A critical analysis of policy initiatives involving small and medium enterprises in Malaysia

This thesis is a study of Malaysian government policy for stimulating the role of small and medium enterprises (SMEs) in economic and industrialization growth. It was envisaged that SMEs would be one of the primary foundations for the country's future industrial growth. Besides being playing a...

Full description

Saved in:

Bibliographic Details
Main Author:	Abdul Hamid, Abu Bakar
Format:	Thesis
Language:	English
Published:	2003
Subjects:	HF Commerce
Online Access:	http://eprints.utm.my/id/eprint/6430/1/AbuBakarAbdulHamidPFC2003.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-utm-ep.6430
record_format	uketd_dc
spelling	my-utm-ep.64302018-09-27T04:01:38Z A critical analysis of policy initiatives involving small and medium enterprises in Malaysia 2003-09 Abdul Hamid, Abu Bakar HF Commerce This thesis is a study of Malaysian government policy for stimulating the role of small and medium enterprises (SMEs) in economic and industrialization growth. It was envisaged that SMEs would be one of the primary foundations for the country's future industrial growth. Besides being playing a major role in generating employment, SMEs were to be critical in strengthening industrial linkages, penetrating the markets and generating export earnings. It had been emphasised that there is a need to set programmes into the industrial process which enhance industrial linkages between SMEs as suppliers of parts and components and large enterprises. However, as reported by UNIDO (1995) the implementation of such programmes have not always been successful in developing countries due to lack of communications between agencies, lack of private sector investment, inconsistency in implementation and unfair regulatory burdens placed on SMEs. Furthermore, the government of Malaysia (1995) commented that common features of SMEs are poor quality, delays in delivering their services, absence of technological innovation and a of lack managerial capabilities. For the empirical study, a survey and an in-depth case study were conducted to determine the government policies for encouraging linkages between large firms and the SMEs, specifically the vendor development programme (VDP) and the local content requirement programme (LCR). The study uses the rich data of interviews and observation to evaluate critically the positive and negative lessons from the two initiatives. The results from the study show that SMEs and anchor companies welcomed government policy to stimulate SMEs. However, several failures of the VDP were recorded at the implementation stage. In contrast the LCR had few critical problems and benefited SMEs and anchor companies. Numerous incentives are available in the promotion of SMEs have not fully benefited SMEs overall due to implementation obstacles and the managers' preference to concentrate on the daily operation of their SME. The concept of close relationships between an anchor company and supplying SMEs is still relatively new and there was evidence in the failure of SMEs and anchor company to communicate openly. Nonetheless, within the study the performance of SMEs in fulfilling the operating requirements was encouraging as evidenced by the absence of negative comments from the anchor companies regarding on the delivery, quality and cost of the SMEs. The study recommends that there should be a continuous communication and commitment between anchor company and the SMEs with periodic visits and monitoring by the appointed government agency. In addition lessons should be learnt from the operating of the VDP concept by Proton and Japanese firms. Finally, anchor company should have a high level of market access either to domestic and overseas markets. 2003-09 Thesis http://eprints.utm.my/id/eprint/6430/ http://eprints.utm.my/id/eprint/6430/1/AbuBakarAbdulHamidPFC2003.pdf application/pdf en public http://dms.library.utm.my:8080/vital/access/manager/Repository/vital:62268 phd doctoral University of Derby, England, Derbyshire Business School Derbyshire Business School
institution	Universiti Teknologi Malaysia
collection	UTM Institutional Repository
language	English
topic	HF Commerce
spellingShingle	HF Commerce Abdul Hamid, Abu Bakar A critical analysis of policy initiatives involving small and medium enterprises in Malaysia
description	This thesis is a study of Malaysian government policy for stimulating the role of small and medium enterprises (SMEs) in economic and industrialization growth. It was envisaged that SMEs would be one of the primary foundations for the country's future industrial growth. Besides being playing a major role in generating employment, SMEs were to be critical in strengthening industrial linkages, penetrating the markets and generating export earnings. It had been emphasised that there is a need to set programmes into the industrial process which enhance industrial linkages between SMEs as suppliers of parts and components and large enterprises. However, as reported by UNIDO (1995) the implementation of such programmes have not always been successful in developing countries due to lack of communications between agencies, lack of private sector investment, inconsistency in implementation and unfair regulatory burdens placed on SMEs. Furthermore, the government of Malaysia (1995) commented that common features of SMEs are poor quality, delays in delivering their services, absence of technological innovation and a of lack managerial capabilities. For the empirical study, a survey and an in-depth case study were conducted to determine the government policies for encouraging linkages between large firms and the SMEs, specifically the vendor development programme (VDP) and the local content requirement programme (LCR). The study uses the rich data of interviews and observation to evaluate critically the positive and negative lessons from the two initiatives. The results from the study show that SMEs and anchor companies welcomed government policy to stimulate SMEs. However, several failures of the VDP were recorded at the implementation stage. In contrast the LCR had few critical problems and benefited SMEs and anchor companies. Numerous incentives are available in the promotion of SMEs have not fully benefited SMEs overall due to implementation obstacles and the managers' preference to concentrate on the daily operation of their SME. The concept of close relationships between an anchor company and supplying SMEs is still relatively new and there was evidence in the failure of SMEs and anchor company to communicate openly. Nonetheless, within the study the performance of SMEs in fulfilling the operating requirements was encouraging as evidenced by the absence of negative comments from the anchor companies regarding on the delivery, quality and cost of the SMEs. The study recommends that there should be a continuous communication and commitment between anchor company and the SMEs with periodic visits and monitoring by the appointed government agency. In addition lessons should be learnt from the operating of the VDP concept by Proton and Japanese firms. Finally, anchor company should have a high level of market access either to domestic and overseas markets.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Abdul Hamid, Abu Bakar
author_facet	Abdul Hamid, Abu Bakar
author_sort	Abdul Hamid, Abu Bakar
title	A critical analysis of policy initiatives involving small and medium enterprises in Malaysia
title_short	A critical analysis of policy initiatives involving small and medium enterprises in Malaysia
title_full	A critical analysis of policy initiatives involving small and medium enterprises in Malaysia
title_fullStr	A critical analysis of policy initiatives involving small and medium enterprises in Malaysia
title_full_unstemmed	A critical analysis of policy initiatives involving small and medium enterprises in Malaysia
title_sort	critical analysis of policy initiatives involving small and medium enterprises in malaysia
granting_institution	University of Derby, England, Derbyshire Business School
granting_department	Derbyshire Business School
publishDate	2003
url	http://eprints.utm.my/id/eprint/6430/1/AbuBakarAbdulHamidPFC2003.pdf
_version_	1747814658180382720

A critical analysis of policy initiatives involving small and medium enterprises in Malaysia

Similar Items