Study of Malaysian Style of Management: Business Report

malaysia business culture

                                                              Malaysia business culture


A management style denotes a particular set of behavior, attitudes or mindset of people. The uniqueness and characteristics of that style can be easily noticed or felt by an individual who looks at it with a fresh perspective. However “a style” is a consequence or outcome of several factors. Here in this report we are going to discuss the Malaysian and Islamic Management Style and analyze the cutting edges of both types of Management styles.




In 1975, Malaysia was granted independence from Great Britain. In 1965, Singapore ceased to be a member of the Malaysian federation and became an independent country. Parliamentary rule was restored in 1971. Since 1971 Malaysia has been improving the countries economy and helping their citizens to improve their lives. Since then Malaysia has grown to become a major economic power in the Asian ranks and is counted in the East Asian Tigers. This tremendous achievement presents a unique case to us to look to it as model developing country. Malaysia proposes to be a fully developed country by the year 2020 (which is called vision 2000) and as such it is a good case for study especially for countries striving to come out of the trap of the continuous poverty. Before delving into the management practices and styles it would be beneficial to have an idea of the make-up of the Malaysian work force. Below is the result of the study conducted on some of the major aspects of Malaysian human resource.





The general characteristics especially the literacy rate of the Agricultural, Industrial, and Information Human Resources of the Malaysian society is given below:


Agricultural Human Resources:


The percentage of literacy is (60%-65% or less roughly) and low average educational levels.


Industrial Human Resources:

The percentage of literacy is higher than agricultural age, based on value of at least a high school education, including for blue-collar jobs. College education for management and professional jobs.


Information Human Resources:

The percentage of literacy is rates of population (90%+ preferably), and ideally at least some college education or other skilled job training. Also lifetime learning, requiring everyone to regularly update their education and training in their job area. Longer life spans also mean an average of three careers and eleven jobs in a lifetime, also requiring further education.



Education is considered to be the key to social status and successes. Most students are required to learn English as well as other languages. Many Malaysians study at home or abroad. Their literacy rate averages about 78%. This represents about 85% for Peninsula and 65% for Sarawak and Sabah.


The above study shows that Malaysia has a rich human resource and has improved over the years over all their developmental plan. Malaysia has an adequately trained and skilled manpower in the agricultural sector and they provide a comprehensive plan of manpower training in order for the workers to operate new technological processes and methods, high-tech equipment and new demands.




The above statistics give us a reasonably good view of how has the Malaysian manpower been in the different sectors and what level of skills they pose in that particular industry. Malaysia is one of the new developing countries and is branching into more fields of specialized high technology manufacturing and also branching towards the information age. They have good human resources, they train and retrain their workers using up to date information. These various resources effects the options for development available to Malaysia. Their vision for Malaysia calls for economy that is technologically proficient, fully able to adapt, innovative and invent, and driven by “BRAIN POWER’, skills and diligence and possession of rich information.





One of the important changes in trend that is being witnessed in the Malaysian economy is the increasing participation of the women in the work force. This trend seems to come from the west where majority of the women are working women and contribute to development of the local economy. Data available on the Percentage of Working Women in Malaysia shows that it has increased from 42.2% in 1980 to 46.1% in 1993. However, the percentage of working women still lags behind from the percentage of men (87% in 1993)


An interesting feature of the economy is the percentage of the people working in the manufacturing sector (30.8%). The same trend was registered for employment in the wholesale, retail, etc.


Another important and striking factor in the development of the Malaysian economy is the presence of large number of youth in their work force. The data available Malaysian Age shows  Life expectancy ranges from 68-71 years and 65 years and over are about 4% of the population. Malaysian age distribution is mainly younger population with averaging 4% of older people.


The present development in the Malaysian economy is well supported by the Malaysian educational system, which continuous to produce high quality and high skilled labor force, which adds to the productivity of the Malaysian economy.




Malaysia has got a human resource ministry that is quite dynamic in its actions and looks at future outlook of the industry and the demand of work force. This Ministry is also concerned with maintaining the government prescribed regulations on the employers so that the employees get their right that has given to them according to the law of the land. A program that is designed to find the jobs for the prospective employees is ELX.


ELX is a project to improve the employment services offered by the Ministry of Human Resources. It highly leverages on capabilities of the Information Technology and Communications.


The objectives of the project are to improve the job matching through electronic means; thus, enhancing the human resources employment and mobilisation. This project also enhances the dissemination of labour market information.



  • Online registration and job application by the Job Seekers
  • Online registration and job posting by Employers
  • Electronic job matching
  • Electronic data gathering and analysis of the labor market information


The Ministry is also concerned with the proper implementation of governmental regulations in the relationships between employers and employees. For this purpose the Ministry monitors the following practices that are being followed by the employers in the industry.




  • Under what circumstances is a contract of service deemed to be broken
  • The correct definition of ‘overtime’
  • The rate an employee who work overtime be paid
  • The pay time of the Employees
  • The time When wages be paid to an employee upon a normal termination of contract of service
  • The maternity benefits provided for female employees under the Act
  • The time of commencement of the maternity leave






In Malaysia, most students are required to learn other languages. Educational system over the years had made a five fold increase (improvement) in enrolling students. Malaysia has seven universities in Malaysia, and more than 30 other institutions of higher learning. They also have adult correspondence courses. Thus it can be quite easily said that the Malaysian educational system is a system designed on the information  age needs. They have developed diversified educational models to meet the necessary diverse need of their students or workers. In addition to traditional educational institutions; also distance learning, computer/multimedia/interactive educational packages, internet are available as informal methods of learning.


Turning Malaysia into a center of education excellence is no mean feat. There have to be stringent measures to ensure that the quality of higher education is not compromised by  its rapid expansion through the franchising of programs, the establishment of distance learning programs, external degree programs,  branch campuses and various private universities and colleges. The LAN or National Accreditation Board Act was legislated in 1996 to establish a board for the functions of formulating policies on the standard and quality control of courses of study; certificates, diplomas and degrees in higher education. It is also empowered  to monitor, review and oversee the standard and quality of courses of study in all institutions of higher learning for accreditation of certificates, diplomas and degrees. Through such continuous and close monitoring, it is hoped that all institutions and their academics will be pushed to work towards greater excellence in both teaching and research.


Education is viewed by many as an investment with a relatively long gestation period.  The various reforms and changes in the higher education sector in Malaysia will provide and increase education opportunity to bring the returns for Malaysians, but success will be greater if some forms of financial assistance can be made available to the lower income groups. This is because despite  the increasing affluence among Malaysians  over the years, there are still many deserving students who are being deprived of a tertiary education because of financial constraints. This situation is aggravated by the recent economic downturn which  has financially incapacitated many parents who are sponsoring their children’s education both locally and abroad.  The government has tried


As global economic activity is now shifting towards one that is based on information technology (IT),  Malaysia must now move into the IT industry if it is to achieve the vision of becoming an industrialized nation and an IT world player by the year 2020. The Multimedia Super Corridor3 (MSC) is a timely effort to propel Malaysia into the Information Age. The Prime Minister of Malaysia sees the MSC as a global facilitator of the Information Age, an  enabler for mutual enrichment of business, government and institutions of higher learning using leading-edge technologies in an increasingly  borderless world. Collaborations among government, higher education sector and IT industries within the MSC is fast becoming a common feature, to effectively and collectively develop new tools and solutions for the delivery of education to the masses through the innovative applications of multimedia and the Internet. In this respect, the role of the MSC in supporting the higher education sector towards making.


Having developed a thorough background of the Malaysian culture and the present condition of the Malaysian workforce it is easy to understand the dynamics of Malaysian management style. We can divide the factors that have the most profound effect on the Malaysian mangement style and have a big effect on the shaping of Malaysian management style.


  1. A) Environment
  2. B) System / Structure
  3. C) Human Values.




Today Malaysia is more or less in a similar situation like her neighboring countries due to accelerated economic growth in the Asian Pacific region. However one unique feature  is the Vision 2020 spearheaded by the Malaysian government. The leadership style of the great man behind Vision 2020 (i.e. Datuk Seri Dr. Mahathir Mohamad, the Prime Minister of Malaysia) has inspired many organization leaders. This compelling aspiration towards a futuristic goal is a powerful driving force for the leader of an organization to move forward with his or her personal quality attributes, thereby creating a style on its own.





In a large organization, the system and structure to support, manage and facilitate running of the business are imported ideas. Generally the management system is based on “divide and manage” doctrine with rigid compartmentalization of work. Like many organizations, century old “Management by Part” Taylorizm is crumbling down in the face of advanced and fast changing technology, higher customer standards, international competition and emergent global village economy. The search for an appropriate management system / structure is a struggling process for most organizations. Many un-successful attempts are impeding any orderly evolution of an appropriate and stable management style. However the Malaysian businesses are more inclined towards the changing technologies are flexible enough to adopt the integration necessary for suvival in today’s changing work environment.




Human value-system has some unique characteristics in Malaysia. Its diversified cultures with many different races (Malays 70%, Chinese 30%), are blended within organization, creating a potential synergy for a emergent strong culture. As it is more and more recognized that organization should behave like an organism, and not mechanical parts to be managed, and the integrity of human value system has a profound impact on any strong management style to come there is more and more emphasis being  laid on the cooperation and understanding between the people belonging to different races.


On the strengths of “Environment” (Vision 2020) and “Human-value” (rich cultural heritage and traditional Malaysian values), a unique Malaysian Management Style is unfolding. However, the retarding force is the imported system / structure that undermine the traditional value. But Malaysian organizations are working to introduce a style that is compatible with today’s changing environment keeping in view the traditional Malay values. A distinctive Malaysian Management Style is certainly in the making when organizations acquire the knowledge and wisdom to transform their present system / structure on the foundation of traditional Malaysian value and sound principles towards the direction of national Vision 2020.





The Malaysian management style has transformed over the years from that of an authoritarian and rigid style to a flexible team based management style. This transformation has been particularly pushed by a change in production technology, which require increased participation from each and every quarter of the production process. The management practices that are being followed today are mixture of Japanese system along with the traditional Malay practices with a tinge of American management style. Still today in the agricultural orgaizations there is rigid control over the production facilities with a social class difference between the employer and the employee; However in industrial units the production process has evolved a lot use the latest management techniques necessary for the development of the efficient work processes.




Malaysian style is a promoter of the participatory style of management. The juniors as well as the workers are allowed to make suggestions rather they are encouraged to make such suggestions. The suggestion made by the indivdual is given due consideration and if considered good enough is taken by the management is included in the normal routine processes.




The Malaysian managers have borrowed the Japanese strategies of consensus and team building. The Malaysian business of today is using more teams in order to get efficient results then what he used to make before. The teams are usually assigned a task and are given a target to be achieved. It is then dependent upon the discretion of the team members as to how to achieve that result. Whatever the case might be the decision that is taken by the team members is reached through the consensus process. The team members discuss the given situation that is presented to them and then discuss the alternatives that are available as the ways to solve the problem. Each and every member of the team presents his own views as to how to approach the given situation and best solution is discussed by the each and every member and pros and cons are discussed and once the thing is in place it is accepted as the consensus decision and then it becomes a duty of the team members to do his best in order to achiever the results that are the goals of the whole process. Such a structure promotes loyalty in the group members and    makes him more and more productive as far as his working in the group is  concerned.



Malaysian managers are using the concept of quality circles in order to find the best level of the quality at the lowest possible price to the consumers. They set the quality levels of the product and then strive to obtain that level of quality with in the limitations that they have set for themselves in the production process. These self-imposed regulations on the quality of the product with in the limitations of the cost and the resources make it easy for the buyer to obtain the product at the lowest possible cost. This reverse system of acquiring the cost at the lowest level has resulted in the quality at the lowest cost. And as quality is the main determinant of the success of the product; achieving it at the lowest cost is going to be the most cutting edge for the company over its competitors. Everyone in the world as today’s business leader puts it that everyone can achieve the quality in today’s environment. Even the most inefficient of the organizations can produce the goods of a high quality. But the main thing that counts is the sheer cost effectiveness with which the company can deliver the quality of the goods. As Malaysian companies are using the quality circles in order to promote the quality at the lowest cost therefore the companies can really have an edge upon their competitors as they can really work their way out of the quality achieved at high cost. The Malaysian managers rather being indigenously orchestrated by them over the period have borrowed such practices. No matter how Malaysian mangers are nurturing the values in their style they are really going to do good to their business by employing such strategies. This also shows that the Malaysian manager is a dynamic manager who has the ability to incorporate the better of the changes in the ever changing world of management. The attitude on part of Malaysian manger is bound to make the Malaysian managers a success in today’s fast changing world as only those are going to survive in today’s environment who are able to keep the pace with the changing environment of today.





Malaysian managers have also adopted the phenomenon that is being applied across the globe to attain maximum quality with the input from each and every member of the team. TQM that is being used by the Malaysian managers is being used to promote the quality as well as the workers’ participation in the process. Such a system has got a dual purpose that to increase productivity by increasing the quality of goods and by increasing the workers’ participation by giving them a chance to voice their opinions. Such an environment gives the workers to participate more in the production process and to also increase the productivity of the worker in the longer run. These steps are bound to increase the productivity of the Malaysian firms in the long run and to evolve their homegrown management strategies.






Islam is not only a religion but also a complete code of activities. It not provides us with the guidelines of living a pious life but also a complete set of activities while dealing with other individuals. Islam is the religion of peace and justice and preaches its followers to practice the same. These are some of the fundamentals on which the building of Islamic principles are built. Islamic management style has re-surged as a major management style over the years. The need for an alternative management style as compared to the capitalistic and communist system was considered because of some of the failures of these systems; which has been demonstrated over the years with certain events. These events include the disintegration of Soviet Union and the collapse of the East Asian Economies that plagued their economies.


In Islam, State action mixes freely with private initiative, maximization of output with ethical distribution, and enjoyment of worldly things within self-bound limit. Private gains or profits in Islam flourishes side by side with sacrifice. A religion that closes the gap between these extremes can not be merely a value system or a transient social system. Unfortunately most of us disregard the Islamic teachings on this subject and  prefer to follow the western rules of distribution of wealth which largely emanate from capitalism, and which are not based on justice and moderation,( Miyana Rawi ) but on the possession of and lust for getting more and more leading to a further widening of the gap between the rich and the poor.


Whereas, the Quraan stresses on  the endowment of natural resources blessed on us for our well-being, the proponents of capitalism point to the scarcity of resources as the main cause of economic activity, and emphasize not on the whole conduct of man in society but instead consider man as a being who desires to possess wealth by finding out selfish alternative uses of these scarce means to meet ends. The concept of “economic man” who is completely involved in the production of wealth, and that of the “invisible hand” given by Adam Smith are denounced in clear terms in Islam. Man’s ultimate well-being rather than the manipulation of resources  for selfish ends is the main concern of Islam.


While Islam allows free trade in most items except those which are harmful to mankind, capitalism encourages one to trade in anything and hardly any restrictions are placed. Capitalism encourages the formation of companies such as multinationals to reap profits from the poorer nations through the creation of artificial shortages. This is totally against the Islamic principles and is stated by the Holy Prophet in the following words: “Whoever withholds cereals that they may become scarce and dear is a sinner”.

Given that in today’s society, economic achievement is judged by the living standards of the society, the desire for materialism has resulted in a race to maximize one’s ownership of economic resources. Whereas, the socio-economic system in Quraan is not wealth-centered but man-centered,  falsifying the belief of modern economics that unless a man acts selfishly he cannot act economically. According to the Quraan, man has been endowed with unlimited natural resources- as compared to scarce resources as suggested by capitalism—for the good of  mankind and not for manipulation for the purpose of individual self-interest. These endowments are to be used in accordance with the principles of justice, balance and proportion . History has shown that natural resources such as water and power have never really been scarce. To create artificial shortages in order to manipulate higher prices is considered  absolutely immoral in Islam, since according to the teachings of Islam, resources are meant to be used strictly in accordance with Allah’s will and not otherwise. Those who squander or misuse natural resources are held to be ungrateful to Allah. Islam prohibits both Israf  (wastefulness) and Tabzir  (prodigality)which can result in disorder in the society.



In such scenario the emergence of a new management style is imperative; which must be able to answer the problems being posed to the world because of the present imbalances management styles. The Islamic management style seems to be the answer to the present problems of the changing world.


Some of the Islamic principals that are the foundations of the Islamic management styles are discussed in detail over here to give us a better understanding of Islamic management style.



Islam promotes the equality of all human beings. Islam doesn’t promote that preferential treatment being meted out to individuals because of their family, stature in the political system or the influence they pose because of their wealth. Islam  propose a system based on equality and justice. In this way Islam gives the roles to the merit system that the present democratic system has now come to understand and praise. Islam has given this system to the mankind for the last fourteen centuries. There have a lot of cases in the Islamic history when the ordinary citizen of the state or a non-Muslim has been given an equal trial or treatment despite of the fact that the other party consisted of citizen of higher stature or a Muslim. Thus Islam has given us a model of equality for each and every individual of the society where everyone has got equal rights. This system on the face of it seems to be quite unconventional and seems to be unpractical but has got a long-term implication. The long-term implication of such a situation is that the lower segment hasn’t got grievances against the authorities or rich segment of the society. This helps in controlling the social upheavals that may occur in a society because of the unrest that might be promoted because of the unjust treatment being meted out to the individuals.


Islam promotes the equality of the even those who have conquered upon by the Muslims. Even then if there is a conflict between the Muslims and Non-Muslims even then the Muslims are not supposed to cross the limits are bound to do their acts with in the limits of the law.


Islamic management style has got a definite role in the business life of the Muslim

Businessmen who in actuality practice the Islamic values. He doesn’t really differentiate between the employees of managerial level or the staff level. He prefers to mingle with each and every worker of the organization. Such a structure not only reduces the cost for the employer but also reduces the managerial problems being faced by the employer in the handling of large number of employees. This sort of an attitude on part of the employer instills a wave of  motivation in the employees which leads to higher productivity and more profits. Thus in the end Islamic system also takes care of the considerations of the entrepreneur but in a different way and in a perspective that is normally ignored by most of the people but one which is highly profitable and is also compatible with the modern needs of time.




In Islam the employer and employee have got a very delicate relationship. Islam gives a wide array of duties and responsibilities to both the employer and the employee. Both the employer and the employee have defined duties and responsibilities for each other and once they have agreed upon a given contract they are obliged to honor it until and unless the other party forgives him the responsibility. Islam has given due rights to the employee (Ajeer) in the form of the payment of the fee at the right time but at the same he has got to fulfill his commitments that he has made to the employer (Aajir). According to the Islamic values the employer (Aajir) is supposed to pay the employee(Ajeer) the money before his sweat from the job gets evaporated. In this Islam has kept a balance upon the delaying tactics of the employers that the employers of this age employ and  make the laborers suffer the difficulties.


However, Islam doesn’t give the unlimited right to the people who are employed by an individual and until and unless the employee delivers what he has promised to deliver he is not supposed to earn the money that he has been promised to receive. In this way Islamic management style gives us a comprehensive method of determining the rights and duties and obligations of one party on the other. Such a system is bound to increase the cooperation between the employer and employee and to increase the efficiency of the organization as a whole.





Islam promotes continuous development and growth of the human beings not only in the spiritual world but also in the material world. But this growth must not be on the expense of others as Islam prohibits exploitation and use of unfair means for the purpose of personal development.


Islam promotes personal efficiency and in turn the efficiency of the organization by promoting healthy competition between the individuals working for the organization. In Islamic management style the participants are encouraged to perform to their best. The Islamic management system promotes highest output from the workers by giving them the reward in term of compensation and also rewarding them by the process of promotion in the ranks of the organization.


The Islamic management style has the touch of the market mechanism in that it promotes competition and efficiency but it prohibits the practices that are normally conducted in today’s market place. Such a situation is bound to increase the productivity of the system and society in the largest interest of the human beings without hurting the interests of the people who are involved in the system.


The Islamic management style also tries to promote the efficiency in the system by increasing the motivation in the system as the people are encouraged in the open environment in front of every individual so that others are also encouraged to their best in order to be one of the people who would be rewarded next time in the same manner. Such a reward and compensation system takes into view both the markets as well as the moralistic point that Islam preaches to its followers. Thus we have a system that is quite effective and promotes social harmony among the various classes of society.




The process of decision making in the Islamic society is quite different from what is being practiced these days across the globe. The Islamic management style doesn’t promote the same method of decision making of using the show of hands and making decision on the number of people on who are in the favor of having their thing done. Rather in Islam the thing that is emphasized is the long-term benefits of the people not just the short sighted approach that the masses choose for so often in the process of getting to a decision.


It is not like that in Islam people don’t have the right raise their voice in the process in which they are going to take part. Each and every participant is allowed to be part of the forum that is going to decide on the future of the path that they are going to follow.


In the process of decision making one individual who is head(Ameer) of the team tries to get the opinion of the individuals who are going to be affected by the decision making. The head or the Ameer first presents the problem to team that he is heading such a problem is then put to the thought process of the individuals present over the place. Then each and every individual is asked one by one to give his view on how to tackle the issue.


Once the issue has been propounded by each and every individual then the head or the Ameer gives his own verdict; which might be one of the solutions presented by the people or the one that the head or the Ameer himself considers the best for the whole party. Once the decision is made by the head then it is imperative for the people to follow the decision taken by the Ameer in its totality and spare no effort in the implementation of the decision. In Islam the masses are not given the right to do whatever they want to do to themselves because Islam is a complete code of conduct and controls the activities of its followers in the way that is most suitable for the long-term benefit of the organization. Thus Islam promotes the best of the decision made by the people in the light of the wisdom of the head or Ameer of the organization.







The concept of Teamwork is the hallmark of the Islamic management style. The Islamic management style promotes that each and every member of the team gives his best to the organization and that they should try to obtain the results rather then watching at the hierarchical distribution of the authority, responsibilities and the duty. In Islamic management style the leader is supposed to be the one who should lead and motivate the whole organization in the way so as to promote the highest level of efficiency of the organization.


In Islamic management style a leader is supposed to be the one who should lead all the way by example.

This can be considered as management example. When the workers are motivated by the leader in this way by the show of his own contribution and effort, then the worker motivation and morale is increased and he becomes more and more eager to contribute to the productivity of his firm.


In Islamic management style there are as such no distance between the leader and the worker and once the leader shows to worker how much he is contributing to the firm then the worker also considers it his responsibility to add this much to the productivity of the firm.












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