INDONESIA AND MALAYSIA

Presentation summary

Introduction to Indonesia and Malaysia

Historical, economic, political and cultural characteristics of both countries

Labour market trends of both countries

Management and organization features of both countries

Human resources management of both countries

Conclusion of the analysis of Indonesia and Malaysia

Introduction to Indonesia and Malaysia situated in South-East-Asia

similar in many ways

- national history : colonized by Western countries

- cultural values and ideals : from the Asian culture

- economic and political specificities

different in other ways

- geographic features

- resources available

- level of industrialization

Context : historical, economic,, political and cultural characteristics 1/4

Indonesia and Malaysia are quite similar in terms of historical and cultural heritage and economic development

both countries were colonized by European powers in the early XXth century

but they did not experienced an identical political system

Context : historical, economic,, political and cultural characteristics 2/4 economic similarities between both nations : 3

development phases during the last century- period 1, before their independance : mainly exported first

commodities and raw-materials to the West- period 2, around the 1960’s : industrialization started through a

governemental modernization policy with the apparition of manufactures and exploitation of minerals > attract foreign investisments and support the national prosperities

- period 3, since the 1990’s : continuity of the economic growth affected in 1997 by the financial crisis > both governments take drastic measures

both countries benefit from the recent increase in price of oil and gas and depend on the world market price changes

Context : historical, economic,, political and cultural characteristics 3/4 one common point concerning the political system of

both countries : the one-party authoritarian political system

Features Indonesia Malaysia

Type of system presidential democracy constitutional monarchy

Head of state the president the king

Head of government the president the prime minister PM

Parliament yes yes, a bicameral parliament

Government power centralized in a minority split between the royal family and the elected party

Context : historical, economic,, political and cultural characteristics 4/4 Indonesia and Malaysia are quite similar in terms of

cultural and ethical ways

both countries are multi-ethic societes sharing common values- family and relative integration, mutual and collective help- harmony, cooperation and compassion- saving face : non-violent and non-conflictual nations

but are quite different because of their geographic and demographic features- Indonesia recognizes more ethno-linguistic groups- Malaysia differs with a multiplicity of religions

The labour market trends

low cost and young labour in South-East-Asian countries

Indonesian labour market structure different fron Malaysian labour market

governemental policies on the labour market different from both countries

Country Indonesia Malaysia

0 to 14 years 28 % 31 %

15 to 64 years 66 % 63 %

over 65 years 6 % 5 %

Agriculture 42 % 13 %

Industries 18.5 % 36 %

Services 39.5 % 51 %

Unemployenment rate 10 – 12 % 4 %

Women work under-represented Encouraged

Children work yes but illegal illegal, not so much

Migrants work not so much necessary

General labour market satured unsatured

Management and organisation features

multicultural facet of management : originate from Western ethics, Islam religion and Asian culture

both countries depending on foreign FDI and outsoucing

management structure based on 5 principles, whose :

- a regulated management by a Ministry

- an integrated management of all the stakeholders

- an adapted management mixing Western and Easter theories and pratices

Human Resources Management (recruitment)

HR management associated with HD development in both countries

labor recruitment process occurs in two main ways in both countries :- word-of-mouth : person directly recommended by another

employee- Kinship selection : relatives and ethnic/religious community

acquaintances favorized for a vacancy

but a new recruitment way appeared in Malaysia because of the lack of skilled payroll : the need-based selection (with newspaper, magazine and website ads)

Human Resources Management (education and training) 1/2

shortage of skilled labor in Malaysia and slack of unqualified payroll in Indonesia

two countries and two different approches of education and training

education in both countries + Malaysian specificities :- public education is provide by the Ministry of Education- 6-first-years education in primary school are mandatory and can be

followed of 6 optional years in high schools- however the Malaysian Ministry tries to reform the education system

Human Resources Management (education and training) 2/2

training after graduation in both countries + Malaysian specificities :

- a little negleted in both countries by the employers

- employee additional knowledge through working with senior workers

- the Malaysian nation sets up the HRD Act of 1992 : requires firms meeting some criteria to help financing the training fund

- the government provides financial assistance to training for some organizations

Human Resources Management (remuneration and rewards)

HR department in charge of managing remunerations and rewards by respecting the established laws

public sector pay system under the responsability of the governement in both countries, applying the principle of « equal pay for equal work »

private sector wages determination affected by the gorvernemental rules :- minimum wage set up in Indonesia / no minimum in Malaysia- the « target work » established in Malaysia which motivates to be

more productive in exchange of performances rewards

Human Resources Management (relashionship and trade unions)

HR department in charge of managing remunerations and rewards by respecting the established laws

public sector pay system under the responsability of the governement in both countries, applying the principle of « equal pay for equal work »

private sector wages determination affected by the gorvernemental rules :- minimum wage set up in Indonesia / no minimum in Malaysia- the « target work » established in Malaysia which motivates to be

more productive in exchange of performances rewards

Human Resources Management (industrial actions and stikes)

industrial actions and strikes theoretically allowed under conditions of …- time : stikes should not exceed 6 days (Indonesia)

- mobilization : 2/3 of employees must vote for it (Malaysia)

actually these actions are made illegal and punished because both countries avoid violence and agressiveness

industrial actions settled by an established process :- negociation and conciliation : stakeholders search an agreement- third-part use : appointed by an official institution (Indonesia) or

chosed by the stakeholders (Malaysia)- verdict pronunciation : delivered by the third-part

Conclusion of the analysis of Indonesia and Malaysia

similarities exist between both countries- based on a same historical, economic and cultural model (from their

Wester n heritage)- shared identical religious, cultural et ethical values (from the

dominant Islamic religion and Asian culture) with a same aim : maintaining the national unity and security

- resort to 5 same cultural management principles and 2 specific selection means

- set up a state-control policy concerning the regulation of remuneration and TU

… but they are also different in many ways as- geographic and demographic features / level of industrialization- labor market structure : Malaysia moves to a capital-intensive

production system whereas Indonesia uses largely the available labor

THE END

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