Title: Conestoga in the Philippines
Background
The Philippines is a country in Southeast Asia with about 7,641 islands. Manila is the capital city of the Philippines, while Quezon City is the densely populated area according to the statistics. Compared to the other countries in the world in size, the Philippines is the fifth covering the area 300,000squere with 99.38% dry land and 0.62% water. The population is more 100 million. The Republic of Philippines, as officially identified, is an integral member of the UN, the EAS, the APEC forum, the ASEAN forum, and the WTO. Being a constituent of the international organizations gives the country an advantage to be on the world market. Its products may fetch better prices on the global market. The Asian Development Bank has the headquarters offices in the Philippine. It is an upcoming market and a lately mechanized nation with an economy evolving from agricultural to manufacturing.
Foreign exchange
The Philippine currency is the Peso, as it is renowned globally. The Pesos currency code is PHP, and the symbol is ₱. The exchange rate is the price of a unit of foreign currency in terms of the domestic currency. In the Philippines, the exchange rate is conventionally expressed as the value of one US dollar in peso equivalent. For example, US$1 = P50.00. At present, the country’s exchange rate policy supports a freely floating exchange rate system whereby the Bangko Sentral ng Pilipinas (BSP) leaves the determination of the exchange rate to market forces.
The Peso appreciated against the US dollar in 2019. It averaged to ₱51.03/US$1 during late 2019 appreciating by 1.39 percent from the previous average of ₱51.74/US$1. The Peso’s appreciation during the period was due to the benign domestic inflation environment, sustained inflows from OF remittances, foreign direct investments (FDI), and business process outsourcing (BPO) receipts. The Peso was also buoyed by the market’s anticipation of the interest rate reduction by the Exchange Rate December 2019 Department of Economic Research 5 US Federal Reserve. The Peso had also appreciated by 4.38 percent relative to the ₱53.26/US$1 average in late 2018
In October 2019 a year, the Peso appreciated an average of ₱51.50/US$1, rising by 1.17 percent from the ₱52.11/US$1 average in the previous month. The Peso appreciated amid market expectation of another rate cut in the US and positive developments in Brexit negotiations as well as the US-China trade talks. The Peso continued to appreciate against the US dollar in November 2019, as it averaged ₱50.73/US$1, 1.53 percent higher than its average in October. The Peso was supported by the release of domestic inflation data for October, which eased to a three-year low, the rebound in the country’s economic growth, and the US Federal Reserve rate cut.
It depreciated marginally against the US dollar in December by 0.08 percent to an average of ₱50.77/US$1, relative to its proportion in the previous month. The Peso’s slight depreciation was due partly to lingering uncertainty in the US-China trade negotiation. The Peso appreciated against the US dollar by 3.84 percent to close at ₱50.64/US$1 on 27 December 2019 from the end-December 2018 closing rate of ₱52.58/US$1.5 11. A weak peso can improve the external price competitiveness of Philippine products, thereby increasing the country’s export earnings. The peso equivalent of remittances in foreign currencies will also increase, as the peso depreciation will mean more pesos in exchange for one foreign currency unit (e.g., US$1). This means an increase in activities like tourism and investment activities, as it will be less costly and more desirable for foreigners to travel and invest in the Philippines
Economic Integration
Economic integration is an agreement between two or more countries to cooperate with each other to promote mutual trade. It will be very much easy for Conestoga College to invest in the Philippines because of the existing diplomatic relations between the two countries. Canada and the Philippines signed a mutual accountability framework (MAF) reaffirming the aid effectiveness principles of transparent and effective development cooperation between the two countries. The goal of Canada’s international development assistance program in the Philippines is to improve the climate for investment and to advance the economic opportunities.
The Foreign Investments Act allows foreign investments in the Philippines and provides a list of restrictions on foreign ownership in specific industry sectors. It is called the Negative List and is comprised of two lists A and B. The list is based on the restrictions under the Constitution and laws, and is not exhaustive. The version currently in effect is the 11th, promulgated in 2018. It provides that List A may be amended “at any time to reflect changes instituted in specific laws.” In contrast, List B can only be modified once every two years, according to the Foreign Investments Act and its revised implementing rules and regulations.
List A, includes activities reserved to Philippine nationals by mandate of the Constitution and special laws. Foreign equity is not permitted (therefore, there must be 0% ownership). List B includes activities and enterprises regulated for reasons of security, defense, the risk to health and morals, and protection of small and medium-sized enterprises. This provides a restriction of up to 40% foreign equity.
Market entry options
Market entry is the bringing the products or associated products into the market of your choice that initially did not have the products. Conestoga College deciding to go to the Philippines will open new ideas and opportunities, enable a strong and capable workforce, expand the domestic and regional market, and experience favorable economic setting.
Choosing to have a branch in the Philippines is a sustainability strategy for the College, as it wants to achieve economies of scale and increase earnings through enhanced enrolment and increased student retention, which can expand with investment in the Philippines. Equity mode of entry is the best for the College to enter the Philippines, and it may have joint ventures or wholly-owned subsidiaries. A joint venture allows organizations to share cost’ risks and profits. The organization can access the partner’s assets. The College can use this to start the operations in the foreign land. Second, a wholly-owned subsidiary can set up through acquisition; the College can buy the already existing firm in the Philippines.
Strategy and Structure
The standardization approach and decentralized organizational structure is the best way for the College to use in expanding. It bases on the advantage of the world as a global market by allowing firms to expand their global impressions in the selling of the products recognizing societal and cultural disparities that shape the consumers in a foreign country. Greater empowerment of employees and more efficient decision making are characteristics of this structure. Conestoga will consider the traditional and cultural behaviors of students in the Philippine to come up with a structure tailor-made for them.
Human Resource
The polycentric staffing will work well with Conestoga in the Philippines as it will focus heavily on the norms and practices of the Filipinos. Still, the upper management position is held by those from the HQ. Having the country manager from the Philippine encourages the locals to join the College as they link that to the sense of owning it and feel involved in the foreign investment. This staffing approach has a more significant advantage over the others as it lowers the cost of hiring, provides an opportunity for promotion of locals and increases their commitment, and responds better to the host country’s demands for localization of subsidiary operations.
The following training topics are necessary for the newly appointed country manager in charge of the Conestoga in the Philippines.
- Industry-specific regulations- set up specific rules and regulations to govern the firm, ensures that all employees work per the rules to achieve the objectives.
- Creating an inclusive workforce- The managers have an art to embrace and nurture diversity of employees.
- Conflict resolution- As diversity is embraced, conflicts arising should be appropriately managed and resolved.
- Cybersecurity- The new managers should have adequate knowledge of cybersecurity and policies and procedures.
- Hiring and firing- Managers to have an overview of hiring and firing practices that may come in handy during interviews of staff recruitment.
- Nurturing talent, coaching, and employee retention- This topic helps the manager identify skills among employees, coach less experienced ones on work, and retain valuable and high skilled employees.
- Emergency procedures- Equips the manager with skills in responding to emergency issues and safety in the workplace.
- Identifying training needs- Help new managers in identifying and recognizing gaps in the employees’ knowledge
- Accessibility requirements- Ensuring that employees’ training needs are met
- What it means to manage- Establish that the new manager knows time management, the delegation of duties an how to build confidence, trust and respect among employees