Organization & Management: The Local and International Business Environment of The Firm
Organization & Management: The Local and International Business Environment of The Firm
HIGH
MANAGEMENT SCHOOL
Self-
The Local and International Learning
Business Environment of the Firm Module
7
Quarter 1
Republic Act 8293, section 176 states that: No copyright shall subsist in
any work of the Government of the Philippines. However, prior approval of the
government agency or office wherein the work is created shall be necessary for
exploitation of such work for profit. Such agency or office may, among other things,
impose as a condition the payment of royalties.
2
Organization & SENIOR
HIGH
Management SCHOOL
Self-
Learning
Module 7
Quarter 1
The Local and International Business
Environment of the Firm
3
Introductory Message
In addition to the material in the main text, you will also see this box in the
body of the module:
As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them
to manage their own learning. Moreover, you are expected to encourage and assist
the learners as they do the tasks included in the module.
4
For the learner:
This Self-Learning Module was designed to provide you with fun and
meaningful opportunities for guided and independent learning at your own pace
and time. You will be enabled to process the contents of the learning material while
being an active learner.
5
MODULE THE LOCAL AND INTERNATIONAL
7
BUSINESS ENVIRONMENT OF THE FIRM
EXPECTATIONS
At the end of this module, you are expected to:
PRETEST
Directions: Identify whether the statement is correct or incorrect by
encircling the option that represents your answer.
6
RECAP
Directions: Jumble the letters to find the correct word described in each item.
1. Through this process, the organization can decide how to respond to the various
issues and challenges brought about by these forces.
EVITONARNMENL SNNGCANI
2. It is also called a task environment or competitive environment.
TNEMNORIVNEORCIM
PHICGRADEMO DITIONSCON
MERSCUSOT
CONOMICE SDITIONSCON
7
LESSON
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. Understanding the local and
international business environment of the firm requires managers of organizations
to sharpen their cultural intelligence. Cultural intelligence is an individual’s
ability to favorably receive and adjust to an unfamiliar way of doing things. This
will enable them to develop their ability to accept and adapt to different cultures,
both local and international, that may affect the organization to which they belong.
Access to materials and labor may be limited in local businesses. There are
many privileges which a domestic business enjoys like low transaction cost, less
8
period between production and sale of goods, low transportation cost, encourages
small-scale enterprises, etc.
1. Power Distance – the degree to which a society accepts or rejects the unequal
distribution of power among people in organizations and the institutions of society.
9
because of these, managing globally can be very complicated, obviously has a major
impact in the way business operates all over the world.
4. Global Outsourcing
10
outsourcing solutions to achieve strategic business objectives for the outsourcing
company.
11
5. Access to New Markets
1. International Recruiting
12
3. Incurring Tariffs and Export Fees
Another challenge both U.S and UK leaders said they face in the report is
incurring tariffs and export fees—29% agreed this is a challenge for their global
businesses. For companies looking to sell products abroad, getting those items
overseas can be expensive, depending on the market.
While globalization has made foreign countries easier to access, it has also
begun to meld unique societies together. The success of certain cultures
throughout the world caused other countries to emulate them. But when cultures
begin to lose their distinctive features, we lose our global diversity.
13
Additionally, global businesses must keep up with different and ever-
changing labor laws in new countries. When expanding into new countries,
companies must be aware of how to navigate new legal systems. Otherwise,
missteps lead to impediments and severe financial and legal consequences.
The political climates in the United States and Europe show that there are
different viewpoints on the results of globalization. Many countries around the
globe are tightening their immigration rules, and it is harder for immigrants to find
jobs in new countries. This rise in nationalism is mainly due to anger from the
perception that foreigners fill domestic jobs or at companies moving their
operations abroad to save money on labor costs.
Companies see many aspects of their businesses change once they enter the
global marketplace. For example, globalization makes the workforce more diverse.
This diversity is an overall positive change, but it creates some challenges, such as
language barriers and differences in cultural expectations.
ACTIVITIES
Directions: In one whole sheet of paper, answer, and explain the following
questions:
1. Why do companies have to study their environment first before venturing
into new businesses?
2. How cultural intelligence important in terms of doing business globally?
3. How would you describe Philippine culture? Do you think it would be easy
for a foreign manager to manage his or her company in the Philippines?
14
WRAP UP
VALUING
Point of Reflection
POSTTEST
Directions: Read the statement carefully and encircle the letter of the
best answer.
2. One of the benefits of globalization were it easier than ever to access foreign
culture, including food, movies, music, and art.
A. Access to New Cultures B. Access to New Talents
C. The Spread of Technology and Innovation D. Higher Standards of Living
Across the Globe
3. It exists when two or more countries agree on terms that help them trade with
each other.
A. Trade Fair B. Trade Agreement
C. Trade Barriers D. Trade Mark
15
A. Trade Fair B. Trade Agreement
C. Trade Barriers D. Trade Mark
KEY TO CORRECTION
A 5. Economic conditions 5. F 5.
C 4. Customers 4. F 4.
B 3. Demographic conditions 3. T 3.
B 2. Micro-environment 2. F 2.
A 1. Environmental conditions 1. T 1.
R E F E R E N CE S
A. Books
16
B. Website
https://www.outsource2india.com/why_outsource/articles/global-outsourcing.asp
https://velocityglobal.com/blog/globalization-benefits-and-challenges/
https://en.wikipedia.org/wiki/Trade_agreement
https://opentextbc.ca/businessopenstax/chapter/barriers-to-trade/
17