CHAPTER 6.0 SUMMARY AND CONCLUSION
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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Appendix 1.1: Major Indicators of The Manufacturing Sector, 2010-2020
Adapted from: The Productivity Report (2017)
Appendix 2.1: Malaysia's Labour Productivity Performance, 2012-2016
Adapted from: The Productivity Report (2017)
Appendix 2.2: Labour Productivity, Capital Intensity and TFP Growth, 2006 - 2016
Adapted from: The Productivity Report (2017)
Appendix 3.1: Semi-Structured Interview with the CEO of Company ABC
1. Can you briefly explain the history of Company ABC before you take over the business from the founder of Company ABC?
2. In your opinion, what are the factors that you think, is important for a firm to boost their productivity? Why?
3. In your opinion, what are the factors that able to explain/crucial to the productivity performance of companies in E&E industry?
4. What are the issues and challenges of E&E industry?
5. Are your company and industry ready for the challenge of the fourth industry revolution?
6. What are the incentives to improve E&E industry contribution in productivity growth in Malaysia?
Appendix 3.2: Interview Transcript
1. Can you briefly explain the history of Company ABC before you take over the business from the founder of Company ABC?
The CEO of Company ABC: During 1961, the founder of Company ABC, who is also my beloved father started to trade electrical goods in Selangor. He started the business by establish retail, and then starts to wholesale electrical goods. Then my father realize the business potential opportunities and started to manufacture electrical appliances and lamps during 1970-1980. It took about 20 years for my father to build up the brand and knowledge in this E&E industry. Up to now, Company ABC also act as an agent, and bring in some products from other foreign country to sell in Malaysia. About 55% of sales of Company ABC come are from foreign countries and the remaining one are locally.
2. In your opinion, what are the factors that you think, is important for a firm to boost their productivity? Why?
The CEO of Company ABC: Various articles and newspaper already mentioned about the methods to improve productivity. For example a good and sustainable competitive advantage and creativity in business. However, the real issue is what makes consumer to purchase your products. In my opinions, companies in Malaysia must have a very clear goal on what productivity goal they want to achieve, and then set the appropriate measurement to measure whether the firm close to achieve or have a very large gap with the goal they set. If they don't have a clear goal and idea relating to this, there is no effectiveness in doing so because all the efforts they put on will be meaningless. Moreover, after achieving the goal, I will give rewards to all of my employee and penalty for them if they can’t achieve the goal that I set. A good reward and penalty system enables my employees to have a clear goal in doing their task, and also it can be a very good motivation for
them to do their work.
Besides that, I think the amount of technology knowledge you need is also crucial.
By comparing both local automotive manufacturer Proton and Perodua in Malaysia, the key difference between them is the supports that they have. Perodua is being supported by Daihatsu, a very strong and famous automotive manufacturer has provides Perodua with various technology support. This enable Perodua to have a very good products quality and at a very competitive price.
Compared to Proton, before the joint venture of Geely, their sales are very low.
Aside from the management issue, their products with low level of innovation and technology, plus the price is slightly expensive, all these causes them having issue to sustain in the market. Now they have Geely partnering with them, we can see how they will perform in future. Therefore, a company really need innovative and continuous R&D to be able to improve their firm productivity. Last but not least, I personally think product differentiation also important.
Besides that, I know that currently a lot of incentives are providing by government in order to help SME and mid-tier firm in Malaysia to have their own business, so that the economy and GDP of Malaysia can improve. However, a lot of people misunderstood and misuse the financial support from government. They treat it as one of the financial source they government will always provide for them. This causes them have no intention to survive and keep evolving themselves in this fast changing world. Thus, their company have no competitiveness and eventually will fail if they do not pick up themselves and take initiatives to improve. However, one thing I like about the effort of government is that they once set up a seminar that providing training for the firm owner of mid-tier companies. The purpose of this training is to train them so that they can improve and develop their company in this environment. One issue that they having with this event is that the execution matter. They have about 50 owners come together