Malaysia Analysis: Economic, Cultural, Technical, Environmental

The official name for Malaysia is the Federation of Malaysia which is a form of federated constitutional monarchy under the Supreme Head of State of Malaysia, His Majesty, the Yang di-Pertuan Agong. The Yang di-Pertuan Agong will elect who is the becoming Prime Minister and with the Prime Minster advice, also elect the cabinets (Malaysia: Political Structure 2009). As the constitutional monarch is concern, the Yang di-Pertuan Agong will holds office for five years after being elected by the conference of Rulers (Politics in Malaysia 2000). A few political parties can be found in Malaysia but the main political party is the National Front (Barisan National). It is a multiracial party which consists of 14 parties with the largest being the United Malays National Organization (UMNO). As for the House of Representatives (Dewan Rakyat), they have 192 members and are the legislative authority of Malaysia. These representatives are elected by popular vote for the terms of five years (Politics in Malaysia 2000).

According to Prime Minister, Najib Razak, since assuming office on April 3, 2009, he has wasted no time implementing the changes he says that are needed to improve the struggling economy and prepare Malaysia to accomplish developed nation status by 2020 (Malaysia: Political Constraints Slow Economic Reform 2009). This shows that the government is trying their best to improve and it is proven when ‘The Tehran Time (August 26, 2009) reported that Malaysia’s economy is recovery from slump.’ Apart from that ‘The New Politikler (June 8, 2009) also reported that the nations are very satisfied with the Prime Minister’s performance toward improving the country development.’ Thought this satisfaction and recovering stages that the government is making, this may give Harvard University’s an opportunity to test their business venture there.

As mention by the former Secretary of State Christopher (1995), Malaysia’s commitment to education reflects its historic role as a crossroads of culture and commerce. And today, Malaysia has become one of the top 10 countries that supply foreign students to the United States and now the United State are making a very significant contribution in Malaysia. Through this good relationship in handling education between the United State and the Malaysia may give an advantage for United State University like Harvard University to expand their business or educational level to Malaysia.

In Malaysia, in order to establish a private education institution, companies are required to submit a registration application to the Department of Private Education of the Ministry of Education and Department of Private Education of the Ministry of Higher Education (License and Permit n.d.). Thus, if Harvard University wishes to expend their operation to the Malaysia market, firstly, they have to fill up the application forms and submit it to the Department of Private Education of the Ministry of Education and Department of Private Education of the Ministry of Higher Education for approval. After the license approval, they can proceed with the other applications like land application and buildings.

3.2 Economic Analysis of Malaysia

This year (2009), it is believed that the ringgit is expected to weaken against the US dollar as macroeconomic conditions in Malaysia deteriorate. The exchange rate against the US dollar has been erratic in recent months (Malaysia: Currency Forecast 2009). This movement might be caused by the fluctuations in the US dollar. A weaker ringgit might help the US trade competitiveness. If Harvard University would come into the Malaysia market, it could be an advantage for them since the local currency is lower than theirs. However, according to them as well, the ringgit will be expected to strengthen against the US dollar in 2010 when the economy picks up significant momentum compared with the US (Malaysia: Currency Forecast 2009). This could be a threat for them when the Malaysia currency begins to rise. Higher investment is needed and might be an issue for them in the future.

According to Firch forecast, this year (2009), Malaysian economy will grow up to 1.5% better than South Korea, Taiwan, Thailand, Hong Kong and Singapore (Chong 2009). Since that growing economy can bring benefits like more job opportunities and more growth, this can bring benefits for Harvard University as well when they enter the Malaysia market. As for the unemployment rate for Malaysia, according to ‘The Star (2009), the International Trade and Industry Deputy Minister, Datuk Mukhriz Tun Mahathir stated that the domestic unemployment rate may rise to 4.5% by year-end from 3.7% last year and is the highest unemployment rate ever for the country.’ Since that this is a really high figure of unemployment rate in Malaysia, when Harvard University enters the Malaysia market, this could be strength for both parties. Firstly, Harvard will get to have cheaper labor cost for both skilled and unskilled employees and secondly, Malaysia can decrease their high unemployment rate.

For foreign investors to enter the Malaysian market, there are some incentives given by the Malaysian government. According to ‘Bernama (2008), Malaysian government continue to give tax relief to enhance private investors, incentives to attract foreign direct investments as well as provide more funds to boost regional economic corridors despite tough economic conditions.’ Since that Harvard University is a US brand University, they could get tax relief and some incentives from the Malaysian government upon investing in the country. ‘Bernama (2008) also stated that the government has allocated an additional RM300 million under the Strategic Investment Fund to further strengthen private investment. This fund will include the implementation of education industry in Malaysia. In this case, besides just tax relief, since Harvard University is an education industry, they could also get funds from the government in dealing with their operations.’

3.3 Cultural Analysis of Malaysia

According to Almeida (2007), Malaysia represents a unique fusion of Malay, Indian and Chinese traditions, creating a multicultural and pluralistic nation that has its character strongly rooted in social harmony, religion and pride in its ancestral background. She also added that today, Malaysia offers a unique blend of old traditional culture and new technological innovations. Since Malaysia is a multicultural nation with different races and religion around the corner, for Harvard University to enter the Malaysia market that could not be hard due to the higher level of acceptance from the nation towards different cultures and religions.

In Malaysia, the official language of Malaysia is Bahasa Malaysia but English is very widely spoken by the nations. There are other major languages as well that are being used in the country such as Chinese language and Tamil language. The other part of Malaysian uniqueness is that most of the Malaysian can speak more than one languages and many others dialects too (The Malaysia Page for Tourists, Kids and Teachers 1997). This could be strength for Harvard University to enter the Malaysia market although Harvard University is a US brand university that uses English as their main language, they could be no problem in entering the Malaysian market as the nations can speak quit well English. In fact, most of the nations in Malaysia receive English language teaching as early as preschool.

Malaysia is a country of collectivism. It depends much on the help from other countries. However, a study found that people from a collectivist country like Malaysia and Singapore has more strongly correlated independent and interdependent self-concepts than people from individualist countries like the US and the Australia (Lee and Kacen 1999). In this case, since Malaysia is a collectivist country and the US is an individualist country, dispute might occur between these two countries if they where to merge together. According to Parboteeach, Bronson and Cullen (2005), collectivist culture does not bring harms to others and a collectivist culture was positively related to a willingness to justify ethically suspect behavior. Although so, but the difference in culture might can still bring dispute towards each other. This could be a threat for Harvard University if they would want to venture into Malaysia market. Malaysia is a high-power distance country with low uncertainty avoidance and moderate quantity of masculinity (Geert Hofstede Cultural Dimensions 2009). Believing this, Harvard University may not tape into consumers who have low living standards, but they can still target those who can afford.

3.4 Technology Analysis of Malaysia

Malaysia is an emerging Asian economy aspiring to move towards a technology-driven and high-tech production-base pattern of development (Mun and Su 2004). In fact, Malaysia has been categorized in a group of countries that has the potential to develop their own technology (Mani and Bartzokas 2002). Few years back, former Deputy Prime Minister Sri Najib Tun Razak which is currently the Prime Minster announced that Malaysia had used a new remote sensing technology to detect illegal logging and forest fires in the country (Malaysia Adopts New Remote Sensing Technology to Detect Illegal Forest Burning 2006). This shows how well prepared is the country to used new technologies as their solutions to their current situations. This proves that Malaysia has the potential to provide the best technology equipment that might benefit Harvard University as they on-going their operation in the country.

According to Khosrowpour (1998), the well use of information technology in a business enables to smooth an organization. Currently, the country has various types of facilities for communication. They have telecommunication facilities such as telephones, fax and emails in the country. This will be an advantage for Harvard University if Harvard University will expand into Malaysia market because whenever they have problems or inquiries, they can just communicate through the facilities that have been provided by the government of Malaysia. Apart from that, the advance in telecommunication can also save the cost of travelling. For instance, if meeting is needed, staff can use video conferencing as their tools to communicate instead of taking a plane and travel for 10 hours just for a day meeting.

Besides telecommunication, Malaysia is also advance in transportation. They have transportation like planes, cars, trucks and other kinds of transportation available in the country that can bring one from places to places. This will make easy for Harvard University in training their staff if they need to send them over to the US for training purposes, they can travel by plane to their destination. Apart from that, the use of transportation like planes can help Harvard University which will be located in East Malaysia, Kota Kinabalu being attracted by students outside that particular state or even outside the country itself. They could either travel by air or by sea. This will be another advantage for Harvard University if they will expand their operation to the Malaysia market.

3.5 Environmental Analysis of Malaysia

Malaysia is a country that is made up of two regions. The Peninsular Malaysia which lies between Singapore and Thailand and East Malaysia across the South China Sea on the island of Borneo which has a total land of 330, 400 sq km (Geography and Climate 2009). From time to time, the population of this country keeps increasing. It is proven when in year 1991, the total populations are 175, 63.400, year 2000, the total populations are 23, 274.700 and year 2005, the total populations are 26, 127.700 (Saw 2007). In this case, to compare year 2000 and 2005, there is an increase of a total of 2, 853.000 people which will be something good to Harvard University if Harvard University would expand their operation to Malaysia market as there will be a demand on education by these increasing populations.

As for the climate of the country, Malaysia is a country where it is warm throughout the year with temperature ranges from 20°C to 30°C on an average (Climate of Malaysia n.d.). This shows that Malaysia essentially observes tropical weather but it is believed that it is never too hot. In this case, this could be strength for the staff of Harvard University which will be based in Malaysia as back than in the US, they have 4 seasons while in Malaysia, only one season throughout the year. Since the American tends to love summer, tropical weather like Malaysia will not be a difficult place for them to fit in.

According to Lau (2009), Malaysian average income in a month is around RM 3, 686 per month which has not been deducted for utilities bills and all. After deduction, nothing much left. As Harvard University which is already well-known for its standard, the price of entering that particular university is not cheap and this could be a threat for Harvard University when they enter into the Malaysian market as they cannot attract a lot of students from the country itself. However, by referring to appendix 1, the median salary of job as a lecturer is at around RM44, 277 a year with less than RM4, 000 a month (Salary Survey for Country: Malaysia 2009). This could be an advantage for Harvard University if they enter the market as the pay rate for lecturers are low.

3.6 Competitive Audit

Having probed into the competitive environment, it is very obvious that in Malaysia market, there are already a few competitions for Harvard University. In the past few years, Malaysia has offered MBA courses in partnership with foreign universities. Those foreign universities are as follows:

Asian Institute of Management, Philippines

Charles Sturt University, Australia

Cranfield University, UK

Henley Management College, UK

Heriot-Watt University, Edinburgh, UK

European University of Ireland

New Castle Australia

Nottingham Trent University, UK in association with Financial Time Management

Southern Cross Australia

Staffordshire University, UK

The American University of Hawaii, USA

The University of Hull, UK

University of Bath, UK

University of Dubuque, Iowa, USA

University of Lincolnshire & Humbershire, UK

University of Reading, UK

University of South Australia

University of Strathclyde, UK (Malaysia’s Master in Business Administration 2001).

This could bring threats to Harvard University as there have already quit a number of private universities that offered MBA programs in Malaysia. Apart from the above, the Malaysia local universities does also offered MBA program but only limits to few government universities only. Those universities are such as:

• Malaysia Multimedia University
• Malaysian University
• University of Malaysia Duilasa
• University of Putrajaya Malaysia
• International Islamic University of Malaysia
• Malaysia Technology University
• University of Malaya (Malaysia’s Master in Business Administration 2001).

Although the Malaysia government does also provide MBA program in their local universities, however, these universities can only be entered by the Malaysian themselves. It is a no for the non-Malaysian. Thus, even there are a few local universities in Malaysia that offers MBA programs, Harvard University that comes with standards and reputations can still grab a stand in the Malaysia market.

There is a research found that parents tend to switch their children to private universities from the government ones (Sennholz 2003). This could be strength for Harvard University. Although Harvard University only offers MBA programs, if parents have this kind of mentally of going into private universities instead of their local ones, children might grow up with this kind of mentality as well. For instance, if a student has studied all the way in private schools, there is a big probability that this student might enter to a private university like Harvard University to continue with a Master. Thus, although Harvard University might face competition with the local universities, but there are still some people out there that will prefer private universities especially like Harvard University which is already well-known of their standards and reputations.