For the impact on public and private sector, the policies will be more open and flexible. Malaysia had been improving on such as adopt “Reducing Unemployment and Increasing Employment Opportunities” and “provide training and creating employment opportunities in public and private sectors”. Moreover, government provides tax incentives to employers who engage retrenched workers. By the way, government also putting efforts to reduce foreign workers. (Mini Budget, 11 Mar 2009)
For the impact on this, they will follow human resources management strategies because competitive pressures within public and private sector have increased the strategic value of a skilled, motivated and adaptable workforce, and the HRM strategies to support and develop it by enhanced communication with workers, employment security, flexibility in job assignments and training workers for multiple jobs.
In management style, pluralistic style would be more effective since employers achieve results by joining the groups, encouraging participation, motivating employees and coordinating their work efforts. While for employees, they have the freedom to make decision themselves for whether to obtain a range of specialist skill.
Economic
Economics is the that studies the , , and of and . (Wikipedia, 2009)
Many countries are already in recession, in particular the US, the euro area and Japan. Government policies that maintain a business environment with opportunities for growth and profits have made Malaysia an attractive manufacturing and export base in the region. The private sector in Malaysia has become partners with the public sector in achieving the nation's development objectives.
However, Malaysia’s growth in 2009 will be between negative 1 per cent to positive 1 per cent due to the worsening of global economy. (Mini Budget, 11 March 2009) The bad performance of export outputs and manufacturing has been create a negative impact on the services sector and affects consumer and investor to invest in Malaysia. By the way, in the current economic downturn, most of the companies are facing difficulties in obtaining loans from financial institutions, even for workable projects. Finally, the companies will close down or retrench their workers in order to save cost.
For the impact on public and private sector, the policy will be stricter. The government will assist private sector face the crisis by do not allow the financial institutions restrict credit flows to companies or impose tighter conditions. The government will introduce a RM5 billion fund (Working Capital Guarantee Scheme) for working capital guaranteed by government in the ratio of 80 per cent guaranteed by government and 20 per cent by financial institutions. (Mini Budget, 11 March 2009)
While for styles, financial institutions will be more suitable to use the unitary style. Financial resources must be controlled by the top management since it is valuable and quite complicated. By the way, top management is making the approval for loan; they have the highest authority and final decision in approve the loan for the borrowers. While the employees will only follow the instruction make by the employers and have no authority in making decision since they are only taking part in their work so the employees might not be familiar to the process or detail and sometimes low in motivation when handle those jobs.
According to management strategies, with the scheme in place, it will reduce the cost of doing business for the SMEs (Small and medium enterprise) and increase their cash flow position. This will also help the property market and encourage local SMEs to invest and grow. By the way, Bank Negara Malaysia has opened its doors to help facilitate discussions between banks and borrowers. (Mini Budget, 11 March 2009) Greater engagement between banks and borrowers is needed. Banks need to actively communicate with their current and potential customers to gauge their loan repayment abilities. By the way, looser condition for the loan application would reduce cost of doing business and attract businesses to invest. For the impact on this, they will follow accommodation and institutionalization strategies since public sector are required to give fully support to the SMEs, by the way, they need to conduct an agreement to ensure viable companies have access to funds from the banks. This is important for the survival of many SMEs in the country.
Social
A person’s social environment includes their living and working conditions, income level, educational background and the communities they are part of. (Health-EU, 2009)
Malaysia government committed to eradicating hard core poverty by 2010. Thus, government works hard to build capacity for future growth and reduce the burden of citizen in public and private sector.
- Improve access to private education
- Public-private partnership
Here the government to assist implementation of projects through the public private partnerships. (Bernama, 2009)
By this policy, an effective area for public-private partnership is education. Therefore, the impact on the public and private sector policy is their policy will be more flexible and open to assist this plan.
Within strategies, to optimize existing capacity and improve access to private education, the government proposes to increase the number of scholarships for entry into local private universities. (Malaysia News Daily, 2009) For the impact on this, they will follow accommodation and institutionalization strategy because the public and private sector are certainly required to assist the implementation of this plan but at the same time, they also need to establish jointly agreed procedures to ensure this policy is carried out according to plan.
For styles, here, government act as an employer is more toward pluralistic style within the public and private sector education. Education must not be control, however should keep on develop and improve it by receiving commitments from some others sources. While the employee within the education institutions is more toward unitary style when prepare reports and documents required by government to follow-up the plan progress.
- Opportunities for Post-Graduate Education
Nowadays, social changes has influence the demand for education level. In order to chase up the societal changes around the world, the government will take this opportunity to encourage more Malaysians to pursue Masters and PhD courses with financial assistance.
However, this will affect the public sector alone because government only employs this policy in the public institutions.
For policy, it will be more flexible and open to assist this plan. While for style, it is more towards unitary style. This is because The Ministry of Higher Education will implement the programme and they have highest authority to make the final decision and in charge of the payment scheme; since government is the one who provide financial assistance for the students. However, the public institutions have to obey and follow the requirement of government. For instance, they need to prepare reports and documents required by government to follow-up the student’s progress.
For the impact on management strategy, they will follow accommodation and institutionalization strategy because the public sector are certainly required to give the full support of this plan but at the same time, they also need to establish jointly agreed procedures to ensure this policy is carried out according to plan.
Technology
In general is the relationship that society has with its tools and crafts, and to what extent society can control its environment.
New product development in the industry was imperative to increase market share by raising sales. It is imperative for the automotive industry to think and plan ahead and need to appraise their viability and how they can value add to stay competitive in the long run.
Declaring that this is the way advance, Deputy Prime Minister Tan Sri Muhyiddin Yassin has called on Malaysian companies to invest in developing green and clean technology for vehicles to further develop the automotive industry in the future. (Bernama, 2009) This will reduce the dependence on foreigners’ technology.
For policies, in order to assist companies to restructure and promote green technology. The impact on the public and private sector policy is their policy will be more flexible and open to assist this plan.
For strategies, government provides this scheme with totaling RM5 billion of loans is available for application of green technology within the development of the automotive industry. (Mini Budget, 11 March 2009) For the impact on this, they will follow human resource management strategy because automobile industry within public and private sector needs highly skill and highly motivation people in order to contribute to the growth and technology advance.
While for management style, it is more suitable to use pluralistic style since two way communications able to create more innovative ideas. Technology in advance needs involvement of employees and employers.
2.2 Internal environment factors in Industrial Relations
Culture
Culture refers to an organization's , beliefs, and behaviors. (, 2001)
Government’s policies can effect cultural change about work. In general, employee engagement is mostly about the impact someone feels they have on an organization’s success. To make an impact employees need opportunities to continuously enhance their knowledge. Employee engagement is an important part of employee happiness. And feeling connected is a large part of what employees want. (, 2009)
For policies, government provides 163,000 training and job opportunities in both public and private sector. For the impact on the public and private sector, policy will be more flexible and open to assist this plan.
For strategies, they will follow human resource management strategy because this scheme has been influence the organization culture because as long as the employee receives more job training, they will increase interest in work, improve performance and enhance work quality. Finally creating the sense of engagement; creating the sense that individuals are a part of a greater entity.
For style, staff from varied cultures reflects different learning styles and bring different preferred working styles to their jobs. Therefore, unitary and pluralistic style should adapt accordingly to diverse cultures. It is suitable to use pluralistic style within an employee engagement culture while unitary style within a single authority culture.
3.0 Conclusion
As a conclude, government, employer and employee are the three main “actor” within industrial relations. External environment such as political, economic, social and technology has been impact the relationship between employer and employee in public and private sector within Malaysia. By the way, organization culture has been created a big impact too. In addition, government policies within mini budget would impact the strategies and the management styles of the public and private sector.
In my opinion, for political, the government plans to double the levy of foreign workers under the package may backfire as it will raise the cost of doing business. The employers in manufacturing and services sectors were not consulted before the double levy was announced. As such, employers are now faced with additional hardships due to both the economic slowdown and now, with the sudden policy change by the government. For suggestion, government has to re-examine the double levy policy, and to hold a dialogue with the relevant industry players on the policy.
While for economic, with government guaranteed loans for businesses worth RM25 billion, or 41 per cent of the package, it will buffer downside risks to corporate earnings and help industries struggling with debts. For my suggestion, there would have been greater impact if the package included measures to raise disposable income for lower and medium-income groups. For example, the government should give direct cash assistance to the people or tax cuts to boost domestic consumption, as was done in Japan, Singapore or Taiwan.
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4.0 References
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Bernama, (26 March 2009). Business: “Invest In Green Technology, Muhyiddin Tells Car Makers”. (online) (Cited 5th June 2009). Available from:
- Rose E., Employment Relations. Financial Times/Prentice Hall, 2001.
- Salamon M., Industrial Relations: Theory & Practice. Financial Times/Prentice Hall, 2000.
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Salby, (12 March 2009). Bernama: “”. (online) (Cited 5th June 2009). Available from:
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YAB DATO’ SRI MOHD. NAJIB TUN ABDUL RAZAK, (10 March 2009). “Mini Budget (2009)”. (online) (Cited 5th June 2009). Available from:
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