Local and International Business Environment of the Firm

The definition of business environment means all of the internal and external factors that affect how the company functions including employees, customers, management, supply and demand and business regulations.

1. A strategic mindset

2. Effective Environmental Scanning

3. Due diligence and analysis

4. Strengthen the business

Local and International Business Environment of the Firm

What Philippine Businesses do in this new era of uncertainty?

On Handling Business Matters in the Philippines

-The Filipino way of doing business is influenced by East and West

-It is by means of friendly relationship.

- Filipinos do like a polite reply with a smile.

-Christmas is a time to show appreciation. Through Token and Gifts. Gifts could be range from BASKET OF GOODIES to company giveaways.

- Office hours are 8:00 - 5:00 with one hour lunch break. Banks are 9:00 - 3:00. Offices are generally close during weekends.

-Philippines have its own etiquette.

-To show respect, Filipinos usually address people by their titles.

-Everyone avoid avoid lost of face.

-English is the official business language, documents are written in english however it is common to hear "Taglish".

-Business lunches and dinners usually arranged through phone and confirmed by the secretary. The one who invites customarily pays.

Summer-weight clothing normally worn in temperate zones.

-Philippines imposed foreign ownership restrictions.

-17 procedures and 80 days to establish foreign owned business.

- Constitution prohibits foreign companies from buying land.

Business operates within a complex network of political, legal and institutional framework conditions - the "so-called" business climate. A conducive local business climate reduces the costs of doing business, unleashes economic potential and attracts investment. In contrast, if the local business climate is shaped by problematic governance patterns, political guidelines, laws and regulations and ineffective administration, private and public sector pay enormous and unnecessary costs with negative impact on economic growth patterns.

Key Differences Between Domestic and International Business

The most important differences Between domestic and international business are classified as under:

1.Domestic Business is defined as the business whose economic transaction is conducted within the geographical limits of the country. International Business refers to a business which is not restricted to a single country, i.e. a business which is engaged in the economic transaction with several countries in the world.

2.The area of operation of the domestic business is limited, which is the home country. On the other hand, the area of operation of an international business is vast, i.e. it serves many countries at the same time.

3. The quality standards of products and services provided by a domestic business is relatively low. Conversely, the quality standards of international business are very high which are set according to global standards.

4.Domestic business deals in the currency of the country in which it operates. On the contrary, the international business deals in the multiple currencies.

5.Domestic Business requires comparatively less capital investment as compared to international business.

6.Domestic Business has few restrictions, as it is subject to rules, law taxation of a single country. As against this, international business is subject to rules, law taxation, tariff and quotas of many countries and therefore, it has to face many restrictions which are barriers in the international business.

7.The nature of customers of a domestic business is more or less same. Unlike, international business wherein the nature of customers of every country it serves is different.

8.Business Research can be conducted easily, in domestic business. As against this, in the case of international research, it is difficult to conduct business research as it is expensive and research reliability varies from country to country.

9.In domestic business, factors of production are mobile whereas, in international business, the mobility of factors of production are restricted.

International Business Environment

-Communication is easier.

- Because it is a business entity whose commercial activities are performed within a nation. Alternately known as internal business or sometimes as home trade. The producer and customers of the firm both reside in the country. In a domestic trade, the buyer and seller belong to the same country and so the trade agreement is based on the practices, laws and customs that are followed in the country.

The Philippine Business Environment

-Philippines is ranked 108th out of 189 economies in doing business 2014. The score was increased by 25 point compared on 2013.

-It only shows a positive reforms made by government.

- Easier to deal with construction permits, get credit, pay taxes etc...

- 37.5% of the firms competing against informal firms.

-International Business is one whose manufacturing and trade occur beyond the borders of the home country. All the economic activities indulged in cross-border transactions comes under international or external business. It includes all the commercial activities like sales, investment, logistics, etc., in which two or more countries are involved.

-Access to materials and labor maybe limited.

-There are many privileges which a domestic business enjoys like low transaction cost, less period between production and sale of goods, low transportation cost, encourages small-scale enterprises, etc...

In different countries, sometimes even within a country, there are substantial differences in attitudes, beliefs. motivation morality, superstition, and perception, and as well as other characteristics. In 1928. Geert Hofstede developed a model in which worldwide differences in culture are categorized according to five dimensions.

The Role of Business in the Economy

The Local Environment

of the Firm

-The vital role of the business is to act as a vehicle for economic progress. Business catalyzes economic growth and ease poverty.

-Business made possible exchange among people.

-Micro, Small, Medium Enterprises are important in the Philippines because theses MSME's are the backbone of the country's economy account for 99.6% of all registered business that provide work to the 70% of the country's labor force.

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