The Director Of Abc Electronics Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The aim of this report is to the Director of ABC Electronics, and this report has been commissioned to justify and make clear of the HR issues that ABC Electronics has to take into account when resourcing and managing a new company outside UK (Malaysia).

Executive summary

This report is designed subsequently researching about the HR practices and other related issue in operating a company at Malaysia. This report will include main features of the country which includes the legal system, and the labour market information. Thus, it also included the cultural difference that ABC Electronics might face while operating in Malaysia. Role of the state has also been included as it gives a reflection on the impact of HR practices which include regulatory and protective legislation. It draws on HR policies on recruitment and selection, pay and rewards and training and development are also they areas that have been researched. Level of trade union are vital to be included as it gives a perception on how Trade unions works in another country.Laslty, conclusion and recommendations has been made on what HR key issue that ABC Electronics need to consider before and while operating in the country

Choice of country and rationale

Main features

2.1Brief History

2.2 Demographics and labour market information

2.3 Economy

2.4 System of government and legal system

2.5 HR practices in Malaysia

Cultural differences with the UK and how has it impact on HRM policies and practices.

Role of state

Regulatory legislation(terms and condition of employment)

Protective legislation(relating to equal rights and in health and safety)

Assessments of management styles and HR policies on recruitment and selection.

Analysis of employees' participation and level of trade unions

Introduction to trade unions


Conclusion and recommendation

Research Methodology

The research methods are vital as the methodology as a whole refers to the process and the procedural framework within which the research is conducted. This methodology is defined by Leddy (1989, cited by Remenyi et al, 1988, pp 28) as "an operational framework within which the facts are place so that the meaning may be seen more evidently." This research has been carried based more on secondary research method, where journal, government websites, newspaper article and book have been the prior to the research. In addition, an informal interview was carried out from a manager working in Malaysia.

Choice of country and rationale

Malaysia has been the country of choice. Malaysia is one of the leading Asian countries in manufacturing. According to Siva lingam G (2008), Malaysia from being a monopoly government, telecommunications services are now being provided by a number of governments linked privatized forms, private forms and a foreign firm with Malaysian partners.

Main features of the country chosen

2.1 Brief History

Malaysia is a federal constitutional monarchy in South East Asia. It consists of 13 states and three federal territories. Malaysia has is a country of multi racial and multi ethics. The country declared Islam as their national religion, while protecting the freedom of religion. The government is modelled by the Westminster parliamentary system, a legacy of British colonial rule. Federal country stands the highest court in Malaysia, followed by the Court of Appeal and two high courts, one for Peninsular Malaysia and one for the East Malaysia.

2.2 Demographics and labour market information

As the year 2011, the population stands 28,859,154. As for the labour market information, Malaysia education system has been designed is a way where any basic skilled labour would have to undergo 11 years of school education, therefore it would be easier for them to be trained in new skills. The workforce in Malaysia is basically multilingual speaking two or three languages including English. As the has been many MNS venture to Malaysia, which are demanding for technically trained workers, Malaysian's government has taken it into consideration in increasing the volume of engineers, technicians and other skilled personnel graduating each year from public, international universities, colleges as well the technical and industrial training intuitions. The government has also given comprehensive system of vocational and industrial training, including advanced skills training.

2.3 Economy

According to the Star online (2012), the Malaysian economy is forecast to grow in between 4.5% and 5.5% in 2013. The report claims that 4% to 5% growth would translate into nominal gross national income (GNI) per capita growth of 6.4% from RM 30,956 to RM 32,947. The report added that the Government expects the services and manufacturing sectors to contribute 4.2 percentage points to the GDP growth to the GDP growth. Basically Malaysia has a market-oriented economy, with well develop financial and banking sector. High telecommunications network and services, as well a fully develop industrial parks, including free industrial zones, technology parks and MSC.

2.4 System of Government and legal system

As been mentioning earlier, the government type of Malaysia is constitutional monarchy. The legal system in Malaysia has written cons tuition knows as the Federal Constitution. It was adopted on 31st August 1957. It is the highest law of the country and contains the fundamental rights of the citizen. The Constitution grants our basic rights such as the rights to life and liberty, rights to equality, rights to education, right to property as well as freedom to practices one's religion.

Malaysia has very supportive government policies, a responsive government with liberal investment policies. The government provides many various types of incentives for investment, for example, incentives for manufacturing sector such as incentives for strategic project, incentives for manufacturing companies, while additional incentives for the manufacturing sector such as reinvestment allowance.

2.5 HR practices in Malaysia

Human resources (HR) are the backbone of an organisation (Gerhart and Milkovich, 1990, Pfeffer 1998). Malaysian HRM practices have great influences from the British colonisation experiences. Hirano (1991) describes Malaysian HR practices into two main streams, namely British oriented values and ethic orientated values. However in recent year, with the many MNCs venturing to Malaysia has left Malaysian back with a different style of HR practices. In addition, the increased union of work related values and the expectation of Malaysian overseas graduates makes the Western ideas to absorb even faster as well redesign the value of HR practices in Malaysia.

Cultural differences with the UK and how has it impact on HRM policies and practices.

Culture is a major issue to be looked upon as business grows globally and the workforce even more diverse (Trompenaars F and Woolliams P, 2003). Every individual of the society will have an impact of their culture within them. Thus, when taking the business to a global platform it necessitates the need to understand the cultural difference between the host and the foreign country in business.

Malaysia on the whole is a multi-cultural society. The core factor of their culture is family. This in turn brings in unity, loyalty, respect. Many authors have pointed their strong beliefs and have mentioned that it will be difficult for them to adapt to new cultures easily (Drake, 2010). The culture of Malaysia is even more described by a survey by Geert Hofstede (2001) which puts forth the key highlights as:

Acceptance to the hierarchy,

Masculine nature of society,

Long term commitment.

The people of Malaysia are ready to accept the hierarchical order- They would follow their instructions carefully, the organisations have centralised structure and abide by their orders and procedures set for them. This also highlights the existence of a higher percentage of inequalities. They have a masculine society- The society as a whole tries to exhibit the nature of a masculine individual. They aim for success, driven by competition and focussed to enhance skills for development. Individually the people of Malaysia have long term commitment to their member groups.

On the contrast, United Kingdom being the host country exhibits a different culture. As being said in that way ABC Electronics would not face any big differences as there are still many similarities, thus the differences are also adaptable.

The similarity between UK and Malaysia would be a friendly-culture. As there has been many MNc has left an influence of being friendly between employer and employees. Employees nowadays are trained and well adapt the culture in Western. They are as well culture orientated. There are the two major similarities between the UK and Malaysia. This is definitely important information as when employees in Malaysia are adaptable to the culture in UK as it would not be tough for them to be trained.

However, there are still some differences between the UK and Malaysian culture. It has been illustrated in the table below:



United Kingdom

Industrial relation


Employee-employer(more formal)


Can't take up negative comments

Employers put negative comments in a coded manner


Male biased

50-50(equal gender)

Abide by the procedures and orders

Come up with suggestions for change

Don show any reaction on face

Straight forward

In Malaysia, as far as industrial relation is concerned is a father -son is the way how employers behave to their employees, which means the employee will have to listen all what the employers said. However, this does not apply in all organization as there is also organization in Malaysia which follows the employee - employer culture (Maniam S 2012). As gender is the concern, Malaysia could be gender orientated country where men's has slightly greater influences than women. And in the UK is equal gender treatment. This probably would give an insignificant power for ABC Electronics while recruiting people or even when managing them in the workforce. Malaysian employees are used to abide by the procedures and orders while the UK employees are bolder to come up with suggestions for change. These differences could be a positive vibe for ABC Electronics, as the employees are calmer to be handled.

4 .0 Role of state

4.1 Regulatory legislation (terms and condition of employment)

The highest employment law in Malaysia are the Employment Act 1955 (EA) and the Industrial Relations Act 1967 (IRA), which directly impacts the employment relationship. To promote investment and growth, the Malaysian government encourages an affectionate relationship between employer and employees. The EA administrates issues relating to employment in Malaysia and applies to most employees whose wages do not exceed RM1, 500(USD 1= RM3.22) or who are engaged with specific work, for example manual labour or supervising manual labour. The main area protected by EA involving to employment contract contains the termination of contracts, maternity protection, days and hours of work, annual leave, public holiday, termination and lay off benefits and methods of dealing with complaints and enquiries.

On September 28, 2011 Article 8(2) of the Federal Constitution was amended to prohibit gender discrimination through the Constitution (Amendment) (N 2) Act 2011. This development would have occurred in Malaysia due to influences of MNC which are operating in Malaysia, which are discrimination of gender stand as the uppermost responsibilities.

Examples of regulatory system in Malaysia included, matters such as form and scope of employee consultation and participation on decisions regarding recruitment, promotion, dismissal and redundancy, maximum number of working hours per day/week and may more.

4.2 Protective legislation (relating to equal right and health and safety)

An effective implementation of Occupational Safety and Heath (OSH) practices could reduce accidents thus decreasing compensation paid. Studies (Jaselskis and Suazo, 1993; Teo and Phang, 2005) have found that safety measures taken in the workplace can lead to better safety performances and Laukkannen (1999) also emphasised on safety as being part of a skilful job performances.

Malaysian has established law for health and safety, Occupational Safety and Health Act 1994. Every employer in Malaysia has to establish a safety and health committee at the place of work in accordance if there are forty or more persons employed at the place of work. Every employer shall consult the healthy and safety committee with a view to the maintenance.


6.0 Analysis of employees' participation and level of trade unionism

6.1 Introduction

A trade union refers to an organization which is made up of workers who come together so as to achieve goals which they share. The trade unions fight for the rights of their members through leaders who are usually elected competitively (Clegg 1990, p. 345). The leadership in a trade union would therefore negotiate for the rules applicable at the places of work. The leaders of the trade union therefore negotiate with the employers or the employer organizations and arrive at decisions which are binding on the members of the union though at times the conditions of non members could also be affected by such negotiations (Clegg 1990, p. 356).

6.2 Discussion

In terms of employee participation and representation, the position in the United Kingdom is that an employee has the right to join or remain outside a trade union is more on indirect participation. British employees are encouraged to join trade union, however there are a certain percentage of employees who are not a members of the union. The Employment Relations Act (ERA) 1999 enacted into UK labour law a system of statutory trade unions recognition under which a union can compel an employer to recognize and bargain with it.

The Employment Relations Act 1999 represented a more favorable legal development for unions. By allowing unions to apply for statutory recognition, the Act notionally provided them with an opportunity to gain a foothold following the shift towards enterprise-level bargaining.

In Malaysia, the position is slightly different from that in the United Kingdom. The right to join a trade union is guaranteed under the constitution. Malaysian employees are all allowed to join Trade Unions, Private sector and public sector has their very own characteristic on Unionization. For example: Public sector employees are not allowed to strike, but the private sector employees are allowed to strike. However, the Trade Unions Act, 1959 and the Industrial Relations Act, 1967 place some restrictions (Jomo & Todd 1994, p. 276). In Malaysia workers cannot form general unions and thus membership must be confined to a particular trade, industry or establishment. Certain classes of workers such as those in managerial and execution position should not be members of a trade union. The law relating to trade unionism in Malaysia fails to effectively protect workers. Workers have been dismissed for engaging in union activities (Darlington 2012, p. 525). The government engages in a policy of segregating trade unions and this has seen only less than 2% of private sector workers being protected by collective agreements (Institut 1987, p. 216). The severe restriction in Malaysia makes it very difficult for workers to go on strike. The requirement to call a strike is that a ballot must be taken of the involved workers to determine whether to call a strike (Turner & O'sullivan 2011 p.524).

Conclusions and key recommendation

After the research has been carried out, it could be stated that UK based companies have some differences compared to Malaysian companies. It may be not a severe sight of the differences that ABC Electronics Company will have to take account in, as the differences are not a major one as Malaysian HR policy has lots of hint of British. Importantly globalization has a massive impact in organization nowadays, and that could be a reason the employee in Malaysia likes to work with the foreign organization. As they are more benefits for them

Interestingly, based on the reading done Malaysian companies has a great impact on Western culture merely because many MNCs are operating in that specific country. It appears that Malaysian employees are currently aware about the right that they acquire as in that is one of the greatest influences MNC has given to is an important information as it shows the acceptability of the employees in Malaysia. They are willing and happy to work with the foreign organisation is high purely because looking at the benefits given by the MNC companies, they prefer to working with the foreign companies (S, Maniam 2012).As far as Trade Union is concerned, both the countries are using the indirect participation way of joining the trade union. This information is important gives ABC Electronics picture on how the trade union works in Malaysia and how does employees react to that. It will help to manage employees, as in UK trade union employees are encouraged to join, however as far as Malaysian organization is concerned, unionism could be a membership which is confined to employees of that particular establishment or company. And basically Trade Union in Malaysia, are trade unions are confronted by economic factors, generally beyond their control, such as threat of capital flight, and overseas competition. This gives an illusion that ABC Electronics would also have to take in account of those factors.

Otherwise, as far as Malaysian organisation concerned and upon the reading Malaysian employees are lack of these skills which is has been a major issue for UK employees. Skills such as leardesrship, accountability and culture. These probably could be the areas that ABC Electronics will have to look in to. UK employees looks like has been given lots of privilege compared to the Malaysian employees, as in that ABC Electronics need to be more specific in HR issues in pay and rewards strategies.

As far as the Employment legislation is concerned in Malaysia, there is some basic similarity on the way employee is treated. In this way, ABC Electronic has not many changes to be made in the HR practices to launch in Malaysia. The business can be set up in Malaysia but a keen understanding of their culture in depth is required. The people of Malaysia will be friendly to accept the new company but they will take some time to adapt. An organisational culture with a combination of both the cultures will help towards the growth of the business as well as bring in unity and equality among the staff. It will also provide greater support in managing the human resource factor. As been mention earlier in culture differences, there are not major differences between UK and Malaysian culture. It could be understood that employees in Malaysia are adaptable as there are not major differences and they are also welcoming the culture of UK.