skilled “go-between” is needed

Meeting with subordinates

▪ ORGANIZATIONAL CHART ▪

Filipino corporations execute a paternalistic and hierarchical management style.

▪ DOING BUSINESS IN THE PHILIPPINES ▪

LeadershipManagerial Performance MonitoringAppointment of Key ManagersFormal Performance Targets

Managing expatriatesWelcome and recognize the employee and familyEstablish support Counseling or workshops Assist the spouse with job counseling, resume writing, and interviewing techniquesEducational counseling for the children

▪ DOING BUSINESS IN THE PHILIPPINES ▪

Sexual HarassmentRemains a major social issue in the PhilippinesNo specific laws against sexual harassmentSimilar to other Asian countries

MotivationGrant of BonusesAwards for Loyalty

Business EthicsTraditionally, corruption has been part of Philippine businessFilipino government is addressing the problem It is advisable to use a local representative carry out the negotiation in the Philippine way.

▪ DOING BUSINESS IN THE PHILIPPINES ▪

Expatriate assignmentsConduct extensive interviews Offer many training opportunitiesStronger job security

DiversityMalay, Spanish, and American culturesOptimism and tolerance Because of the economic development of the country, nationality is rising.

CommunicationFrequent meetings, consultations, and correspondence are neededIt is not fruitful to be formal and businesslike all the time. Filipinos have fascinating nonverbal language

▪ DOING BUSINESS IN THE PHILIPPINES ▪

International Differences in Work Related Values:

Similar to the United States in many ways.Studies by:

TrompenaarsHofstedeEdward T. Hall

▪ DOING BUSINESS IN THE PHILIPPINES ▪

Universal vs. Particularism

UniversalismIndividualism vs. Communitarianism

CommunitarianismNeutral vs. Emotional

EmotionalSpecific vs. Diffuse

Diffuse

Achievement vs. Ascription

AscriptionTime (sequential/synchronous)

SynchronousThe Environment (inner-directed/outer-directed)

Outer-Directed Environmental Culture

Trompenaar’s Cultural Differences:

▪ DOING BUSINESS IN THE PHILIPPINES ▪

Hofstede’s Dimension Difference: Power Distance

High Power DistanceUncertainty Avoidance

Low Uncertainty AvoidanceCollectivism vs. Individualism

CollectivismFemininity vs. Masculinity

Masculinity

▪ DOING BUSINESS IN THE PHILIPPINES ▪

Edward T. Hall’s Difference in use of:

Language: Low Context vs. High Context Culture

High Context

Time: Polychronic vs. Monochronic Culture

Polychronic

Use of SpacePublic

8’ to 10’

Social4’ to 8’

Personal18” to 4’

Intimate18”

▪ DINING & ENTERTAINMENT ▪

Business Meals CommonSpouses invited to Dinner, not Lunch

Invitations/MannersAlways accept invitations to social events“Kumain ka na ba?” “Yes”

“Pabaon”Utensils UseAlcohol Consumption

▪ DRESS ▪

Business DressMen:

Barong TagalogWomen:

Conservative SkirtsUniforms

Casual DressAny Modest/Modern AttireWestern Styles Popular

▪ SYMBOLS, RITUALS, & CUSTOMS ▪

SymbolsBahay Kubo

ValuesFamilyContent and Structures“Filipino Value System”

CustomsCan have quiet natureCare for elderly and disabledClothesFood“Ho” and “Po”

EtiquetteAvoid staringBreak eye contactRaising of eyebrowsPhysical contact“The Finger”Maintain positivity

RitualsRiceBusiness Cards

Recommended GiftsRecommended GiftsA gift item related to the country or city you inhabitA gift item related to the country or city you inhabitFine pensFine pensStationary imprinted with your company logoStationary imprinted with your company logoDinner at a fine restaurantDinner at a fine restaurantPerfumePerfume

Gifts to AvoidGifts to AvoidLiquorLiquorKnivesKnives

▪ GIFT GIVING ▪

Declaration of Basic PolicyDeclaration of Basic PolicyChapter 1, Article 3 = Title VII Chapter 1, Article 3 = Title VII

“The State Shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers.”

Prohibited PracticesProhibited PracticesArticle 34 = Foreign Corrupt Practices ActArticle 34 = Foreign Corrupt Practices Act

ProvisionsProvisionsMinister of LaborMinister of Labor

Work PermitsWork PermitsDept. of LaborDept. of Labor

▪ BUNINESS LAWS & ETHICS ▪

Miscellaneous ProvisionsMiscellaneous ProvisionsRegulatory PowerRegulatory PowerVisitorial PowerVisitorial Power

Passport/Visa RequirementsPassport/Visa RequirementsPassport valid six months beyond intended stayPassport valid six months beyond intended stayVisa requirementsVisa requirements

EthicsEthicsConfrontationConfrontationBusiness problems/PractitionerBusiness problems/Practitioner’’s prides pride

““saving facesaving face””FavorsFavors

▪ BUNINESS LAWS & ETHICS ▪

▪ GENERAL RELOCATION ISSUES ▪

FamilyHousing ConsiderationsCostsLaundrySalaryElectronic CompatibilityMannersPetsShoppingEducation/Child CareTransportationFoodTaboos/Superstitions

Click on selected photos for more related info!

SALAMAT!SALAMAT!(Thank You!)(Thank You!)

▪ TAGALOG PHRASES ▪

How are you?What’s your name?Who is your manager?Where is the school?When is the meeting?Where is their office?I’m from America.

Kumusta ka?Ano’ng pangalan mo?Sino ang manedyer mo?Nasaan ang eskwelahan?Kailan ang pulong?Saan ang opisina nila?Taga America ako.

Back to

Slide Show

▪ RELIGION ▪

Back to

Slide Show

Holy WeekHoly Week

Back to

Slide Show

JOSE RIZAL

Back to

Slide Show

Back to

Slide Show

Bahay KuboBahay Kubo

Back to

Slide Show

Click on any photo to return to slide show.

Click on any photo to return to slide show.