Essay: Genting Berhad – human resource management and expatriates

1.0 Introduction
Most of the company has spread information about the global knowledge in the organization. Company that step in a global market can gain more opportunities compare to the competitor. Expatriate was a person who has a citizenship in one country, but living in another country because of some reason. They will stay at there for some period of time and then went back to their own country or some will never. (Business dictionary, 2017). Expatriates arrangement was a purpose of the multinational company sent their employee who are originally hired by them to work temporarily abroad. These can let their employees to obtain more skill about their company.
Human resource management functions can let the human resource management work through an integrated HRM system. Staffing was defined as an individual through a selection and training process for a specific job to achieve the organizational objectives. Staffing can reduce the HR conflict arises because of the expatriates arrangement. This is because staffing involves job analysis and human resource planning. Job analysis was a process to determine the skills and knowledge of employees that needed in performing a job in the organization. (R.Wayne Mondy and Judy Bandy Mondy, n.d) Expatriates can be chosen through this analysis so that will not get an impact while let the wrong people perform job in another country and gain nothing skills or knowledge.
Human resource planning was emphasis that organizational goal which need to complete by a determined number and type of employees. Research was important because planning need the analysis information of the employees in order to predict the human resource supplies and needs. (George Elton Mayo, n.d) Human resource manager should plan accurately to let which employees be the expatriates so that can perform the job well. Human resource manager should also matching accurately the employees be the expatriates. This is because an expatriate should consider the family issue, different working environment and the different culture. They should choose the one who love to challenge new things and have a personality that easy to adapt a new environment. If not, even though they have good performance, they will not perform well and bring negative impact to the company.
Human resource manager should assign right people to be an expatriate so that reduce HR conflict and bring advantage to the company and perform well in another country’s company. This is because after they living in the foreign country can let them know detail about the local market condition and able to reduce the risk that limit their own company going through a success.
2.0 Content
2.1 Description and discussion of the topic
Expatriates arrangements have been an essential part of organizations for many years and will continue to grow in importance. (Dolins, 1999) Expatriates will go abroad for an expatriate arrangement and will return back to their home country when the arrangement is completed. Thus, currently expat trends show that the Western Europe and the US are the two biggest regions that sending and receiving the expats. Furthermore, in the Asia zone also currently experience an important rise in the expatriates.
Sending employees abroad can provide significant opportunities and many benefits for companies and employees. The company can use the expatriate arrangement to implement control strategies and coordination from the headquarters that able to develop managerial skills or to transfer the technical knowledge. Todays, China is a fast growing economic power in the world with an average annual GDP growth and it became the second largest market place of the world. (Zuliu Hu,Mohsin S. Khan, 1997) Many international companies have favoured to set up their production in China especially Sweden because the country provided cheap labour policies and open up market. Thus, Sweden companies often send expatriate to China to help the subsidiary and to follow the same management style with that of home company.
When the organization decided to send their employees to go for an expatriate arrangement, it takes over all the responsibilities besides the basic functions of human resource management. For selecting an expatriate, there are four types of selection approach that the company can do with which are ethnocentric, polycentric, regiocentric and geocentric approach. (R.Wayne Mondy, Judy Bandy Mondy, 2014) The geocentric approach is the most likely to be adopted and used by truly global firms which the organisation that applies the worldwide incorporated business strategy, manages and recruit employees on a global basis.
Moreover, expatriate assistance in improving the business performance in the host country and they also help in breakdown the barrier between the parent company and subsidiaries. Expatriates are not only used for the coordination but also for the knowledge transfer which able to improve the business relation to dominate the international market.
2.2 Relevant theories or concepts associated with the topic
In this globalization, the companies that are conducting their businesses in their countries are getting more and more. Increasingly, companies must be managed globally which confronts managers with several challenges which the company will send expatriates to the worldwide. Expatriates are often selected from those already within the organization and the process involves four distinct stages.
Self- selection is the first stage which candidates determine whether they are right for expatriate arrangement, and their family are interested in relocating internationally which extends to an entire of family. According to Rick Schwartz, when candidates are selected for expatriate assignments, spouses, partners and entire families also need to be ‘selected’. The human resources managers play an important role when it comes to the selection of the expatriates; therefore, it is an interest to look closer at their way to work when selecting appropriate candidates for foreign arrangements. (Björkman, 2005) Human resources management is also an important tool for this dissertation since that division within organisation is the one with a great influence when it comes to the selection of expatriates, and evaluating and deciding.
Stage two involves creating a candidate database which organized according to the company’s staffing needs and it also included in the database is information such as the year the languages the employees speak, the employees are available to go overseas, the countries the employees prefers the jobs for which the employees is qualified and more. (International Recruitment, 2017) In more specifically, the focus on selection expatriates arrangement also includes strong communication skills, technical competence, interpersonal skills and professional or technical expertise; the most important is cultural adaptability which the candidates have to adapt the new environment in foreign countries so they would not face the culture shock.
Besides that, the stage three involves scanning the database for all possible candidates for a given expatriate arrangement to the human resources department. After that, the department will determine which candidate is assessed on the managerial and technical readiness relative to the needs for the arrangement. At the final stage, those candidates with good performance will be acceptable to go for expatriate arrangement. When an appropriate candidate has been selected, he or she must get prepared to face the challenges of the new position. (Waxin, 2007)
If the decision is made to employ expatriates, certain selection criteria should be carefully considered in the stage two and three. However, when considering employees for the expatriate arrangement, most of the companies which possession will choose the technical competence rather than for job experience.
2.3 Identify the contributions or significance of the topic area within the work organizations
The reason why the number of Malaysian organization sending their human capital on expatriates arrangement had increased rapidly recent year is because the employee who being sending aboard will bring great contribution to team; organization and themselves. Expatriates is important and significant to all organization when they decide to be multinational organizational.
When organization decide to build a new site to another country outside their headquarter country, they will need to consider the recruitment problem. As it is out of their home country, culture; social; and regulation might be different. Thus, serious consider to make sure the culture and management method are same with the home company is required. Expatriates are a best choice to organization as they have enough knowledge of the parent organization. It able to contribute to organization as they can breakdown the barrier between the home company and host company; help the employee recruit in host country follow the same management style with home company; make local employee follow same culture; and decrease the risk for organization when they decided to develop into multinational company. (Goel, 2013) In an organization, there are many managers and employee who take part in decision making. Sending out expatriates may help parent organization to hold the key position in the progress of making important decision.
Since headquarter has sending out at least one expatriates, home organization may able to have more understanding about the local employee needs. This help headquarter management to develop better relationship with the employees in host company and able to provide security and personal needs to them. Besides that, local employee may have more motivation when they working with expatriates as he/she was sending out by parent company and more reliable than others. (Mark E. Mendenhall, E Dunbar, GR Oddou, 1987)
When sending a manager aboard to the host organization, the expatriate managers will acquire a deep and wide range of knowledge about the culture; new technology; and others information that different from parent country while he/she living and working abroad. He/she will have individual learning about the culture; social; regulation and management different in different country. They able to expand their horizon; gained a wide variety of type of new knowledge; make a lot of friend whatever on business or personal; and also earning high salary while they being send to host country for working. This is a kind of contribution to individual which bring back by themselves.
Other than that, this kind of knowledge may contribute to organization by helping organization to have better understanding the different culture of different country and manage to know the changing conditions in global. It is important to a multinational organization to improve the business relation to dominate the international market and the changing of the global to make sure they are up to date to the consumer demand and not being knock out by the changes of global demand. Furthermore, the knowledge transfer by the expatriate managers can be transform from individual learning to organization learning (Antal, 2001). He/she may share their own experiences and knowledge with team member; departments; or individual. They will pass their experiences when they have opportunity to communicate with others. When there is an improvement in a department, it will affect other department as well such as the virus will distribute to other person by person.
3.0 Case Development
3.1 Describe the nature of business of the company
Genting Berhad is the parent and holding company that manages investment in others Genting companies. The Headquarters was in Malaysia, and this multinational corporation companies was started from humble beginnings in 1965.
The founder for Genting Group was Tan Sri Lim Goh Tong. He builds his business empire to international world just with the simple principles of humility, discipline and conviction. His son, Tan Sri Lim Kok Thay inherits his chairmanship of Genting Group when he was retired in December 2003. Under the leadership of Tan Sri Lim Kok Thay, the Genting Group continues to grow from strength to strength, and manages to lead the company with a successful overseas strategy.
Genting Malaysia is a member of the Genting Group, which leading destination resorts operator in the world. With a vision of to be the leading integrated resort operator in the world. While, the mission are committed towards providing the most delightful and memorable experiences to their customers. They also aim to generate sustainable growth and profits, consistently enhance their stakeholders’ value. Over this 45 year, Genting Malaysia has been principally involved in leisure and hospitality business covering theme parks, gaming, hotels, and entertainment.
Recently, Genting Berhad also in a progress to corporate with the American firm studio which is the 20th Century Fox. This will be the first kind of studio theme park launch in Malaysia and the most attractive theme park in Southeast Asia. With this keeping changing strategy for not being defeat from other competitors make Genting still own a stronger position in world.
3.2 Human resource practices of topic
In the year of 2013, Resort World Genting had announced its development for the world’s first ever international Twentieth Century Fox theme park in licensing partnership with Twentieth Century Fox Consumer Products where Genting had been investing more than RM400 million in the project. Introducing new facilities in the Twentieth Century Fox theme park such as water rides, media-based rides (featuring with themes like Predator, Night at The Museum, Life of Pi and so on) and more, requiring employees to operate the rides and the equipment involved. Thereafter, Genting had sent its employees to Los Angeles, California, United States of America, for training and development programs. The activities conducted during the training and development program providing trainings to employees on the operation of the equipment as well as the role representing the stories and the characters from the FOX properties (The EL Team, 2013).
Genting Malaysia had exercised compensation and human resource development practice to manage training and development program. The company has provided allowance for employees or expats in the training programs, which is also known as direct compensation, indirect compensation such as accommodation, medical service and more. The need of allowance for expats to live in United States is essential for those who went for training. In fact, Genting Malaysia had invested a total of RM3.27 million in the year of 2015 for its employees in both internal and external training program (Annual Report, 2015). Besides, expats need not to worry about their accommodation when the training and development program was ongoing.
Referring to Appendix I, the cost of living index- Expatistan, shown the comparison of cost of living comparing Kuala Lumpur, Malaysia with Los Angeles, California, United States, in which it shows a distinct difference between these two countries. The cost of living in United State is rather more expensive than Malaysia in a difference around 55% in overall (“Kuala Lumpur is 55% cheaper than Los Angeles, California. Mar 2017 Cost of Living,” 2017). From statistic shown, most significant difference in the cost of living between Malaysia and United States is housing and personal care, contributing 65% and 68% respectively. This is might be caused by the drastic drop in currency of Malaysia in recent years. And therefore, it will become a burden for expats to stay in that country. However, there are also companies which did not provide or insufficient allowance to maintain expats life due to some external factors, for instance, inconsistency in currency of certain country. The expats of Genting was provided with allowance during the training and development program in United States, but since the currency in Malaysia was dropping, expats who stayed in United States unable to cover their living cost, in fact, they might withdraw from the training and development program which may contribute to the failure of training and development program conducted. In short, the company may not be able to gain knowledge or skills from the expats (Castro, 2011).
Multinational company such as Genting Group may need to be updated with the latest information with its branches located in different country to smoothen the company’s operation and development of the company goes smoothly. From 16th to 19th September 2015, the 34th Genting Plantations Management Conference was held in Kunming, China. Besides, in March 2015, “Game Changing”, which is a conference held in London by Genting UK for Senior Management with a key note speaker, Sir Clive Woodward (Annual Report, 2015). The purpose for organizing such conference is to encourage employees to participate in the training programs in order to improve their competencies and knowledge. In addition, the conference might also improve the relationship between the leaders in subsidiary, which may help to enable the senior or top management in different subsidiary to exchange or generate more ideas for company’s operation and development.
As long as people are trying to communicate with others, conflicts might be aroused due to disagreement with other’s view or suggestion. Difference in culture or believes may aggravate the conflicts between the employee. For instance, during the conference, the suggestion or ideas mentioned did not fully accept by 100% of the employee who involved or participate in that conference. For example, the suggestion of a risky development might be rejected by those who are fear of uncertainty.
Furthermore, Genting Malaysia established Environment, Health, and Safety (“EHS”) policy where it takes initiatives to working towards a goal which is ‘Zero Accident’. It is obviously that Genting advocate the safety and health of its employees and expats. In the year of 2015, the operating units of Genting Plantation indicated that the injury or accidents happened at the workplace was 0.03%, which is close to zero fatal accidents (Annual Report, 2015). In short, Genting has implemented human resource practice on safety and health, regarding to its employee as well as its expats. Besides, Genting has also conducted various safety and health programs to educate and provide knowledge to its employees and expats on how to take good care of their health and safety in the workplace and also when they go for expatriates, for example talks, health and wellness activities, sports and more (Annual Report, 2015).
In October 2015, the opening of Resorts World Birmingham has created more than hundreds of new jobs. Different kinds of recruitment campaigns were undertaken prior to the opening of the resort. Besides that, the employees in Genting have been sent to work with the Birmingham’s council and job recruitment centers. Genting has conducted Induction programs to cover important topics such as responsible, customer service, food hygiene, gambling, technical systems, first aid and money laundering days to help the new staff bond together. (Genting, 2015)
Culture can be defined as the acquired knowledge that people use to interpret experiences and generate social behavior. It is important to recognize that culture is learned and helps people in their efforts to interact and communicate with others in the society. When placed in a culture where values and beliefs are different, some people have a great deal of difficulty adjusting. Cultural differences are a popular issue when moving overseas for some expats. The conflicts with co‐workers in host countries occur constantly causing discomfort and high-stress. (Jose Marc Castro, 2011)
Employees in Genting Malaysia has three main different races with different religious group, they celebrate different holidays in Malaysia. As they switch to Genting United Kingdom, an employer and expatriates may discuss, or argue over religious principles due to different religious. Next, religion is not only belief. The faithful practice their religion through actions like manner of keeping or wearing one’s hair, dressing styles, trying to recruit others to their faith, following certain diets, fasting, praying, avoiding certain language or behavior and observing some religious holidays. (Thomson, 2017)
3.3 Insight on the effect of the topic on the effectiveness of the company
There are advantages and disadvantages which are practiced by Genting Group. Looking at the recruitment employees from different countries with different cultures, the advantage is increasingly global activity by helping the organizations reflect and have better understanding of the largest growing markets of the future such as Brazil, Russia, India and others (Michael Gates, 2008). In contrast, the disadvantage is communication issues, it can directly impact productiveness due to lack of cohesiveness. This explains why some companies catering to international customers by hiring multilingual customer service employees. (futureofworking.com, 2016)
Moving on to the compensation given by Genting Group, the advantage is the compensation encouraged the employee to work harder to get more bonuses.When the employees put more effort in their task, the Group may able to achieve higher performance. In contrast, the disadvantage is limited number of the higher position as many employees would strive for the best to get promote to the higher position. This might cause some of the employees to feel disappointed for not getting promoted while they have given all their efforts.
Next, human resource development implemented by Genting Groups has the advantage of improving organizational effectiveness and performance by upgrading employee’s skills and competencies. In contrast, the disadvantages of human resource development may also lead to time-consuming issue as the human resource development programs are not properly implemented. (Price, 2007; Dessler, 2011). Others, human resource development also wasted financial resources when conducted training programs did not bring any benefits to the organization, the financial resources would be better if they have spent to allocate budget to other activities. (Price, 2007; Budhwar, 2004).
Lastly, Genting has implemented human resource practice on safety and health by conducting monthly “Occupational Safety and Health talks” to educate employees have better understanding on the importance of safety and health matters. The advantage of safety and health helps to save insurance and legal costs. A good standard workplace can reduce absences and sick leaves as the employees are all in good mental and physical condition. Thus, it also helps the organization to save the costs of staff absence. (nibusinessinfo.co.uk, n.d.)
4.0 Recommendation
There are several reasons associated with the failure of an expatriate which there are a few disadvantages in Genting Group to the expatriate to work in the worldwide. Every country has different culture compared with the expatriate’s home country which same to the culture shock. The main issue that stated is the communication skills which refer to the language problems. The recommendation for the company to overcome this culture distance’s communication issues is to provide expatriate a language training before they go for the expatriate arrangement. The company should apply the foreign language training because the knowledge of the language of the host country to successfully working and living in the host country. Furthermore, a language always carries an enormous amount of the culture it represents. If expatriates are proficient in the local language, the potential for misunderstanding is greatly reduced. As a result, language is a key to expatriate adjustment and that it improves effectiveness and negotiating ability. Therefore, the company ought to organize a pre-move orientation and training such as tuition class to lecture them before the expatriate arrangement begin so that they are able to gain access to new social support structures outside of work and the expatriate community.
Moreover, there will be time-consuming and financial resources wastes if the human resources development did not implement the training process for expatriate properly. To overcome both of the issues, the company can provide a short-term and low budget training process for those expatriates. Company can offer an online assistance and training in areas such as career services, cross-cultural training ad employee’s assistance programs such as internet which offers global expatriates 24 hours per day, seven days a week training program. An advance technology is a time-saving and cost-effective solution for the stress experience by employees who are on the expatriate arrangement. Thus, technology can be used to provide on-going support and contact. For examples, online career services allow expatriate the opportunity to upgrade skills while on the arrangement. Lastly, it is also effectiveness to employees since they can learn faster which can save times and costs through the online learning system.
Thus, the disadvantages that faced by Genting Group is that when they use promotion as compensation to expatriates, it will cause some employee feel unfair when they come to another country as an expatriates and pay all their efforts in Genting Group but not getting the promotion to higher position because the higher position such as team leader; assistant manager or manager is limited and other employees being promoted already. Thus, they may improve this disadvantage by setting higher standard for higher position while give expatriates extra resources.
Genting Group may set higher standard for the higher position and encourage expatriate’s employee try their best to achieve the standard in order to have the higher position. Genting Group may give expatriate’s employee some extra resources to encourage them and also avoid themselves from this disadvantage. For example, Genting Group may require the manager position must be the subject matter expert in their position and have a depth of knowledge that could help them to have better performance. Genting Group may give expatriate’s employee more job that related to their position and help them more familiar with all subject matter in their position. Moreover, to test on the standard of all expatriate and local’s employee, Genting Group may have an annual performance test to examine employee if they qualified for the job position or not. If not, Genting Group may downgrade the employee to another position and upgrade other employee that is qualified. Therefore, expatriate’s employee will have a chance to promote themselves to higher position.
This proposal is effective to Genting group as when expatriate’s employee have a chance to promote themselves into higher position and having resources from company, they will more willing to work hard and feel valuable for them to give their efforts to Genting Group. When expatriate’s employee have done many tasks well and achieve the higher standards, Genting Groups will have a reason to rewards the expatriates a higher position.
5.0 Conclusion
In conclude, we know that an expatriates is important and significant to all organization when they decide to be multinational organizational. Sending employees aboard can provide significant benefits to both companies and employees. Company do not need to worry about recruitment problem and may increase the relationship between employees and company while expatriates increase themselves in the field of knowledge and management different in other country. This is the reason why Malaysian organization sending their human capital on expatriates arrangement increase. Besides, from this assignment, we know that expatriates is not simply select from employee but required to select based on some process include self-selection, creating a candidate pool, technical skills assessment, and making a mutual decision.
Moreover, we can know from this assignment that Genting Group sending a lot of expatriates to other country such as Los Angeles, California, United States of America. Genting Group also sending employees to Birmingham’s council and job recruitment centres. Thus, we also know that expatriates brings three advantage include increasingly global activity, compensation encouraged the employee to work harder and improving organizational effectiveness and performance. In contrast, expatriates brings three disadvantages include cultural distance, limited higher position and time-consuming issue. However, there are three suggestion include language training, short-term; low budget training process and setting higher standard for higher position while give expatriates extra resources that may improve the disadvantage.
After doing this assignment, we know that expatriates are important to a multinational organization even though they have brought disadvantage to organization. We may know more about human resource management and also know more about Genting Group human resources management and able to increase our knowledge on Genting Group.