LESSON 5 ORGANIZATIONAL-MANAGEMENT-THE-LOCAL-AND-INTERNATIONAL-BUSINESS-ENVIRONMENTS(1).pdf

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THE LOCAL AND
INTERNATIONAL
BUSINESS
ENVIRONMENTS
RRby ROWELL RIZALTE

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OBJECTIVES
1Recognize the
factors that
affect the local
business
environment.
2
Acknowledge the
forces that affect
the local
business
environment.
3
Discuss the
different phases
of economic
development
4
Explain the role
of business in
the economy

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Overview: The success of
businesses depends on
adapting to both local and
international environments.
Key Focus: How external
factors affect business
strategies and operations.

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The Local Business
Environment
Influencing Factors:
Both microenvironment and
macroenvironment play a role.
Unique Business Conditions:
The Philippine business environment
is shaped by various factors, leading
to a unique business climate.

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Impact of Weather and
Natural Disasters
Weather Conditions:
Hot and stormy seasons impact
industries, particularly agriculture.
Natural Disasters:
Earthquakes, typhoons, and droughts
can disrupt production and increase
food prices.

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Philippine Cultural
Aspects in Business
Consumer Preferences:
Preference for American-made
products and local brands.
Role of Sentiments:
Importance of appealing to local
tastes and using local ingredients.

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Opportunities in the
Local Environment
BPO Industry:
A major source of employment and
economic contribution.
Statistics:
1.3 million Filipinos employed in 2019,
with growth of 8-10% per year.

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Digital Economy Growth
Rise of Freelancing:
Philippines ranks among top
countries for freelancers.
Gig Economy:
35% growth in freelancing market in
2019, driven by the pandemic.

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Characteristics of the Local Business
Environment
Proximity
Local businesses
are closely
interconnected,
with strong
community ties
and
interdependence
.
Familiarity
Leaders and
employees often
have a deep
understanding of
the local
market's unique
needs and
preferences.
Responsiveness
Local businesses
can quickly
adapt to
changing
conditions and
capitalize on
emerging
opportunities.

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SOME TERMINOLOGIES
EXTERNALITY
A consequence
of any economic
activity which
affects
unrelated third
parties. INFLATION
An increase in the
prices of goods and a
decrease in the
purchasing value of
money
QUOTAS
Restrictions in
international trade by
limiting the number
of exports or imports
in a country for a
certain period
TARIFFS
Taxes to be paid in a
particular import or
export transaction

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Political and Legal Factors in
the Local Environment
Regulatory Compliance
Organizations must navigate a
complex web of local laws,
regulations, and policies to
operate effectively.
Government Incentives
Some local authorities offer tax
breaks, subsidies, or other
incentives to encourage business
growth and investment.
Political Stability
The predictability and reliability
of the local political landscape can
significantly impact business
operations and risk.
Corruption
Navigating potential corruption
and unethical practices is a
common challenge for businesses
in certain local environments.

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Economic Conditions in the Local Market
Market Size and Growth
Understanding the size and
growth potential of the local
market is crucial for business
planning and expansion.
Infrastructure and
Resources
The availability and quality of
local infrastructure, labor, and
other resources can affect
business operations and costs.
Consumer Spending
Patterns
Analyzing local consumer
behavior, preferences, and
purchasing power helps
businesses tailor their offerings.

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Sociocultural Influences on Local
Business
Demographic Trends
The age, gender, and ethnic composition of the local population can shape consumer
demands and business strategies.
Cultural Values
Understanding the local community's traditions, beliefs, and norms is crucial for
developing meaningful connections.
Lifestyle Preferences
Adapting to the unique leisure activities, consumption habits, and work-life balance of
the local community is essential.

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The International
Business Environment
Key Considerations:
Political, economic, social, and
technological factors.
Different Trade Policies:
Importance of understanding
country-specific regulations like
taxes, tariffs, and trade laws.

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Impact of Political
Stability
Government Role:
Stability of government affects
international business decisions.
Trade Agreements:
Influence of trade rules and policies
on business operations.

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Adapting to
International Markets
Regulations and Protection:
Different copyright laws and
patents.
Conclusion:
Adapting to both local and
international environments is
crucial for business success.

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The Challenges of the International Business Environment
1
Cultural Differences
Navigating diverse languages, customs,
and norms across international markets
requires cultural agility and sensitivity.
2
Regulatory Complexity
Complying with a wide range of legal and
regulatory frameworks in different
countries adds operational complexity.
3
Logistical Challenges
Coordinating supply chains, transportation,
and distribution across borders can be a
significant operational hurdle.

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The Role of Technology in International
Management
Virtual Collaboration
Leveraging video conferencing,
cloud-based tools, and real-time
communication platforms to
facilitate global teamwork.
Data-Driven Insights
Harnessing advanced analytics
and business intelligence to gain
deeper visibility into
international market trends.
Process Optimization
Implementing digital tools and
automation to streamline global
logistics, procurement, and
supply chain operations.

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Strategies for Success in the Global Marketplace
Glocal Approach
Combining global scale and local responsiveness by
adapting products, services, and strategies to individual
markets.
Strategic Partnerships
Forming alliances with local companies and leveraging their
market knowledge and relationships.
Talent Development
Investing in the cultivation of a diverse, culturally aware
workforce capable of thriving in international settings.
Agile Adaptation
Continuously monitoring global trends and rapidly adapting
business models and operations to changing conditions.

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Phases of Economic Development
Overview:
Economic development has progressed
through distinct phases, each shaping
business practices and the global economy.
Importance:
Understanding these phases helps
businesses adapt to changes in production,
technology, and market demands.

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Phases of Economic Development
1
Mercantilism
(1500-1780)
Countries accumulated wealth through
trade relations with other countries and
colonies. Use of manual labor and basic
tools, limited transportation, and local
markets..
2
Fordism
(1880-1970)
Named after the production model introduced by Henry Ford. Assembly
line production, standardized products, and mass consumption. Led to
more affordable products and the rise of the middle class
3
Industrial Revolution
(1780-1880)
Marked by the shift to mechanized production and
factories. Introduction of steam engines, mass
production, and long-distance transportation.
Increased production capacities and broader market
reach.

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Phases of Economic Development
4
Post-Fordism
(1970-2010)
Focused on flexible production, innovation, and new technologies. Shift from
mass production to customized goods, with an emphasis on digital and
automated processes. Companies expanded globally, leveraging
advancements in communication and transport.
5
Globalization
(2010 - Present)
The current phase of economic development is characterized by a
global marketplace. Establishment of regional economic
organizations enabling free trade. Increased competition among
companies to maintain quality. Focus on sustainability and
environmentally responsible business practices. Globalization has
led to interconnected economies and heightened consumer
expectations.

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The Role of Business in the Economy
Economic Contribution:
Businesses drive economic growth
through transactions that involve
manufacturing, distribution, delivery,
and service provision. Stimulating Growth:
Movement of money and
resources leads to overall
economic development.Attracting Investments:
A robust business sector attracts
investments, fostering further
growth.

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Impact of a Thriving Economy
Encouraging Start-ups:
New businesses emerge, fostering innovation and development.
Benefits to Society:
❖Job creation and better employment opportunities.
❖Wider range of products and services available to consumers.
❖Improved quality of life through access to new innovations.

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Thank
you