West meets Southeast: A cultural fit of goal setting theory to the Filipino workforce

The Philippines comprises over 7,000 islands in Southeast Asia and has a burgeoning population of eighty-nine million people (National Statistics Office, 2007). Filipino culture is a blend of the East and the West, with influences coming from Malay, Chinese and Arab settlers as well as periods of Spanish and American colonization (Roces and Roces, 2002). The Philippines is viewed economically as a developing country. A sizeable percentage of the Filipino workforce is highly skilled, owing to a long-standing emphasis on education and English instruction in the school system (Olchondra, 2008). Drawing upon its educated workforce and low labor costs, the Philippines has become the second largest country of business process outsourcing (BPO) behind India (Hookway and Cuneta, 2009; Magtibay-Ramos et al., 2008). In only a few short years, BPO revenue in the Philippines has tripled from approximately $2 billion in 2005 to roughly $6 billion as of 2008 (Flores, 2009; Magtibay-Ramos et al., 2008). The Business Processing Association of the Philippines (BPAP) expects the industry to expand to $12 billion and roughly one million workers by 2011 (Flores, 2009; Magtibay-Ramos et al., 2008). Approximately 85 percent of the BPO business in the Philippines is in banking (typically call centers) and comes mainly from US multinationals. As of August 2009 the Philippines had approximately 946 call centers within and around Metro Manila (Call Center Directory, 2009), and more expansion by Western multinationals is expected and encouraged by the Filipino government (Magtibay-Ramos et al., 2008). Despite the increasing importance of the Philippines in the global economy, there is little management scholarship focused on the Philippines. In particular, there is a paucity of research examining Filipino culture and managing and developing the Filipino workforce. One explanation for this could be the assumption that the American introduction of the English language in the society has sensitized Filipinos to adopt Western ways (Andres, 1981; Church, 1987;Roces and Roces, 2002). As a result, it might be taken for granted that Western (largely American) management theories are simply transferable as is – what Filipino management scholar Andres critiqued as “the transplant syndrome.” He cautioned that “the values and aspirations of those governing, strategized by their unique managerial processes, [could] eventually become the norms of thought and behavior of the governed” (1981: 154-155). Yet while business and governmental organizations in the Philippines may resemble American structures, the informal and unspoken behavioral conventions still remain uniquely Filipino (Gupta and Kleiner, 2001). Another explanation for the lack of studies focusing on the Philippines could be the international management field’s preoccupation with Asian management practices in Japan and China over the past twenty years. While these two countries have represented global economic opportunities, they may have also seemed to present more of a cultural challenge to Americans and other Westerners than the Philippines. In a recent study on East-West differences in employee motivation examining China (Hong Kong) and the United States, Canada and Finland, Chiang and Birtch (2007) found the Western respondents attributing internal factors to successful performance, in contrast with the Chinese mix of internal and external factors. However, the authors point out that while Hong Kong has been widely used as a representative sample for Asia, the inclusion of other cultures is needed to truly represent the Asian context. Increasingly, scholars are questioning the implementation of Western management theories in developing countries (Earley, 1997; Galang, 2004; Hafsi and Farashahi, 2005; Kiggundu et al., 1983), and conceptualizing culturally fit or local models (Andres, 1981; Mendonca, and Kanungo, 1993). In their review of 170 management articles, Hafsi and Farashahi discovered “widespread applicability of western-based general management concepts and organizational theories to developing countries” (2005: 505). Yet Hafsi and Farashahi (2005) support broadening the scope of theoretical frameworks past Western boundaries, pointing out that today’s organizational scholarship is evolving from all locales, including developing country contexts. Galang (2004) found that many of the human resource management practices in US and Canadian corporations in her study were also being implemented in the Philippines. However, the outcomes varied somewhat among the Western (US and Canadian) organizations as compared with the Filipino organizations. Andres (1981) has asserted from early on that Western management models can be effective in the Philippines but ought to be modified for Filipino culture. In particular, he viewed a process-based approach, such as a management by objectives model, as potentially successful there. So, how might a Western manager in a multinational enterprise effectively motivate his or her workforce in the Philippines? Incorporating local norms into management theory respects the developing economy’s natural work rhythms; yet juxtaposing them with Western dimensions might further inform nonFilipino managers through an accessible blend of the local and global. In taking this approach, I will first present salient themes in the literature on Filipinovalues and behavior, closely followed by an overview of Hofstede’s (1980, 2001) oft-cited cultural dimensions. As the Filipino norms are less widely known, I present them first and draw attention to them throughout the remainder of the chapter. Then I review goal setting theory and propose a culturally fit model for the Filipino context based on Locke and Latham’s (1984) and Kanungo’s (1986) models of goal setting theory.