BBHI4103 INDUSTRIAL RELATIONS

BUSINESS SCHOOL

SEPTEMBER 2017

____________________________________________________________________

BBHI4103

INDUSTRIAL RELATIONS

____________________________________________________________________

NAME : SARPRIT KAUR A/P PARITAM SINGH

MATRICULATION NO : 880415085842001
IDENTITY CARD NO. : 880415-08-5842
TELEPHONE NO. : 016-2362506
E-MAIL : sarprit_kaur@oum.edu.my
TUTOR’S NAME : MR. SELVARAJAN VELU
LEARNING CENTRE : NEGERI SEMBILAN
 BBHI4103 INDUSTRIAL RELATIONS

TABLE OF CONTENT

ASSIGNMENT GUIDE PAGES

__________________________________________________________________

TOPIC 1

1.1 Introduction 01
1.2 Purpose Of The Assignment 02
1.3 Malayan Banking Berhad 02
1.3.1 Organisation Structure 02
1.3.2 Organisation Chart 04
1.3.3 Organisation Employment Size And Type 05

TOPIC 2

2.1 Integrity In The Context Of Industrial Relation (IR) 06

2.2 Trust In The Context Of Industrial Relation (IR) 07

TOPIC 3

3.1 Importance And Implication Of Integrity And Trust In The Context Of

Industrial Relation (IR) 09
3.2 Importance Of Integrity In An Organisation 09
3.3 Implications Of Integrity In An Organisation 10
3.4 Importance Of Trust In An Organisation 10
3.5 Implications Of Trust In An Organsation 11
 BBHI4103 INDUSTRIAL RELATIONS

TOPIC 4

4.1 Recommendations To Nurture Integrity Values In An Organisation 12

4.1.1 Setting A Clear Expectation 13
4.1.2 Being A Role Model 13
4.1.3 Developing And Appreciation 13
4.2 Recommendations To Nurture Trust Values In An Organisation 13
4.2.1 Clarity 14
4.2.2 Character 14
4.2.3 Consistency 14

TOPIC 5

5.1 Conclusion 15

Bibliography 16
 BBHI4103 INDUSTRIAL RELATIONS

TOPIC 1

1.1 INTRODUCTION

The term “Industrial Relations” indicates towards the complex of human

relationship which emerges in work place. According to Salamon (2001), industrial
relation is a set of phenomena, operating both within and outside the workplace,
concerned with determining and regulating the employment relationship. Industrial
relations in any work place involves several element of human relationships in which one
individual interacts and adjusts with the other, and one group understands and cooperates
with the other.

Therefore, harmonious industrial relations can bring prosperity and

success to an organisation. In order to achieve this situation, the organisation requires
tolerance and cooperation from all the human relationship that are involved. Basically
there are five moral terminologies concepts that are practiced in industrial relations as per
Figure 1.1 to create harmonious relationship internally or externally of the organisation.

Figure 1.1 5 Concepts In Industrial Relations

1
 BBHI4103 INDUSTRIAL RELATIONS

1.2 PURPOSE OF THE ASSIGNMENT

Based on the top five concept which is been mention in Figure 1.1, I will
be touching on the concept of integrity and trust. The purpose of the assignment is to
explain the concept of integrity and trust, to analysis the importance and implications as
well as to recommend on how to nurture these concepts in the context of industrial
relation in a selected organisation. I have selected Malayan Banking Berhad, which is one
of the largest banks in Southeast Asia to analysis all the above mention aspects.

1.3 MALAYAN BANKING BERHAD

Malayan Banking Berhad was formed in the year 1960 by the Malaysian
business tycoon Khoo Teck Puat and few of his partners in Kuala Lumpur. Malayan
Banking Berhad began venturing into regional markets from its early years, expanding
progressively to become South East Asia’s fourth largest bank by assets today. Besides
that, Malayan Banking Berhad is also known as the largest financial services in Malaysia
and also operates from its three key “home market” of Malaysia, Singapore and
Indonesia. Malayan Banking Berhad is also known as the largest public listed company in
Bursa Malaysia. Malayan Banking Berhad has long been acknowledged for its integrity,
trust, leadership and financial strength which made the bank to be recognized as the
World’s Top 20 Strongest Banks by Bloomberg Market magazine.

1.3.1 ORGANISATION STRUCTURE

The organisation structure of Malayan Banking Berhad is shown in the

below Figure 1.2, in which it’s divided into commercial banking, investment banking,
insurance and takaful, asset management and others. Each structure has its own
contribution towards the success of Malayan Banking Berhad to meets its vision and
mission of its organisation which is to humanizing financial services is clearly
demonstrated through its commitment to ensure easy access to financing for all, fair

2
 BBHI4103 INDUSTRIAL RELATIONS

3
 BBHI4103 INDUSTRIAL RELATIONS
terms and pricing, advising customers based on their needs and being at the heart of the
community.

4
 BBHI4103 INDUSTRIAL RELATIONS

Figure 1.2 Malayan Banking Berhad Organisation Structure

1.3.2 ORGANISATION CHART

5
 BBHI4103 INDUSTRIAL RELATIONS
Malayan Banking Berhad has its very own organisation chart in which
each departments perform their task effectively which eventually helps to smoothens the
entire banking process. Datuk Abdul Farid Alias was appointed as the Group President
and Chief Executive Officer which he is responsible to spearhead Malayan Banking
Berhad’s overall business growth and regionalization strategies. Besides that, to ensure a
good balance between driving operational excellence and strong governance to deliver
sustainable long-term value for shareholders, customers, employees and all other
stakeholders. As per Figure 1.3, we can see that the organisation group is divided into
three department which is business, function and country. Each department is given their
own team to organize the entire banking process or issues according to its team function.

Figure 1.2 Organisation Chart Of Malayan Banking Berhad

1.3.3 ORGANISATION EMPLOYMENT SIZE AND TYPE

6
 BBHI4103 INDUSTRIAL RELATIONS
Malayan Banking Berhad is among the top 5 banks in South East Asia
with total assets of more than USD 150 billion. It has an international network of over
2,200 branches and offices in 20 countries, employing 46,000 employees who serve over
22 million customers. Over the years, Malayan Banking Berhad has built its expertise in a
wide area of financial services and today its range of service includes commercial
banking, investment banking, stockbroking, insurance and takaful, Islamic banking,
offshore banking, asset management, venture financial, leasing and hire purchase, trustee
services and internet banking.

TOPIC 2

7
 BBHI4103 INDUSTRIAL RELATIONS
2.1 INTEGRITY IN THE CONTEXT OF INDUSTRIAL RELATION (IR)

Integrity is defined as the quality of being honest and having strong moral
principles by The Oxford Dictionary. At the individual level, integrity is more than ethics,
it’s more about the character of the individual. Integrity is a characteristic of an individual
that are consistently considerate, compassionate, transparent, honest and ethical.

Therefore, from the corporate level, integrity is referred to the culture,

policies and leadership philosophy. According to a famous psychologist Dr Robert
Turknett (2005), integrity is the foundation of leadership and it involves a careful balance
between respect and responsibility. Besides that, Kouzes and Posner (2002), has also
stated that the culture of integrity has to start at the top and be seen in the conduct and
activities of the executives. Corporations that have these values outperform from other
firms by a wide margin in terms of revenue growth, job creation, stock price and
profitability.

In the banking industry, it is very important that the top management have the
quality of integrity embedded in them as this will set an example to the other level of
staffs in an organisation. Integrity helps to promote the services and quality of an
organisation which eventually helps to achieve the organisation mission and vision.
Integrity is the authentication of a person who displays strong moral and ethical
principles at work. Employee who demonstrate integrity derive others to them because
they are reliable and dependable. Those employee is ethical and can be relied on to
perform in reputable and righteous ways even when no one is observant. Employee who
works in the bank sector has to set a strong integrity value in them as the risk in the
banking sector is always high especially it involves private information of the account
holder and financial

statements. Integrity plays an important role in any organisation because it encourages

open communication between the employer and employees. This will eventually lead

8
 BBHI4103 INDUSTRIAL RELATIONS
towards an effective communication between the top management and lower
management which can be useful in promoting new ideas, suggestion in improving any
conflict in the workplace and so on. Datuk Abdul Farid Alias has always practices the
concept of integrity in Malayan Banking Berhad because he believes when employees
has integrity in their job, employees will seek more effective way to improve their job
and will also give honest feedback to the employer. And the employer who practices
integrity will be willing to discuss the company’s policies and bring in new changes
which will help to give a positive effect to the organisation besides gaining more trust and
respect from the employees.

2.2 TRUST IN THE CONTEXT OF INDUSTRIAL RELATION (IR)

The concept of trust can be analyzed in various fields of social science.

Accroding to Luhmann (1979), trust is regarded as a coordination mechanism in reducing
social complex in sociology. From the aspect of economics, trust is treated as an
economic lubricant, reducing the transaction cost among exchange parties (Fukuyama,
1996). Meanwhile in organisation science, trust has the effect of leaning risk-taking in
inter-personal relationship (Mayer, Davis and Schoorman, 1995). According to Walton
and Mckersie (1965), a high level of trust between labour and management is important
antecedent of a cooperative relationship pattern and also plays a crucial role in integrative
bargaining and joint problem solving. Therefore trust enhanced the quality and quantity
of communication, the resource availability from timely and accurate information and
cooperation among constituents as they share responsibility for the organisation
performance. For example, in Malayan Banking Berhad the organisation trust their
employee and have confidence in them – in their integrity towards work and their
abilities. For example, every Monday before the working hours, each manager branches
has to conduct a brief meeting to discuss on their performance and how to overcome their

daily challenges to improve their work performance and in this meeting every employees
can voice out their problem and suggestion towards improvement.

9
 BBHI4103 INDUSTRIAL RELATIONS

High level of trust in an organisation produces more productive employee,

better employee morale, lower employee turnover and better financial performance.
When the organisation has a high level of trust, employees tend to see the higher
management as credible thus cultivating the value of respect between employer and
employee. Therefore trust also tend to treat every employee fairly regardless of their
position, race or relationship. Future more, having trust in an organisation also allows the
employees and employer to trust one another in achieving goals, vision and mission of
the organisation.

TOPIC 3

3.1 IMPORTANCE AND IMPLICATIONS OF INTEGRITY AND TRUST IN

10
 BBHI4103 INDUSTRIAL RELATIONS
THE CONTEXT OF INDUSTRIAL RELATION (IR)

Industrial relations usually imply good and positive relations between the
employees and employers. Therefore, the importance and implications of integrity and
trust is very necessary.

3.2 IMPORTANCE OF INTEGRITY IN AN ORGANISATION

In order for an organisation to survive longer in the market, the

organisation should practice a high level between the top level management and the lower
level management. As Kouzes nd Posner (2002), pointed out, the development of shared
values improve the environment and productivity. Besides that, it also helps to
strengthens personal effectiveness, corporate loyalty and ethical behavior. It also fosters
team work, corporate pride and consensus. It’s also proven that, any organisation that
have these values outperform other organisation by a wide margin in terms of revenue
growth, job creation, stock price and profitability. According to Quigley (2007), it’s
important for an employer to search for employee with similar value because this match
will be a key factor in one’s ability to grow professionally and gain experience. If a
manager that act with integrity can portray a sense of security and stability to employee
and also smoothen the communication process with the employees in which will help to
discuss and share the organisation information with each other in order to achieve certain
goals.

3.3 IMPLICATIONS OF INTEGRITY IN AN ORGANISATION

11
 BBHI4103 INDUSTRIAL RELATIONS
In Malayan Banking Berhad, Datuk Abdul Farid demonstrates his integrity
by practicing what he preaches. Since the day one ever since he has been appointed as the
CEO of Malayan Banking Berhad, he has been implementing the concept of openness in
the organisation. He is known as a leader who advocating the teamwork in the
organisation. He always keeps a good relationship with his manager and employees.

Besides that, Datuk Abdul Farid, do communicate with all their branch
manager to know the problem that each branch faces and try to solve it with dynamic way
to solve it so that all the employee will be able to work under a peaceful environment
since almost every time we get to hear from news involving financial scandals in which
many customer loses their money through certain scam. If the communication between
the top management and lower management doesn’t run smoothly then many disaster
could occur in future which will cause a lot of difficulties to overcome it and this will
affect the organisation brand.

3.4 IMPORTANCE OF TRUST IN AN ORGANISATION

According to Bill George, no matter how effective an organisation

strategy, vision or communication be, the organisation will fail to achieve its desired
result if the organisation can not inspire trust.

Trust is often found wanting in today’s banking relationship, presenting a

challenge for both consumers, who want to trust their banks and financial institutions,
which need trust to retain customers and grow their business. Because trust can be an
elusive concept to grasp, it is useful to dissect its positive and negative implications. An
organisation with trust characteristics improves employer-employee relationship, building
respect and loyalty which leads to a supportive and safe work environment. This is
because when an organisation has a high level of trust, the employee has the sense of

12
 BBHI4103 INDUSTRIAL RELATIONS
loyalty towards what they do in the organisation and this leads to new ideas and
breakthrough in their field as each employees can trust each other and this will eventually
increase their productivity in the organisation.

3.5 IMPLICATIONS OF TRUST IN AN ORGANISATION

Implication of trust in employees in Malayan Banking Berhad has been a

major step in realizing the organisation vision and mission. Trust is a important element
whereby to gain the trust from the customer specially in banking industry in not that easy
as it might see to be. To gain the customers trust, Malayan Banking has come up with
many safety plan and policies which is a compulsory for every employee to obey. And to
implement the trust in between the employee, Malayan Banking Berhad has practice in
giving fair treatment to all its employee without taking consideration of their position in
the organisation.

From this aspect of been treated equally by the employer. The employee
will be feel appreciated and will stay loyal to the organisation without involving with any
form of scandals. This will also motivate the employees and in result of been motivated
the employee will tend to perform much better and give more satisfaction to their
customer by providing quality service.

13
 BBHI4103 INDUSTRIAL RELATIONS
TOPIC 4

4.1 RECOMMENDATIONS TO NURTURE INTEGRITY VALUES IN AN

ORGANISATION

In order to build and nurture integrity in an organisation, one should

constantly involve in developing and maintaining a professional and respectful
workplace. This involves ethical leadership, active management and the organisation
should have the right people to develop effective processes and professional reporting.
There are some ways which can be used by the organisation to nurture integrity value so
that the organisation can sustain and achieve their organisation goals.

4.1.1 SETTING A CLEAR EXPECTATION

When an organisation is appointing employees it is important for the

organisation to set a clear expection which the organisation will be expecting from their
employee. For example, in Malayan Banking Berhad whenever there is new staff
appointed the branch manager will clearly state all the expection which the manager will
be expecting from the new employees. During the orientation of the new staff, the
manager or the senior staff of the branch will explain clearly what is the employees
position, job scope, expectations and professional standards, have code of conduct as well
will introduce the branch culture and values. This orientation session will eventually
create confidence and integrity in the employees towards the duties that they will
handling in future and will encourage themselves to be able to work towards the
organisation’s goal.

14
 BBHI4103 INDUSTRIAL RELATIONS
4.1.2 BEING A ROLE MODEL

Besides setting a clear expectation, the top level management to also be a

role model towards their employee. In Malayan Banking Berhad, not only the top
management level team shall set example to be the role model but the middle level
management team also has to set an example to be role model in order to motivate the
lower level management to be like their seniors and work along with the seniors without
any misunderstanding.

4.1.3 DEVELOPING AND APPRECIATION

A manager with integrity should constantly remind employees to be

positive and appreciate their work. The top level management team should have training
and development courses for the employees in order for them to upgrade their skills,
talents and increase their loyalty and integrity towards their work. Employees with
unique talent and capabilities should be appreciated by sponsoring them in training to
refine their skills for the betterment of the organisation. Thus, allowing the employee to
feel appreciated and wanted. In Malayan Banking Berhad, to appreciate their employee’s
effort and feel wanted this organisation organised a award giving ceremony in yearly
bases. In this award function all those employees are be awarded with awards in many
kind of form to honor their hard work and sincerity for the organisation.

4.2 RECOMMENDATIONS TO NURTURE TRUST VALUES IN AN

ORGANISATION

It has been top priority for Malayan Banking Berhad to maintain a friendly
relationship with their customers so that it will be easier to communicate with the
customers and it will be easier for the employee to gain the customer trust towards their
organisation.

15
 BBHI4103 INDUSTRIAL RELATIONS
4.2.1 CLARITY

Clarity is indeed a value that Malayan Banking Berhad needs to focus on.
It allows employees and employers to improve in their coordinated action, mobilize
potential teams throughout the organisation thus encouraging the trust and determination
of the stakeholders. This added value also brings out the leadership style that would
promote what the employee knows best and leading the organisation in a way that all
would accredit and accept. Apart from that, it also allows employers to recognise and
appreciate the ones that has potential to become role models for others. When the
organisation can produce such clarity in the management team, customers will be able to
look upon and establish trust with the organisation.

4.2.2 CHARACTER

Character is basically a value that need to be embedded in a leader. In

organisation such as Malayan Banking Berhad, a person who positively leads from
character does not need the title, authority or even power because people will eventually
trust you because they trust your goal. Like Datuk Abdul Farid, a person of full positive
character and personality, other regional managers should follow his footsteps in guiding
a team like he does. Character represents who you are and it would be the central fiber of
your being. It can sets one apart, create trust, and advocates excellence. When managers
and employees have a positive character, it is easier to build trust among each other.

4.2.3 CONSISTENCY

Consistency is hard to achieve but it when it does, it can structure and

support employee’s expectation. Being consistent in what you do to lead one towards a
trustworthy working relationship. Organisations where practice consistency, employees
tend to fell more organised than where things are constantly change even it’s for the
betterment of the organisation like Malayan Banking Berhad. By making things more
consistent, employees would be comfortable and suit the environment and get their work

16
 BBHI4103 INDUSTRIAL RELATIONS
done fast instead of wasting time in adapting to new changes which can increase the
productivity. This would allow employees to understand their duties and the leader’s
expectation for them easier.

TOPIC 5

5.1 CONCLUSION

Integrity plays and important role in an organisation in order to expand

leardership skills. Employees and employers with integrity will help to develop trust in
their relations with others in which they are respected and valued.. On the other hand,
trust must be equally and cherished organisation traits because trust does not come easily
but it has to be earn.

Employees who maintain integrity and trust in them helps to create a

harmony and mutual understanding between all the organisation employees. In long run,
this culture could impact the working relationship within an organisation and create a
highly valued working environment. When employees are motivated and take pride in
their work, the organisation would benefit the commitment and the loyalty from the
employees which allows them achieve the organisation’s goals in a matter of time.

(2988 words)

17
 BBHI4103 INDUSTRIAL RELATIONS
ATTACHMENT

REFERENCES

Fukuyama, Francis, (1996) Trust: the social virtues and the creation of prosperity, New
York: Free Press.

Kouzes, James M., & Posner, Barry Z. (2002). The Leadership Challenge. San Francisco:
Jossey-Bass.

Luhmann, N. (1979) Trust and Power. Chichester: Wiley.

Mayer, R. C., Davis, J. H., and Schoorman, F. D. (1995) An integrative model of

organizational trust. Academy of Management Review, 20: 709–734.

Quigley, James H. (2007). Trust – An Essential Asset: Creating Individual and Corporate
Value, The Raytheon Lectureship in Business Ethics. (Waltham: Bentley College,
2007), pp. 1- 24.

Salamon, M. (2001). Industrial relations: Theory and practice (4th ed.). London, London:
Prentice Hall.

Turknett, Robert L., & Turknett, Carolyn N. (2005). Decent People Decent Company:
How to Lead with Character at Work and in Life. Mountain View, CA: Davies-
Black Publishing.

Walton, Richard and McKersie, Robert, (1965) Behavioral Theory of Labor Negotiations,
2nd ed., ILR Press, Ithaca, NY.

18