CHAPTER 4: ORGANIZATIONAL BACKGROUND OF COMPANY ABC
5.3 External Factors
but when firm grow bigger and bigger, a certain amount of rules and regulation are needed, so that the firm able to manage in a more easier way. While for big firms like Google and Apple, they already have a culture in their company that everyone who works in the company knows what they should contribute to help the company.
keep improving themselves in order to compete in the fast changing industry only deserve to be stay in the market. Therefore, when business owner relies on the financial aids from government, they will only be stagnant and eventually get eliminated from the market in the long run.
5.3.2 Industrial Revolution 4.0
As mentioned in the previous factors that able to improve the firm productivity, there are some external factor that enable the overall contribution of E&E industry in terms of GDP growth, labour productivity, exporting productivity and etc. In order to improve the contribution of E&E industry, solely depends on the effort of firm itself will be challenging. Currently the world economic are changing in a very fast pace due to the advancement of technology, communication systems, information transfer mode, politics relationships and many more. Therefore, in our opinion, Malaysia government should put more focus in building a strong fundamental for manufacturing sector, especially in E&E industry.
The main contributor in manufacturing sector is E&E industry, therefore, through providing more aids for E&E firms, business owners able to improve their performance and productivity in a huge success. By providing more specific training and seminars to prepare more and more business owners in E&E industry in order to get ready for Industrial 4.0. By doing a briefing of what type of technology, or what type of machinery able to help each specific firm in order for them to boost their productivity, it will give them confident to invest and use more advance technologies in their production operation. This requires a good conformity between firms and also government. Government need to listen to the needs of the industries and sectors for the overall growth. Government need to see this as a whole big plan and one should not
be ignored throughout the process. Firms with competitive advantage and resources able to improve their performance and productivity with a good management team in their company. On the other hand, SMEs also can get benefits from this process as they can acquire the amount of knowledge that enable them to kick start their operations at a higher efficiency.
Industrial revolution 4.0 is one of the hottest topic that people and business owners are concerning about. The evolution and advancement of technology will benefit human population. However, a lot of people debate that this will reduce the job opportunities in the market. The CEO of Company ABC mentioned that this revolution is still very new in Malaysia, so he still can’t foresee how this will impacts the future towards E&E and other industries. Yet, Company ABC will still be open and accept any challenges for them. The CEO mentioned that they already started to get themselves comfort with some of the systems and programs relating to AI into their manufacturing site. Although is not matured yet, but Company ABC are looking step by step so that when it really comes to Malaysia, they could prepare themselves for it. However, he stated that it will be challenging for Malaysia because the outflow of talents in Malaysia, especially in AI industry. The number of talents in Malaysia is very limited, so even they wanted to expand the usage in AI or other advance technology, the amount of breakthrough they can get is also limited.
5.3.3 Impacts of China
Moreover, the CEO of Company ABC also mentioned about the impact of China growth in the recent years. Especially the One Belt One Road Initiative (OBOR). The purpose of OBOR is to connect China, Central Asia, Europe, India, East Africa and also Southeast Asia. The interconnection of all these main lands through rail road enables all the nations that are in this initiative to grow their economies together. This is a win-
win solution that proposed by China President, Mr. Xi Jinping in order to make the whole world become one economy system. The CEO of Company ABC mentioned that the agreement of this initiative, Malaysia have made a good and solid friendship together with China, and with the investment China put in Malaysia, surely will benefit from the performance and productivity growth in long run. Our Prime Minister, Dato’
Sri Najib Razak also mentioned in his personal blog, saying that the mutual discussion, sharing and also construction able to set Malaysia in a strong foot step in the future.
The borders open to trade enable to boost the economic growth for Malaysia’s underdeveloped east coast. This land bridging initiative also enables a cost and time efficient trading of goods between Africa, Middle East and Asia (Razak, 2017; “Najib reiterates benefits”, 2017).
The CEO of Company ABC further explain that the interconnection with other countries will increase the export of Malaysia made products to other countries, while this also supported by our Prime Minister. Through this there will be a great demand that will encourage more and more big firms and SMEs to expand their operations.
Moreover, this will link back to the factors that we interpreted during the interview with the CEO of Company ABC. In order for firms to cope and increase their productivity to fill the demand gap, a firm requires to have a resolute goal setting that how much quota the production line should be producing in a period of time. Besides that, the welfare of employee also must be taken care in order for them to feel motivated to complete the target set by upper management. Furthermore, the level of technology and R&D also be par with the quality that foreign countries required.
The CEO of Company ABC also said that when business owners able to expand their network to China, and get to source cheaper raw materials or productions over there, also able to boost the productivity of firm. By reducing the cost of production, business owners able to allocate other financial resources into R&D, machinery modification, training and development of employees, rewards of employees and many more.
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