Berjaya Corporation Berhad Essay
Berjaya Corporation Berhad
A business that seeks to operate honestly, considers people and the environment when making business decisions, and tries to make a positive contribution to the local community and to wider society
Berjaya Corporation Berhad is an investment holding company and is engaged in the provision of management services. Berjaya Corporation group of companies is founded by Tan Sri Dato’ Seri Vincent Tan Chee Yioun when he acquired a major controlling stake Berjaya Industrial Berhad in the year of 1984. It is originally known as Berjaya Kawat Berhad and now known as Reka Pacifiic Berhad.
In October 1988, Berjaya Group became the holding company of Reka Pacific Berhad. The principal activities of the subsidiaries consist of Consumer Marketing, Direct Selling & Retail; Financial Services; Hotels, Resorts, Vacation Timeshare & Recreation Development; Property Investment and Development; Gaming & Lottery Management; Development of Sanitary Landfill, Environvental Services and clean Technology Investment; Food & Beverage; and Investment Holding (appendix 1). Hence, due to their strategies structure, it has made them successful until today.
At Berjaya Corporation group of companies, they believe that being a social responsible company can bring a balance between profitability and communities they operate. Due to their business, Berjaya companies almost in touch with society daily needs. Therefore, Berjaya always encourage their staff to take part in the Group’s Corporate Social Responsibility (CSR) activities. Over the years, Berjaya Corporation had planned many charity projects, fund-raising events and donations as a social commitment towards the society.
2.0 Current Practices
To curb the escalation of strays in Malaysia, Berjaya Corporation Berhad organized a charity concert and conducted by Berjaya Youth to raise funds for the approximately RM115,000 for the sterilization of 1,000 rescued animals. Besides that, Berjaya Youth had collaborated with Paws Animal Welfare Society (PAWS) to launch its Mobile Animal Clinic at Berjaya Times Square (appendix 2).
Better Malaysia Foundation, Tan Sri Dato’ Seri Vincent Tan ‘s personal foundation, had donated the mobile animal clinic that worth RM220,000 to create awareness on the importance of spaying and neutering of animals to curb the escalation of strays in Malaysia. The mobile animal clinic features a well-equipped examination room that can administer vaccination and perform sterilization on animals safely.
Besides that, Berjaya Corporation has partnered with PAWS Animal Welfare Society to build a cattery building that can provide space for 300 cats. This cattery is to improve the living conditions of homeless cat till they get adopted. With this cattery, Berjaya Corporation want to create awareness for people to adopt a cat instead of buying. This is a good news for PAWS as PAWS is shortage of space and limited funds to take care those abandoned cats and dogs (appendix 3).
Disabilities are always one of the groups that need community to give support. On 14 June 2014, Berjaya Corporation Berhad donated RM200, 000 to the Life Prostheses Centre (“LFL”) located in the Bandar Utama Buddhist Society’s building in Petaling Jaya, Selangor. The centre is the first and only prostheses workshop in Malaysia that provide free prosthetic limbs to poor and less fortunate Malaysia (appendix 4). However, the cost of making a limbs is not cheap, each cost estimated between RM3, 000 to RM5, 000. With the contribution of RM200,000 , it will enable the centre to get 40 to 70 prosthetic limbs depending on the type and level of amputation.
Next, Berjaya Cares Foundation contributed 10 units of dialysis machines worth RM450,000 to the National Kidney Foundation of Malaysia (appendix 5). Since the establishment of this foundation, Berjaya Corporation have never failed to support them, Berjaya Corporation Berhad has raised funds for National Kidney Foundation through annual Kenny Roasters Chicken Run event for 2 years and through donation boxes placed in 7-Eleven outlets. Last year, they get to set up a one-stop information hub for all matters related to kidney and kidney care.
Employees of Berjaya Corporation had their priority in the company. Berjaya Corporation always give their employees good quality in their workplace to make sure their employees can focus in their career development. Besides that, employees are constantly encouraged to participate in training and development programmes which relevant to their job field, so they can improve their productivity and develop skill sets.
Moreover, Berjaya Cares Foundation regularly organizes talk about health, safety awareness and other topics such as personal development to their staff (appendix 6), while the Sports Toto Fitness Centre with full completed gymnasium equipment and facilities is set up to encourage their staff to exercise regularly and maintain a healthy lifestyle.
Besides that, Berjaya Cares Foundation had set up a Staff Welfare Fund to manage and supplement financial aid to their employees and their family member whenever they need help in illness, natural disaster and death. This is a very good benefit to become their staff.
A group of 17 Sports Toto volunteers went to Kuala Selangor Nature Park to plant mangrove trees. Mangrove trees are very good in carbon absorption and act as natural flood retention “sponge” to hold heavy rainfall which can prevent flood. Next, Mangrove trees help to hold sediments along riverbanks to safeguard coastline erosion and reduce pollution to coral reefs and marine life and also provide breeding and nursery grounds. They had planted 100 mangrove saplings (appendix 7).
Other than Sports Toto, Berjaya Hotel & Resorts conducted a project of three day Tioman Island Clean-Up Day with over 100 participants including staff, media and children from Sekolah Kebangsaan Tekek, Tioman. This activity can educate people about the importance of coral reefs to the ecosystems. There are a total of 121 reef-destroying Crown of Thorns were removed during the dive clean-up (appendix 8). They also clean up the beach with given handheld plastic bags. The result of cleaning up the beach is 15 bags of discarded plastic litters, paper wastes, beverage cans and bottles that weighing over 300kg.
2.4 Sports Toto
In Malaysia, gambling is illegal as Malaysia is a Muslim country and majority of the population is Muslim. However, Berjaya Corporation Berhad insists of starting up the gambling business to the country and it is known as Sports Toto. Sports Toto Malaysia was incorporated by Malaysia Government in 1969. Then it is privatized in 1985. Today, Sports Toto is owned subsidiary of Berjaya Sports Toto Berhad and listed on the main market of Bursa Malaysia. Sports Toto is a zero sum game that accumulates the money and distributes to the winners and at the same time, gain profit from it. When people are winning the game, there will always a lot of losers. There are losers more than winners.
2.5 Conflict of the Board
As we know, the current chairman and Chief Executive Officer (“CEO”) of Berjaya Corporation is Dato’ Robin Tan Yeong Ching, the eldest son of Tan Sri Dato’ Seri Vincent Tan Chee Yioun. Tan Sri Dato’ Seri Vincent Tan Chee Yioun was the previous chairman and CEO of Berjaya Corporation and now he is the major shareholder of Berjaya Corporation. Dato’ Robin Tan Yeong Ching was later appointed as the Chief Executive Officer (“CEO”) of the Company on 1 January 2011 and subsequently as the Chairman/CEO of the Company on 23 February 2012. CEO and Chairman shouldn’t be the same person because this will be conflict.
3.0 Rank about the company
Employee is the most concern for Berjaya Corporate Berhad because employees are company’s best asset. As Boudreau and Ramstad (2007) present: “Whether it is called “people,” “labor,”“intellectual capital,” “human capital,” “human resources,” “talent,” or some other term, there source that lies within employees and how they are organized is increasingly recognized as critical to strategic success and competitive advantage.
Without employees, Berjaya Corporate could not be success like today. Berjaya Corporation Berhad is the Top 30 Best Companies to work in Malaysia and today Berjaya Corporation Berhad has a total of 17,000 employees strength. Berjaya Corporation has various industries such as food and beverage, automotive, hotel and resorts and more. Hence, employee takes an important role in the company as they are backbone of the company and they are the one who services the customers. Therefore, company need to treat their employee nicely as the way you treat your employees is the way they will treat your customers (Branson, 2014).
According to the Maslow Hierarchy Needs (Abraham Maslow, 1943), there are five categories of human needs such as basic needs, safety needs, belonging needs, esteem and self-actualization needs. These five needs separated to high and low categories. However, company should try to fulfill the low needs for their employee. Although is not a company’s responsible to fulfill all the employees needs, employees will become loyalty to the company once the company can fulfill their needs. Employees who
The hierarchy of needs theory is relevant to this study as the theory is applicable to organizational orientation and employee motivation (Greenberg & Baron, 2003). First of all, employees work to fulfill their basic needs in their life. They will only work for company when there are reasonable salary amount for them. Thus, Berjaya Corporation will give their employee bonus, incentive and even lucky draw during Berjaya Founder’s Day.
Next, safety needs is a very important need towards the employees especially for some job that will take risk. Berjaya Corporation had always conduct healthy talk or body check to their employees, so they know how to take care their body. Other than that, belonging needs is very important to an employee. Employee who feels they belong to the company, they usually will put a great deal of effort into their daily tasks.
Community is the second concern of Berjaya Corporation, they have planned many charity events and donations towards the community. Every year, they will have an event called as Berjaya Founder’s Day. Berjaya Founder’s Day is an annual affair dedicated to give back to society. This day, they will rise up a fund from the efforts of staff and sponsor form banker, suppliers and friends of Berjaya. The first Berjaya Founder’s Day was conducted on 26 February 2011 and get RM6.6 million donations for 30 beneficiaries. Next, the second Berjaya Founder’s Day get a total amount of RM11.6 million for 61 charitable organizations. The third Berjaya Founder’s Day on 23 February 2013 contributed RM20.2 million to 74 charitable organizations, while the latest Berjaya Founder’s Day on 22 February 2014 has collected RM25.6 million to 90 charitable organizations.
From above, we can see that every year of the amount and number of charitable organization are increasing. This shows that nowadays society a lot of people need help from a big company like Berjaya Corporation come out to support them. These charitable organizations include those that support community, education, heath causes, international humanitarian aid, local performing arts as well as environmental awareness and animal causes. According to instrumental theories from Garriga and Mele’s (2004), Berjaya Corporation is focusing on achieving economic objectives through social activities. Through social activities, this can maximize shareholders’ value and is a strategy for competitive advantage.
Times have changed. There are more than 8,000 companies around the world use corporation social responsibility in their business. Because corporate social responsible is a way for companies to benefit them while also benefitting the society. It is a win-win situation. According to a data released by Net Impact, the nonprofit that aims to help businesses promote sustainability, 65% of MBAs surveyed say they want to make a social or environmental difference through their jobs ([email protected], 2014). When a big company can give back to the community, it will be the most inspiring parts of corporate life. It shows that the company takes care of the society and it is an ethical company. This helps company to get good reputation from the society.
Environment is the third concern of Berjaya Corporation. Berjaya Corporation is a diversified company that will initially influence the environment from their projects. When they are starting up a factory in a rural area, Berjaya Corporation will have to go through the process of deforestation. Cutting off the trees will definitely given a negative impact to the environment such as landslide due to the destroyed on the existing mechanical root structure in the area.
However, as an ethical business, Berjaya Corporation will take up the responsibility to improve the environment by organizing an awareness event. For instance, mangrove trees planting for environmental conservation were held on 19 April 2011 with the group of Toto Sports volunteer in Kuala Selangor. Total of 100 mangrove trees are planted. The resource of our planet is limited and unsustainability is stated in the theory of Environmental Ethics (Paul W. Taylor, 1986).
Moreover, Berjaya Corporation has also incorporated “Go Green” program in their business to avoid wastage and spread the awareness towards their customer. For example, use green products for take away food and beverage such as Starbucks Reusable Tumbler and Kenny Rogers Roasters I-Care Box. This shows how Berjaya Corporation cares about the environment. In addition, Berjaya Corporation chooses to cooperate with local suppliers to use less paper work and also give business to them. In addition, Berjaya Corporation ships their products by sea rather than airfeirght.
3.4 Sports Toto
Sports Toto is a subsidiaries company of Berjaya Corporation. Sports Toto is very popular among Malaysian and it is the largest number of forecast operator in Malaysia as it has more than 670 outlets in Malaysia. Over the years, Sports Toto has been made many corporate social responsible such as charity, community sports, education and cultural promotion. It is a responsible corporate citizen but also a unhealthy games for Malaysia especially Malaysia is a Muslim country. It is unfair when only the Chinese and Indian can buy Toto tickets while the Malay is not allow to purchase.
Malaysian called it “buy a hope” when they place their bets. Therefore, everyday there are a lot of Malaysian spend money on buying toto tickets. Some of them even use their money like water to purchase to try to win the grand prize. But Sports Toto is the only one that “winning big”. However, people with little money are always attracted to buy because it gives them the feeling of winning and the amount of the prizes is too great for them.
In summary, gaming industry is harmful for individuals and society. However, it is the greatest happiness for the greatest number, stated by the utilitarianism theory of Jeremy Bentham (1987) . Jeremy Bentham said that it does not matter on the action but the result. If the result happens to be good and not harmful to others, it is consider as ethical. Therefore, the Sports TOTO game do helps on certain people on their financial issue. Sports TOTO creates hope for people to continue survive without financial difficulties.
3.5 Conflict of the Board
In Berjaya Corporation, the CEO and Chairman seat is taken by the same person who is Dato’ Robin Tan. It is unethical to do so because it shows no fairness towards the employee. This is egoism ethical because they only hand over the position towards to their family instead outsiders.
Chairman and CEO have different roles in the company, if this two roles combined together will creates an inherent conflict of interest. The Chairman of the Board of a company is the chief representative of the shareholders. The CEO of the company is the leader of the managers. The job of the chairman is to look after the shareholders. His main job is to fire the incompetent managers that are not qualified or control ones that overreach. Chairman should also look for workers that are potential enough to help company earn profit.
While the CEO’s job is to manage, report to the board that set the policies and priorities based on the shareholders’ wished and needs such as higher income, high reward policy or bonus. Besides that, he should look out for the interests, salary or extra allowance of managers. If chairman was the same person, he will basically reporting to himself. This shows that Chairman and CEO had two different and conflicting roles. Where this might bring conflict of interest arises.
Berjaya Corporation Berhad should encourage more green activities instead of replanting the trees or cleaning the beach. They should conduct green activities in all of his company and Subsidiaries Company together as this will be effective towards the society. They can also gather different ideas and save up unnecessary costs. It can also bring a good image to their employees or other company will follow their steps.
Besides that, Sports Toto should stop convince consumers that buying toto tickets is a good habit through advertisement, this may lead people to spend a lot of money on toto tickets and end up becoming poor. Next, Berjaya Corporation should allow every employees to attend the health talk, not only the small amount because this may causes employee feel unfair and do not feel they belong to the company. Lastly, Berjaya Corporation should get two people to in charge position of CEO and also chairman as this two positions will have conflict if taken by the same person.
Berjaya Corporation Berhad is very good in their CSR which makes them different from other company. CSR can also bring benefits in terms of risk management to company such as cost savings, access to capital, customer relationships, human resource management, and innovation capacity. CSR can also make company outstanding compare to company that did not do CSR.
According to the European Commission, company with more responsible business can foster more growth. Hence, CSR is very important for a company especially public listed company like Berjaya Corporation. However, Berjaya Corporation not to only focus on CSR but also take care of their primary stakeholders such as shareholder and customer by fulfill their needs and wants.
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Appendix 1: Berjaya Corporate Structure
Appendix 2: Animal Mobile Clinic
Appendix 3: New home for homeless cat
Appendix 4: Free prosthetic limbs to poor
Appendix 5: Donate 10 units of dialysis machines to the National Kidney Foundation of Malaysia
Appendix 6: Health talk to employees
Appendix 7: Sports Toto volunteers plant mangrove trees
Appendix 8: Tioman Island Clean-Up Day