STRATEGIC MANAGEMENT PAPER FOR PHILIPPINE

DEPARTMENT OF AFFAIRS – OFFICE OF CONSULAR

AFFAIRS

GERALD WILLIAM C. PARAGAS

Ph.D. Candidate in Business Administration17 SEPTEMBER 2011

EXECUTIVE SUMMARY• DFA - Office of Consular Affairs should improve its internal activities on the e-passport

program in order to cater and foster “100 % PUBLIC STATISFACTION.”

• DFA – OCA should improve its financial activities by cutting costs up to Php2.6 Billion. This could be done by fully adopting and operating the e-passport program on its own, and producing its own e-passport booklets.

• DFA – OCA’s TOWS Matrix resulted to the strategies of Forward and Backward integration, Product/Process development and Retrenchment.

• DFA – OCA should pursue Conservative strategies based on the analysis of the organization’s Strategic Position and Action Evaluation (SPACE Matrix).

• The Internal and External (IE) Matrix directs DFA – OCA to adopt the Grow and Build strategy.

• The Grand Strategy Matrix (GSM) positions DFA – OCA in Quadrant I which represents Growth and Strong Competitive position.

• The Quantitave Strategic Planning Matrix (QSPM) of DFA - OCA showed that Forward and Banckward integration topped the said matrix, followed by Product development and Retrenchment.

DFA – OCA is the sole entity that produces passports for Filipino citizens. DFA – OCA has been transferred from its old location in Pasay City to a state of the art building in Paranaque City on March 2010.

The timely transfer of the DFA – OCA enable it to launch its e-passport program per the mandate of the International Civil Aviation Organization (ICAO).

DFA – OCA has adopted the e-passport program of Oberthur Technologies, a French company, while the e-passport booklets are printed by the Bangko Sentral ng Pilipinas (BSP).

INTRODUCTION

RESEARCH DESIGN AND METHODOLOGY

Data were obtained from the following:

Passport Custodian of DFA – OCA.

Official website of the Philippine Department of Foreign Affairs.

Official websites of reputable newspapers.

Scope of the study:

The study focuses only on the e-passport program of DFA – OCA. The study did not include other consular services.

REVISED VISION STATEMENT

“To advance the interests of the Philippines and the Filipino people in the world community”

THE MATRIX OF ORIGINAL MISSION STATEMENT:

Component Yes No Statement 1. Customers Filipino people and Filipinos “overseas.”

2. Products and

Services

3. Markets ‘Regional and global’ 4. Technology ‘We have highly responsive system, which

ensures effective delivery of services.’

5. Concern for survival, growth, and profitability

6. Philosophy 7. Concern for

public image ‘Our missions abroad are the partners of Filipinos

overseas in the pursuit of the national interest and in the promotion and protection of their rights and well-being.’

8. Concern for employees

‘Our personnel are our greatest asset. We are committed to the personal, professional and career development of each employee.’

THE REVISED MISSION STATEMENT:Component Yes No Statement

1. Customers Filipino people and Filipinos “overseas.”

2. Products and Services

E-passport services

3. Markets ‘Philippines, regional and global’ 4. Technology ‘We have highly responsive system, which ensures

effective delivery of e-passport services.’ 5. Concern for

survival, growth, and profitability

‘For sustainable delivery of world – class e-passports for Filipinos.’

6. Philosophy ‘We are a competent organizational arm of the Philippine Department of Foreign Affairs that delivers fast and efficient world – class e-passports.’

7. Concern for public image

‘Our missions abroad are the partners of Filipinos overseas in the pursuit of the national interest and in the promotion and protection of their rights and well-being.’

8. Concern for employees

‘Our personnel are our greatest asset. We are committed to the personal, professional and career development of each employee.’

REVISED MISSION STATEMENT

The Office of the Consular Affairs of the Philippine Department of Foreign Affairs is the prime agency of the government responsible for the pursuit of the rights of Filipino people and Filipinos ‘overseas’ to have a world – class e-passport services. We are a competent organizational arm of the Philippine Department of Foreign Affairs that delivers fast and efficient world – class e-passports for the Filipino people in the Philippines, regional and global. The organization is geared towards the sustainable delivery of world – class e-passports for the Filipino people. Our missions abroad are the partners of Filipinos overseas in the pursuit of the national interest and in the promotion and protection of their rights and well – being. We have highly responsive system, which ensures effective delivery of e-passport services. Our personnel are our greatest asset. We are committed to the personal, professional and career development of each employee. In pursuit of our goals, we strive and live by the principles of excellence, integrity and patriotism.

COMPETITIVE PROFILE MATRIX (CPM)

DFA - OCA has the highest CPM

DFA - OCA U.S.A. MALTA CRITICAL SUCCESS FACTORS

WEIGHT RATING SCORE RATING SCORE RATING SCORE

1. Fee Competitiveness

0.75 4 3 2 1.5 1 0.75

2. Turn Around Time (TAT)

0.5 2 1 1 0.5 4 2

3. Management 0.01 2 0.02 1 0.01 4 0.04 4. Number of Clients 0.01 2 0.02 3 0.03 1 0.01 1.27 4.04 2.04 2.8

SUMMARY OF OPPORTUNITIES1. DFA – Office of Consular Affairs can choose the best competitor for the e-passport project through bidding.

2. More demands of e-passports as the population increases.

3. Fixed seven percent (7%) unemployment rate entails increase in e-passports.

4. Lack of opportunities in the Philippines enable the working population to emigrate, hence, entail e -passport

demands.

5. Salaries ranging from US$10,000 to US$20,000 entice Filipino professionals to work abroad.

6. Filipino professionals are entitled to “family status” in K.S.A. Hence, an increase in the demands of e-

passports.

7. Filipinos enjoy tax free monthly earnings in K.S.A.

8. Filipinos enjoy more savings due to the affordable over-all cost of living in K.S.A.

9. Saudi Riyal currency is pegged at 3.75 to US$1.

10. Largest bulk of money remittances were sent by Filipinos in K.S.A.

11. The remittance industry has a positive effect to the Philippines’ Gross National Product (GNP).

12. Filipinos abroad provide the needs of their loved ones.

13. Filipinos abroad send their children to school to finish college.

14. Filipinos abroad support their parents, and send their brothers and sisters to school.

15. Filipinos abroad own a house, a car, a jeepney or engage in a business when they return home for good.

16. Filipinos abroad bring home latest models of electronic gadgets, TVs, stereos, and other household items.

17. Filipinos abroad bring home their “Katas ng Saudi” such as owning a condominium unit and jewelries.

18. Filipinos abroad save money to pay for the medical treatment of their sick parents or sick children.

19. Filipinos abroad settle long-pending family debts.

20. Filipinos abroad see and enjoy the world.

21. Filipinos abroad propagate the Filipino culture and foster mutual understanding with the local people and

other foreign workers.

22. Migration to advanced countries such as U.S.A., Canada, Australia and New Zealand.

23. Philippines’ e-passport is the cheapest among other countries.

24. Philippines’ e-passport is produced by Oberthur Technologies which pioneered the creation of e-passports.

SUMMARY OF THREATS

1. Filipino domestic helpers and skilled workers are not entitled to high wages and

benefits. Hence, low demand of e-passports among these working groups.

2. Filipinos abroad tend to be free from the pressures of family members.

3. Filipinos abroad tend to forget the pains of a relationship torn apart.

4. Filipinos abroad tend to escape from the maltreatment or battering of a spouse.

5. Migrant Workers and Overseas Filipino Act of 1995 impose deployment ban on

countries of Lebanon, Jordan and Iraq and other hostile and war torn countries.

6. Detention of distressed Filipino workers by foreign authorities.

7. Trafficking due to forced labor and economic exploitation.

8. “Drug mules” tagged against Filipinos abroad.

9. Maltreatment of Filipinos abroad by their employers.

10. Illegal recruitment of Filipinos to work abroad.

11. The lobbying activities of the representative of the recruitment industry pressure

DFA – Office of Consular Affairs to release the passports on time.

12. The malfunctioning of the e-passport machines of Oberthur Technologies.

EXTERNAL FACTOR EVALUATION (EFE)

DFA-OCA has maximized manyof its opportunities.

THE EFE SCORE OF DFA – OCA IS:

3.715

SUMMARY OF STRENGTHS AND WEAKNESSES1. DFA – Office of Consular Affairs’ organizational structure is tall yet effective.

2. Leadership style of DFA – OCA Assistant Secretary is participative in nature.

3. Increased processed passport applications from 3,000 in 2009 to 5,000 in 2010.

4. The realization of having a world – class e-passport services.

5. Overseas Filipino Workers (OFWs) are given priority to satisfy their e-passport needs.

6. Chosen Oberthur Technologies which has fully satisfied the needs of the e-passport program.

7. Applicants receive quick and efficient services with the e-passport appointment system.

8. E-passport is a “fool proof” system which cannot be tampered.

9. Passport Tracking Service (PTS) system.

10. Extension of the validity of passports.

11. Mandatory over – time policy.

12. Negative interpretation on passport assistance favors done by employees.

13. Employees tagged as “Passport Fixers.”

14. “High School Graduate” as a minimum academic requirement for hiring.

15. The Authentication Division has been reverted back to the old DFA Building in Pasay City.

16. Long queue of e-passport applicants outside the building.

17. “Atmosphere of inequality” among Filipino outbound travelers.

18. Php530 Million cost of DFA – OCA new building is not essential and significant.

19. DFA – OCA new building is not accessible to “commuter applicants.”

20. DFA – OCA continuously pay Oberthur Technologies for its services, and no control of e-passport courier.

21. DFA – OCA continuously pay Bangko Sentral ng Pilipinas (BSP) for its e-passport booklets.

22. Losses of Php600 Million for regular processing and losses of Php1.1 Billion for expedited processing of e-

passports.

23. Filing of application and releasing of e-passports within three (3) to four (4) months.

24. No concrete measures to decrease the backlogs of the e-passport appointment system.

25. Waiting time is one (1) to two (2) months to get into the e-passport processing.

INTERNAL FACTOR EVALUATION (IFE)

DFA-OCA is internallyweak.

THE IFE SCORE OF DFA – OCA IS:

2.18

TOWS MATRIX OF DFA – OCA

STRENGTH – OPPORTUNITY STRATEGIES

STRENGTHS

Leadership style of the DFA – OCA

Assistant Secretary is “participative” in nature. (S2)

Applicants receive quick and efficient service with the e-passport appointment system. (S7)

OPPORTUNITIES More demands of e-passport as the

population increases. (O2) Philippines e-passport is produced by

Oberthur Technologies which pioneered the creation of e-passports. (O24)

SO STRATEGIES

Assistant Secretary may follow some

suggestions of his subordinates to abolish the “e-passport appointment system” since it creates delays/backlogs that lasts up to two (2) months before an applicant can process his/her application. The Assistant Secretary may create and revive the “walk-in system/first come first serve system or the quota system” in a day.

This strategy is PROCESS (PRODUCT) DEVELOPMENT. (S2, O2)

To fully realize the effectiveness and

efficiency of the e-passport appointment system, Oberthur Technologies should introduce a new process in the system by allowing the applicants to process their e-passports “on-line.” This will enable to diminish the problems of the appointment system.

This strategy is PROCESS (PRODUCT) DEVELOPMENT. (S7, O24)

TOWS MATRIX OF DFA – OCA

WEAKNESS – OPPORTUNITY STRATEGIES

WEAKNESSES

Php530 Million cost of DFA – OCA new

building is not essential and significant. (W8)

DFA – OCA continuously pay Oberthur

Technologies for its services, and no control of courier services for e-passport deliveries. (W10)

DFA – OCA continuously pay Bangko

Sentral ng Pilipinas (BSP) for its e-passport booklets. (W11)

Losses of Php600 Million for regular

processing and losses of Php1.1 Billion for expedited processing of e-passports. (W12)

OPPORTUNITY

Philippines e-passport is the cheapest

among other countries. (O23)

WO STRATEGIES

Since the Philippines e-passport is the

cheapest among other countries, then the renovation of the old DFA building will suffice the needs of the e-passport applicants and will not cost as much as Php530 Million, a cost to buy a new state of the art building, and align the e-passport brand to this hi-tech building.

This strategy is RETRENCHMENT. (W8, O23)

DFA – OCA should adopt the e-passport

program of Oberthur Technologies in order to allow Oberthur Technologies to “rapidly” and fully “distribute” the said program to DFA – OCA. This will stop DFA – OCA in continuously paying Oberthur Technologies. Centralized e-passport deliveries.

This strategy is BACKWARD AND FORWARD INTEGRATION. (W10, O23)

DFA – OCA should produce its own e-

passport booklets instead of BSP. This results to BACKWARD INTEGRATION. (W11, O23), and thereby avoid losses of Php600 Million and Php1.1 Billion, respectively – RETRENCHMENT. (W12, O23)

TOWS MATRIX OF DFA – OCA

STRENGTH – THREATS STRATEGIES

STRENGTH

E-passport is a “fool proof” system which

cannot be tampered.

THREATS

Migrant Workers and Overseas Filipino Act

of 1995 impose deployment ban on countries of Lebanon, Jordan and Iraq and other hostile and war torn countries.

Trafficking due to forced labor and economic

exploitation.

“Drug Mules” tagged against Filipinos abroad.

ST STRATEGIES

E-passport can protect Filipino workers by

not allowing them to work in countries with deployment bans. The deployment ban notice is indicated in a tamper proof page of the e-passport booklet.

This strategy is PRODUCT DEVELOPMENT. (S8, T5)

E-passport can protect Filipino workers from

trafficking since victims can be easily tracked and rescued by the authorities of the “sending” country (Philippines) and of the “receiving” (foreign) countries.

This strategy is PRODUCT DEVELOPMENT. (S8, T7)

E-passport can discourage Filipino workers

to attempt to be as “Drug Mules” since it can divulge real identities of the suspects at the immigration of the “receiving” country.

This strategy is PRODUCT DEVELOPMENT. (S8, T8)

TOWS MATRIX OF DFA – OCA

WEAKNESS – THREAT STRATEGIES

WEAKNESS

DFA – OCA continuously pay Oberthur

Technologies for its services, and no control of e-passport courier.

THREAT

The malfunctioning of the e-passport

machines of Oberthur Technologies.

WT STRATEGIES

DFA – OCA may avoid the malfunctioning of the

e-passport machines and can cut costs by compelling Oberthur Technologies to fully transfer its e-passport program to DFA – OCA, and the latter will now solely control the said program. Plus, centralized e-passport courier.

This strategy is BACKWARD AND FORWARD INTEGRATION. (W10, T12)

Another strategy is RETRENCHMENT. (W10, T12)

SPACE MATRIX OF DFA – OCA

X-AXIS Industry Strength (IS) 6 best, 1 worst 1. DFA – OCA production of e-passports as compared to U.S.A. and Malta. 3 2. DFA – OCA resource utilization is worst. 1 IS Average 2 Competitive Advantage (CA) -1 best, -6 worst 1. DFA – OCA e-passport fees are the lowest among U.S.A. and Malta -2 2. DFA – OCA “NO” control over BSP and Oberthur Technologies -6 CA Average -4 Y-AXIS Financial Strength (FS) 6 best, 1 worst 1. DFA – OCA increase in income between 2009 and 2010 by 60% (3,000 to 5,000 e-passports). 5 2. DFA – OCA unnecessary expenses on e-passport program and booklets. 1 FS Average 3 Environmental Stability (ES) -1 best, -6 worst 1. DFA – OCA competitors’ (U.S.A. and Malta) e-passport fees are much higher. - 2 2. DFA – OCA e-passport turn-around time (TAT) among U.S.A. and Malta is average. -3 ES Average (ES) -2.5 CONCLUSION: ES Average is -2.5; IS Average is 2 CA Average is -4; FS Average is 3 DIRECTIONAL VECTOR COORDINATES: x-axis: CA -4 + IS 2 = -2 y-axis: ES -2.5 + FS 3 = 0.5 THE COMPANY SHOULD PURSUE CONSERVATIVE STRATEGIES

THE SPACE MATRIX

Backward and Forward integration, Product

development and Retrenchment

AGGRESSIVE CONSERVATIVE

DFA – OCA (-2, 0.5)

DEFENSIVE

COMPETITIVE

INTERNAL AND EXTERNAL (IE) MATRIX OF DFA – OCA

GROW AND BUILD STRATEGY – Backward and Forward

integration, Product development and

Retrenchment

IFE = 2.18 (x-axis) EFE = 3.71 (y-axis)

STRONG (3.0 – 4.0)

AVERAGE (2.0 – 2.99)

WEAK (1.0 – 1.99)

HIGH (3.0 – 4.0)

I II (DFA – OCA)

III

MEDIUM (2.0 – 2.99)

IV V VI

LOW (1.0 – 1.99)

VII VIII IX

GRAND STRATEGY MATRIX (GSM) OF DFA – OCA

STRONG COMPETITIVE POSITION – Backward and

Forward integration, Product development and

Retrenchment

RAPID MARKET GROWTH

STRONG COMPETITIVE

POSITION

WEAK COMPETITIVE

POSITION

SLOW MARKET GROWTH

QUADRANT 1 DFA – OCA

QUADRANT 2

QUADRANT 3 QUADRANT 4

SUMMARY OF MATRICES OF DFA – OCA

TOP 1:Backward and Forward TOP

2:Product development TOP 3: Retrenchment

STRATEGY OPTIONS TOWS MATRIX

SPACE MATRIX

IEM GSM TOTAL

INTEGRATION STRATEGIES

1.FORWARD 2 1 1 1 5 2.BACKWARD 3 1 1 1 6 3.HORIZONTAL 0 0 0 0 0

INTENSIVE STRATEGIES

5.MARKET PENETRATION

0 0 0 0 0

6.MARKET DEVELOPMENT

0 0 0 0 0

7.PRODUCT DEVELOPMENT

5 1 1 1 8

DIVERSIFICATION STRATEGIES

8.RELATED 0 0 0 0 0 9.UNRELATED 0 0 0 0 0

DEFENSIVE STRATEGIES

10.RETRENCHMENT 3 1 1 1 6 11.DIVESTITURE 0 0 0 0 0 12.LIQUIDATON 0 0 0 0 0

PORTER’S STRATEGIES

13.COST LEADERSHIP

0 0 0 0 0

14.DIFFERENTIATION 0 0 0 0 0 15.FOCUS 0 0 0 0 0

QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)OF DFA – OCA

Highest QSPM Score.

BACKWARD AND FORWARD INTEGRATION

PRODUCT DEVELOPMENT RETRENCHMENT

6.97 5.39 4.36

ACTION PLANS OF DFA – OCA

The Action Plans of DFA – OCA is:

DFA - OCA Action Plans(12 September 2011).docx

THANK YOU FOR LISTENING ANDGOD BLESS…