Question

In the international business environment, what is the recommendations for Australian cotton manufacturer moved into the Philippines? ( mainly focus on Environment (Culture) Business ,Environment (Ethics) Business ,Environment (Trade) Potential in Emerging Markets) approx 150 words

case study: M&S Textiles Australia is a manufacturer of quality cotton fabrics. Due to increased competition from cheaper imported goods, the company is contemplating the establishment of a manufacturing plant in Asia to reduce the cost of manufacturing at home. The company has identified Bangladesh, Vietnam, Philippines, and Malaysia as potential countries for the establishment of the overseas manufacturing plant. As a complement of the current production in Australia, this new facility will supply products to customers around the world (include Australia), but it will not sell products itself. The headquarters of M&S Australia is responsible for sales and marketing in Australia and overseas.

Answer 1

solution:

Given data:

Offshoring is a well-known and widely popular method of business followed by large establishments. It can be defined as the transfer of a part of the business' activity to another country, utilizing its resources and processes for the benefit of the business. There are mutual advantages to it for the country which is the recipient of such business and for the business itself, but we won't be too much focused on it. As outlined in the abstract in the question, M&S Australia is looking to set up offshoring sites in the Philippines to reduce the manufacturing cost back home. In order to take this step, it's important for M&S Australia to be aware of the international business environment in the Philippines. This case study will be focusing on the recommendations divided into Business Culture, Business Ethics and Trade Potential of the Philippines relevant to the question.

Business Culture

​In the Philippines, the business culture is heavily reliant on personal relationships. It's important to establish a comfortable rapport with the businessmen in order for them to commit to your requirements. It's often so observed that their business deals are ​not too straightforward and they prefer indirect reconciliations which might be an odd behavior to quite a few other nationalities, including Australians who prefer to have direct and to the point conversations.

• Greeting: The official business language in the country is English. While performing any business activity, shaking hands to greet and confirm deals is ideal. Additionally, there are more advantages if the business providers in the Philippines are approached through other personal connections.
• Work Hours: Regular working hours are from 8 am to 5 pm (including an hour lunch break) with ideal meeting time being mid-afternoon. There is a certain laid-back approach to time and hence it's important to account for a 15 min buffer for any time-bound activity.
• Communication: As established before, indirect communication is preferred paired with courteous and diplomatically presented truth or words of negotiation.
• Other recommendations:
  • A significant number of business meetings are held in informal locations, like while playing golf.
  • In order to build personal rapport, they might be prone to asking personal questions which is a means for them to know their business partner.
  • Dignity and pride are of high value in the Philippines and hence, it's important to be gentle and polite while pointing any negative attributes.

Business Ethics

​The multiple dialects in the region​, the fragmentation in geography (more than 7000 islands), the predominantly Roman Catholic culture in the region paired with the comparatively short experience in nationhood has created an unusual understanding of 'business ethics' in the Philippines. In the country, the scope of business ethics is very limited. With the Philippines opening it's boundaries to attract international businesses in order to grow the economy at a steady rate, it has indulged in practices that might not be considered ethical. Ethical codes have not yet formed a strong foothold in the corporate culture, not to say that no business follows ethical practices, but the examples are pretty scarce. The primary ethical concerns in the country can be summed up as follows:

• swift growth and liberalization of the economy,
• unequal wealth distribution,
• environmental destruction,
• corruption.

​Trade Potential

The Philippines is considered an emerging market with an overriding focus on attracting foreign investment to boost employment and facilitate growth in the economy. In accordance with its state, the country was able to formulate multiple plans - Philippines Development Plan, Export Development Plan, UNDAF agreement, Medium-Term Phlippines Development Plan and others, formulated to promote economic growth, job creation, quality education and availability of basic needs for the citizens. The government has aimed to boost international trade through:

• establishing multiple government and non-governmental organizations that work to promote foreign investment and exporting,
• establishing fruitful trade agreements (historically being the part of WTO, ASEAN, etc),
• relaxing the regulations on foreign ownership and investment in the country,
• providing monetary support and tax incentives to foreign investment,
• facilitating privatization across all sectors.

Hence, in summary, the Philippines is one of the major developing economies in the emerging market. Priced with an opportunity, in recent times, of multiple benefits for foreign business investors, it is a prized location for offshore activities.

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