CHAPTER 4: ORGANIZATIONAL BACKGROUND OF COMPANY ABC
5.4 Challenges and issues faced by Malaysian firms in enhancing the firm
Therefore, the CEO outsources part of its production for China manufacturers. The pros of doing so is that the overall cost will be cheaper comparing to production in Malaysia.
Moreover, the CEO also mentioned that due to the rapid growth and advancement in China, their technological level is in a higher level compare to Malaysia, hence it will be more efficient for manufacturing over there. With the standards of product the CEO want, China manufacturers able to produce and keep the cost lower. Moreover, the competition in China also very intense, therefore the price will be much lower if we have the network over China.
5.4 Challenges and issues faced by Malaysian firms in enhancing the firm
This does not only apply for E&E firms, but in other industries also facing this issue.
Moreover, issue relating to the tighter rules on the foreign workers also one of the reason that causes pressure for foreign firm to switch their operation to other countries, and also Malaysian firms. The new rules had causes the cost to hired foreign workers became higher, according to economist Hoo Ke Ping on one of the news report. Hoo also mentioned that the drop in sales and demand in the weak market environment increased is one of the factors that causes foreign companies to move their operations to other countries. This same applied to Malaysian firms as the moving out of foreign firms and increase in costing will eventually pressure them in the long-run. Moreover, the leaving of foreign companies will also cause the loss of job opportunity, technology and investors’ transfer (FMT Reporters, 2017). This results was a new finding for us as our Chapter 2 mentioned about the challenges will be the difficulties in choosing the suitable human resource. However, what firms more concerning are about the cost of labouring throughout their operation.
Besides that, the growth of China in recent years enables them to provide sufficient labour, at a lower price compare to Malaysia. Besides that, the production rate over China is much higher due to the high population in China. They have the economies of scale that able them to produce products in high amount, for their domestic consumption and also the requests from other countries. The CEO also gave an example related to our Malaysia automotive brand Proton. He stated that the market size in Malaysia and the number of exports are not enough for Proton to achieve economies of scale. Therefore they are forced to increase the price of their cars and eventually customers will lose interest towards their products because of the price issue.
Malaysians will prefer a better quality car at a lower price. Therefore, he further emphasizes on the importance of reaching economies of scale while producing products.
The second challenges that the CEO mentioned during the interview was big manufacturers will have a lot of advantage and this will be not healthy for the growth
of SMEs. Big firms have a lot of advantage in terms of financial, knowledge, technology, human capital, management experience and many more. All these requires time and accumulation of past experiences in order for big firms to continue their operation in the market. However, for SMEs they have a lot of limitations in various sides. Difficulties in getting financial supports, lack of network in businesses, does not have the ability to compete with famous brands and etc are the problems and challenges for them. The findings from this also mentioned in our Chapter 2, that financial sourcing will be one of the challenges for SMEs. Improving the GDP of a country can’t solely depend on the few big firms but it requires the growth from various sectors and industries. The CEO stated that balance is very crucial and this is what the government and industry requires to find out a solution.
Lastly, is about the rapid change of the world and public purchase behavior. Due to the advancement in technology, people use smartphone as one of their daily necessity. They buy online, surf online and look for information on the internet. Therefore, the CEO mentioned that this had changed how Company ABC advertises their products and brand name in the current world. During his father generation, Company ABC advertise using newspaper and flyers. All these traditional advertising methods were how the companies promote during 1980-an. However, now they switch their advertising platform to social media websites and online. For example, they use Youtube, Facebook these online platforms to do their advertising. Moreover, the change of public purchase behavior also one of the issues stated by the CEO. He said that previously, people will buy electronic appliances at small retail stores, but due to the impact of hypermarket, and e-commerce, it influences the way they sell their products. By selling on hypermarkets, they will buy from Company ABC in a very huge amount and requires a cheaper price from them. While on the other side, selling through e-commerce platform, the sellers will request for promotions or discounts in order to attract people to buy on online. All these will eventually affect the profit of Company ABC, but the CEO said that this was an inevitable event, the world is changing and so as we.
CHAPTER 6: SUMMARY AND CONCLUSION
6.0 Introduction
The research of this study is to identify and explore the important factors that impact the productivity of Malaysian firms in E&E industry, and the issues and challenges faced by Malaysian firms to boost their firm productivity. The data of the study was collected by conducting a semi-structured interview with the CEO of Company ABC and case study approach was adopted to have a more in-depth understanding of the study. A comparison was made between the findings in Chapter 5 and literature reviews in Chapter 2, and conclusion are stated in this chapter.
6.1 Limitations of the Study
In this research, due to lack of researches had done on this specific topic in the past in context of developing country especially in Malaysia, there is a lack of information that can be found by us. We faced constraints in finding additional information that are needed for evidence to justify all the factors that impact the firm productivity in E&E industry. Lack of information may lead to inaccurate results and there might have other factors that are yet to be found by us in this research. Some other key factors that are relating to productivity may require further researches to find out and study about the impact of these factors toward the productivity growth.
Moreover, this research study only involved the study of single organization which consisted of Company ABC only. All the information generated from Chapter 5 were obtained specifically from the CEO of Company ABC that based on his own experiences, opinions and perceptions. The data collected through semi-structured
interview with the CEO of Company CEO may not provide a strong conclusive and reliable information. Moreover, the data collected from this case study approach may not necessary be useful for some of the Malaysian firms in E&E industry. So the collected qualitative data from the case study may not always bring useful or relevant to Malaysian firms in E&E industry. There is no comparison or sufficient information that enable us to justify all the impact of the factors towards the productivity of E&E firms, in order for us to measure and generate accurate and precise results from our research.
6.2 Recommendations for Future Research
Since there is a lack of researches done in the past relating to what are the factors that impact the productivity of Malaysia firms in E&E industry, and also there will have a possibility that there are other factors that we could not explore during this research, there is a possibility that this result may not able to cover for every firm in E&E industry, either in Malaysia or International. Therefore, it requires more research to be done in the future by other researchers, in order to make the results to be more precise, so that more Malaysia firms able to look into the factors that able to boost their firm productivity.
On the other hand, this research is only study about a single organization, and the results that we collected might not be comprehensive to determine the most important factors that will impact the productivity of Malaysia firms in E&E industry. Therefore, by studying and analyzing more organizations in Malaysia within the same industry, collecting the opinion, experience and comment from more CEO, enable the future research have a better and more complete measurement. This enables to pinpoint what are the other factors that will impact the productivity of Malaysia firms in E&E industry, moreover it can further discover the issues and challenges that they have in E&E
industry. Last but not least, their opinions toward Industrial 4.0 also will be crucial for the development of future technologies.
Lastly, a comparative study is also crucial because every single firm will have different type of management style, culture, operation method, production method, technology knowledge, size and strategy aspect. By comparing, it able to generate and develop new insights that will benefit future researchers, and also the growth of economy in Malaysia.
6.3 Conclusion
In this section, we concluded that the there are four internal factors, and two external factors from the results that we collected and analyzed, that will impact the productivity of Malaysia firms in E&E industry. Moreover, we also identified what are the issues and challenges facing by the firm in E&E industry, and also the impact of fourth industrial revolution towards the performance and productivity of Malaysia firms in E&E industry.
In a nutshell, we learned a few factors that will impact the productivity of firm according to the opinions and experiences of CEO of Company ABC. We sorted it into the internal factors and external factors. First of all, the internal factors that we learned are firm need to have a clear goal setting about what their company wants to achieve in short-term and long-term. Moreover, this requires a certain level of rewards for employees, in order for them to get motivated and contribute towards the growth of the company. Besides that, the knowledge of technology, research and development investment, and also level of innovativeness also will impact the productivity of firm, especially in manufacturing sector. All of these internal factors are supported by various journals and articles that will impact the productivity of firm.
Secondly, the external factors that we found out that will impact the productivity of
Malaysia firm in E&E industry are the support from the government and also the impact of China. For a business owner, searching for resources to improve the performance of firm can be challenging, but with the support of government in various aspects able to reduce the risk and increase the success chance for firm to perform in the industry.
Furthermore, with the More Open of China and also the investment in Malaysia, plus the One Belt One Road Initiatives, it can definitely open more opportunities that will aid in the future economy and growth of Malaysia.
Thirdly, the issues and challenges that face by the Malaysian firms in E&E industry, we categorized in three main issues, which are the government policies issue, big differences between big firms and small firms, and also rapid change of world. The exemption from tax, tighter rules for foreign workers, and the weak business environment had set Malaysian firm in a hard situation. Besides that, when the differences between big and small firms increase will also discourage the new startups from SMEs due to the constraint and limited access to resources. Moreover, the changing in communication and also advertising will require Malaysian firm to be fast enough to accept and adapt the changes of how consumers behave.
Lastly, the impact of Industrial 4.0 also requires a longer time to observe and predict the impact towards Malaysian firms in E&E industry. However, this could be done in a better way if the firms and government able to work together closely to work together on these uncertain changes towards the world.
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