Malaysian Manufacturing Research Articles

Assessing the influence of social capital and innovations on environmental performance of manufacturing SMEs

AbstractPursuing sustainable development has become a necessity for all types of businesses, including small medium enterprises (SMEs). Owing to the increasing stakeholder pressures towards environmental conservation, innovations may be required given SMEs' limited resources. Drawing upon the resource‐based view, this study aims to shed light on how social capital helps small manufacturing firms to innovate, and how innovations, in turn, enhance their environmental performance. Based on data gathered from 203 small Malaysian manufacturers and analysed using partial least squares structural equation modelling (PLS‐SEM), the findings emphasised the crucial role of social capital, process innovation and digital innovation in enhancing a small firm's environmental performance. Both process innovation and digital innovation mediate the relationship between social capital and environmental performance, of which digital innovation held a stronger effect. Additionally, findings from the Importance Performance Map Analysis (IPMA) specified that digital innovation has a high importance for environmental performance but showed a low performance. Overall, the model exhibits medium predictive power, and provides theoretical and practical implications for guiding future directions in enhancing the environmental performance of manufacturing SMEs.

Environmental Analysis of Power Generation from Pineapple Waste

Malaysia's manufacturing and transportation sectors are largely reliant on fossil fuels. In 2009, fossil fuels such as natural gas, coal, diesel oil, and palm oil were used to produce 94.5 percent of electricity. Concerns about energy security, crude oil price volatility, and climate change are all driving major changes in how energy, specifically electricity, is produced, distributed, and consumed. In this regard, renewable energy resources are becoming more appealing in Malaysia for long-term energy growth. There is because Malaysia has an abundance of renewable energy sources, the most important of which are biomass and solar. This article presents the potential use of pineapple wastes as one of renewable sources of energy (biomass) in Malaysia and their impacts towards environment.

Productivity effect of minimum wage in the manufacturing sector of Malaysia

This study measured the effectiveness of Malaysia's minimum wage by assessing the effect of minimum wage on productivity in the Malaysian manufacturing sector. Panel data covering a 10-year period were collected from 297 manufacturing firms in Peninsular Malaysia that were registered with the Federation of Malaysian Manufacturers (FMM) and analysed using static panel data regression to examine the effect of minimum wage on productivity. Panel data analysis revealed that the study's random effect model (REM) was the best model to describe the relationship between the minimum wage and productivity. The study found that the minimum wage improved labour productivity. Therefore, the minimum wage policy that was introduced in Malaysia under the Minimum Wage Order 2012 increased firms’ productivity. Increasing workers' wages motivated them to be more productive. This study's results are useful in highlighting to regulators, policymakers, manufacturing associations, employers, and workers the effects of the minimum wage. The implications of the findings will help improve the national minimum wage policy.

Cognitive Motivational Perspectives of Performance Measurement System and Organisational Commitment: Role Ambiguity as a Mediator

The use of Comprehensive Performance Measurement System (CPMS) in facilitating and influencing decisions has been predominant for such purposes. It is also a complex link of CPMS with individual performance which has been evidenced in the literature in recent years. Nonetheless, prior studies have shown inconsistent findings on CPMS informational characteristics and their behavioral implications. Therefore, by taking the cognitive motivational theory and role theory into account, the current study contends the usefulness of CPMS information in increasing role expectation and motivation. Accordingly, this study examines the influence of CPMS on the role ambiguity of managers and organizational commitment by collecting data from 120 business unit managers of manufacturing companies that are registered under the Federation of Malaysian Manufacturers (FMM). To further examine the mediating effect, the study employed Partial Least Squares and the Sobel test and found that the informational characteristics of CPMS enhance organizational commitment by reducing role ambiguity. Overall, CPMS may provide useful information or feedback to better understand the roles of managers to essentially enhance motivation and improve commitment.

The Effects of Health, Labor and Capital towards Labor Productivity in Manufacturing Industries

The manufacturing industry is the focus of this study, in which the proportion of its contribution to economic growth is experiencing a decreasing trend recently. Does it involve factors such as the input of capital, health, or workers that give significant impacts on labor productivity in the Malaysian manufacturing industry? This paper discovered the relationship between capital, health, and workers that consist of foreign and local labor with the labor productivity in the Malaysian manufacturing industry from 1986 to 2020. The Cobb-Douglas production function was used to derive the model specification in this study. The results showed that all variables are significant, in which capital and health have a positive relationship, whilst the factor of labor including local and foreign labor has a negative relationship with labor productivity. These findings may provide some insights into the improvement of manufacturing industries’ performance in Malaysia. It would be useful in determining which input factors significantly affected the productivity of manufacturing labor.

Exploring the Impact of Contingency Theory on Sustainable Innovation in Malaysian Manufacturing Firms

This study looks at the impact of contingency theory on sustainable innovation in Malaysian manufacturing firms. A quantitative approach was used, with convenience sampling to select participants from a target population of Malaysian manufacturing employees. An online survey distributed via email was used to collect 101 sets of data for the study. PLS-SEM (Partial Least Squares Structural Equation Modeling) was used to analyze the collected data. According to the findings, corporate sustainable support policies and sustainable incentives have a significant positive impact on sustainable innovation in Malaysian manufacturing firms, whereas top management commitment was found to be insignificant. Companies that prioritize sustainable practices through policies and incentives are more likely to promote sustainable innovation, according to the findings. As a result, businesses should prioritize developing these two attributes in order to foster sustainable innovation, thereby improving sustainability practices and contributing to the country’s long-term development goals. Future research should, however, investigate why top management commitment may not be a significant driver of sustainable innovation in Malaysian manufacturing firms.

An Analysis of Eco-Innovation Capabilities among Small and Medium Enterprises in Malaysia

The objective of this study is to look at how Malaysian small and medium enterprises (SMEs) are applying eco-innovation capabilities in order to sustain their business performance. Eco-innovation capabilities are represented in this study by five different types of practices, with the indication of unexpected circumstances: eco-product innovation, eco-process innovation, eco-organisational innovation, eco-marketing innovation, and eco-technology innovation. The qualitative research approach was used in the study, and the content analysis was based on in-depth interviews with six top-level managers/owners of Malaysian manufacturing SMEs. According to the data, more than half of SMEs acquired eco-innovation capabilities in order to continue their business performance and thrive in the business sector, while having to confront certain hurdles due to unforeseen situations. According to the findings, eco-innovation capabilities encourage SMEs to engage in waste management, recycling or reusing resources, research and development, sustainable goods that utilize customer requests, and the use of environment management machines. Thus, the findings of this study may aid the efforts of government agencies, policymakers, and top-tier manufacturing SMEs in building an exceptional innovation platform on which SMEs may rely for assistance and support in preserving their business performance in the future and beyond.

Effects of internal and external corporate social responsibility on employee job satisfaction during a pandemic: A medical device industry perspective

The outbreak of the COVID-19 pandemic has dramatically changed human lifestyles and contributed to the creation of a new normal in the business environment. This study examines the direct and indirect impacts of internal and external corporate social responsibility (CSR) practices on employee job satisfaction through organisational identification, conditional on employee age. A total of 236 valid responses were received from eight multinational medical device manufacturers in Malaysia. Partial least squares and PROCESS algorithms were employed to assess the hypothesised interactions between the predictors and criterion variables. The empirical results showed that internal CSR (i.e., CSR to employee) could significantly drive a greater sense of belonging and work satisfaction. Surprisingly, however, external CSR (i.e., CSR to community) negatively affects job fulfilment in the medical devices industry during the pandemic. Nevertheless, the findings also showed that ongoing CSR activities in the community could build organisational identification and subsequently improve job satisfaction. Conversely, CSR to environment did not statistically influence job satisfaction, either directly or indirectly. The mediating effects of organisational identification were not associated with employee age. This study provides a practical framework for effective CSR strategies amid the pandemic that can help organisations align with social responsibility, enhance their reputation, and contribute to society.

Board Characteristics, Firm Characteristics, Technological Innovation and Manufacturing Firm Performance: Conceptual Paper

This paper aims to study a potential interrelationship between board characteristics, firm characteristics, technological innovation, and firm performance in the manufacturing sector. The paper is a conceptual paper. It offers a brief review of the literature regarding on these four variables. This study intends to employ a quantitative research approach in determining the determinants of firm performance. Several methods including online and offline material from article journals, books and industrial reports are used to collect and analyzed the literature. This study is grounded on RBV theory. The theoretical argument and literature findings indicate that viewing the firm performance from the perspective of internal sources by incorporating the three determinants, which include board characteristics, firm characteristics, and technological innovation, has the potential to improve manufacturing firm performance. This study reveals that there have been very limited studies have combined the three internal determinants of firm performance such as board characteristics, firm characteristics, and technological innovation on firm performance. As a result of focusing on internal firm resources, the framework will provide a greater emphasis on strategic sources that the firm owns and can fully utilize in order to improve the Malaysian manufacturing firm performance. Therefore, this warrants more investigation, and future studies are needed to further analyze the proposed framework.

The Relationship of Industry 4.0 and Business Performance in Malaysian Manufacturing Firms: A PLS-SEM Model

Since the last decade, the industrial sector had rapidly evolved with the presence of state-of-the-art technologies that had transformed industries, society, as well as processes due to the novel opportunities stipulated by Industry 4.0 Digital Technologies. Thus, manufacturing industry internationally have been pursuing the paradigm shift and attempting to implement Industry 4.0 Digital Technologies into their respective organizations. However, albeit the fact that Industry 4.0 had promised substantial improvement to manufacturing system and processes, the correlation and influence of Industry 4.0 Digital Technologies upon Business Performance are still ambivalent as there are insufficient empirical data and studies to support the implementation and lots of challenges were met during the process of implementation. Therefore, the paper aims to provide empirical evidence collected from manufacturing firms in Malaysia via questionnaire to bridge the literature gap by identifying the correlation concerning Industry 4.0 Digital Technologies and Business Performance with Partial Least Squares Structural Equation Modelling (PLS-SEM) method to model their correlation. Accordingly, 124 responses were gathered, and results implied that Industry 4.0 Digital Technologies are directly positive correlated with Business Performance. In other words, manufacturing firms intending on achieving high excellence in Business Performance, Industry 4.0 Digital Technologies will be the impeccable solution.

Sustainability and Lean Manufacturing Practices: The Mediating Role of Manufacturing Performance

Lean manufacturing practices (LMP) is considered a manufacturing philosophy that can lead to global manufacturing performance. It gives manufacturers a competitive advantage by enhancing their economic, environmental, and social positions. This study aims to examine the relationship between LMP and sustainability among Malaysia’s manufacturing organisations. Specifically, it investigates the mediating role of manufacturing performance (MP) on the relationship between LMP and sustainability. Consequently, this study integrates both the Resource-Based View (RBV) and Stakeholder Theory to map and position the possible relationships between the variables in the conceptual framework. This study applies the quantitative method in which a questionnaire is developed through an extensive literature review. The population size for this study is 2368 firms, based on the Federation of Malaysian Manufacturers (FMM). In this study, the unit of analysis embodies the middle up to the top management of the selected firms. The survey questionnaires were randomly distributed to a sample of 335 manufacturing organisations in Malaysia, with a 30.4 per cent response rate. The data obtained were analysed using PLS-SEM. The results indicated i) a positive relationship between LMP and sustainability, ii) a positive relationship between LMP and MP, iii) a positive relationship between MP and sustainability, and iv) a mediating role of MP in the relationship between LMP and sustainability. Hence, LMP provides a better insight into Malaysia’s manufacturing organisations by considering manufacturing performance and economical, social, and environmental sustainability. Additionally, future research also can be done through empirical study if the variables of lean manufacturing practices can be formed into multidimensionality which current study had tested lean manufacturing practices in unidimensionality. Multidimensionality perhaps could identify precise practices of lean manufacturing practices in contribution to increase the manufacturing performance towards sustainability.

Exploring moderating effects of industry 4.0 adoption on sustainable performance of Malaysian manufacturing organizations

ABSTRACT Industry 4.0 adoption helps businesses to achieve sustainable operations. This study aims to identify the drivers of firms’ sustainable performance and explore the moderating role of industry 4.0 adoption on financial, environmental, and social sustainable performance. The triple bottom line, resource-based view, and stakeholder theory were used as the foundational theories and data was collected from 269 Malaysian manufacturing three organizations. The results showed significant effects of stakeholder pressure, organization capabilities, green marketing, and green entrepreneurial orientation on organizational sustainable performance. Meanwhile, the direct impacts of organizational sustainable performance on financial, environmental, and social aspects were supported. Industry 4.0 adoption showed remarkable moderating effects on financial and environmental aspects of sustainable performance. The study provides manufacturers with significant insights into how they need to respond to sustainable development in effective ways. The findings can assist managers and policymakers in setting strategic plans to achieve sustainable performance through industry 4.0 adoption.

Measuring Organisational Effectiveness through Employee Involvement in Malaysian Manufacturing Industry

Business organisations need to operate effectively in ensuring the company’s overall success. Besides, employee involvement is one of the important issues that should be focused by organisations nowadays in ensuring organisation effectiveness in strengthening the company performance. In light of this, the current study looked into employee involvement and how it affects the organisational effectiveness in the manufacturing industry in Selangor. It was conducted to analyse which elements of employee involvement that have the most impact on organisational effectiveness. Three dimensions of employee involvement were tested against organisational effectiveness in this cross-sectional study, namely employee empowerment, team orientation and capability development. The primary data were collected from a group of 206 employees in Selangor through a self-administered questionnaire survey. Analysis of descriptive, correlation and multiple regression were carried out to test the variables of employee involvement for the predictions on organisational effectiveness. The results of the study revealed that all three independent variables which are employee empowerment, team orientation and capability development has significant influence towards organisational effectiveness. In view of this, it is highly recommended that all business organisations should encourage employee involvement and start building a long-term positive relationship with its employees All these will ensure that business organisations are managed effectively and corporate goals and objectives are successfully being achieved.

FLEXIBLE WORK ARRANGEMENTS: EXPERIENCE OF A MALAYSIAN MANUFACTURING COMPANY

ABSTRACT
 
 Purpose: The demands and the needs of employees prompted the development of flexible work arrangements in the West. Using role conflict theory, the present study examines the relationship between the level of flexible work arrangements and the amount of work-life balance evident in the Malaysian manufacturing sector

Does the Environmental Management System Predict TBL Performance of Manufacturers? The Role of Green HRM Practices and OCBE as Serial Mediators

Over the years, Malaysian manufacturers struggled to mitigate the widened gap among the three aspects of TBL performance, e.g., economic, social, and environmental. Although, the economic performance is relatively elevated compared to environmental performance based on environmental performance index (EPI) data reports. Similarly, less than twenty per cent (20%) of manufacturers are ISO14001-certified out of the total registered firms in the 52nd FMM directory. The firms must employ green HRM practices to foster pro-environmental behaviour and support their managers to adopt the environmental management system (EMS) framework to reap the benefits of TBL performance. To resolve these issues, sustainability has become an essential strategy for manufacturers in addressing environmental problems due to consistent ecological awareness among stakeholders that compels firms to adopt EMS and green HRM practices to foster organizational citizenship behaviour for the environment (OCBE) and improve triple bottom line (TBL) performance. This research aimed to investigate the impact of the EMS on TBL performance through green HRM practices and OCBE via a serial mediation approach among ISO14001-certified manufacturing firms. A quantitative methodology was employed based on a positivist paradigm. The sample of 350 respondent firms was randomly targeted via standard questionnaires. Around 248 manufacturers responded with a response rate of 70%, which is sufficient for data analysis. After outliers and normality assessment, the clean data of 216 manufacturers were finally analysed using SmartPLS 4.0. Structural equation modelling (SEM) analysis revealed that EMS is positively related to OCBE, and OCBE is positively associated with TBL. EMS is positively related to green HRM practices, and green HRM practices are positively associated with OCBE. Furthermore, it was confirmed that green HRM practices and OCBE serially mediated the relationship between EMS and TBL performance among ISO14001-certified manufacturing firms. The current study also presents vital organizational and managerial implications.

Fostering closed-loop supply chain orientation by leveraging strategic green capabilities for circular economy performance: empirical evidence from Malaysian electrical and electronics manufacturing firms.

In recent years, the concept of a circular economy (CE) has gained importance and attracted significant attention among scholars and practitioners. Research that examines the firm's supply chain capabilities and orientation for performance is well established nonetheless still lacking in supporting the transition from a linear economy to a circular economy. The firms can foster a closed-loop supply chain orientation (CLSCO) through strategic green capabilities as an alternative obtainable to SC firms to achieve CE performance. Thus, this study is interested to examine the antecedents and outcomes of CLSCO by applying the Resource-Based View and Natural Resource-Based View theories. In total, 150 Malaysian manufacturers responded to the survey and were analysed using the SEM Lisrel method. Among the hypotheses tested, only one had no direct effect on CLSCO, and that was the recovery capacities. The remaining hypothesis indicates that CLSCO is positively affected by integration and production capabilities. In contrast, the results of CLSCO indicate that the extent of a company's CLSCO does affect its success in the circular economy. The study concludes, based on the RBV and NRBV principles, that the success of firms in optimising their resources would enable them to use the CLSCO and attain CE performance. Thus, there are numerous ways in which this study can provide practitioners with valuable research insights.

Environmental, social, and governance adoption in the Malaysian wood products and furniture industries: Awareness, adoption, and challenges

As the world intensifies efforts to mitigate the effect of global climate change, an on-line survey was carried out involving 1,081 wood products and furniture manufacturers in Malaysia. The main objective was to evaluate the level of awareness, extent of adoption, and challenges faced by these manufacturers in adopting environmental, social, and governance (ESG) practices. The survey found that large-sized companies were more receptive to adopting ESG practices, as opposed to the medium-, small-, and micro-sized companies. Respondents were apparently more responsive to environmental requirements, followed by governance, and finally the social factors. Within the environmental sphere, compliance with using certified and legal wood and wood products, waste management, and conformance to emission standards were well received among respondents. The survey revealed that market forces and legislative requirements were the two most important factors that enticed respondents to comply with the ESG practices; among those respondents who did not comply with ESG requirements, the primary deterrent factors include lack of awareness, no direct benefit from adopting ESG, and the high cost involved. The ESG compliance may transform the wood products and furniture industries into a more sustainable industry, offering equitable wages and green jobs while producing high value-added products.

Modeling the time-varying effects of oil rent on manufacturing: implications from structural changes using Markov-switching model.

Previous "oil curse" studies primarily estimate a single, linear effect of oil rents on income using time-invariant parameters over entire sample periods. This means the true effects of oil dependence cannot be captured if structural changes are taking place, or effects are non-linear. We introduce a two regime Markov-switching model into the resource effects literature to assess the time-varying effects of oil rent dependence on the Malaysian manufacturing sector. We also allow for non-linear threshold effects. We find the impact of oil rents is regime-dependent. Under a rarer "first regime" structure, there is no significant effect. Under a predominant "second regime," there is an inverted U-shaped effect, with oil rents' share of GDP up to 8% positively associated with manufacturing, and negatively associated beyond this. We find connections between regime changes and the 1997 Asian financial crisis and 2008 global financial crisis. Implications for effective diversification policies are discussed.

Has Digitalisation Mitigated the Impact of Covid-19 on the Manufacturing Sector’s Performance?

The Covid-19 pandemic brought many businesses to a standstill as international travel restriction was imposed across countries in addition to a national lockdown. Firm performances were depressed due to reduced order and output. This study examines whether digitalisation has mitigated the negative impact of the Covid-19 pandemic on Malaysia's manufacturing sector. Using sales as the performance yardstick of 24 industrial sectors from January to December 2020, our result shows that manufacturing sales performance was negatively related to the Covid-19 pandemic. However, the adverse impact of Covid-19 was mitigated with a higher level of digitalisation. The mitigating role of digitalisation remains robust in further analysis. This study has managed to quantify the mitigating effect of Covid-19 on manufacturing sectors. As a policy implication, the government should expedite the introduction of the 5G network, promote digital adoption across all sectors to ensure business continuity and provide an effective response mechanism in any pandemic or crisis.

Moderation of innovation capability on innovation performance relationship

The purpose of this research is to investigate the antecedents of innovation performance and the role demonstrated by innovation capability; whether strengthening or weakening the relationship within Malaysian manufacturers. This study implements quantitative approach with data collected from Malaysian manufacturing industry using structured questionnaires. The hypothesised relationships from 105 companies are further tested using Smart PLS software in measuring the framework's structural equation modelling. The results from this study support the proposed research objectives indicating the positive direct relationship between the influencers and innovation performance. The finding reflects on the partial moderating effect of innovation capability on the relationship. From the obtained results, the scholars provide several recommendations to assist decision-makers within manufacturing industries. This paper further confers on suggestions to improve firm's innovation performance through understanding and developing the constructs investigated.