Under the Eleventh Malaysia Plan (11MP), manufacturing sector is the core sector that sustains sustainable growth for Malaysia to achieve high-income country status by 2020. In the manufacturing sector, the E&E industry is the main driver of this sector which contributes significantly to employment, investments, added value and exports.
RESEARCH OVERVIEW
- Research Background
- Problem Statement
- Research Aim
- Research Objective
- Research Objectives
- Research Questions
- Significance of the Study
- Chapter Layout
- Conclusion
What are the issues and challenges faced by Malaysian firms in improving their firm productivity in the E&E industry. We want to find out what are the most important factors affecting Malaysian firms' productivity in the E&E industry.
LITERATURE REVIEW
Manufacturing sector in Malaysia
All this research aligns with the mission and vision of the 11th Malaysia Plan (11MP), where the government in Malaysia sets a growth target to increase manufacturing productivity by 3.7% per year. Under the 11MP target, the manufacturing productivity level targeted around RM112,100, while the manufacturing productivity growth targeted around 2.6%.
Electrical & Electronics (E&E) Industry in Malaysia
There are two elements of MFP growth, namely technical change (TC) and technical efficiency change (TEC). During the 9MP and 10MP eras. TFP growth is maintained at 1%. Some industries are forced to reduce capital expenditure due to uncertainty in the global market.
Among a number of intangible assets, human capital and management skills are important for improving firm performance. In addition to researching the impact of factors towards the productivity of Malaysian firms in the E&E industry, we would also like to find out what the obstacles and challenges will be for the firm owner. Moreover, according to the study of Bender et al. 2016), management practices will also be one of the challenges for the firm to empower their employees.
Consequently, the inefficiency of the allocation of managerial talent will also lower the productivity of the enterprise (Queiro, 2016). The ultimate reason for doing this is to improve the performance and productivity of the business. Moreover, changing public purchasing behavior is also one of the issues raised by the CEO.
Especially in the E&E industry, it is one of the largest contributors to Malaysia's GDP.
Productivity
Factors that enhance productivity among Malaysian firms in E&E industry
- Management Factor
- Personnel Factor
- Financial Factor
- Technical Factor
- Production Factor
- Location Factor
- Government Factor
In the manufacturing sector, the Malaysian government also provides various incentives and facilities so that the manufacturing sector in Malaysia is able to improve their productivity (MIDA, 2018). Ramey (2013) also stated that technology enables firms to remain competitive as they are in terms of technology and technology. In addition, it can also help them improve productivity and provide information that further improves efficiency.
According to Hercko, Slamkova and Hnat (2015), the cooperation of all systems is able to accelerate the brain work and decision-making processes. In the study by Thatcher and Oliver (2001) on the impact of investment in technology with respect to company production, their results showed that investment in technologies that reduce the company's overhead costs are able to improve production efficiency and therefore in profits to increase. Gandy (2015) studies on the factors that can increase the profitability and sustainability of small business in the USA, also proves that with the availability and hiring of the skilled workforce, it can help the firm to boost their profitability and sustainability.
Studies by Li (2014) mentioned that firms are able to gain a competitive advantage through a strategic supply chain management, and this has changed with the introduction of technology. Most importantly, the country run by a government must be stable and peaceful in order for businesses to be able to run in the country.
Barriers and challenges of enhancing Malaysian firms’ productivity in E&E
Moreover, the inability for a firm to catch up with the advancement of technology has also become one of the biggest challenges for manufacturing firms, especially in the E&E industry. When the production of the products is not effective and efficient, the firm will lose its competitive advantage and customers may change their place of purchase. This causes firms not to follow the pace of the industry and ultimately jeopardizes their position.
Although high-complexity technologies come with good profit and market success, he also stated that the firm's owner and management team should take care of technological expansion. According to Obasan's (2014) study on the impact of business environment on the survival of SMEs in Nigeria, it supports and reinforces that policy makers and also access to infrastructural facilities are one of the steps for business growth and survival. Feigenbaum (n.d.) stated that getting customers to pay on time is one of the issues that determines a company's finances.
This will affect the cash flow of the companies thus resulting in lack of liquidity in emergency situations or investment in better equipment to improve performance and productivity. 2013) stated that monetary rewards are essential to retain potential workforce. When the location is not good for the company to fully exploit and increase the competitiveness of the company, it will affect the future direction of the companies (Bhatnagal and Sohal, 2005).
Conclusion
However, the availability and ability for firms to provide attractive compensation packages to employees also determines the performance and productivity of firms. Finally, the location of businesses is also challenging for firms when they decide to expand their businesses. In the next chapter of methodology, a semi-structured interview will be conducted to investigate more factors that can improve the firms' productivity in the R&D industry.
METHODOLOGY
- Research Design
- Exploratory Design
- Case Study Approach
- Data Collection Method
- Primary Data Collection
- Semi-Structured Interview
- Transcribing and Checking
- Coding
- Conclusion
The design chosen to be applied in this study is a case study approach that aims to gain an in-depth understanding of the factors affecting Malaysian businesses. Because this study uses exploratory research, qualitative research is used in this study. In this research study, the main factors influencing the productivity of Malaysian companies in the E&E industry were examined using the method of a personal in-depth interview conducted with the CEO of company ABC.
In this research study, researchers conduct a semi-structured interview with the CEO of an E&E company to obtain primary data. For this research study, the qualitative data was collected during the interview session with the CEO of Company ABC, Chief Executive Officer. In this research study, there is no need to use transcription editing software because there were only three voices in the interview session, which are the voice of the CEO of Company ABC and the researchers of this research project.
There is no statistical test used in this research project to check the validity and reliability of the qualitative data. In this chapter case study approach is adopted and exploratory research was applied in this research.
ORGANIZATIONAL BACKGROUND OF COMPANY ABC
- Background of Group Chief Executive Officer of Company ABC
- Company ABC’s Business
- Introduction
- Factors that affect the firm productivity of E&E industry in Malaysia
- Internal Factors
- Technological Knowledge
- R&D and Innovativeness
- Welfare of Employees
- External Factors
- Industry Revolution 4.0
- Impacts of China
- Challenges and issues faced by Malaysian firms in enhancing the firm
The CEO of ABC Company has a Bachelor of Commerce degree graduated from the University of Melbourne, Australia in 1984. The CEO of ABC Company stated that ABC Company has very little dependence on foreign labor. The interview section with the CEO of ABC Company took place on March 23, 2018.
In addition, the CEO of Company ABC also mentioned about the impact of China's growth in recent years. Moreover, it will link back to the factors we interpreted during the interview with the CEO of Company ABC. The CEO of Company ABC: Various articles and newspapers already mentioned about the methods to improve productivity.
The CEO of Company ABC: Regarding the 4th industrial revolution, I can personally say that it is still very new in Malaysia. The CEO of Company ABC: I think in my opinion that the government plays an important role here.
SUMMARY AND CONCLUSION
Limitations of the Study
In this research, due to the lack of research on this specific topic in the past in the context of developing countries, especially in Malaysia, there is a lack of information that we could find. We faced limitations in finding the additional information needed for evidence to substantiate all factors affecting firm productivity in the E&E industry. Lack of information can lead to inaccurate results, and there may be other factors that we are yet to discover in this research.
Some other key factors that are related to productivity may require further research to identify and examine the impact of these factors on productivity growth. Furthermore, this research study only included a study of a single organization, which consisted only of the ABC company. All information obtained from Chapter 5 was obtained specifically from the CEO of ABC based on his own experiences, opinions and perceptions.
Furthermore, the data collected from this case study approach may not be necessary for some of the Malaysian firms in the E&E industry. There is no comparison or sufficient information that enables us to justify all the influence of the factors on the productivity of E&E firms, so that we can measure and derive precise and accurate results from our research.
Recommendations for Future Research
Thus, the collected qualitative data from the case study may not always be useful or relevant to Malaysian firms in the E&E industry.
Conclusion
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