Indonesia, with over 240 million people and rich of natural resources and abundant human resources, is very attractive for investors operating in wide array of industries. Many reports on Human Resource Management (HRM) and the English journals have written about the developing countries in Europe, Africa, and Asia (countries such as Hong Kong, China, and India), but surprisingly, writing on HRM issues in Indonesia has been rare and mainly limited to labor economics and macro-level Human Resources Development. Therefore, this thesis intends to make a contribution to literatures of HRM issues in Indonesia, with the example for German companies which are establishing their subsidiaries in Indonesia. This book examines Human Resource Management Issues in Indonesia from environment context such as political, economical, socio-cultural, technological, environmental and legal perspective (PESTEL Analysis) culture dimension difference between Indonesia and Germany and the current issues of managing human resources in Indonesia by firms, especially for multinational companies, such as issues of general condition of labors, recruitment and selection process, compensation appraisal, performance management, trade unions and gender. Regarding HRM issues, the study has also shown that foreign companies have many threats, if they establish their subsidiaries in Indonesia. But on the other hand, Indonesia has some strengths and already improved some essential sectors that should be considered as opportunities for foreign companies, such as abundance in labors, rich natural resources, good international relationships, increasing foreign trades and FDI, growing telecommunication development, and starts improving national education and health. As conclusion, the HRM issues for foreign companies establishing a subsidiary in Indonesia are very complex, especially due to environment aspects and culture dimension difference. However, through understanding culture dimension of Indonesian societies, use the opportunities and minimize the risks, managing people in Indonesia is not an impossible mission.

Text Sample: Chapter 3.4.1, Intellectual Property Rights: Since Indonesia signed ‘the Trade Related Aspect of Intellectual Property Rights and Counterfeit Goods (TRIP’s)’ in 1994, Indonesia has some laws related to the copyright, patent and trademark (Laws Number 14 and 15 of 2001 for patent and trademark respectively, while copyright law was revised in 2002 by Law Number 19). However, Intellectual Property (IP) Registration in Indonesia is very complicated, inconvenient and expensive. While Japan and the United States are using application with paperless system due to the great support of the development of information technology, Indonesia is still using manual typing with 25 copies and the process has a lot of bureaucracy process. The official payment for registration is not overly expensive, however, because all of the processes related to the application and registration take place in Jakarta, additional costs arise and application becomes more expensive that the first official payment. Official payment for a trademark registration is only Rp.450,000, or equivalent to US$ 45.00. But, when an applicant completes the process of application, the costs are higher than this amount. Taking into account the official fee for the service, transportation and accommodation expenses, the cost actually totals around Rp.1.500.000 or equivalent to U.S. 0. This total assumes that there are no problems with the registration process. In addition, Indonesia still battles against society’s low understanding of IP registration, IP laws and IP rights, as reported in Global Competitiveness Report 2008-2009 , that Property Right in Indonesia was poorly defined and not protected by law. Indonesia ranked 117 out of 134 countries. Besides, IP protection in Indonesia was very weak and not enforced. Indonesia was only rank 102 out of 134. Therefore, Indonesia still needs more time to introduce the new laws to people so they can better understand the laws and the meaning of IP for businesses. Research and Development: Human Development Report 2007/2008 reported that Indonesian expenditure for Research and Development (R&D) is only 0.005335% of GDP (2000-2005) with 207 R&D researchers per million population. It indicates that R&D in Indonesia is lower than Malaysia, which has R&D expenditure 0.69% of GDP with 299 researchers per million population. With this limited R&D budget, the Ministry of Research and technology decided the priorities on research science and technology in these such areas: energy, agriculture and food, ocean, land and space, information technology, biotechnology and manufacture. Maturity of Technology: According to Investment Law Number 25/2007 Article 10, foreign investors in Indonesia are required to improve the competence of workers of Indonesian workers through work trainings and to provide trainings and transfer of technology to Indonesian workers. Industrial technological development in Indonesia lags behind or is off course in comparison to other ASEAN countries. This is reflected in the large number of industries still engaged in low-tech, traditional, small-scale and low-productivity activities. In terms of the Technology Achievement Index (TAI), Indonesia was ranked 11 out of 12 East Asian countries in 2004 with TAI 0.175, Technology Creation Index (TCI) 0.004, ranked 7 out of 12 East Asia countries, diffusion of recent innovations 0.174, diffusion of old innovations 0.130 and human skills 0.392. It indicates that technological activity in Indonesia is still at the bottom of the technology ladder. In summary, industrial technological development in Indonesia is still weak, at least in the large manufacturing sector and this may be one reason behind the country’s low and even negative productivity growth. The government, therefore, needs to do a great deal to promote industrial technology development. This could be done, for instance, by harmonizing the openness towards trade and investments in the country.

• International Management

• Indonesian Culture

• Indonesia

• PESTEL Analyse

• Human Resource Management

Jenny S. Lange wurde in Indonesien geboren und lebt seit 2006 in Deutschland. Nach ihrem ersten Studium in Indonesien hatte sie bei einigen multinationalen Firmen langjährige umfassende Arbeitserfahrungen im Bereich Marketing, Vertrieb und Management gesammelt, sowie als Betriebsmanagerin bei einem Dienstleistungsunternehmen gearbeitet. Danach entschied sich die Autorin, ihre fachlichen Qualifikationen im Bereich Internationales Management durch ein Masterstudium in Deutschland weiter auszubauen. Den MBA Internationales Management mit den Schwerpunkten International Human Resource Management und Wirtschaftspsychologie an der Fachhochschule Nürtingen-Geislingen hat sie im Jahr 2009 erfolgreich abgeschlossen. Ihr multikultureller Hintergrund, ihr Interesse und ihre Arbeitserfahrungen haben sie motiviert, sich der Thematik des vorliegenden Buches zu widmen.