History of the Business Management in the Philippines by pty71927

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									 International Human
Resource Management
       Guide To
THE PHILIPPINES


         Roneal Jit
      Michael Corbett
      Ahmad Marda
       Yvette Jaquez
        Joe Huang
IHRM Guide to The Philippines
• Host Country Profile: Philippines

• Parent Country Profile: United States

• US-Philippines Cultural Gap Analysis

• Company Case Study: Ford Motor Co.

• IHRM Issues

• Role of IHRM in Cross Cultural Ethical
  Issues and Corporate Social Responsibility
    Country Profile:
Republic of the Philippines
Geography



  Area: 300,000 sq. km. (117,187 sq. mi.).
              Capital: Manila
 Terrain: Islands, 65% mountainous, with
         narrow coastal lowlands.
             Climate: Tropical.
   People
Population (2000 census): 76.5 million. Government’s
            estimate for 2003: 82.0 million
  Annual growth rate: 2.36%.Ethnic groups: Malay,
                       Chinese.
 Religions: Catholic 85%, Protestant 9%, Muslim 5%,
                Buddhist and other 1%.
Languages: Tagalog, English, language of government
             and instruction in education.
             Education: .Literacy: 92.3%.
Life expectancy ( 2003): 67.2 yrs. for males; 72.5 yrs. for
                        females.
  Work force ( 2003): 34.6 million. Services (including
  commerce and government): 48%; agriculture: 36%;
                    industry: 16%.
 Government



                 Type: Republic.
               Independence: 1946.
         Constitution: February 11, 1987.
Suffrage: Universal, but not compulsory, at age 18.
Home Country Profile:
United States
• Economic & Military Super Power

• Characteristics of Americans:
   • Independent
   • Straight Forward
   • Value Time


• Current Issues
   • Outsourcing
Cultural Gap Analysis:
US-Philippines
• Shared History

• Institutions

• Family Values

• Education

• Work Norms
Ford Motor Company
• History and Business Profile

• Mass Production

• Globalization

• Company Financial
IHRM ISSUES

Target Country: Philippines
Parent Country: US
Company: Ford Motor Co.
ASEAN Ford
• Confidence
  •   Economic
  •   Employee
  •   Environment
  •   Growth
IHRM & Ford
•   Compensation & Recognition
•   Staffing
•   Development
•   Cultural Gap
MAP
• “The skillful management of people turns out to be the most
  critical single ingredient to helping business survive &
  excel…”
“People Vision”
•   Continued Education       • Increased Productivity &
•   Awareness                   Utilization
•   Empowerment               • 1991- 10%
•   Open-Book                 • Today- 64% &       70%
•   Responsibility              Export Production
•   Efficient Communication
The BIG Picture
•   Employers Confederation of the Philippines (EcoP)
•   Social Leadership
•   Human Resource Development
•   “Big Brother – Small Brother”
An Outsider’s Opinion
•   Expatriates rank Philippines #2
•   Friendly Attitude
•   Education
•   Housing
•   Health Care
•   Sporting & Recreation
   Role of IHRM in
Cross Cultural Ethical
       Issues &
   Corporate Social
    Responsibility
Corporate Social Responsibility
• Definition and Scope
• Globalization Effect
• Legal issues
   • Home Country
   • Host Country
   • International Standard
5 Stages of Corporate Responsibility
•   Defensive
•   Compliance
•   Managerial
•   Strategic
•   Civil
Human Resources Training and Stages of
Social issues
•   Latent
•   Emerging
•   Consolidating
•   Institutionalization
The Philippines
•   Political Environment
•   Social Environment
•   Economic Condition
•   Labor Practices
Corporate Strategy and Responsibility
•   Economics
•   Social
•   Markets
•   Outsourcing
Fair Pay / Fair Labor
  Work Conditions
Special Economic Zones (SEZ)

• Ford Philippines Assembly Plant
   • No. 1 American Road, Greenfield Automotive Park,
     Special Economic Zone, Sta. Rosa, Laguna, Philippines 4026
• Zones are a key role in attracting new investors to the
  country
   •   Tax incentives
   •   Low corporate income tax rates
   •   Indirect access to governmental administrative services
   •   Minimum government influence
   •   Administers their own economic, financial, industrial and
       tourism development
Areas of Investments
The SEZ
• Abuse in the SEZ
  • Many industries using extralegal methods are successful
    in preventing the formation of unions
  • Poor working conditions
• Ford Motor Co.
  • Keeping their workforce happy to avoid unionization
  • Provide sufficient benefits and rights to the trained
    workforce
Labor Force
• 1996 Labor Code
    • Allow all private and public sectors workers with the exception of the
      military and police, to freely associate and to form or join a union
• Forced labor is prohibited by the Constitution, but bonded labor of
  children known to occur
• Children in the labor force
    •   Approximately 3.7 million children are economically active
    •   At least 2 million are working in hazardous condition
    •   Can work at the age of 12 with parental consent
    •   Can not work more than 6 hours a day and can not work at night
Cont.
• Standard workweek
  • 48 hours for most industries
  • 40 hours for government workers
  • Work beyond 8 hours in any given day requires payment
    of 125 percent the regular wage
  • No limit on overtime hours
  • Must have 1 day of rest per week
                        LABOR FORCE STATISTICS
                                                INDICATOR                                  2004           2005p


                        Household Population 15 Years Old and Over (000)                      52,675         53,975

                              Labor Force (000)                                               35,447         35,664

                                    Employed (000)                                            31,547         31,634

                                           Less than 40 Hours (part-time) (000)               11,095         11,323

                                           40 Hours and Over (full-time) (000)                20,028         19,814

                                           Did not work during the Past Week (000)                 423            496

                                           Mean Weekly Hours Worked                                41.9            NA

                                           Underemployed (000)                                    5,522       5,098

                                    Unemployed (000)                                              3,900       4,030

                                           Mean Weeks Looking for Work                              7.9            NA

                        Labor Force Participation Rate (%)                                         67.3           66.1

                        Employment Rate (%)                                                         89            88.7

                               Underemployment Rate (as % of Employed)                             17.5           16.1

                        Unemployment Rate (%)                                                       11            11.3




Note: Details may not add up to totals due to rounding, p Preliminary, NA Not available.

Source of data: National Statistics Office, Labor Force Survey.
Wages
• Minimum wage
  • Established in 1950, based on democratic principles
  • Wage boards set minimum rates in each of the country’s
    15 administrative regions
  • Local prices, rates of inflation, need to attract
    manufacturing investment, and economic stability of the
    region
         Cont.


Currency Conversion Results
                                                                                       Exchange
                   Symbol                     U.S. Dollar                                                  Philippine Peso
                                                                                           Rate


                USDPHP=X                            1                         Apr 29              54.000       54.000



    http://finance.yahoo.com/currency/convert?amt=1&from=USD&to=PHP&submit=Convert
                                Category                                              Computation (in Pesos)


 OT Work on Regular Day                                               125% * Rate/Hour


 OT work during Rest Day or Special Public Holiday
  First 8 hours
  In excess of the 1st 8 hours                                        130% * Rate/Hour
                                                                      130% * Rate/Hour+30% of(130% of Rate/Hour)




 OT work on Special Public Holiday falling on employee’s              150% * Rate/Hour
 rest day                                                             150% * Rate/Hour+30% of(150% of Rate/Hour)
   First 8 hours
   In excess of the 1st 8 hours


 OT work on Regular Holiday
  First 8 hours                                                       200% of Rate/Hour
  In excess of the 1st 8 hours                                        200% of Rate/Hour + 30% of (200% of Rate/Hour)



 OT work on Rest Day falling on a Regular Holiday
  First 8 hours
  In excess of the 1st 8 hours                                        260% of Rate/Hour
                                                                      260% of Rate/Hour + 30% of (260% of Rate?Hour)




Source: Department of Labor and Employment (http://www.dole.gov.ph)
         Family Income and Expenditures

                                                       INDICATOR                                                                  2000         2003



             Average Family Income                                                                                                 145,121      130,604



             Average Family Expenditures                                                                                           118,839      109,988



             Average Family Savings                                                                                                 26,282       20,615




MANDATORY EMPLOYMENT CONTRIBUTION

13th Month Pay                           By law, companies are required to give its employees a 13th pay equivalent to one (1) month salary.

Social Security                          As mandated by law, both employer and employees are to contribute for the social security benefits of the
Systems (SSS)                            employees in accordance with the following schedule:
Contributions




            Source of data: National Statistics Office (NSO), 2003 Family Income and Expenditures Survey (Preliminary Results).
Union
• The Constitution and the Labor Code guarantee workers’
  rights to self-organization.
   •   Common in the manufacturing sectors
   •   Secure a labor contract from the employer
   •   Defines the rights and duties of
   •   Covers wages, hours of work and working conditions
                                 Regions                                                          Daily Minimum Wage Rates
                                                                                                  Non-Agriculture Industries*
                                                                                              (in Pesos/day) - As of September 2004


Metro Manila) private sector workers & employees                                                            P 300.00
Wage Order # NCR 10 (July 10, 2004)
private sector workers and employees


               CAR (Cordillera Autonomous Region)                                                           P 205.00

                                 Region I                                                                   P 175.00

                                 Region II                                                                  P 193.00

                                Region III                                                                  P 243.50

                               Region IV                                                                    P 237.00

                                 Region V                                                                   P 194.00

                                Region VI                                                                   P 190.00

                                Region VII                                                                  P 208.00




           Source: Department of Labor and Employment (http://www.dole.gov.ph)
           Note: Wage per region inclusive of COLA / ECOLA (which rates varies per region).
Cont.
                                             INDICATOR                                                        2003         2004 p


Existing Unions                                                                                                 16,091        16,724


   Membership (000)                                                                                              1,517         1,572




Existing Collective Bargaining Agreements (CBAs)                                                                 2,842         2,798


   Workers Covered (000)                                                                                             556            555




    Sources of data: Bureau of Labor Relations, Statistical and Performance Reporting System (SPRS) (2003).
Work Conditions

• Labor Laws (Based on U.S)

• 40 hour work week

• Safe & Healthy Work environment

• Paid Vacation

• Minimum wage $4.55 for non-agriculture, $2.45 for
  Agriculture

• Child Labor, 16 is the minimum working age by law.
Conclusion


• Philippines and IHRM
  • Historic and Cultural Ties
  • Adoption of American Standards and Norms


• Role of IHRM
  • in Cross Cultural Ethical Issues and Corporate Social
    Responsibility

								
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