Released by: The Edge
Date: 25 September 2006
Are you ready to deal with the rise of China and India as potential economic powerhouses in the region? Have you felt the impact of trade or business encroachment of the fast-developing third world economies? Have you identified your organisation and individual core competencies and the special niches in your global markets?
Do you foresee your country taking the lead in regional issues and spearheading innovative new business models and concepts, such as Islamic banking and clean renewable energy, in the not-too-distant future?
If these are questions are pertinent to you and of real concern to you, then you are probably a `globally conscious manager'. If they are not, then be warned that you and your organisation may not be ready for the realities of a rapidly evolving global marketplace.
It is the responsibility of the 21st century-manager leader - while keeping his ear to the ground (listening for competition) - to peer ahead into the distant horizon that may be five to ten years away. Failure to do so will result in the organisation being disintermediated, thrown off course, becoming directionless or, even worse, doomed to obsolescence and financial ruin.
Situational Analysis
It is on this note that the Malaysian Institute of Management (MIM) is paying special attention to the outcome of the Managing Global Challenges Workshop held recently in Kuala Lumpur. The workshop was organised by the Mumbai-based Strategic Foresight Group (SFG) in partnership with MIM, among others.
Given the lack of mechanisms to deal with potential and unforeseeable problems, managers must depend on whatever foresight and analysis that is available to them. Deliberations and dialogue at the workshop had resulted in the identification of "drivers" of future events that have been grouped within the SGF's 4-G framework - growth, governance, God and geopolitics. Managers would do well to take
heed of these high-impact drivers that will have a strong bearing on Malaysia's economic and political future.
Growth
Malaysia has maintained a gross domestic product growth of 6.2% since 1991. The government has proven its ability and competence in dealing with sticky situations - it introduced new economic policies after 1969 and responded brilliantly to the commodity markets crash of 1985 and the financial market crash of 1997.
The most important drivers of Malaysia's future growth are
- Human capital development
- Continued success in the current areas of strength (petroleum and palm oil)
- Impetus to the service sector
- Development of new technologies
- Participation in the growth of China, India and the Middle East
- Global and national financial stability
- The Hydrocarbon situation
- A Shift to alternative energies
Malaysia is likely to achieve a sustainable growth rate of 6% to 7% for years to come. The country will have its energy supplies and financial stability well within control while it continues to place emphasis on human capital development. However, to keep growth going strong, Malaysia will need to significantly enhance its relationship with China, India and the Middle East and invest heavily on
developing new technologies.
Governance
Although Malaysians have enjoyed harmonious co-existence and effective delivery of goods by the public administration, there are quarters that have raised questions about transparency and accountability.
The most important drivers for Malaysia governance are
- Quality of political leadership
- Economic and political literacy
- Re-assessment of the New Economic Policy (NEP)
- Potential influence of vested interests and religious forces
- Accountability, transparency and effective delivery of public goods
- Structural changes in political system
It is expected that the quality of political leadership will continue without any major disruptions. However, managers must pay attention to sporadic calls for a reassessment of the NEP and certain political structures, as these would have profound consequences on the way business is run. Managers must also take heed of the need for greater accountability and responsibility.
God
The 2004 general elections result was an affirmation that Malaysian citizens regard religious and political stability as important to the nation's prosperity and peace, present and long-term. The re-focus on a value based culture, led by the government and the promotion of Islam Hadhari should reposition Malaysia as a progressive, modern and peaceful Islamic country.
However, certain drivers may reverse gains made during the 2004 election. The drivers for the future will be
- Risk of unforeseen tragedies like natural disasters and global health pandemics
- Risk of rising of extremist religious groups
- Opportunity to develop culturally relevant products and services, particularly Islamic banking
- Opportunity to export the model of religious harmony and cultural co-existence as new diplomacy to the countries experiencing strife
Malaysians will do everything in their power to maintain social harmony. Amid our kongsi-rayas and efforts to learn about and accept one another better, the bold among us will find opportunities for cultural mapping.
This in turn will help Malaysia harness her cultural strengths and channel them into new avenues for business and diplomacy. The threat of natural disasters and global health pandemics may, however, throw a spanner in the works.
Geopolitics
On the world stage, Malaysia has found herself between rising giants, India and China. These were not forces to be reckoned with a decade ago but now prove to be a real challenge. In last two decades, Malaysia has been a driving force in ASEAN and the government has been working towards the eventual creation of an East Asian Economic Community. Be that as it may, Malaysia, like her neighbours, is
sensitive to US' actions and policies in the region.
The future drivers of change will be
- Relations with ASEAN neighbours, particularly Indonesia
- Movement of labour in the ASEAN region
- Political stability within the neighbouring countries in ASEAN
- Strategic partnership with India, China and the Middle East
- Role of the United States in the region
- Global role in partnership with ASEAN
With regional stability sustained, Malaysia is poised to emerge as a regional leader with the option of taking on a new global role as peacemaker and map out a new alignment with China, India and the Middle East.
The SFG has also come out with three possible scenarios (see illustration) that Malaysia could face in the light of the four drivers in the 4-G framework. The first is merely a continuation of the status quo, which many managers ought to be comfortable with. The second scenario is optimistic and would allow many to make great fortunes. The last scenario serves to remind us that if managers fail to
stay relevant by staying competent and responsive, the whole country may languish in the doldrums.
"We have to roll up our sleeves..."
Where to, Malaysia?
As Malaysia moves into the next half of its journey to Vision 2020, to developed nation status, it will need to brace against external forces and internal demands. It will have to carefully decide and balance its internal expectations and priorities against external pressures and demands for growth and global presence. It will need to consider and re-think its options and seriously weigh the three
possible scenarios for its future. The scenarios will at least provide a guide to what Malaysia wants to become and achieve. In view of the current emerging forces, it may have to slow its growth pace and be more pragmatic and realistic in what it aspires to be at the end of 2020. Regardless of what the scenarios are, one fact remains - Malaysia has faced crises before and has proven its ability
to respond sensibly, capably and with fortitude to what it believes is right for the Malaysians' destiny and future. For Malaysia, not taking any action or failure to respond to crisis is definitely not an option.
Malaysian management leaders need to be more globally conscious and not be complacent about past successes as others are moving forward very quickly. With the rapid advancement in technology and today's flattened world, where accessibility and technological pervasiveness and ubiquity prevail, the rules of trade will change.
The real future of Malaysia is how we really foresee it to be - we have to roll up our sleeves, and just get down to the real job. In so doing, we need to have the good sense to be sensitive in our multi-ethnic and multi-cultural society, to be prudent and just, and with determined political will, re-engineer Malaysia to realise the desired outcome. We therefore need to be equipped with strong,
visionary leadership to determine and create our future rather than just let it happen or let others determine our destiny.
Dr Wilson Tay is the CEO of the Malaysian Institute of Management (MIM), the National Management Organisation of Malaysia, which celebrates its 40th Anniversary this year. It invites companies and professional managers to be members. Contact MIM Membership Support and Outreach at (03) 2164 5255; fax (03) 2165 4681; email: inquiries@mim.org.my or visit
www.mim.org.my. For more on the Managing Global Challenges workshop, go to (www.strategicforesight.com).
