Halal Food Industry in Indonesia

This assignment delves into the Indonesian halal food industry. It examines the competitiveness of the sector, analyzing its strengths, weaknesses, opportunities, and threats (SWOT) with a focus on Information and Communication Technology (ICT) influence. The discussion also covers trade protectionism in Indonesia and its impact on the halal food market, alongside factors influencing rice farming businesses. Additional topics include sustainable waste management in Palembang and resistance to agribusiness development in West Papua. Finally, the assignment explores international marketing strategies for Indonesian companies, particularly within the halal food sector.

Running head: INTERNATIONAL HUMAN RESOURCE MANAGEMENT
International Human Resource Management
Name of the Student
Name of the University
Author note

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Executive summary
The purpose of this report is to highlight several factors like recruiting, training and development
process of the workforce of an organization who is trying to expand their business from
Singapore to the market of Indonesia. All the probable aspects of this expansion of the business
are discussed in this report along with that a balance sheet for the organization is also provided.

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Table of Contents
Introduction......................................................................................................................................3
Job design and structure...................................................................................................................4
Hofstede’s dimensions.................................................................................................................4
Recruiting and staffing ways...........................................................................................................7
Training and development process..................................................................................................8
Remuneration package.....................................................................................................................8
Conclusion.....................................................................................................................................11
References and bibliography.........................................................................................................12

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Introduction
International Human Resource Management can be considered a set of actions that
targets to manage effectively the human resources or the workforce to achieve the targets made
by the organization (Papargyropoulou et al., 2015). In this context IHRM might be defined as to
be able to manage the workforce to attain all the objectives of the organization along with
gaining the competitive advantage over the market competitors for that particular organization.
IHRM includes traditional activities like recruiting, selection of the candidates, the training and
development process and appraisals (Patunru & Rahardja, 2015). This paper focuses on the
IHRM of the reputed food chain Carona Fast food who have established their business in the
market of Singapore 3 years back and now are aiming to set their foot on the market of Indonesia
to gain more reputation globally. The aim of the management is to establish the organization as
one of the most reputed fast food chain in the market of Asia within 5 to 6 years. In this context
Indonesia has been chosen as the country where Carona Fast food is going to expand their
business. Indonesia is a country that is rich with human resources of almost 261115456 people
and out of them almost 60% are able to work. It is seen that the country’s economic stability is
good for setting up a new business regarding food sector. Currently in Indonesia there has been
affluence of government aids and foreign investments that backs up the commerce and trading in
the land of Singapore. From the last five years the Singapore government is maintain good
relationships with the neighboring nations and that is positively influencing the economy of
Indonesia. It is seen that the business sector is experiencing a boom because of various foreign
investments and positive initiatives taken by the government. Thus the management of Carona
Fast Food has decided to venture in the market of a foreign land like Indonesia. There is another
factor behind choosing Indonesia out of all nations because the culture of Indonesia is quite

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similar to Singapore and that can become a potential plus point for the organization to compete
in that market.
Job design and structure
The management of Carona Fast Food has decided to send a team of five executives to
Indonesia for setting up their business in there and they want the best individuals to go there
considering the foreign market and the fierce competition in business related to food
(Papargyropoulou et al., 2015). It is a matter of fact that replacing the successful domestic
organization by a foreign organization is not an easy task and that is why the management and
the senior human resource director has to take decisions after considering all the aspects while
recruiting the team of five members.
The team of five members has to be matched with the requirement of the market, thus the
director of the human resource manager is to recruit 5 professionals dealing with five major
issues regarding the quality of the food, basic strategy of the business, an executive to train and
develop the employees of the organization, a master chef along with an individual who will look
after the marketing and advertising aspects of the organization in the market of Indonesia.
The manager has to keep in mind that he should send a team of five where those
members has to be from various ethnic backgrounds and the team should be culturally diverse in
order to be able to fight the oddities in the foreign market. The director of Human Resource
management has to consider the model of Hofstede in order to recruit individuals successfully.
Hofstede’s dimensions
Power distance index:

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The PDI can be defined as the extent to which less competent members of an
organization would accept and would definitely expect that the power is distributed unequally. In
this context, the power and inequality can be perceived from the lower level followers. The more
PDI can be seen, it can be said that the more the hierarchy is established (Tanuputri, Chaveesuk
& Guritno, 2016).
. If the PDI score is lower, then it can be said that the employees are majorly discontent with the
authority.
Individualism Vs Collectivism:
IDV projects the extent to which individuals within a society can merge into one group.
The societies which are individualistic, often loose ties and can relate the individuals to their
immediate family. The focus is on I versus We. To counter this, Collectivism explains that a
society where closely integrated relationships merge extended families and other individuals in
one group. These groups are seen to have an undoubted loyalty and support towards each
member when any issues emerge with any other groups.
Uncertainty Avoidance index:
The UAI can be described as the tolerance of the society for ambiguity, in which
individuals avert a particular event that is totally unexpected. The society that has a higher score
in this UAI generally opts for the stiff codes of behavior, laws, and guidelines and in general is
seen to depend on the absolute truth.
Masculinity:

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In this particular dimension, it can be seen that masculinity is the preference inherent in
the society regarding the achievement, assertiveness, heroism and material rewards aiming the
success (Patunru & Rahardja, 2015). The counterpart of Masculinity explains the preference for
cooperation and caring nature toward s the weak and the quality of life (Wijaya, Widjaja &
Hariyanto, 2016). In the societies which are inclined towards masculinity, the women are more
competitive but lesser emphatic than the population of men.
Long term orientation:
This particular dimension joins the connection of the past along with the present and
future challenges. If the score of LTO is lesser than normal, it can be said that, the traditions are
given importance and often restored. If the score is on the higher side, it can be said that they
have more adaptive mentality and their views are more pragmatic (Tanuputri, Chaveesuk &
Guritno, 2016).
Difference between the market of Singapore and Indonesia
According to the dimensions of Hofstede, it is seen that Indonesia scores 78,14,46,48 and
62 respectively in the dimensions of power distance, individualism, masculinity, uncertainty
avoidance. Whereas Singapore’s scores in these dimensions are respectively 74, 20, 48, 8 and
72 . Thus it can be said that there are some major differences in the market of Indonesia and
Singapore. The differences are mentioned in the above.
In the market of Indonesia, when the management of Carona Fast Food has decided to
expand their business, the organization has to be in mechanistic structure keeping in mind that
they have to recruit people with specializations in their respective fields. Like, there should be a
master chef, a man who will look after the marketing and advertising department, an individual

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only to judge the quality of the products they are selling and the other two individuals would
look after the strategies of the business and training and development of the staffs. The organic
structure of the organization would focus on the communication between the employees as that
can clear any sort of misunderstandings and can potentially boost the productivity and
profitability of the organization (Papargyropoulou et al., 2015).
The management of Carona has decided to expand their business in the market of Indonesia
considering that currently Indonesia is in the 13th rank economically and a virgin market for
retailing, where as Singapore ranks 4th according to the GDP as of 2016. Thus, Indonesia became
the automatic choice for the management of Carona Fast food to expand their business.
Recruiting and staffing ways
Staffing process
The management of Carona has to keep in mind while recruiting five members of a team that
would be sent to Indonesia for the expansion of their business is that the members of the team
must be from different ethnic and different specialized fields to attain the best results. The team
must be consisting of a specialized chef, a business strategist, a marketing and advertising
strategist along with a manager who will look after the training and developmental issues and
finally a taster who would check the quality of their foods. These are the skills which are to be
evaluated while the process of recruiting officials for the organization.
Interview
There should be a test to judge the potentials of the interested candidates and after evaluating
thoroughly the eligible individuals by interviewing them shall be recruited (Patunru & Rahardja,
2015). The recruitment process should be internal, because by recruiting externally, there would

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be a risk factor, because, in this way, the organization has to depend upon the individuals whom
are new with the concepts and the style of doing business of Carona fast food and the
management of the organization will have to train them for quite a long time, whereas, if they
recruit internally they will not have to worry much as they already know the capabilities of the
candidates they are choosing to send to Indonesia for the expansion of the business.
Employment test
As the selection of the candidates will be internally, there will be no question of tasting their
capabilities again, as they all have to be serving a long time for the organization.
Training and development process
The management of Carona fast Food has to focus on the training and developmental
issues as they are expanding their business in a foreign market and thus they should not take any
chances to ruin their chances of profitability. Thus before sending the team to a foreign market,
the management of Carona should employ some experts to provide the required training.
The management might hire some expatriates from Indonesia so that they can provide
some information regarding the foreign market, the culture of that country along with the
information regarding logistics and business etiquettes in order to get successful.
Currently the trend of the markets is changing rapidly and thus the organizations have to
improvise with time (Wijaya, Widjaja & Hariyanto, 2016). It is a matter of fact that the director
of Human Resources has to be extra cautioned because of the changing market requirements and
they have to send a team where every individual have a pragmatic mindset and are able to
improvise their works with time as per the needs of the market. The management of the
organization might call in a few expatriates of that foreign market to provide a brief regarding

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the market of the foreign market to the team of five members who will initially set up the
business in Indonesia. The management should also stress on the important factors like the
changing market and the needs of the market. Apart from that the management of the
organization has to be aware of the various factors that can potentially harm the profitability of
the organization. This overseas expansion of business for an organization is a risky venture and
thus the managers have to be extra caution before taking any decisions.
When the expatriates will be sent to the market of Indonesia, they would surely feel some
problems related to cultural diversities, and that issue can be taken care of by thorough training
and developmental process initiated by the management of the organization. It is a matter of fact
that for the expatriates it will become a huge problem initially, but things will get sorted later on
and only by communicating more with the local people the individuals will be able to deal with
such issues. In this context, it can be said that the management of Carona will have to deal with a
cultural shock of the employees who will be sent to Indonesia to set up the business. In an
entirely different environment, the employees will surely face some major cultural shock due to
exposure in a different cultural environment, but those issues can be solved after giving it some
time. When they will return back to the home country, they will be able to train other employees
to fight these issues of cultural shock. In a way this could potentially become fruitful for the
organization.
Remuneration package
International compensation packages like high incentives and paid foreign tours motivate
the employees with high qualifications and experiences to work overseas. These expatriates who
spouse and children work overseas to be able to provide them with better living standards owing

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to the high compensations they get by working abroad. Initially the management of the
organization has to be aware of that in the foreign market it would be unlikely that they just set
up their business and can start counting the profits, rather to settle the business the management
might require 2 to 3 years (Bohari, Hin & Fuad, 2017). In this scenario the management has to
carefully make the budget for the remuneration packages of their employees. The management
might take a chance by setting a lesser fixed salary for the officials and give them bonus money
according to the profitability of the organization. In this way, for better remuneration, the
employees would be more motivated towards the organization and the organization would
become more successful within a short time. A balance sheet is the general statement regarding
the liabilities, assets and the capital of any business or any other commercial organizations at a
certain time and the details of the balance of the revenues and the expenses over the time
(Borsuk & Chng, 2014).
Balance sheet:
A balance sheet reveals the assets and liabilities of a company and is prepared either half
yearly or annually. The liability side shows that owners capital and the amount the company
should return to the investors including dividend. These are the long-term liabilities. The short-
term liabilities reveal the expenses like cost of living allowances, taxes, housing and other
expenses the company has to pay to either outside parties or to the employees. The balance sheet
of a company on the asset side shows the current assets like cash and inventory which the
company can use to pay these liabilities. The balance sheet below shows the arrears of salaries
and incentives that the company has to pay to its employee under current liabilities.

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Projected balance sheet for the period ….
Period 1 Period 2
Amount(
$)
Amount(
$)
Amount(
$)
Amount(
$)
Current assets
Cash at bank 400000 450000
Accounts
receivable 5000 40000
Inventory 60000 65000
Prepaid expenses 10000 20000
Total current
assets 475000 575000
Fixed assets
Land 400000 400000
Furniture 10000 10000
Plant and
machinery 100000 100000
Tota fixed assets 510000 510000

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Total assets 985000 1085000
Current liabilities
Accounts payable 60000 60000
Outstaning
payments 400000 500000
Total current
liabilities 460000 560000
Owner's equity 500000 500000
Retained earnings 25000 525000 25000 525000
Total liabilities 985000 1085000
Note1. The outstanding payments consist of salary and incentives of employees.
Note 2: It has been assumed that the amount of fixed asset remains the same showing no sale and
purchase.

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The company of study, Carona Fast Food is planning to enter Indonesian market. The
balance sheet approach above shows that the salary and incentives of the assigned human
resource in Singaporean dollar amounts to 40000. The compensation approach here shows that
amount of remuneration, which Carona has to pay its employees if they work within Singapore
before they are posted overseas in Indonesia. The company on entering into the Indonesian
market would come under influence of the political, economic, social and technological factors
of the country. For example, the remuneration of 40000 in Singaporean dollar is equal to
398672696.72 in Indonesain Rupiah. Now, the employees who would be posted in Singapore
require bearing huge initial expenditure like housing and availing the basic needs like food,
which would be expensive. The company moreover would be coming under influence of
Indonesian tax systems, which is different from Singapore. For example, the corporate tax rate in
Singapore is 17 percent while tax rate in Indonesia is 25 percent (Tanuputri, Chaveesuk &
Guritno, 2016). This analysis shows that the employees and the company would have to bear a
huge expenditure to function overseas in Indonesia. Moreover, the high expenditure like tax rates
in Indonesia would erode the income of Carona and its employees posted overseas in Indonesia.
They would as a result be left with less income if they want to return to Singapore. For example,
in Singapore the income would be 33200(83 percent of 40000) in Singaporean dollar while in
Indonesia the income would be 30000(75 percent of 40000). This analysis shows that the
company and its employees posted in Indonesia would have to spend huge expenditure both to
operate in the Indonesian market and to relocate back the Singapore.
Conclusion
Thus to conclude, it can be said that the organization Carona fast Food is a renowned
brand of fast food in the market of Singapore and looking at the bright prospects of the market of

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Indonesia, the management has decided to expand their business there. It has been seen that the
management of the organization is taking every decision with proper caution as they do not want
to incur loss as that can potentially affect the morals of the employees and can potentially affect
the reputation of the organization. Thus a thorough analysis regarding this issue with a proper
balance sheet is provided in this report and finally, it can be said that the decision of expanding
the business in the market of Indonesia is actually right in the present situation of the global
market.

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References and bibliography
Wijaya, S., Widjaja, D. C., & Hariyanto, A. (2016). The underlying factors affecting consumers’
behavioral intentions in foodservice business in Surabaya, Indonesia. Heritage, Culture
and Society: Research agenda and best practices in the hospitality and tourism industry,
53.
Bohari, A. M., Hin, C. W., & Fuad, N. (2017). The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and
Space, 9(1).
Patunru, A. A., & Rahardja, S. (2015). Trade protectionism in Indonesia: Bad times and bad
policy.
Sari, F. P., Mulyana, A., & Asmani, N. (2017). Determinants Transfer of Primary Business of
Rice Farmers Household at Musi Rawas District South Sumatera Indonesia. Review of
European Studies, 9(2), 204.
Butler, J. R. A., Slamet, A., Meharg, S., McEachern, S., Neilson, J., & Hajkowicz, S. (2015).
Australia-Indonesia Centre Megatrends: Agriculture and Food. Report prepared for the
Australia-Indonesia Centre, Monash University.
Papargyropoulou, E., Colenbrander, S., Sudmant, A. H., Gouldson, A., & Tin, L. C. (2015). The
economic case for low carbon waste management in rapidly growing cities in the
developing world: The case of Palembang, Indonesia. Journal of environmental
management, 163, 11-19.

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Ginting, L., & Pye, O. (2013). Resisting agribusiness development: The merauke integrated food
and energy estate in West Papua, Indonesia. Austrian Journal of South-East Asian
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Hapsari, C., Stoffers, J., & Gunawan, A. (2017). The Influence of Perceived Cultural and
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Marketing, 7(3), 238-245.
Tanuputri, M. R., Chaveesuk, R., & Guritno, A. D. (2016). A Collaborative Approach for
Importing Halal Food Products in Major Ports of Indonesia.
Tanuputri, M. R., Chaveesuk, R., & Guritno, A. D. (2016). A Collaborative Approach for
Importing Halal Food Products in Major Ports of Indonesia.
Abdul, M., Ismail, H., Mustapha, M., & Kusuma, H. (2013). Indonesian small medium
enterprises (SMEs) and perceptions on Halal food certification. African Journal of
Business Management, 7(16), 1492.
Borsuk, R., & Chng, N. (2014). Liem Sioe Liong's Salim Group: The Business Pillar of Suharto's
Indonesia. Institute of Southeast Asian Studies.