Senior High School - Accountancy, Business and Management

1. Lesson 2: THE LOCAL AND
INTERNATIONAL
BUSINESS ENVIRONMENT
OF THE FIRM
Prepared by: Gladuardo B. Butic
Sagada National High School – SHS ABM
Organization and Management 1:30 – 2:30

2. We are done with lesson 1 of chapter 2 –
Environmental forces and Environmental Scanning and
I am happy that everyone was enthusiastic in learning
this lesson. Today, we will learn about The Local and
International Business Environment of the Firm.
Please follow the activities to begin with.
“Dito, mas matamis ang matututonan at yan ang totoo.
Hindi gaya ng matamis niyang oo na nasa bandang
huli ay bolero”

3. Activity 1.a: WORD CHALLENGE TABLE
In this activity you will give your well thought idea about the word or words by
providing the definition or an explanation. Then in the last column, rank your answer
by writing 1 if you are very sure of your idea, 2 if you are sure of your idea and 3 if you
are not sure of your idea. You are given 21 minutes to answer.
WORD/S DEFINITION OR EXPLANATION RANK
Cultural
intelligence
Local Business
Environment

4. Activity 1.a: WORD CHALLENGE TABLE
International
Business
Environment
Power Distance
Uncertainty
Avoidance

5. Activity 1.a: WORD CHALLENGE TABLE
Individualism-
Collectivism
Masculinity-
Femininity
Time Orientation

6. Activity 1.a: WORD CHALLENGE TABLE
Manana habit
Globalization

7. Activity 1.a: WORD CHALLENGE TABLE
Currency
Exchange
Product
Inflation rate

8. What is your Reflection?
Activity 1.b.: READiscover
This is the time for you to read about the Local and International Business
Environment of the Firm on page 17 – 19 of your text book.
Compare your answer if you got the idea or the thoughts about the word or words in
your reading correctly or has connections.

10. Activity 2: ASSIGNMENTS WITH CHOICE
This activity is a homework assignment that you need to work on for two (2) days.
You can choose to answer first the difficult questions then followed by the easy questions. Or
you can answer two or three questions for today and the rest will be on the following day. And
or you can answer anytime you like or feel within the 2 days’ period. Please give a substantial
explanation or answer.
“Ok lang kung zero ka ngayon sa lovelife mo basta ang importante hindi ka ma-zero sa academics mo… ito
ang mas nakaka-hiya”
Learning Review Questions:
1. Define cultural intelligence. How important is it in terms of doing business globally?
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2. Is it easier to manage business in countries with high power distance rating? Explain your answer.
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11. 3. Which is valued by members of a Filipino society: masculinity or femininity? Explain your choice.
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4. Why should a country’s politico-legal issues be considered when managing in a worldwide environment?
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5. How would you describe the Philippine culture? Do you think it would be easy for a foreign or expatriate manager
to manage his or her company in the Philippines? Explain your answer.
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12. Cultural Intelligence
• Is an individual’s ability to favorably receive and adjust to an unfamiliar way of
doing things.
• This will enable managers to develop their ability to accept and adapt to
different cultures, both local and international, that may affect the organization
to which they belong.
• Monochronic cultures refer to cultures emphasize punctuality and sticking to
set rules.
• Polychronic cultures are more flexible as regards time; accomplishing many
different things at once is also common for these cultures.
• Dilemma scenario:

13. Lesson 2: THE LOCAL AND
INTERNATIONAL
BUSINESS ENVIRONMENT
OF THE FIRM
Prepared by: Gladuardo B. Butic
Sagada National High School – SHS ABM
Organization and Management 1:30 – 2:30

14. Geert Hofstede’s Cultural Dimensions
1. POWER DISTANCE (Power Distance Index /
PDI)
– the degree to which a society accepts or rejects
the unequal distribution of power among people in
organizations and the institutions of society.
– This refers to the degree of inequality that exists –
and is accepted – between people with and without
power.

15. 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.
Western Countries Philippines
India and the Philippines have high power distance, while the US and Australia
have low power distance. The use of the terms “Sir and Madam” to refer to the
boss/superior by subordinate employees in the Philippines shows respect for
authority figures, or high power distance. In the US, subordinates just use the
name or nickname of the boss when addressing him or her, indicating lower
power distance.
Activity 3: What’s the Difference?
In this activity, you will use your creative expressions to express an in
depth understanding about the five (5) Geert Hofstede cultural dimensions using cut-
out pictures/visuals. Make your point of view by showing the difference between
western countries and the Philippines.

16. PDI Characteristics Tips
High PDI • Centralized organizations
• More complex hierarchies
• Large gaps in compensations,
authority and respect.
• Acknowledge a leader’s
status. As an outsider, you
may try to circumvent his or
her power, but don’t push
back explicitly.
• Be aware that you may need
to go to the top for answers.
Low PDI • Flatter organizations.
• Supervisors and employees are
considered almost as equals.
• Delegate as much as
possible.
• Ideally, involve all those in
decision making who will be
directly affected by the
decision.

17. Geert Hofstede’s Cultural Dimensions
2. Uncertainty Avoidance
– the degree to which society is uncomfortable with risk,
change, and situational uncertainty
– This dimension describes how well people can cope with
anxiety.
– In societies that score highly for uncertainty avoidance,
people attempt to make life as predictable and controllable
as possible. If they find that they can’t control their own lives,
they may be tempted to stop trying. These people may refer
to “maňana,” or put their fate “in the hands of God.”

18. UAI Characteristics Tips
High UAI • Conservative, rigid and
structured, unless the danger of
failure requires a more flexible
attitude.
• Many societal conventions.
• People are expressive, and are
allowed to show anger or
emotions, if necessary.
• A high energy society, if people
feel that they are in control of
their life instead of feeling
overwhelmed by life’s vagaries
• Be clear and concise about
expectations and goals, and
set clearly defined
parameters. But encourage
creative thinking and
dialogue where you can.
• Recognize that there may
be unspoken “rules” or
cultural expectations you
need to learn.
• Recognize that emotion,
anger and vigorous hand
gestures may simply be part
of the conversation.

19. UAI Characteristics Tips
Low UAI • Openness to change or
innovation, and generally
inclusive.
• More inclined to open-minded
learning or decision making
• Less sense of urgency.
• Ensure that people remain
focused, but don’t create too
much structure.
• Titles are less important, so
avoid “showing off” your
knowledge or experience.
Respect is given to those
who can cope under all
circumstances.

20. Uncertainty Avoidance – the degree to which society is uncomfortable with risk,
change, and situational uncertainty
Western Countries Philippines
Managers in the US are risk
takers. Filipinos are seguristas
that are afraid of taking risks
within business endeavors in the
market.

21. Geert Hofstede’s Cultural Dimensions
3. Individualism – Collectivism
– the degree to which a society emphasizes individual
accomplishments versus collective accomplishments.
– this refers to the strength of the ties that people have to
others within their community.
– A high IDV score indicates weak interpersonal connection
among those who are not part of a core “family.” Here,
people take less responsibility for others’ actions and
outcomes.

22. Geert Hofstede’s Cultural Dimensions
3. Individualism – Collectivism
– In a collectivist society, however, people supposed to be
loyal to the group to which they belong, and, in exchange,
the group will defend their interests. The group itself is
normally larger, and people take responsibility for one
another’s well-being.

23. IDV Characteristics Tips
High IDV • High value placed on people’s time
and their need for privacy and
freedom.
• An enjoyment of challenges, and an
expectation of individual rewards for
hard work.
• Respect for privacy.
• Acknowledge individual
accomplishments.
• Don’t mix work life with social life
too much.
• Encourage debate and expression
of people’s own ideas.
Low IDV • Emphasis on building skills and
becoming master of something.
• People work for intrinsic rewards.
• Maintaining harmony among group
members overrides other normal
issues.
• Wisdom is important.
• Suppress feelings and emotions
that may endanger harmony.
• Avoid giving negative feedback in
public.
• Saying “No” can cause loss of
face, unless it’s intended to be
polite. For example, declining an
invitation several times is
expected

24. Individualism – Collectivism – the degree to which a society emphasizes
individual accomplishments versus collective accomplishments.
Western Countries Philippines
Individualistic cultures like those of the US
and Australia are characterized as “I” and “Me”
cultures where employees prefer to work alone
without help from others. Mexico, Thailand, and
the Philippines exhibit collectivism or preference
for group or team work.

25. Geert Hofstede’s Cultural Dimensions
4. Masculinity-Femininity
– the degree to which a society values assertiveness and
feelings of material success versus concern for
relationships.
– This refers to the distribution of roles between men and
women. In masculine societies, the roles of men and
women overlap less, and men are expected to behave
assertively. Demonstrating your success, and being strong
and fast, are seen as positive characteristics.

26. Geert Hofstede’s Cultural Dimensions
4. Masculinity-Femininity
– In feminine societies, however, there is a great deal of
overlap between male and female roles, and modesty is
perceived as a virtue. Greater importance is placed on
good relationships with your direct supervisors, or working
with people who cooperate well with one another.

27. MAS Characteristics Tips
High MAS • Strong egos – feelings of
pride and importance are
attributed to status.
• Money and achievement are
imporant
• Be aware of the possibility of differentiated
gender roles.
• A long-hours culture may be the norm, so
recognize its opportunities and risks.
• People are motivated by precise targets, and by
being able to show that they achieved them
either as a group or as individuals.
Low MAS • Relationship oriented /
consensual
• More focus on quality of life
• Success is more likely to be achieved through
negotiation, collaboration and input from all
levels.
• Avoid an “old boys’ club” mentality, although this
may still exist.
• Workplace flexibility and work-life balance may
be important, both in terms of job design,
organizational environment and culture, and the
way that performance management can be best
realized.

28. Masculinity-Femininity – the degree to which a society values assertiveness
and feelings of material success versus concern for relationships.
Western Countries Philippines
The Japanese and Mexicans do not
hesitate to push or express what they want,
unmindful of hurting other’s feelings, thus
showing masculinity. Filipinos, Thais, and
Swedes would rather keep quiet and accept
defeat if what they want is not acceptable to
others, thus, exhibiting femininity.

29. Geert Hofstede’s Cultural Dimensions
5. Time Orientation
– The degree to which a society emphasizes short term thinking
versus greater concern for the future or long-term thinking.
– This dimension was originally described as “Pragmatic Versus
Normative (PRA). It refers to the time horizon people in a society
display. Countries with a long-term orientation tend to be
pragmatic, modest, and more thrifty. In short-term oriented
countries, people tend to place more emphasis on principles,
consistency and truth, and are typically religious and nationalistic.

30. Time Orientation – the degree to which a society emphasizes short term
thinking versus greater concern for the future or long term thinking.
Western Countries Philippines
The Americans, who are risk-takers,
prefer short term thinking. On the other hand,
Filipinos and the Japanese, who are not risk-
takers, are long term thinkers.