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Doing business in the Philippines Report

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Updated: Sep 10th, 2019

Introduction

There are some important issues that one needs to consider before embarking on a mission to do business in a given country. Such issues as social, economic, and political environment of a country would be worth of consideration by a prospective investor.

The current paper intends to explore the possibility of doing business in the Philippines. It will emphasize on the social, economic, and political situation in the Philippines.

In addition, the culture, language, customs and protocol of the Filipinos shall be addressed, as well as their business etiquette, business culture, negotiation techniques, and meeting protocols.

Background

The Filipino culture is heavily influenced by forces outside the Asian region including Mexico, and the United States. The influence of Islam in the Philippines has been somewhat limited, unlike such other Asian countries as Indonesia and Malaysia (CIA-The World Factbook 2011).

Filipinos have embraced many western values under the auspices of the Roman Catholic Church that has a large following in the country. The Filipinos have a strong sense of dignity and personal pride.

Business Structures

Most companies in the Philippines are family controlled. Business structure is largely hierarchical with the owner-managers possessing a lot of power. However, western business practices are slowly being embraced (Communicaid 2009).

Having good contacts with the top management is crucial as they are responsible for making most decisions. When making initial business contacts with Filipino organizations, only the senior people in your organization should meet with senior representatives from the Filipino organizations as sending lower ranking officials would be considered an insult.

Management style

The Filipino culture is characterized by paternalistic management style due to the strongly hierarchical culture. On the other hand, it is important for managers to become acquainted with some of the strong Filipino attributes that underline personal relationships in the Philippines.

To start with, the Filipinos are wary of being embarrassed for their actions, or for failing to live up to society’s expectations (Communicaid 2009). To criticize an individual in public is frowned upon, as it amounts to an insult.

Meetings

Filipinos are not very particular about time, and most business meetings start late. As such, western business representatives can get frustrated with the slow progress of meetings and negotiations. Small talk is common before the start of a business meeting and it is during this time that the relations-building process between the two parties is established (Barcelon 2011).

Filipinos are nonconfrontational because they strongly believe in getting along with others smoothly. They frown on any form of negative talk. Moreover, Filipinos rarely contradict other people openly.

Therefore, a meeting might appear to be moving smoothly even when there is no apparent progress. When establishing new business contacts, gifts are often welcome as they are a sign that negotiations have been concluded satisfactorily.

Teams

Filipinos strongly believe in team spirit. People make sacrifices for their fellow team-members and those who appear to criticize team-members are severely dealt with (Communicaid 2009).

It is important to treat every team member with respect and dignity because in case you insult one of the team members, the other team members could feel insulted as well.

Communication style

English is the business language in the Philippines and as such, communication is not a problem for most western business people. Because the Filipino communication style is heavily influenced by the country’s Asian roots, western business people are therefore advised to desist from using coded and diplomatic language as this could complicate communication (Nolan 1996).

Like most other Asian countries, Filipinos find it very hard to say ‘no’ as this could be interpreted as being unfriendly or confrontational. Overseas visitors should also be wary of the Filipino body language.

For example, the Filipino may smile as a way of hiding annoyance, embarrassment, or disagreement, and the western business people can take this as a sign of pleasure or agreement. Once an agreement has been reached, it is always advisable to wait for requests for information or a contract before proceeding.

Women in business

Although the Filipino culture acknowledges the role of women in business circles, they should not be seen to dominate their male counterparts. Gender bias in the Philippines is almost nonexistent.

Dress code

Personal grooming is important in the Philippines, both at business and social gatherings. Filipinos have a tendency to judge somebody based on their appearance. During business meetings, it is always advisable for men to dress in a suit and tie, while women are expected to dress modestly (Taglaw 2007).

Formally evening wear is also acceptable at most of the good restaurants in manila, but one is always advised to check the dressing code well in advance

Top Tips

  • Many Filipino organizations are hierarchically structured.
  • The Filipinos strongly believe in saving face
  • It is common for business meetings in the Philippines to start late
  • Filipinos are nonconfrontational, but do not interpret their politeness as a sign of agreement
  • Foreign business representatives need the assistance of local to help them wade through the bureaucracy hurdle
  • Gifts are acceptable in business meetings as they signify agreement in negotiations

Cultural, social, and economic climate

The Filipino culture is a blend of western and eastern cultures, with a strong influence by the Malay culture. Economically, the country’s nominal gross domestic product was estimated at $ 216.1 billion in 2011 (Barcelon 2011).

Poverty influences the country’s social climate. For example, nearly 30 % of the population lives below the poverty line.

Successful entertaining

Business entertainment is common in the Philippines. The arrangement for business lunches and dinners takes place over the phone and it is customary for the inviting party to pay (Torres 2006).

The informal atmosphere of business entertainment enables everybody to relax. Dress code differs widely, and tipping is also highly anticipated.

Facts and figures

The Philippines consists of more than 7,000 islands on the coastline of Southeast Asia. The Philippines has a population over100 million, most of who lie in the lower middle income category. In addition, the Philippines has a land area of approximately 298,171 sq km, and a life expectancy of 71.66 years (CIA-The World Factbook 2011).

Manila, the capital city, has a population of 11 million, and is also the largest city in the country. Other large cities in the Philippines include Cebu City, Davao, and Zamboanga. The country’s monetary unit is the Peso.

Conclusion

Doing business in the Philippines calls for an understanding of the social, economic and political climate in the country. The Filipino culture is characterized by paternalistic management with a strong hierarchical culture.

Many of the leading companies in the Philippines are family controlled. Business meetings start late, and the Filipinos strongly believe in team spirit. English is the business language in the Philippines, while gender bias in the Philippines is also almost nonexistent.

Reference List

Barcelon E. 2011, Doing business in the Philippines. Web.

CIA-The World Factbook 2011, . Web.

Communicaid 2009 , Doing Business in the Philippines | Philippine Social and Business Culture: A Philippine Overview. Web.

Nolan J. 1996, Philippines business: the portable encyclopedia for doing business with the Philippines, World Trade Press, California, USA.

Taglaw 2007, Doing business in the Philippines. Web.

Torres Q. 2006, Doing business in the Philippines. Web.

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IvyPanda. "Doing business in the Philippines." September 10, 2019. https://ivypanda.com/essays/doing-business-in-the-philippines/.

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IvyPanda. 2019. "Doing business in the Philippines." September 10, 2019. https://ivypanda.com/essays/doing-business-in-the-philippines/.

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IvyPanda. (2019) 'Doing business in the Philippines'. 10 September.

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