Released by: The Edge
Date: 30 April 2007
Malaysian managers are most effective at managing stakeholder relationships and organisational finances but are weakest when it comes to organisation capability.
According to the Malaysian Institute of Management's (MIM) 2006 Malaysian Management Capability Index study, of the nine major drivers of management capability, Malaysian management achieved 74% capability in "external relationships," and 73.1% capability in "financial management".
The study, released on April 24, surveyed CEOs, managing directors and general managers of 110 companies. The respondents rated their organisation's capability to engender visionary and strategic leadership within their organisations at 72.4%. They also rated management's capability to create new value for their organisation by encouraging innovation in products and services at 72%.
But, according to the study, management is weakest at "organisation capability" (66.4%). This is best described as the ability to maintain a "boundary-less" organisation that effectively applies best management practices to achieve goals and objectives and emphasises continual, individual and organisational improvement and learning.
Management of Malaysian companies was also seen as lacking several competencies, including "performance leadership" (71.3%), "application of technology and knowledge" (71.1%) and "people leadership" (70.7%). Respondents also say their organisation was least capable at measuring and monitoring "results and comparative performance", the most heavily weighted criterion in the MCI.
MIM's CEO Wilson Tay says the study indicates that Malaysian companies have excelled in areas given greater emphasis by management. It, nevertheless, shows that managers are more focused on achieving short-term, rather than long-term, goals when it comes to outlook and performance.
"It is indicative that in many respects, we are more concerned about form rather than substance," says Tay.
"Relationship and financial management, however, can drive our performance in the long term. `Organisation capabilities' are the weakest, which indicates that our management skills and practices are not strong and have much room for improvement," Tay says in an e-mail interview with Manager@Work.
According to the survey, overall, Malaysian companies are performing at a mediocre level of 71% of potential management capability. It added that organisations should aim to exceed 80% capability for all competencies measured by the survey to achieve management capability excellence. In the immediate term, Malaysian companies would need to strengthen their organisational, people, technology and
performance management capability, says the survey.
But compared with other countries in the region, Malaysia's 2006 MCI at 71.3 is higher than New Zealand's 2006 MCI at 68.6, but; lower than India's 2005 MCI at 76.4. India did not conduct an MCI study last year.
The largest disparity between Malaysia and New Zealand is in the category of "innovation - products and services", says the study.
Tay says the greatest challenge in improving management capabilities in Malaysian companies is changing managers' mindsets about enhancing human capital development efforts. Managers of small and medium-sized enterprises may face more problems in making improvements due to their lack of resources and expertise, compared with multinationals.
"MNCs and LLCs [limited liability companies] can attract talented people with their remuneration packages. However, SMEs have to offer more development and ownership opportunities in the long term to attract and retain talent," says Tay.
The MCI survey questionnaires were mailed out between August and December last year to 850 companies, of which 110 (13%) responded. According to Tay, the companies surveyed included MNCs like British American Tobacco, Petronas, Sunway Group, Genting Group and Boustead Group, and SMEs like TA Furniture, People Potential, TMS, Infopro, and Great Wall Plastics.
