Home  >  Opinion

Can GLC’s adopt the MNC culture?

  • We don’t need archaic and bureaucratic methods to restrict our institutions. We want new, inclusive and modern management.

By Ravindran Raman Kutty

Sitting down watching the news and reading the papers, I am wondering if we can migrate or transform Malaysian Government Linked Companies (GLC’s) into a multi-national corporation (MNC) management mode or style. What is stopping us from being one? How is the management style in an MNC so dynamic? Why is the culture of an MNC so cohesive and encouraging? What makes the MNC environment so inviting and customer-centric? Why is the leadership style of an MNC so dynamic and participative? Is it the mind-set of an MNC that makes all the difference?

When I surfed the internet on this topic, I was extremely surprised to find that there were few if not none who have actually done a study or considered this subject as a topic for their dissertation programme. Why are the MNC’s so successful? Why do they have such a wonderful reputation, such a high brand value? Simultaneously, on the other side, why are most of the GLC’s still dependent on government funding?

Why are so very few of them successful? How come none can claim that they are a formidable brand of the world, although Malaysian Airline System (MAS) came close to it before losing its steam? Sime Darby is another excellent example, while Petronas and AirAsia have done well, too.

The recent spate of massive fraud and mismanagement at several large GLC’s shows that we are certainly going in the wrong direction. 1MDB has a hole of RM40 billion, Lembaga Tabung Haji (LTH) needs a cash injection of RM20 billion while Felda needs RM6.23 billion to revive it. It is scary to think if there are more GLC’s like this to be discovered as the new government is trying its best to literally resuscitate the nation engulfed in debts and wrong doings!

My mind is continuously questioning this situation, desperately seeking an answer for all the wrong doings that has dented the overall image of our nation.

When I checked-in at the Thistle Johor, whose lobby was filled with people checking-out, I was pleasantly welcomed by the GM of the hotel.

While waiting for my room to be cleaned, he told me that he had roped in his IT, Finance and Engineering staff to help in the housekeeping as he had been running 100 per cent occupancy for the last one week. He also added that he, too, was rolling up his sleeves and assisting the housekeeping chamber maids in cleaning and preparing the rooms for the new check-ins.

I was pleasantly surprised by the action of this Irish General Manager, who was not only suave when meeting me at the entrance but also checking on the back room of his operations which is the housekeeping department.

This is a hotel managed by an MNC. The service is immaculate. The overall cleanliness is fantastic.

The front-end staffs are polite and polished. When I LinkedIn eagerly asking these questions, some of my friends who have had experience in working in GLC’s and MNC’s were quick to identify the following factors which make the difference between a MNC and a GLC:

Listening to the voice of customers

The customer is the king. They make or break a business. How does a bottle containing water, sugar and carbon sell like hot cakes in any part of the world? How many drinks of this kind have made it in this world? Very few indeed; each may form a small share of the beverage market but nothing like the number one cola of the world, Coca Cola.

Another example is our mamak shops in comparison with McDonald's or Kentucky Fried Chicken. How come the MNC’s have understood customers from all over the world, be it in Asia or Europe?

Why have none of our mamaks achieved the service quality level of McD or KFC? I am aware of Nasi Kandar Kayu and Kopitiam, which have been listed and are also paving their way to other countries.

Secret Recipe is another successful local company, also penetrating the overseas market. Are there any GLC’s making waves in this area? MAS has done well and equally bad and slackened with her own perils of management. Petronas has made it to the Fortune 500 companies -- well done -- can we push the mark to become the top 100? Is this possible? AirAsia is doing well, hope it stays that way! GLC’s must also learn from the AirAsia's lesson learnt, for their support for a political party and earning the wrath of the social media during the last GE14, May 2018.

Listening to the voice of employees

The Thistle Hotel example is simply great. The GM goes down and mobilises his staff from all departments, and they were all willing and keen to roll up their sleeves and work together. How did this happen? Simply because the staff has been continuously inspired, motivated and trained to provide customer satisfaction and loyalty.

In most MNC’s, such as Motorola where I used to work, it is compulsory for every employee to carry a training booklet which clearly spells out the training programme that you must attend and have attended. The GM of Motorola or the HR Head would conduct random checks by referring to the training booklet, which is also a note book. How many GLC’s have even thought of this practice let alone attempted to implement it? I wonder if this is impossible to do. Can we copy the Motorola 6 Sigma model?

Employees are the backbone of the company. How many GLC employees join and retire from GLC’s, and are known or remembered for their dynamism or pessimism? I know of several GLC’s whose employee turnover is far greater that their financial turnover.

Listening to the voice of processes

By adopting a mind-set of continuous improvements and ensure that the key customer-related processes meet customer needs and expectations. If our ‘Satay Malaysia’ franchise had been well-studied and executed, I am sure we would have given McD and KFC a run for their money. Where is the ‘Satay Malaysia’ initiative today?

The GLC’s must be proactive and possess the highest standard of ensuring the customer demands are carefully studied and executed.

We may be great in coming up with the policies or even campaigns, but we severely lack the power of the Research & Development culture to sustain or even exceed the demands of the customers.

Companies like Walmart, Sinopec, Toyota, Microsoft, Samsung, Volkswagen, Acer, Disney and Coca Cola are examples of companies which respectively spend almost a third of their income on R&D, thus staying on top as a leading and formidable product or service provider.

I was made to understand that the oil extraction costs per hectare by the GLC plantation companies are much higher than the private sector plantation companies. This is a major factor hampering the GLC’s profitability thus resulting in major losses. It is also reported that the higher costs of production of the GLC’s like FGV and PNB has a direct impact on their bottom line compared to the private companies like IOI Corporation or United Plantations.

Trust and empowering people

Our GLC’s are excellent with Key Performer Indicators, but they stop at that point. They hesitate to trust and empower the management and staff to explore and execute projects. If we hire right and fire the rotten, we can certainly empower the best. The MNC’s give you all the empowerment and ensure the deliverables are met.

If the deliverables are not met, the staff are shown the door. This may be too much to handle within our context, but Malaysians working in MNC’s are very accustomed to this practice.

Why not bring more people like Tony Fernandes into our GLC’s and make more things happen?

Micromanagement in GLC’s is another common trait. There are CEO’s in GLC’s who spend time deciding on which photo to use in a brochure or what the storyline for the corporate video should be, rehearsing several times day and night for a presentation or event, having more than seven signatures on a proposal, vetting through every letter and memo. Instead, they should perhaps focus their efforts on empowering the management team to excel in achieving the bigger picture of the company, as well as place more emphasis on developing and grooming leaders as part of their succession planning.

Reward the best, remove the worst

It is equally important to ensure that the remuneration program is well planned and a proper career path is put in place for every employee. Ensure proper meritocracy program is in place, where the best are rewarded and the dead woods are weeded out.

In the interest of building a greater nation, the GLC’s have a cogent responsibility to build, nurture and sustain the best brains and deliver a holistic Malaysia Incorporated. We must stop appointing the CEO’s and Board members based on political affiliations.

MNC cultures and practices are proven ingredients for every Fortune 500 companies, why not our GLC’s study them carefully and prove to the nation that the “proof of the pudding is in the eating”.

I am sure our GLC’s can adopt the best practices of MNC’s without reinventing the wheels.

Cut the bureaucracy

MNC’s are anti-bureaucracy where else GLC’s are notoriously known for bureaucracy at every level.

Imagine if you want to raise a purchase requisition or to repair a company car which has had an accident? It will take you series and series of papers and various levels of approvals. GLC’s are also known for delayed payments, as there is a total lack of ownership and lack of trust as compared to MNC’s who are driven by strict SOP’s and yet easy level of execution.

Clear goals and objectives

MNC’s are goal driven to achieve profit. GLC’s are slightly different as some GLC’s are directly set-up for two reasons. One is GLC’s like PNB, Sime Darby, Petronas, Felda, TNB, Telekom, IWK, IHH Healthcare, Proton, are for profit and GLC’s like MIMOS, MDEC, ISIS, ECER, NICER, are cost centred for efficiency and efficacy supported by policy interventions to further spruce the industry, economy, technology or even social agendas of the country. This clarity must be stated from the beginning and we should stop mushrooming of GLC’s to suit political needs.

Transparent open tender system

GLC’s must emulate the MNC’s method of procurement to avoid the wasteful misallocation of government funds that have happened in the past. Periodic and transparent reporting on the of the GLC’s like what the MNC’s do every quarterly to the Board members.

Reduce government involvement

The government must reduce the its direct participation in the equity ownership of the companies to allow private sector to play a bigger role. This practice of liquidating government ownership would help stimulate private sector investment by reducing the crowding out effect caused by government investment. This will create a healthy corporate sector ambience and financial management as opposed to grants mindset among the GLC’s. The reduction of government involvement will also reduce political parasites sitting in the boards and managements of the GLC’s, which has proven to be wrong and fatal for almost every GLC that is operating in our country.

Malaysia needs a total revisit. We cannot sit back on our laurels and drain the nation’s well-being.

GLC’s must be shaped to meet the rising new challenges. We don’t need archaic and bureaucratic methods to restrict our institutions. We want new, inclusive and modern management with robust individuals leading the GLC’s emulating best practices of the industry. While we can keep adhering to our cultural values and beliefs, we should not never allow GLC’s to become a cost centre relying totally on the government grants and support system. Proven GLC’s must be made self-sustainable and go public and this will make them as truly a Malaysian success story.

(Ravindran Raman Kutty is an active social worker.)

Copyright © 2019 Sin Chew Media Corporation Berhad (98702-V).
All rights reserved. Contact us : [email protected]