The Local and International

Business Environment of the firm

  It is an important institution in society.
The purpose of  Be it for the supply of goods and services
business goes  Creation of job opportunities
beyond earning
profit. There are:  Offer of better quality of life
 Contributing to the economic growth of
the country.
 is defined as
the business whose economic
Local Business transaction is conducted within
the geographical limits of the
country
 refers to the ease of entry into the
political, taxing, labor market, and any
restrictive regulatory compliance for
the local jurisdiction. So, the company
Local business looks for a pro business environment.
environment Union labor laws that influence building
and employment are potentially huge
cost factors.
  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
The Philippine seller belong to the same country and so the trade
agreement is based on the practices, laws and customs
Business that are followed in the country.
Environment  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.
  Philippines have its own etiquette.
 To show respect, Filipinos usually address people by
their titles.

 Everyone avoid avoid lost of face.

The Philippine
 English is the official business language; documents are
Business written in english however, it is common to hear
Environment "Taglish".
 Business lunches and dinners usually arranged through
phone and confirmed by the secretary. The one who
invites customarily pays.
 refers to a business which is not
restricted to a single country, i.e.
International
a business which is engaged in the
Business economic transaction with several
countries in the world.
  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,
International investment, logistics, etc., in which two or
Business more countries are involved.

 Summer-weight clothing normally worn in

temperate zones
 International:
1. Environment Analysis-Political environment
The political environment of any country influences the
business to a larger extent. This political environment is
influenced by the political organization, philosophy, government
ideology, nature and extent of bureaucracy, the country’s political
What are the stability, its foreign policy, defense and military policy, the
Environmental country’s image and that of its leaders both locally and
Forces that affect internationally (Shaikh 2010).

local and
international For example:

business? a country’s policy that restricts the growth of multinationals in

the market will automatically limit the business operations of the
company hence its growth. Similarly, government policy that
allows licensing that is liberal, liberal exportation and
importation, inflow of foreign capital and technology, affects the
business operation. Globalization as government policy too has
influence on the business
 2. Economic environment
Economic factors that influence the business
are the collective of the nature of the country’s
economic system, its structures, and economic
What are the policies, how the capital market is organized,
Environmental and nature of factors of production, business
Forces that affect cycles, and socio-economic infrastructure. Any
local and successful organization pictures out the
international external factors that affect the business,
business? anticipates the prospective market situations
and work to minimize the costs while
maximizing the profits.
 3. Social environment
The country’s social environment affects the functioning of
the business since it determines the value system of the society.
Sociological factors establish the culture of work, labor mobility,
work groups etc, hence, business operation of an enterprise.
These factors include cost structure, customs and conventions,
What are the cultural heritage, peoples’ view towards wealth and income and
Environmental scientific methods, seniority respect, mobility of labor (Shaikh
Forces that affect 2010). All these factors have big impact on the business.
local and
international For example:
business?
peoples’ demand determines the kind of products to be offered
for sale; this demand is consequently affected by peoples’
attitudes, customs, cultural values, fashion and other related
forces. The code of conduct that is supposed to be followed by the
business is determined by the socio-cultural environment.
 4.Technological environment
Technological factors affect business concerning technological
investment, technological application and the effect of technology on
markets. Therefore, any technological advancement affects highly the
business in a country. The type and quality of goods and services to
What are the be produced and the type and quality of plant and equipment to be
Environmental used in a company, is determined by the kind of technology
employed by that company.
Forces that affect
local and
5. Legal environment
international
business? The legal environment affects the business and its managers
greatly. Legal factors involve how flexible and adaptable the law and
legal rules that govern the business are. It also includes the exact
rulings and courts decision. Legal provisions may also contribute to
more or less income depending on the environment of operation.
  Customers
Retailers, restaurants and all types of businesses should
consider the impacts of weather patterns on their customer's
purchasing habits in order to optimize sales.

 Products
number of products are subject to price fluctuations based on
WEATHER weather conditions. Agriculture is an obvious one as weather
has a direct effect on yield, but it certainly doesn't end there.
Some products and certain raw materials become more
expensive to produce when weather conditions are less than
ideal. This has a ripple effect throughout all businesses that
utilize and/or sell associated products. Understanding and
predicting these fluctuations can be helpful for your financial
projections.
  Employees
First, an early busy season likely means requiring
additional help sooner than expected. Delays can mean
opportunity loss. Second, increased worker demand
usually comes with increased costs and can sometimes
lead to temporary worker shortages.

WEATHER Another way weather can impact businesses is with

scheduling and consistency. Weather delays can cause
some businesses to lose days at a time either directly
impacting sales or otherwise cause projects to be delayed
requiring expensive catch-up work. It's important to
maintain a level of contingency and/or flexibility to limit
these effects.
  Property
Don't underestimate the destructive power of
weather. Floods and water damage, wind and ice
damage and all the other ancillary hazards
associated with weather are a major concern of
business (as well as residential) property. Assessing
WEATHER
risk and protecting property that can be effected by
weather is as important as anything else mentioned
in this article. Just like a house, what took your
whole life to build up can be erased in the matter of
a few minutes. So be prepared- better yet: be
covered for such an event.
 1. Age/Gender/Ethnicity and Religion
2. Body language and communication style
3. Personal Appearance/dress
4. Eating and drinking traditions
5. Holidays
CULTURE 6. Language
7. Cultural assumptions/ethics/political
correctness
8. Management style and relationship
9. Work expectation/ time management
 Give 2 examples each for Local
Seatwork Business and International Business
and the Environmental Factor that
#1 affects it. Explain each.