Executive Summary
This report was commissioned to prepare and equipped 6 senior executives with essential knowledge and facts about their foreign assignment for period of one year at the host country – Indonesia.
In order to create a resourceful and talented team for the newly established offshore company, a motivated team which aligns with company objectives is the key point for remarkable success. Preferable candidates come from diverse background and they will be examined to ensure they have high level of interpersonal skills and adaptability towards foreign culture. Hence, detailed research about a country’s climate, culture, language and cuisine etc. will be brief and training will be provided too.
This report also critically analysis about the structure of job design compare to headquarter in Singapore by using Hofstede national culture dimensions in order to find out the most suitable structure for the subsidiary. HR planning is essential during the staffing process to hire the best fit candidates, followed by training and development process to prepare the assignees for the success of foreign assignment.
Lastly, report will discuss the design of remuneration package for the international assignees. A comprehensive compensation package is the key point to draw potential candidates’ attention and this must be well planned to ensure it meets assignees expectation. The financial equality of before- and after-overseas posting is important, thus, balance sheet approach which opted by HR is the most appropriate approach to design the package.

1. Introduction of Indonesia
Indonesia, the country with the largest population follows Islamic faith, consists of an archipelago spread in between Asia and Australia. The capital city – Jakarta, recently rated first in Global Cities Index which conducted biennially for its bustling international business activities compare to 35 cities around the world (Dewi, S. 16 Apr, 2014).
Indonesia is ready to welcome foreign investors under the newly elected president Mr. Widodo’s policies. He intends to quicken and simplify the processes for obtaining the business licenses and to create a business friendly environment for investors in order to remain its competitiveness among neighboring country (Sentana & Hariyanto, Oct, 2014).
Although the nation is still rapidly growing, the government’s corruption cases and poor public services such as health and infrastructure still remain inadequate which discourage foreign investments (The World Bank, Oct 2014).
Possessed with rich natural resources and population over 200 million, investors are draw by its cheaper labor cost, political stability and enormous business market. However, over 28 million citizens are still live under the poverty line due to the rate of employment are much slower than population growth.

1.11 Language, Culture & Climate
This is a highly diversify ethnic country with Bahasa Indonesia as their first language and English as the second language becomes an ideal country for a new subsidiary of foreign investors through the globalization process.
With majority citizens are Muslim, pace of life slows down during fasting period- Ramadhan. Assignees need to be considerate and tolerate for not eating in front of those who are fasting and allowed them to leave earlier than usual for break fast with their family in time.
Indonesia and Singapore both located near to equator which share high similarities in term of weather. Indonesia have almost entirely tropical climate which consists of dry and wet seasons as influenced by tropical monsoon. Light weight cotton clothing is recommended for the hot and humid weather with an umbrella for the sudden pouring throughout the year.

1.12 Cuisine, Transport & Leisure
Indonesia has vast range of food from street side food stalls to fancy high class restaurant. Some of the locals are preferred to eat by using their right hand instead of cutlery.
Public transportation networks are limited relatively to Singapore. Most of them own private vehicles be it motorcycles or cars due to the design of road networks. However, the traffic problem is quite severe during the peak hour, hence time management is important to avoid disappointment when travelling by car.
This is a country mix of heritage and modernization, so you can go diving and trekking if you are a natural lover or simply enjoy shopping in the metropolitan cities fulfilled with high end label around the world.

2.2 International Human Resource Management

IHRM is an internationalization management approach which adopted by MNCs in order to effectively carried out human resource activities at international and national level. Similar activities and dimensions as domestic HRM are involved however it operates on a much bigger scale which requires more complex strategic consideration, coordination and additional HR functions. IHRM activities will have more external stakeholders influenced, higher level of risks exposure and more personal insights into employee’s lives and family situation (Dowling & Welch, 2004). Usually IHRM staffing process activities divided to four particular types: i. Ethnocentric approach – top management staffs are expatriates from parent country (Parent Country National) to ensure there is high level of control by headquarter at the subsidiary company and this is helps to unify the culture.

ii. Polycentric approach – subsidiary employees (Host Country National) have certain level of decision making authority and company managed by local hired. They are seldom promoted to a position at headquarter, likewise, expatriates from headquarters rarely transfer to the host country. In this case, less training needed as they possessed with better understanding of local business culture than the expatriates from parent company.

iii. Geocentric approach – employees (Third Country National) are given opportunities to work at key positions either home or host country which are based on their performance and ability, no national discrimination will be showed.

iv. Regiocentric approach – employees (Regional Country National) are freely transfer within a region but are usually not transfer to parent country. They have certain level of decision making autonomy.

2. Job Design and Structure
Job design is a process to understand job requirements in order to overcome job dissatisfaction and avoid employee alienation by using technique such as job rotation, job enlargement and job enrichment. Non-monetary rewards will raise productivity level through a good job design. Prior to job design, proper job analysis must be carried out in order to create an effective job description and job specification (Business Dictionary). HR must work closely with top management for better understanding and make adjustments accordingly. Organization will strive to stay competitive by adopting mechanistic structure to keep its structure flat thus employees can react to external changes quickly than competitors.

2.1 Hofstede national cultural dimension of Indonesia and Singapore
Geert Hofstede national culture dimension greatly use as a guide to analyze a country’s culture and values by using a scoring system to show the influenced of the 5 dimension which are power distance, individualism, masculinity, uncertainty avoidance and long term orientation to its people (Clearly Culture, 2014). i. Power distance (PDI)
This dimension will show how the people accept inequalities distribution of power in the society. Singapore (scored 74) and Indonesia (scored 78) have a relatively high score which means they believe everyone have their own disposition will accept the hierarchical order and obey to their superior’s command without hesitation. Power is centralized and employees are expected to be told and direct by the manager and the communication is indirect. ii. Individualism
This is to measure the degree of a person depends among its members in the society. Singapore (scored 20) and Indonesia (scored 14) showed that both countries are Collectivist which is tightly-knit society. Visible family or group bonding under this social framework and individuals are expected to comply with the principles of the society where they belong to. Loyalty will be shown and people value the harmonious relationship existing within the group. iii. Masculinity
Singapore (scored 48) and Indonesia (scored 46) which is located near to the middle of the scale showed that this is a society adopt softer aspects of culture which is more on feminine side. Both countries are considered feminine if compare to other Asian country like Japan and China. Certain attitudes such as modest, humble and sympathy are encouraged and normally conflicts are tried to be avoided and resolved with compromising and negotiation. iv. Uncertainty Avoidance Index (UAI)
UAI score is an indicator to show how a society faces the ambiguity and the different ways to deal with its anxiety. Indonesia (scored 48) compare with Singapore has higher UAI score thus they are low risk taker and avoid direct communication during conflict resolution. They value structured situations and prefer to use familiar route in order to exchange views without threaten the harmony in the workplace. However, Singapore (scored 8) considered as risk taker by showing that there is high level of tolerance and acceptability to the unknown challenges v. Long Term Orientation
With the Confucius influencing from the east, long term orientation are a measure of personal stability and observing relationship between people based on their status. Singapore (scored 48) are in the between of East and West thinking ideology.
Refer Appendix 1: Hofstede National Culture Dimensions

3. Staffing Process
HR must plan and study carefully the staffing process in order to get the best fit candidate for the success of the newly subsidiary company. Senior level manager from the home country who have high level of flexibility to adapt foreign culture and possessed with technical skills will be an ideal candidate for the oversea assignment.
Candidate’s background will be studied to ensure they have the necessary skills to excel at the international arena and they won’t pre-terminate the foreign assignment as this is a huge lost to the organization. Family background will be given serious consideration since family support is essential to avoid distraction from candidate during the foreign assignment.
A series of interview and assessment will be conducted to ensure assignee is ready for the assignment. Both mentally and physically must in healthy condition to face the unforeseen challenges. After much carefully deliberation, HR decided to send over six expatriates from headquarter to hold certain high level position. There will be open vacancy for lower management position especially for the Indonesian who plays the role as a buffer to ensure a smoother workflow.
Refer to Appendix 2: Assignees’ Profile

4. Training and Development Process
Expatriates must be competence under the global competition therefore training will be provided to equip them with necessary skill sets and eventually, this will reinforce the organization culture. They will not only act as the representatives from the home country and as well as the connection person between parent and host country. Thus, they must be well prepared to embrace different working environment and mentally prepared for the culture shock during the beginning phase of the assignment.
Before- and the after-overseas posting training will be conducted to create an effective performance team who is able to meet organization objectives. In order to let the candidates have better understanding of the host country, external training will be held by Indonesian trainer who is able to share local business practice and culture in order to have better insights in the country. Prior repatriation, assignees will be brief about current business strategy and working culture at the parent company for culture adjustment and their feedback should be valued for greater success of the next oversea assignment.
Some of the components were selected by HR for effective pre-departure training as showed below: i. Cultural awareness program
This program will provide assignees facts and in-depth knowledge to the working culture of host country in order to eliminate the negative consequences often caused by their inadequate behavior. ii. Preliminary visit
Company can sponsor the potential candidate a field trip to visit the host country prior the oversea deployment. This is to let candidate to have better understanding of the local business environment prior making decision to take up the assignment. iii. Language program
One week of learning Bahasa Indonesia course will be provided for them in order to catch up some of the daily life local language for a better mix up with local employee in a shorter time period.

5. Remuneration Package
According to a research conducted by Mercer, Singapore ranked number 4 among the top ten most expensive living cost city and Indonesia’s Jakarta which ranked 119 (Mercer, Jul 2014).
The package must be well designed to ensure the existing of financial balancing of the expatriate when they live in the parent and host country. Assignees will be motivated under a good compensation scheme and non-monetary rewards should be provided in return for their loyalty. This is a very complicated process and HR must consider all related financial factors in order to maintain an equitable lifestyle of the assignees at the host country.
After much consideration, HR adopted balance sheet approach which will provide an attractive financial inducement on top of maintain assignees’ home country living standard. Certain implications such as currency fluctuation, inflation and greater responsibility taken up by assignees should be reviewed in order to create a comprehensive package.
There are totally four major categories under the balance sheet approach which are: i. Goods and services which emphasize on the daily life expenses such as food, clothing, transport, medical care and leisure activities. ii. Housing which is the rental to be paid at the host country. iii. Income tax of the home and host country should be well managed. iv. Reserve such as contribution to saving, pension contribution and social security expenses.
Besides the foundation block of the basic salary, some other allowances such as hardship premium and relocation allowance can be implemented to show appreciation. Incentive like additional home leave for the assignees and their family to return home country with airfares included or company vehicle entitlement will definitely make the assignment more attractive. Due to the lower standard medical infrastructure in Indonesia, HR will increase the medical insurance for all the assignees.
Refer to Appendix 3: Comparison of remuneration package before and after the assignment.

6. Conclusion
Every organization is struggling to evolve rapidly under the globalization process hence many of them started look for relocation in order to reduce their manufacturing costs and maximize their profit. The newly subsidiary company will not only open up the international market but at the same time it helps the organization to gain a competitive edge in the international market.
IHRM activities must be able to adjust according to the business environment and the present of all level management cooperation is essential to ensure the successfulness of the assignment. The most ideal situation will be happen when the six assignees able to align and applied the business strategy of the parent company to the host company and eventually it will accelerate the organization regional expansion.