Chowdhury’s (2018) is a review of marketing literature from 1972 to 2016 on international business, specifically focused on the following 5 questions:
What are the different phases of international business planning process?
How to select the right market segment in the international market?
What are the different entry strategies and how to select an appropriate strategy?
What are the ways to formulate appropriate strategy in international business?
There are two points that I would like to highlight in this study. First is the discussion on how to select the right market segment in the international market and second is the non-inclusion of branding strategies in the discussion of appropriate international business strategies.
Selecting the right market segment: are the international clusters still applicable?
In the discussion on selecting the right international market segment, Chowdhury (2018) explains that firm decisions should be customer focused. This means considering buyer behavior, which is dependent on demographic (age, marital status, and life-cycle stage) and psychographic (personality) characteristics. However, in his discussion of international markets, he chose clustering based on Cavusgil (1990), which is based on economic characteristics of each country. It is important to note the context with which Cavusgil (1990) explained his segmentation—it is based on a specific brand: Caterpillar, an American construction, mining and other engineering equipment manufacturer. Given that the product is used in the industrial context, Cavusgil (1990) will plainly use economic clustering, or clustering based on the overall economic development stage of each country.
I will argue that this clustering does not apply to all types of products. In Cavusgil’s (1990) description of Dependent Societies, demand is concentrated on basic goods, such as food, clothing, housing, education, and medical care. This is as opposed to Rocking Chairs, the highest tier, which demonstrate dominance in the service economy and high technology sectors. Given technological changes, there are segments within each country that could be described using criteria for Rocking Chairs. For example, many luxury goods are marketed in different countries, including in regions considered as Dependent Societies. Louis Vuitton is present in many African nations, as well as South East Asia, regions that have been classified as Dependent Societies and Seekers, respectively. The existence of startup communities within these economies also demonstrate advancements in technology and the service economy.
Furthermore, the clustering used by Cavusgil (1990) is outdated, as the categories may no longer apply to some countries as their economic standings have since changed. For example, many of the countries considered under Dependent Societies and Seekers are now considered by the International Monetary Fund as Emerging Markets and Middle-Income Economies. It may be detrimental to many brands to consider only Cavusgil’s (1990) clustering in international markets.
Why didn’t the literature review include branding strategies?
It is interesting to note that the Chowdhury’s (2018) review of literature on international business strategies did not include literature on branding as a strategy. The discussion centered on the debate on standardization versus adaptation. The debate focuses on product development, more specifically on operations. While these are important, there are also other aspects that was noteworthy of a discussion. Sicthmann et al’s (2018) study demonstrated that the perceived brand globalness and localness had positive effects on consumer-brand identification, which has demand-side effects. Marketing literature has shown that brands with high levels of consumer-brand identification enjoy higher repurchase rates and increased likelihood of positive word of mouth (Stokburger-Sauer et al, 2013; Tuskej et al, 2013).
Chowdhury, P. P. (2018). Internationalization and International Business Strategies: A Review of Literature. AIUB Journal of Business and Economics, 15(1), 83-119.
Sichtmann, C., Davvetas, V., & Diamantopoulos, A. (2019). The relational value of perceived brand globalness and localness. Journal of Business Research, 104, 597-613. https://doi.org/10.1016/j.jbusres.2018.10.025
Stokburger-Sauer, N., Ratneshwar, S., & Sen, S. (2012). Drivers of consumer–brand identification. International journal of research in marketing, 29(4), 406-418. https://doi.org/10.1016/j.ijresmar.2012.06.001
Tuškej, U., Golob, U., & Podnar, K. (2013). The role of consumer–brand identification in building brand relationships. Journal of business research, 66(1), 53-59. https://doi.org/10.1016/j.jbusres.2011.07.022
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
The research by Don-Solomon and Fakidouma (2021) examined the theoretical implication of cultural diversity management on organizational innovativeness, using a review of literature on culture, organizational culture, cultural diversity, organizational innovativeness, and the impact of cultural diversity on organizational innovativeness. The discussion sought to inform whether diversity is a strength or a weakness to the organization, which is a setting to its innovative drive. It finds that diverse teams are likely to “spark a height of inventiveness” and are in better positions to address problems using effective solutions. Diverse organizations are also more likely to thrive creatively and innovatively.
The article is correct in its assertion that (1) cultural diversity may contribute to organizational innovation, (2) it is important to manage workplace diversity, and (3) it is important to understand that cultural diversity has many dimensions. Research from Lee and Nathan (2010), Kim (2006), and Rijamampinina and Carmichael (2005) affirm these points.
However, there are points made or implied in the article that extant literature contradict. While cultural diversity may influence the innovation orientation of an organization, literature suggests that the mere existence of diversity does not necessarily lead to organizational innovation. Factors such as psychological safety must exist, (Delizonna, 2017).
The literature review focused on the impact of cultural diversity on organizational innovation, inadvertently giving the impression that all organizations will reap benefits of diversity, no matter what form. There are specific cultural factors that need to exist, such as those found in Fritsch et al (2019) and Elia et al (2019).
Lastly, the theoretical discussion does not expound on the complex relationship between cultural diversity and organization innovativeness. The study of Stahl et al (2010), for example, showed that cultural diversity is a double-edged sword.
Statement of the Paper’s Research Problem and Objectives FrameworkUsed in the Paper
The study aimed to investigate how diversity in organizations impact its organizational innovativeness.
Historical Development and Subsequent Development of the FrameworkUsing Other Published Scientific Papers As Basis
The authors systematically built the discussion on diversity and innovativeness by defining concepts and constructs, and establishing how these concepts and constructs relates to each other.
It begins by defining culture and organizational culture using Hofstede (1980), Schein (1990), Kotter and Heskett (1992), and Ravasi and Schultz (2006), focusing on accepted convention and values. It then uses Damanpour (2014), Hamel (2006), and Fernandes et al (2018) to define organizational innovativeness, placing emphasis on unusual ideas and strategic thought.
It further expounds on cultural diversity using Amaram (2007), Ankita (2014), Henry and Evans (2007), and Gupta (2013), identifying dissimilar socio-cultural experiences the result from differing race, backgrounds, and beliefs. It also establishes the dimensions of cultural diversity by Hofstede (2001).
It finally discusses the impact of cultural diversity on organizational innovativeness through Erdil and Ozman Gossart (2013), Adler and Gundersen (2002), and Morgan (1989), identifying both the positive and negative impact that cultural diversity may bring to an organization.
Summary of the Results In Tabular Format Organized by Objectives
Research Objective
Results
To examine the theoretical implication of cultural diversity management on organizational innovativeness.
Diverse teams can collectively spark innovation. Diverse teams are likely to resolve complex problems and offer better solutions. Organizations thrive creatively and innovatively in a culturally diverse workforce tolerant environment.
Three (3) Major Points of Agreement Using Other Published Scientific Papers As Basis
Cultural diversity may contribute to organizational innovation.
Several studies, such as Damanpour (2014), Hamel (2006), and Fernandes et al (2018) contend that cultural diversity contributes to an organization’s innovation-orientedness. Furthermore, Lee and Nathan (2010) found that there are significant positive relationships between workforce and ownership diversity, and product and process innovation, providing some support for claims that urban cultural diversity is a source of
economic strength.
It is important to manage workplace diversity.
Don-Solomon and Fakidouma (2019) contend the value of managing workplace diversity. Extant literature echo the same sentiments. Kim (2006), for example, contends that companies working in the hospitality industry benefits from managing a diverse workforce because diversity offers benefits such as fresh ideas, strong growth, a positive firm image, and an enhanced ability to hire qualified workers.
It is important to understand that cultural diversity has many dimensions.
Mazur (2010) affirm that cultural diversity has many dimensions. Drawing from Rijamampinina and Carmichael (2005), cultural diversity has primary, secondary, and tertiary dimensions. This is an important assertion because culture is influenced by experiences, and experiences are influenced by many aspects of a person’s identity, including but not limited to their age, race, religion, country of origin, and other characteristics.
Three (3) Major Points of Disagreement Using Other Published Scientific Papers As Basis
While cultural diversity may influence the innovation orientation of an organization, literature suggests that the mere existence of diversity does not necessarily lead to organizational innovation.
It is not enough for diversity to exist within the organization. People need to feel safe and secure in their roles and positions to express diversity. You nurture psychological safety through trust, and this means providing an environment where someone can express a dissenting opinion and other see dissent as an opportunity to learn (Delizonna, 2017).
The literature review focused on the impact of cultural diversity on organizational innovation, inadvertently giving the impression that all organizations will reap benefits of diversity, no matter what form.
There is also a case to be made on the value of cultural homogeneity, even cultural cohesion, or when many members of a team share pro-social values and skills. The paper would have established more authority on the subject matter if it explored the benefits of cultural cohesion and how it impacts organizational innovativeness. For example, there is a study conducted on German enterprises that investigated the impact of entrepreneurship culture in the innovation-orientedness of the population in the region (Fritsch et al, 2019). It found that an entrepreneurial culture, nurtured through years of high levels self-employment, specifically science-based self-employment, is a driver of growth. In this study, there is a specific type of experience that drives a specific type of culture—one can argue that this is a form of a cultural cohesion, and one that does not benefit from a diversity of experiences.
There are other studies that quality the benefits that organizations gain from cultural diversity. For example, Elia et al (2019) that alliances do not benefit from cultural diversity, and in fact are generally less innovative when alliances involve partners from other cultures. However, their study also show that cultural diversity becomes positive when those alliances focus on exploration activities, as the challenges of cultural diversity are offset by the benefits of exposure to novel cognitive schemes.
The theoretical discussion does not expound on the complex relationship between cultural diversity and organization innovativeness.
The study of Stahl et al (2010) showed that cultural diversity is a double-edged sword. Diverse organizations suffer process losses through tasks conflicts and decreased social integration arising from differences in beliefs, perspectives, attitudes, and behavior. On the other hand, cultural diversity may also lead to process gains through increased creativity and team satisfaction.
Sources of Information Used in Analyzing the Scientific Paper
Adler, N. J., & Gundersen, A. (2001). International Dimensions of Organizational Behavior. Cincinnati, OH: South-Western
Amaram, D. I. (2007). Cultural Diversity: Implications For Workplace Management. Journal of Diversity Management (JDM), 2(4), 1–6. https://doi.org/10.19030/jdm.v2i4.5017
Don-Solomon, A., & Fakidouma, P. (2021). Managing Cultural Diversity: Implication for Organizational Innovativeness. European Journal of Business and Management Research, 6(4), 368-371. https://doi.org/10.24018/ejbmr.2021.6.4.1031
Elia, S., Petruzzelli, A. M., & Piscitello, L. (2019). The impact of cultural diversity on innovation performance of MNC subsidiaries in strategic alliances. Journal of Business Research, 98, 204-213. https://doi.org/10.1016/j.jbusres.2019.01.062
Fernandes Rodrigues Alves, M., Vasconcelos Ribeiro Galina, S., & Dobelin, S. (2018). Literature on organizational innovation: past and future. Innovation & Management Review, 15(1), 2-19. https://doi.org/10.1108/INMR-01-2018-001
Fritsch, M., Obschonka, M., & Wyrwich, M. (2019). Historical roots of entrepreneurship-facilitating culture and innovation activity: An analysis for German regions. Regional Studies, 53(9), 1296-1307. https://doi.org/10.1080/00343404.2019.1580357
Hamel, G. (2006). The why, what, and how of management innovation. Harvard Business Review, 84(2), 72.
Hofstede, G. (1980). Culture’s consequences: National differences in thinking and organizing. Sage.
Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions and organizations across nations. Sage.
Gupta, R. (2013). Workforce diversity and organizational performance. International Journal of Business and Management Invention, 2(6), 36-41.
Kim, B. Y. (2006). Managing workforce diversity: Developing a learning organization. Journal of Human Resources in Hospitality & Tourism, 5(2), 69-90. https://doi.org/10.1300/J171v05n02_05
Kotter, J. P., & Heskett, J. L. (1992). Corporate culture and performance. Free Press.
Lee, N., & Nathan, M. (2010). Knowledge workers, cultural diversity and innovation: evidence from London. International Journal of Knowledge-Based Development, 1(1-2), 53-78. https://doi.org/10.1504/IJKBD.2010.032586
Rijamampianina, R., & Carmichael, T. (2005). A pragmatic and holistic approach to managing diversity. Problems and perspectives in management, (1), 109-117.
Schein, E. H. (1990). Organizational culture.American Psychological Association, 45(2), 109.
Stahl, G. K., Maznevski, M. L., Voigt, A., & Jonsen, K. 2010. Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups. Journal of International Business Studies, 41, 690–709. https://doi.org/10.1057/jibs.2009.85
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
The research focuses on the impact of globalization on economic growth in the Organization of Islamic Cooperation (OIC) countries. Using a generalized method of moments (GMM) estimator on dynamic panel data on 33 OIC countries during the periods of 1980 to 2008, the study finds:
Economic globalization has a positive and significant effect on the economic growth of OIC countries.
The positive effect of globalization on economic growth is increased in countries with advanced complementarities, such as high levels of human capital and well-developed financial systems.
Economic globalization does affect growth, but whether it is beneficial or not depends on the level of income. Globalization positively impacts high- and mid-level income economics, but negatively impacts low-income economies.
Statement of the Paper’s Research Problem and Objectives FrameworkUsed in the Paper
The study aimed to investigate the effect of economic globalization on economic growth in OIC countries. Its research objectives are the following:
To examine the relationship between economic globalization and growth in panel of selected OIC countries over the period of 1980-2008.
To explore whether the growth effects of economic globalization.
It used the theoretical school of thought that there is a nonlinear relationship between globalization and growth, and effect depends on the existence and characteristics of complementary policies to analyze the impact of globalization on growth.
Historical Development and Subsequent Development of the FrameworkUsing Other Published Scientific Papers As Basis
The authors identified three theoretical schools of thought on the effect of globalization on economic growth given diverse, contradictory, and inconclusive discussions in literature.
The first school of thought subscribes to globalization making growth more prominent, as evidenced in the studies by Dollar (1992), Dollar and Kraay (2002), Edwards, (1998), Fischer (2003), Grossman & Helpman (1990), Harrison (1996), and Sachs et al (1995). These studies suggest and attribute rapid economic growth to openness. Dreher (2006) identifies three dimensions of globalization: economic, social, and political, and found that economic and social globalization impacted growth positively, but political globalization has no impact on growth. Despite the general agreement that globalization impacts growth, there are nuanced differences in the findings in each of these studies.
The second school of thought, on the other hand, posit that there is weak evidence on the impact of globalization on growth, as evidenced by studies by Alesina et al (1994), Rodrik (1998), Rodriguez & Rodrik (2000), Warner (2003), and Krugman (2003). Many of these studies content that there are varying degrees to which globalization impacts economic growth, but these effects are inconclusive and therefore there is no significant evidence to believe that there is a relationship between these two.
Finally, the third school of thought, which the study used, contends that complementary policies impact the effect of globalization on growth, as evidenced by Calderon and Poggio (2010), Change et al (2009), and Gu and Dong (2011).
The study chose the third school of thought to consider the impact of complimentary policies on the growth effects of globalization in OIC countries. This was the general direction of investigation in the discussion of globalization and growth in literature at the time of the study.
Summary of the Results In Tabular Format Organized by Objectives
Research Objectives
Results
To examine the relationship between economic globalization and growth in panel of selected OIC countries over the period of 1980-2008. As a sub-objective, the study also investigated whether the impact of economic globalization differs when countries are categorized according to levels of income.
The results show that economic globalization, as operationalized by the economic dimensions of the comprehensive index of globalization KOF developed by Dreher (2006), has a positive impact on growth (operationalized by the logged per capita real GDP). The coefficient (0.67) is significant at one percent level. This is consistent with Dollar (1992), Edwards (1998), and Grossman and Helpman (1990). The results show that the effects of globalization depends on the level of income of the country. The coefficients of the interaction of globalization and high- and mid-level countries indicate a positive relationship that is statistically significant at one percent and 4 percent respectively. However, the coefficient of the interaction of globalization and low-level countries is negative and statistically significant at less than one percent, indicating a negative relationship.
To explore whether the growth effects of economic globalization.
The results show that the coefficients on the interaction between KOF, human capital, and financial development are positive and are statistically significant at one percent level. The findings indicate that economic globalization indirectly impacts economic growth through complementary policies, such as human capital and financial systems development.
Three (3) Major Points of Agreement Using Other Published Scientific Papers As Basis
There is a limited definition of globalization.
Sammi and Jenatabadi (2014) contend that empirical literature testing or measuring the impact of globalization on economic growth suffer from a narrow definition of globalization. Extant literature agrees with this contention.
Dreher (2006) created a comprehensive index of globalization, the KOF, to provide a nuanced variable of measurement. Understanding that the first iteration of the KOF is still incomplete, this was further improved in 2008 (Dreher et al, 2008). What is noteworthy about the KOF is that it differentiates among three dimensions of globalization: economic, political, and social. At the time of the study’s publication, the KOF was the standard measure for globalization. It is important to note, however, that Sammi and Jenatabadi’s (2014) investigation focused only on the economic dimension of globalization.
Nevertheless, the KOF is still an insufficient measure of globalization. Gygli et al (2019) revisited the index and introduced the following changes:
The revisited KOF introduced 20 new variables, increasing the variables to a total of 43.
It distinguished between de facto (factual) and de jure (legal) measures. For example, trade openness measures distinguished de facto measures such as trade in goods, trade in services, and trade partner diversity, from de jure measures such as trade regulations, trade taxes, tariffs, and trade agreements.
The contention that empirical studies use a limited or narrow definition for globalization is an important issue to raise, as this may be one of the reasons why extant literature are contradictory and inconclusive. It also impacts the insights drawn from the results, and consequently, the policy implications. In Gygli et al’s (2019) revisiting of the KOF found that de factor and de jure globalization describe different characteristics of globalization resulting in distinct country rankings.
Globalization impacts economic growth.
Despite the second school of thought’s contention that globalization impacts economic growth, there are many studies that show that globalization impacts economic growth, supporting Samami and Jenatabi’s (2014) findings. While their focused on the impact of the economic dimension of globalization, other studies have included other dimensions of the KOF, particularly the political and social dimensions of globalization. These studies have found that economic growth is influenced by globalization, although in varying degrees and depending on dimensions measured. Many other studies have also focused on region specific data, but results suggest that globalization has impact.
Ying et al (2014), using a panel fully modified OLS (FMOLS) model of ten ASEAN countries from the period of 1970 to 2008, found that economic globalization has a significantly positive influence on economic growth in ASEAN countries, (2) social globalization has negative influence on economic growth, and (3) political globalization has a non-significant negative effect.
Kilic (2015) used fixed effects least squares method and Granger causality test for 74 developing countries between 1981 and 2011. The study finds that (1) economic and political globalization positively affected economic growth, (2) social globalization negatively affected economic growth, (3) economic growth causes economic globalization and vice versa, and (4) political and social globalization exerts significant influence on economic growth, but not vice versa.
There are different benefits and drawbacks that globalization brings, and it depends on how countries respond to it.
Samami and Jenatabi (2014) contend that globalization’s positive impact depends on the characteristics of the economy—in their case, it depends on the level of income. Their findings show that high- to mid-level income economics in the OIC tend to experience the positive impact of globalization, which is the opposite for low-income economies. This calls to mind Lindert and Williamson’s (2003) contention that globalization may either increase or mitigate income inequality. They suggest that countries that gained the most from globalization are those that changed their policies to exploit it, while those that gained the least failed to shift their policies to respond to globalization. Lindert and Williamson’s (2003) argument aligns with Samami and Jenatabi’s (2014) findings on the value of complementary policies, particularly those that impact human capital and financial systems, in leveraging on globalization.
Three (3) Major Points of Disagreement Using Other Published Scientific Papers As Basis
Despite raising the issue on the narrow definition of globalization, the study still used a narrow definition of globalization.
Samami and Jenatabi’s (2014) was motivated by the following gaps in the empirical discussion of globalization and economic growth: econometric shortcomings, narrow definition of globalization, and small number of countries. Dreher (2006) and Dreher et al (2008) differentiate among social, economic, and political dimensions of globalization. Gygli et al (2019) has shown that this definition could be further improved. Despite this, Samami and Jenatabi (2014) chose to focus on only one dimension of globalization, its economic dimension. Essentially, they were not able to address the issue on the narrow definition of globalization
In using the narrow definition of globalization, the study also fails to address econometric pitfalls.
The first two research gaps that Samami and Jenatabi (2014) identified are related to each other. Using a narrow definition of globalization will result in econometric shortcomings. Their study focused on the economic dimension of globalization, further narrowing the definition used in understanding its impact on economic growth. The results of Ying et al (2014) and Kilic (2015) demonstrate that there are nuances that impact results.
The study narrowly focuses on one aspect, that is the impact of globalization on just economic growth.
The study is about ten years old, which means that discussion about economic growth and globalization has shifted direction in both extant and nascent literature. One of Samimi and Jenatabadi’s (2014) contribution to literature is implying that globalization’s benefits and/or disadvantages depend on how countries respond to openness. However, their discussion is limited to economic effects. In recent years, the discussion has moved towards the impact of globalization on sustainability. For example, Acheampong et al (2021) finds that energy consumption and economic growth are interdependent, which means globalization has an ecological role given its impact on energy consumption. Their study also finds that dimensions of globalization impact growth differently, which means it impacts energy consumption differently. This expands the discussion on globalization, addressing some of the issues on the narrow view of the concept in literature.
Kihombo et al (2022), on the other hand, offers a fourth dimension on globalization: a financial dimension. While in Samami and Jenatabi (2014), financial systems are considered policies, Kihombo et al (2022) define financial openness as an important and relevant dimension of globalization. Furthermore, the latter examined the impact of financial globalization on ecological footprint and economic growth.
Sources of Information Used in Analyzing the Scientific Paper
Acheampong, A. O., Boateng, E., Amponsah, M., & Dzator, J. (2021). Revisiting the economic growth–energy consumption nexus: does globalization matter?. Energy Economics, 102, 105472. https://doi.org/10.1016/j.eneco.2021.105472
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Dreher, A., Gaston, N., & Martens, P. (2008). Measuring globalisation:Gauging its consequences. Springer, New York.
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Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
The COVID-19 pandemic has caused significant disruptions in the global supply chain, affecting various industries worldwide. Some of the main challenges that companies are currently facing in maintaining their supply chains amidst the pandemic include the following:
Supply Chain Disruptions. The pandemic has led to disruptions in the supply chain due to lockdowns, travel restrictions, and factory closures. This has resulted in delays in the delivery of raw materials and components, impacting production schedules and inventory levels.
One global company that was impacted by this was McDonald’s. In 2021 to 2022, McDonald’s could not sufficiently supply French fries worldwide. This issue was discussed in mainstream media worldwide, include the Philippines, Japan, and Australia, among many other countries. This was eventually resolved when supply chains opened up and moved to regular operations.
Demand Fluctuations. The pandemic caused fluctuation in demand for certain products, leading to challenges in forecasting and inventory management. Companies are struggling to adjust their production levels to meet changing demand patterns.
At the height of the pandemic, there was a huge demand for rubbing alcohol, disposable masks, and even toilet paper. Manufacturers had a difficult time planning out production and distribution because of the many restrictions. And as the restrictions of the pandemic slowly loosened, demand for these materials also changed, impacting forecasts and inventory management.
Transportation and Logistics Issues. The pandemic has disrupted transportation and logistics networks, leading to delays in the delivery of goods. This has resulted in increased transportation costs and challenges in managing inventory levels.
Transportation and logistics are crucial in effective and efficient inventory management. I remember during the early months of the pandemic, many fast food chains were selling their inventory of frozen meats, such as Jollibee, McDonald’s, and Mang Inasal. Not only did selling off their inventory helped them with cash flow, it also helped them sell these frozen meats that had expiry dates. With branches closed and with limited ability to transport goods, it was the best solution at that time.
Labor Shortages. The pandemic led to labor shortages due to illness, quarantine measures, and travel restrictions. This has impacted production capacity and led to challenges in maintaining workforce safety.
Financial Constraints. The pandemic has caused financial constrains for many companies, leading to challenges in managing cash flow and accessing capital for investment in supply chain resilience.
The most resilient and successful transportation and logistics companies are those with deep pockets because of the nature of the business. You need good cash flow to ensure that goods are transported. This is something I learned from my in-laws. And so the businesses that continue to operate today in the supply chain industry are those with a very good handle on their finances and/or have very deep pockets to withstand the challenges brought by the pandemic.
The challenges above affect different aspects of companies’ operations in the following ways:
Sourcing. Companies are facing challenges in sourcing raw materials and components due to disruptions in the supply chain. This has led to delays in production and increased costs.
Production. The pandemic has disrupted production schedules due to labor shortages and supply chain disruptions. This has led to challenges in meeting customer demand and managing inventory levels.
I remember during the pandemic that crowdfunding sites such as Kickstarter and Indiegogo release statements to their followers, project owners, and campaign backers to expect long delays in the delivery of the campaign rewards. Many projects typically experience delays, but the pandemic made these delays much, much worse as China was experiencing the brunt of the effects of the pandemic.
Distribution. Transportation and logistics issues have led to delays in the delivery of goods, impacting distribution schedules and increasing transportation costs.
I remember ordering books from the Big Bag Wolf during the pandemic. It took about 3 months before my books were delivered. The original promise was a month, but there were significant delays.
The pandemic has created significant disruptions in the global supply chain, leading to challenges in maintaining supply chain operations. Companies are facing challenges in sourcing, production, and distribution due to disruptions in the supply chain, demand fluctuations, transportation and logistics issues, labor shortages, and financial constraints.
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
The discussion on refugees and migration is a discussion of the allocation of resources. The most significant source of tension in the discourse about migration and asylum is that migrants and refugees are seen as competitions of the host nation’s resources.
The difference with refugees and legal migrants is that the latter move to their host countries with some assets and often with an economic and social integration plan, while many refugees, because of their circumstances, often arrive with no plan and only the clothes on their backs.
For most host countries, the immediate need in the initial period when refugees arrive is to deliver short-term basic needs: food, temporary shelter, and clothing. These efforts require large amounts of resources. However, they also need to provide for their long-term needs and preparing them to integrate into society, which requires an even more massive effort. When you receive refugees, you are essentially managing the nation’s resources, making sure to balance the needs of the citizens of the nation and the needs of refugees.
When war broke out in Syria and through the Ukraine war, many refugees started flocking to Greece. Between 2016-2020, Greece received 3.38 billion euro in an EU support package. Yet, despite support, there are still claims of poor access to resources. Even with overhauls, Greece continues to keep asylum-seekers in refugee camps that struggle to provide accommodations and healthcare (Emmanouilidou et al, 2023).
Refugee movement in Greece is limited, which means they are not integrated into society. From an economic perspective, refugees represent a pool of untapped human resources. There are labor shortages in the European Union, United States, Canada, and Australia. Typically, the short-term solution is to increase the intake of migrants to take up the labor gaps. There’s a reason why economies see migration as one of the drivers for growth—migrants are human resources.
In the long-term, immigration policies shape the cultural fabric of a nation. For example, the United States is a nation built by immigrants. Discrimination and racism typically exist because of concerns that migrants take away resources and opportunities away from citizens, including access to schools and jobs. However, Americans also recognize the value of migration because migrants take on work that many citizens won’t do. Most migrants, however, integrate into American society, accepting dual identities and identify as Asian-American, Filipino-American, etc.
In Japan, a nation known for its cohesive culture, non-Japanese are seen as guests and are treated as so. Should economic conditions worsen, the sentiment is that Japanese should be prioritized in the access to much needed resources. Foreigners are not entitled to Japanese sources. There are also many barriers to integration, language being one of the most significant barriers.
France follows similarly to Japan, although they are more open to migrants than the Japanese. The key difference is that the French expect migrants to fully integrate into French society. They are no longer Algerians, Moroccans, or Tunisians—they are French. Integration often implies leaving behind their home country cultural identity in favor of the French cultural identity (Safi, 2008).
What do the examples of cultural integration in the United States, Japan, and France tell us? There is a diversity of opinion on what it means to integrate into society. Some societies celebrate diversity, which is seen more predominantly in the United States. Some societies are not as welcoming to cultural diversity, such as France and Japan. Is it necessarily bad if a society is not as open to cultural diversity?
If we compare the United States with Japan, they have contradicting sentiments on cultural diversity. Yet they are both innovative economies. It begs the question, is it cultural diversity that leads to innovation, or is it a specific aspect of culture that leads to innovation?
Perhaps the better question is, what does a society give up when they close themselves off from cultural diversity? A study on cultural diversity in London found that cultural diversity was an economic strength for the city, leading businesses to enjoy improved processes and products (Lee and Nathan, 2010).
Furthermore, it’s a basic human right to participate in cultural life, especially one that ties into a person’s identity. Policymakers need to take into consideration that culture is a basic human right, and that policies need to take this into account. There are economic and political advantages to culture diversity, and we can only take advantage of these if we recognize diversity.
Sources:
Constant, A. F., & Zimmermann, K. F. (2016). Diaspora economics: new perspectives. International Journal of Manpower, 37(7), 1110-1135.
Lee, N., & Nathan, M. (2010). Knowledge workers, cultural diversity and innovation: evidence from London. International Journal of Knowledge-Based Development, 1(1-2), 53-78. https://doi.org/10.1504/IJKBD.2010.032586
Safi, M. (2008). The immigrant integration process in France: Inequalities and segmentation. Revue française de sociologie, 49(5), 3-44. https://doi.org/10.3917/rfs.495.0003
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
The trade tensions between the United States and China have significantly impacted businesses operating in both countries, as well as those with global supply chains interconnected with these two economic powerhouses.
These tensions, characterized by tariffs, trade restrictions, and geopolitical rivalries, have introduced uncertainty and increased costs for businesses, forcing them to adapt their strategies to navigate this challenging global business environment.
One of the countries that is significantly impacted by these tensions is Japan because of the interconnections of these three countries and the characteristic of the supply chain involving goods manufactured and traded in these three geographic entities. Trade policies may shift to help insulate economies from the negative impact.
For example, Japanese companies that cooperate with US sanctions against China may also be subject to sanctions by China as many Japanese companies in the semiconductor industry do business with both China and US, forcing them to choose between the two (Kwan, 2023). For example, a Japanese company operates and manufactures goods in China. The US imports these Japanese products that are built in China, and because they are built in China, the US will impose import tariffs. The same holds true for Japanese companies that operate and manufacture goods and services in the United States. When China imports from Japanese firms operating in the US, they also may impose additional tariffs. The sanctions effectively remove any competitive advantage these Japanese firms may have benefited from before the trade tensions.
In response to the growing China-US tensions, Japan passed the Economic Security Promotion Act in 2022 to help mitigate the effects of the tensions. As a result, Japanese firms are being encourage to relocate production bases from China to ASEAN and even Japan (Kwan, 2023). This is an example of supply chain diversification (if relocating to ASEAN) and localization of production (if relocating back to Japan), which are mitigating strategies.
Furthermore, because of the national security dimensions of the China-US tensions, Japan also revised the Foreign Exchange and Foreign Trade Act to strengthen restrictions on foreign capital investment in key industries, which includes arms, aircraft, space-related, nuclear, power-related, cyber-security-related, electric power, gas, telecommunications, water supply, railroads, and petroleum. The goals is to discourage foreign takeover of these core industries, whether American but more specifically Chinese investors.
Nevertheless, there are economies that are poised to benefit from the US-China trade tensions, such as India. Jeanette mentioned Apple Inc. In 2023, Apple release their official supplier list, demonstrating shifts in their supply chain preferences (Jiang, 2023)—another example of supply chain diversification. Apple added five new suppliers, but cut out eight suppliers from China. They also moved production bases to India, rising to a total of 14 bases from 2021’s 11.
If we follow the sentiment of the Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, the Philippines has the potential to benefit from US-China trade tensions. This is because the Philippines has a low exposure to products targeted directly by US tariff actions against the Philippines (Villanueva, 2020). It is worth noting that China is the Philippines’ largest supplier of imported goods, while the US is the fourth largest. On the other hand, Hong Kong is our largest export partner, followed by the US, while China is fourth (Philippine Statistics Authority, 2024).
Nevertheless, there is truly no winner in a protectionist approach to trade. To quote Jeffrey Sachs (2019), “he hardline approach – to be pursued through protectionist trade policies and aggressive technology policies — would prove disastrous, weakening the world economy and creating a self-fulfilling grave risk of future conflict.” If we follow classical economic principles, open trade is a positive-sum game, where all trade partners benefit the more we trade with each other. This is a sentiment shared by Adam Smith, the father of economics. The benefits come from leveraging on competitive advantages and the efficient use of resources.
Kwan, C.H. (2023, August 25). Decoupling proceeding amid lingering U.S.-China tensions—Rising Concerns about the Impact on Japanese Companies. Reiti. https://www.rieti.go.jp/en/china/23051601.html
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
I have been working remotely as a freelance researcher for about 15 years. Working freelance and remotely affords me flexibility and control over how, where, and how I work. The issue with remote work typically revolves around the question of productivity and motivation. What I have discovered is that I can work productively everywhere, so long as I am motivated to do the work. My motivation to work comes from within—it comes from loving what I do. I have the privilege of choosing what I work on and who I work with—this is motivating to me. I was optimistic about the future of work and how many will transition to remote work.
At the tail end of the pandemic, I was surprised when many did not share my sentiments about remote work. Many say that it is isolating. Many executives say that it reduces productivity and even demotivating.
I disagree with this assertion, particularly if we subscribe to the self-determination theory. The theory posits that people are intrinsically motivated to work when their psychological needs for autonomy, competence, and belongingness. Autonomy means having the choice and control over what, when, where, and how you work. Competence is having what you need to succeed. Belongingness is having connectedness, that feeling of being part of something. How I have been working (freelance and remotely) for years addresses these needs, and this is why I continue to be productive and motivated.
Remote work supports autonomy. Remote work affords workers flexibility—the choice and control over what, where, when, and how they work. However, I do understand why some may think that remote work may be disadvantageous because it may undermine competence and belongingness. Remote work can be isolating, and some workers feel that they don’t receive the information or resources they need to achieve their goals or accomplish tasks. It leaves them feeling helpless and without direction. Rigidity and micromanagement, which are poor practices that have trickled into remote work from traditional office work, can also undermine autonomy.
The article provides relevant and feasible strategies to help address the issued above. While the primary issue that the article addressed was the issue of creating work-life balance that allows workers to be productive despite of distractions, these strategies also enhance or contribute to enhancing worker autonomy, competence, and belongingness. For example, routines simplify decision-making. It takes away the need to make decisions on the minute details—such as when should I begin work or where should I work or what should I work on at specific times of the day—and focuses my time and energy on the consequential decisions of the day. This strategy contributes to autonomy because it makes me feel in control and have a choice over how I use my resources (time and energy) for the day. And in doing so, it helps me feel competent because it allows me to demonstrate good time and energy management. Furthermore, it also supports belongingness. It allows me to become present in conversations and meetings because I know that I have allocated enough time and energy for the things that I need to accomplish.
In connection with the first strategy, I particularly appreciate the advice on planning for structure and flexibility. I firmly subscribe to the belief that boundaries enable freedom. In the same logic, structure enables flexibility. My routines enable me to choose what, when, where, and how I work. It also allows me to feel competence because I am able to demonstrate good resource management.
One should caution, however, that the goal is to find a good balance between structure and flexibility. The rigidity of schedules and routines, specifically those that do not allow one to pivot or change, undermines the advantages and benefits of flexibility. The reason why I decided to work remotely is because I want to be there for my family while allowing me to work on things that matter to me. Routines and structure scaffold my days—following the routine are a means to an end. And we should caution on determining success based on how closely we follow structure and routines, particularly on days that call for more flexibility. I found out through years of working that I can be successful in remote work if and when we focus on addressing our needs for autonomy, competence, and belongingness. The article provides feasible and relevant strategies that allows me to do so.
Remote work has allowed me to demonstrate the skills that I am most proud of developing through the years: creativity, problem-solving, and communication skills. I thrive in remote working and learning environments. In fact, I could say that I love this set up because it allows me to keep a balance in work and life. Most importantly, it allows me to have the life that I want, while supporting my needs for autonomy, competence, and belongingness.
What makes it work is communication. I understand why some will see remote work as isolating. However, thanks to technology (video conferencing, instant messaging, and work management platforms), it’s easier and much more convenient to reach out to team members remotely. Technology also makes it easier to get the information you need to accomplish work. There are more tools available today that allow us to work anywhere, anytime, while still feeling connected to the people we work with.
However, I also run the risk of being too digitally connected. There are times when I feel that technology makes it easy for me to multitask. This is when I develop time optimism and wrongly think that I can accomplish more than I can. This is where I believe the strategies in the article help me strike a balance. Routines and structure allow me to allocate my time and energy better. Zeitgebers, specifically, provide signals on when I should transition from work to family—and vice versa. These allow me to be present with my team, my students, and my family. Routines and structure enable me to be flexible and present, which in turn supports my need for autonomy, competence, and belongingness.
While I fully support remote work and remote learning, I find myself pondering about the suitability of remote learning in the college context. I recognize the value of remote learning because it is inclusive and allows more learners to participate in the process. Distance from school is no longer an issue in remote learning, although access to technology is. It allows for flexibility and can be cost efficient for some students—they don’t need to spend for transportation. However, I feel that there are some aspects of teaching and learning that is better achieved in person.
For some context, I teach undergraduate students and have observed that they prefer in-person classes over Zoom lectures. I decided to run a survey to understand their preferences. What I learned are these:
They prefer to collaborate in person.
They prefer to attend lectures delivered in person.
They prefer to work on their group projects in person.
They prefer to work on their individual projects and requirements by themselves at home or any location that they feel comfortable in.
My argument on the value of in-person learning, particularly in undergraduate learning, stems from the need for belongingness. Learning is a social process. For young college students, it is very important to learn with peers. Technology cannot replicate the collaboration dynamic present in in-person collaboration.
And so I continue teaching with a compromise between remote and in-person learning. to hold in-person lectures and schedule in-person group activities. But I also schedule time for students to accomplish their individual requirements remotely. The issue still goes back to the need for self-determination. We work and learn best when our needs for autonomy, competence, and belongingness are addressed. Just as remote work cannot apply to all fields, there are also aspects of learning that cannot be accomplished or addressed remotely.
As I pondered on the value of remote work, specifically its value in my life, I also cannot help but think about whether others feel the same way or derive the same value as I do.
Is remote work for everyone?
How do we address it when not everyone in the team is built for remote work?
Does everyone understand and possess the necessary skills to succeed working remotely?
If they lack these skills, do they know how to develop or enhance these skills?
Do all managers understand how to support their teams in skills development?
More importantly, do all managers understand and possess the necessary skills to lead a working team remotely?
I am also curious about how effective the strategies cited in the article are.
How much does communication and zeitgebers contribute to achieving remote work goals?
Perhaps, also importantly, are zeitgebers and internal communication tools being abused? Are they being used to micromanage remote workers? Do they result in more unnecessary meetings, for example? Lastly, the assumption on the article is that remote workers work in the same time zone. My remote work experience is that I work with team members located in different time zones. Some of the strategies, specifically zeitgebers, will require further contextualization and adaptation to suit a multizonal team. In this context, what kind of zeitgebers will work? What communication strategies will support a team member’s autonomy, competence, and belongingness? What skills and mindset should managers develop in managing these types of teams?
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
The key issues I encounter with AI and machine learning typically revolve around abuse of technology, potential job losses, and AI models going rogue. The webinar provides more context on these issues, expounds on how the technology may be misunderstood, and how these issues are being addressed. What I learned was how broad AI is and that there are very many classifications for AI and, equally, very many ways it can be used.
From an educator’s standpoint, I was happy to confirm my belief that there is value in using AI for learning and development, and its contribution goes beyond what we know about ChatGPT. As one of the speakers mentioned, ChatGPT is a very small part of the AI pie and there are many other models being developed to address very specific learning and development needs.
Generative AI models are being used to help train professionals in various fields. I see many advantages in this. First, most trainings involved self-paced learning using multimedia material. While these are helpful, there are many instances when learners have questions that learning materials cannot directly address. Generative AI models that were developed for training provide interaction during the learning process, which helps keep learners engaged. As an educator, I believe that learning does not occur in a vacuum. In fact, I believe that learning is a social activity. While I don’t consider generative AI models as a substitute of collaborative learning, it seems to be an adequate alternative for when independent learning is a requirement.
I was pleasantly surprised that many view generative AI models as a tool that will help humanize work. The webinar explained how AI can help customer contact agents, who are typically expected to provide solutions as quickly as possible while simultaneously processing huge amounts of information within a short period of time. I have made many calls myself to contact centers, typically when I am already irritable and needing an immediate solution. From an agent’s standpoint, they can’t solve problems they don’t understand, which means they spend a good amount of time gathering the relevant information, including verifying customer identification, before they can resolve an issue. As this process takes time, it annoys an already irate customer even more. Having a way to optimize this step will make the agent more efficient. AI can take out the grunt work so that the agent can spend more time providing solutions—the kind of work that truly matters to the customer. Finally, I was pleased to discover that the development of guardrails in AI is an important issue that practitioners in the field are actively working on. That AI will develop sentience is a concern and fear of many, which I attribute to Hollywood films. Nevertheless, I don’t think these fears are misplaced, particularly as some generative AI models do handle and train on personal and sensitive data. One speaker also mentioned that while currently, those in leadership positions seem responsible and act with integrity, there is still the fear that they will be replaced by others who may not act so and may abuse the information or technology to their advantage.
Initially, I was also hesitant about AI and how it may contribute to education. I can understand how ChatGPT may be used as a tool for cheating. However, I cannot help but compare this logic used in the introduction of the Internet and how the Internet could negatively impact learning because it makes things easy for anyone to “copy and paste” information. However, we have also seen how the Internet has aided students by enhancing their learning. The Internet democratized information. I see AI as something that will also democratize information that will benefit those who have limited access to them (i.e., schools and students in rural areas).
I am excited also to learn that there are many who are using generative AI as a tool we can use to take out the pain points of working. Information processing takes time and effort. As humans, we have the limited capacity to remember data instantly. Having something that processes that information in a relevant and usable output may aid in decision-making.
Generative AI was not developed to replace humans, but instead to help us. This is especially true for the kind of work that is built around human interactions, such as customer contact or customer relations. While chatbots have been developed to help manage customer communications, I find that the current iterations continue to be lacking in many aspects. They bare limited information and I often find that the information they relay are often canned or standard and rarely provided in the context that is relevant to me. Many times, the information they relay are no different than the information that I will find in a company’s website, for example. There are even times when I find it cumbersome to use chatbots, because they are often the first line of communication. So instead of being helpful, I find it wasteful communicating with them, because I already know they won’t provide the information or assistance that I need for my issue or problem. This is why I don’t see why the current iterations will replace humans in customer communication.
The discussion helped me understand that there are measures in place to help address the risks of technology abuse and potential job losses. More importantly, I see that they have a long-term, beneficial view of generative AI, particularly on how they can help us in our lives. Like the Internet, AI is a tool. When used properly, it can add value in our learning, our growth, and our lives.
While the subject matter experts have addressed the issue or fears of AI models going rogue, there are still some questions regarding the sufficiency and robustness of existing guardrails.
Do these guardrails really work?
Are they effective and sufficient in achieving their goals?
Are they protecting against the correct risks? Perhaps more importantly, have the developers identified all the risks involved? Is there a body responsible for identifying the risks?
How do we ensure that there is transparency on how AI models are being trained?
What information or data is being used to train them? Are they using private or sensitive information? How do we ensure that data used have the appropriate consent from entities who own them? Furthermore, how do we ensure that the information is only used as intended, and that the generative AI model will not abuse this information?
As a student and researcher, I find that generative AI’s potential in helping me learn. I also see that AI can help me identify where to start with my research, perhaps even guide me towards the right direction. It has helped me create outlines for my research.
However, I have also seen downsides, particularly for ChatGPT. Some information provided by the platform is not always accurate. I have seen reports generated by ChatGPT citing resources that does not exist. As in any research, it’s always important to check sources and triangulate information to ensure their accuracy.
As a teacher, generative AI has challenged me to find ways how to improve learning and enhance student engagement. Information is readily available, and students can easily create prompts in ChatGPT to generate class requirements. However, just as one webinar speaker has mentioned, teachers should learn how to ask probing questions to help gauge whether learning has occurred.
In general, I am excited to learn more about generative AI and its application in both industry and education.
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
DepEd’s budget received an increase from P633.3 billion in 2022 to P710.6 billion in 2023.
The DepEd, with a 13.2% allocation in the proposed Php5.768 trillion 2024 budget, is second only to the Department of Public Works and Highways (DPWH) with 14.3% share. Only the Office of the Secretary (OSEC) has a minimal budget increase of 5.3%, while all the other agencies under the department have budget cuts (San Miguel, 2023 August 30).
The agencies under the DepEd that are experiencing budget cuts are:
National Book Development Board, by 9.1% (from Php145.4 million to Php132 million);
Early Childhood Care Development Council, by 25% (Php295.2 million to Php221.1 million);
National Museum, by 15.3% (Php1.2 billion to Php 1 billion);
National Council for Children’s Television, by 16.5% (from Php75.6 million to Php63.1 million);
Philippine High School for the Arts, by 8.6% (from Php110 million to Php100.5 million);
National Academy of Sports , by a huge 44.9% (Php357.4 million to Php 196.9 million).
It is particularly problematic to know that the budget of the early education arm of the DepEd will be cut down by a fourth or by PhP74.1 million, while PhP150 million will be allocated to what amounts to discretionary spending.
Fortunately, the House of Representatives decided to realign the confidential funds in the proposed 2024 DepEd budget (Crisostomo, 2023 September 30). However, should the PhP150 million be used for security or to solve issues in Philippine education?
What is problematic in this scenario?
(1) The PhP150 million in confidential funds undermine transparency.
The problem with including an item for confidential funds is that it undermines transparency in the budget process. They are essentially discretionary funds. By their nature, their existence in the DepEd budget also undermines the Constitution because it takes away the House’s ability to scrutinize the budget and determine whether resources are being used or allocated for the most important needs.
Vice President and DepEd Secretary Sara Duterte said that there was “a purpose and need for confidential funds in the Department of Education because basic education was intertwined with national security.” She has also been quoted saying, “For after all, there is security, there is peace.”
I would argue that the correct quote is, “If you want peace, work on justice.” Justice entails transparency and parity, which does not happen when you curtail or undermine systems put in place to ensure their existence. There are also existing departments mandated to address security concerns, particularly the Department of Interior and Local Government (DILG). Why should DepEd address concerns outside of their mandate? Is this an efficient use of their resources?
Furthermore, DepEd, through its secretary, did not fully explain the need for the confidential funds. What needs are these funds addressing? How important are these needs? And do they supersede the pressing needs in the Philippine public education system?
(2) They reduced the budget for important agencies, particularly the Early Childhood Care Development Council (ECCD).
The ECCD Council is a government agency mandated by Republic Act 10410 or the Early Years Act of 2013, as the primary agency implementing the government’s National ECCD System.
The National ECCD System refers to and covers the full range of health, nutrition, early education, and social services programs and services for children aged 0 to 4 years old. Essentially, it aims to address early childhood education needs through a holistic approach.
The Council is responsible for (1) establishing national standards, (2) developing policies and programs, (3) providing technical assistance and support to ECCD service providers, and (4) monitoring ECCD service benefits and outcomes.
Many studies have demonstrated the value of early childhood education, particularly in learning outcomes (Lunenberg, 2000). Reducing the budget of the ECCD by 25% suggests that early childhood education is not a priority of DepEd.
What is the opportunity cost of the PhP150 million in confidential funds?
Does the DepEd truly understand the problems facing Philippine education? What problems aren’t the PhP150 million in confidential funds addressing?
In my opinion, the Philippines is facing a severe public education problem that impacts the growth capacity of the Philippines in the long-term. This should be the priority of DepEd.
(1) The Philippines faces severe learning poverty.
According to the World Bank (2022), there is severe learning poverty in the Philippines: 91% of children in the Philippines at late primary age (10 years old) are not proficient in reading. There are two indicators for learning poverty: (1) learning deprivation and (2) schooling deprivation. In the Philippines, we have both.
Learning Deprivation. Large-scale learning assessments of students in the Philippines indicate that 90% do not achieve the MPL (minimum proficiency level) at the end of primary school, proxied by data from grade 5 in 2019.
Schooling Deprivation. In the Philippines, 5% of primary school-aged children are not enrolled in school. These children are excluded from learning in school.
(2) We are not spending enough to educate Filipino children.
Primary education expenditure per child of primary education age in the Philippines is USD 569 (PPP), which is 83.5% below the average for the East Asia and Pacific region and 29.5% below the average for lower middle income countries (World Bank, 2022).
The approved 2024 Philippine budget is reallocating resources away from early childhood education.
Here lies the problem. Many studies have shown that early education programs have a significant and positive impact on the academic, economic, and social aspects of a person’s life (Lunenburg, 2000). If we are to address the Philippines’ learning poverty today, it would be best to begin by spending for early childhood education.
But will increasing spending alone address learning poverty?
Abrigo (2021) posits that spending alone is not an indication of schooling quality as “some systems may be better at converting education inputs into outputs.” He offers, for example, that “Belarus, and Bosnia and Herzegovina both spend about PPP$50 thousand in cumulative education consumption up to age 15, but their average PISA scores differ by about 70 points.”
Does this apply to us? Unfortunately, this doesn’t seem to be the case if our learning assessments are any indication. This only means that we are not only underspending, but we are also not making efficient use of our limited resources, leading to poor public education quality.
(3) Teachers are part of the reason for the learning gaps.
The World Bank claims that quality of teaching, pedagogy, and classroom management are among the significant factors that impact learning outcomes. The Philippines lags behind in these areas. The report furthers that many of the in-service training programs in lagging countries, including the Philippines, lack the crucial elements of effective teacher training programs (Afkar et al, 2023).
Teachers are crucial in addressing learning poverty. Unfortunately, the quality of teacher training programs has been found to contribute to learning poverty.
(4) We have a classroom gap.
According to DepEd (Tan, 2023), the Philippines require a yearly budget of P100 billion to resolve the classroom shortage by 2030. Having schools and classrooms, particularly in poor communities, is necessary to keep kids in school (Lunenburg, 2000).
Currently, the Philippines lacks 159,000 classrooms.
Poverty is one of the significant reasons why children stop attending school (Fernandez & Abocejo, 2014) and a significant contributor to schooling deprivation. Many children choose to join the labor force to augment household income, while others simply stop attending school because of the costs of doing so, including but not limited to transportation costs. Fernandez and Abocejo (2014) propose that free basic education is not enough, and governments should construct schools close to poor communities to encourage more children to attend.
DepEd estimates that each classroom costs PhP2.5 million to construct. While the figure seems inflated already, the confidential funds could have been used to construct 60 classrooms.
Addressing schooling deprivation requires a holistic approach because poverty is a multi-dimension issue. It is for this reason why the ECCD is mandated to provide early childhood education support with a holistic approach.
(5) The Philippines will suffer in the long term if this is not addressed.
What issues are we currently facing? We have learning poverty in the Philippines. Teachers, who are supposed to help reduce learning poverty, are not only ill-equipped to address the issue, but their poor training contribute to learning poverty. The Philippines also lacks 159,000 classrooms to support public education.
If we don’t address these immediate problems, we are going to run into a labor crisis in the next decade or so, when these children join the workforce.
The Philippine labor force has long been considered as the Philippines’ competitive advantage. We banner our skilled, English-speaking labor force, which has earned us investments in business process outsourcing, among many other industries. However, this competitive advantage is slowly eroding. With Thailand, Indonesia, and even Vietnam (Abrigo, 2021) outspending the Philippines in education, we might soon lag behind our neighbors in Southeast Asia.
Afkar, R., Béteille, T., Breeding, M. E., Linden, T., Mason, A. D., Mattoo, A., … & Yarrow, N. (2023). Fixing the Foundation: Teachers and Basic Education in East Asia and Pacific.
Fernandez, R. C. C., & Abocejo, F. T. (2014). Child labor, poverty and school attendance: Evidences from the Philippines by region. CNU Journal of Higher Education, 8(1), 114-127.
Lunenburg, F. C. (2000). Early Childhood Education Programs Can Make a Difference in Academic, Economic, and Social Arenas. Education, 120(3).
Tales from the classroom is a special blog series where I share research and articles I produce in my DBA (Doctorate in Business Administration) program.
Turon at Lugaw 