0000053825Jumal Produktiviti - [Journal].

Penerbit/ PublisherPusat Daya Pcngeluaran Negara(National Productivity Centre)

Pcti Surat 64,Jalan Sultan 46904

Petalmg Jaya, Malaysia.Tel: 7557266

viserIr. Haji Arshad Haji Marsidi

(Pengarah)Pengarang/£(/i(orMah Lok Abdullah

Pen. Pengarang/Sw/i EditorSujaidi Dasuki

Ahli-ahli/ MembersHaji Ahmad BerekHaji Ruslan Khatib

R. SugunarajahSuhaimy Abdul TahbJunna Abd HamidNor Ami AmdzahAb Rahim Yusoff

Suhaimi HamadPauzi Hanipi

Kami mengalu-alukan sumbangan rencana untuk dimuatkan di dalam jurnal mi. 'JurnalProduktiviti' diterbitkan enam bulan sekah, menampung semua aspek ekonomi danpengurusan serta lam-lam bidang yang ada hubungannya dengan konsep poduktiviti.Rcucana-rencana yang tersiar akan dibenkan honorarium dan tidak semcstmya merupakanpendapat PDPN

'Jurnal Produktiviti' diterbitkan oleh Pusat Daya Pengeluaran Negara(Kemcntenan Perdagaiigan dan Permdustnan) Pcti Surat 64, Jalan Sultan,

46904 Petahng Jaya, Selangor, Malaysia. Telefon: 7557266 (15 tahan),Teleks- MA 36312 PDPN Telegram: Dayapeng.

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EDITORIAL

MENGHADAPI ERAKECEMERLANGAN INDUSTRI

Pertumbuhan ekonomi sebanyak 8.5% dalam tahun 1989 merupakangerbang harapan bagi sektor industri di negara int. Suatu kaji selidik yangbertujuan untuk melihat arah aliran, tahap serta faktor-faktor yangmempengaruhi peningkatan produktiviti telah dilakukan oleh PDPN ke atas49 buah syarikat yang berlainan operasinya.

Hasil kajian berkenaan menunjukkan sumbangan peningkatan produk-tiviti ke atas pertumbuhan Ekonomi Negara hanya 30% sahaja dan 70%disebabkan pertambahan pekerja. Kajian juga menunjukkan hanya 47%daripada industri-industri pembuatan negara mencatat peningkatan produktivitisebenar manakala 53% menghadapi produktiviti yang menurun danmemerlukan perhatian yang serius dan serta-merta.

Penurunan produktiviti bagi industri-industri yang berkenaan berke-mungkinan disebabkan kemelesetan ekonomipada tahun 1983-1985. Andaianini didasarkan kepada peningkatan produktiviti bagi 3 tahun berikutnyaiaitu 1988 - 1988 di mana 37 daripada 49 industri yang telah dikaji selidik itutelah mula menunjukkan peningkatan produktiviti yang menggalakkan.Namun demikian masih terdapat 12 industri yang mengalami produktivitimenurun dan industri-industri berkenaan termasuk petroleum, gas, makananbeku dan biskut.

Penemuan kajian di peringkat makro menunjukkan sektor-sektor yangmempunyai peningkatan produktiviti didahului oleh perlombongan, pem-buatan , pertanian dan pengangkutan. Manakala sektor-sektor kewangan, pem-binaan dan perkhidmatan tidak mencapai peningkatan produktiviti malahmenurun.

Di peringkat industri pembuatan pula, industri yang mencapaipeningkatan produktiviti melebihi 20% bagi tempoh 1983 - 1988 diukur darisegi kos buruh seunit ialah tekstil dan pakaian 58.97%, baja dan racun serangga30.46%, kilang papan lapis dan hardboard 26.64%.

Industri yangproduktivitinya menurun melebihi 20% berbanding dengantahun asas 1985 ialah penapisan petroleum - 49.8%, minyak-minyak sayurandan lelemak - 46.9%, biskut - 40.88% dan industri pembuatan gas - 35.6%.

Kami rasa bersyukur kerana PDPN dapat memberi sumbangan dalammetnbantu industri-industri negara untuk mengenalpasti tahap produktivitimasing-masing. Untuk membolehkan perkhidtnatan ini dibert secara berkesandan menyelumh PDPN telah metvujudkan Unit Pengukuran Produktiviti dimana penekanan aktiviti ditumpukan kepada penyelidikan, pengukuran danpemndingan produktiviti. Seterusnya, PDPN telah menyusun semulapenekanan ke atas aktiviti-aktivitinya di mana aktiviti latihan akandikurangkan sebanyak 50% bagi jangkamasa panjang. Aktiviti latihan jugamengalami perubahan dari segi pendekatan dan kandungan di mana penekanankhusus diberi kepada program-program yang boleh menghasilkan peningkatanproduktiviti dan mutu secara terns menerus.

Selain daripada usaha mempertingkatkan tahap produktiviti melaluiper-khidmatan-perkhidmatan yang dinyatakan, PDPN juga memberi perhatiankhusus kepada salah satu asas peningkatan produktiviti taitu kualiti.Pendekatan kepada isu kualiti diberi secara menyelumh di mana tumpuanbukan hanya kepada pertambahan dan pengembangan kumpulan-kumpulanKawalan Mutu (QCC) di industri, tetapi Gerakan Kawalan MutuMenyelumh diperkenal dan dikembangkan. Program Kawalan MutuMenyelumh (TQC) memberi perhatian bukan sahaja kepada kualiti barangantetapi juga melibatkan si<tem pengurusan bermutu. Usaha ini diharap akandapat membantu usaha negara untuk membudayakan kualiti sebagai cara hidupdan seterusnya menentukan keupayaan negara untuk bersaing di pasaran duniabagi meraih peluang-peluang yang terbuka menjelang era kecemerlanganindustri di dekad 'goan.

BIODATA

Dr. Norma Bt. Hj. Mansor is a Lecturer in thePublic Administration Division at the Faculty ofEconomics and Administration at the Universityof Malaya. She teaches general principles ofmanagement at the Undergraduate and Masterslevel. She obtained her Doctorate Degree fromthe- University of Liverpool, England in 1985.

MALAYSIAN WOMEN INADMINISTRATION AND

MANAGEMENT*

Norma Mansor

This article attempts to shed some light on the development oj Malaysianwomen in the administration and management field. With the advance of moderngovernment, major breakthroughs in science and technology and less rigid andunconventional practices within the business world, there are still certain prejudiceswhich have survived through the years. Although it is slowly changing, one suchof these prejudices is the reluctance to employ women in high ranking positions.The stereotyped prejudices against women is the main stumbling block in awoman's effort to reach the top. However, women are certainly making an impact -especially in the late 198Q's - in many fields. Hence, this article looks at the variousreasons and problems faced by Maiaysian women who are aspiring to reach the topand it also highlights the qualities needed to make this possible.

INTRODUCTION

Traditionally, it has always been men's prerogative to carry out jobsrequiring strenuous effort and excessive mobility, whereas women werealways relegated with jobs within the home environment and does notnecessitate much mobility and energy. Thus these customary roles haveremained as human evolution progressed into much more civilized andmodern times. Consequently men evolved as superior leaders, andcorporate presidents and women as better nurses, homemakers andteachers.1

However, in recent years a major change has been wrought wheremore and more women are going into employment and some even taking

*This paper is based on the talk delivered at "The Malaysian Women Executive'sConference" on October 3rd, 1989. Kuala Lumpur.

over positions which were traditionally held by men. Women's position insociety has improved considerably and men are finally sitting up and takingnotice of women's capabilities in areas other than their traditionaloccupation.

Arguments'have arisen as to what has caused this social change overthe past two decades. Is it the organisations themselves who are changingand employing more women or is it the growing number of women in thelabor force and the shortage of qualified men that have forced organisationsto change their attitudes?

Many have attributed effective birth control as the primary factor thathas prodded women to leave their homes and enter into full-timeemployment. The growing number of women joining the labor force mayhave forced organisations to rethink their employment policies and bringmore women into the traditionally male populated workplace. Butwhatever the reasons, evidently sex-role liberation has arrived and ismaking inroads into every sector of the economy.

In Malaysia, there has always been an excess of women in theunskilled, low income earning group whereas there are very few womenwho are actually in the skilled, high income earning group. In short withregard to the Malaysian society, role differentiation according to gender iswell maintained; that women provide "craft" while men perform"management". This accounts for the low participation of women inmanagerial and professional positions.

The main aims of this paper are two fold. First, is to analyse some ofthe real problems faced by women in management and administration andsecond, to suggest some ways of overcoming them. However, this paperwill also highlight the changes in the Malaysian employment scene.Evidently, women over the years have started to equip themselves with theskills and education and have managed to infiltrate into almost all sectors ofemployment. Thus, the exclusion of women could work adversely forprogress in this country.

Women And Employment - An Overview

Since the 1970's, women have made great inroads in the employmentsector. This can be seen by the steady increase in the female labourparticipation rate from 38.9% in 1970 to 42.2% in 1980 and it increasedrapidly to 45.1% in 1981. However, due to the onslaught of the economicrecession which peaked in 1985, women's participation rate decreased to44.6% and later to 44.1% in 1986 (refer to table 1 below). Although womenstill have a lot of catching up to do in the wage employment market,

women are slowly but surely moving into the male populatedemployment market.

Table 1: Labour Force Participation Rate (LFPR), By Sex,Peninsular Malaysia - 1981, 1985 and 1986.

LFPR

Year

198119851986

Male

86.084.684.8

Female

45.144.644.1

Total

65.064.564.8

Source- Malaysian Women, Facts and Figures Secretariat for Women'sAffairs

Their progress is mainly attributed to the rapid expansion ofeducational facilities as well as the increasing access of women to thebenefits of education at primary, secondary and especially the tertiary level.Education has provided women with the skills and knowledge necessary togam entry into a male dominated realm. Education has also led to changesin attitudes of women as it has developed an awareness among them ofother options besides marriage and childbearmg.

It is not surprising therefore, that more and more women are gainingentry into institutions of higher learning. The participation rates of femalesin university education has risen to 39% in 1980 compared to the 1965 rateof 16%2. Previously, women who sought higher education were mainlydistributed in courses which conform to the socially accepted feminineroles, such as the Arts or Social Sciences and Education courses. However,

Table 2: Percentage Distribution of Educational AttainmentAnd Sex, Peninsular Malaysia 1980

Educational attainment Male Female Total

No SchoolingPrimaryLower SecondaryUpper Secondary/VocationalForm 6

28.241.917.610.81.5

38.237.71438.71.1

33.239.815.09.81.3

Source- Malaysian Women, Facts And Figures Secretariat For Women's Affairs

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Table 3: Annual Enrolment Of University Of Malaya,1967, 1973 and 1975.

Year

All Faculties

Agriculture

Arts

Engineering

Science

Medicine

Education

Economics &Administration

Law

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

TotalMaleFemale

1967

4,5603,3571,203

202mo

9

2,1321,240

792

327327Nil

878712166

38932762

215102113

41735661

NilNilNil

1973

9,1346,4062,728

47642353

2,1321,340

792

608600

8

1,5921,113

479

663536127

684357327

1,5041,054

450

523121

1975

7,7765,0332,743

1279928

2,3141,367

947

80778720

1,7151,121

594

670421249

588188400

1,344942402

211108103

Source Nik Safiah Karim and Fatimah Hamid-Don, 1975, 'Systemsanalysis of higher education for women in Southeast Asia'

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with the advent of the 90s, it is quite common nowadays to find womensigning up for Economics, Business Administration, Law, Accountancyand Engineering courses which were previously dominated by men.

As it can be seen in the enrolment of University Of Malaya, therewere more women comparatively taking Education courses than males.However, in 1967 there were only 61 women who signed up for theEconomics and Administration courses. Since then, there have been morewomen who have signed up for this course. For instance, the total intakefor the academic year 1989/1990 in the Economics Faculty was 375, out ofthis number about 207 were females and only about 168 were males.

Looking at women's participation in wage employment, it is perhapsnot surprising to note that although women's participation in employmenthas grown considerably since the last three decades, most women areemployed as clerical, factory, agricultural and service workers. Even todayin Southeast Asia, only about 10% of the women populace are holdingmanagerial and administrative positions. According to table 5, thepercentage of Malaysian women employed in the administrative andmanagerial field only constitutes 0.8% of female employment. From thisnumber most of the women in this field are usually in low power positionsand a small percentage at the middle management level and very few areactually at the key and top managerial positions. Also the 0.8 percentage isthe total percentage from all sectors. Thus, it does not give the overallpicture of women in mangement in either the government sector or thecorporate sector.

Table 4: Female Employment By Sector In Peninsular MalaysiaFrom 1975 - 1986 (per cent)

Year 1 2 3 4 5 6 7

197519791980198119821983198419851986

40.742.540.139.441.439.638.537.635.9

12.314.614.941.613.016.713.412.115.5

33.938.839.541.644.545.344.044.746.3

6.46.45.86.45.21.94.02.62.9

3.26.65.36.65.21.94.02.62.9

6.38.08.09.38.17.99.010.59.3

37.936.035.335.934.836.936.136.937.2

Note:1. Agriculture2. Mining and Quarrying

3. Manufacturing4. Construction5. Electricity, gas, water & sanitary services6. Transportation, storage and communication7. Services

Sorce: Malaysian Women, Facts and Figures Secretariat For Women'sAffairs.

There is no comprehensive data on women in top managementpositions within the corporate sector. However, we do know that theproportion of women in Administrative and managerial positions in thebusiness field is still very small and remains at a level of 1% or less.

From the overview, it cannot be denied that women contribute to theeconomic growth and progress of this nation. Therefore, the effort inhuman resource development should tackle the low participation ofwomen in management. This is simply because by excluding women fromthe leadership pool to head organisations, is actually limiting organisationsand the nation to only half of the available talent. Hence, organisations andthe nation are denied of a greater number of capable leaders, merelybecause of the prejudice of sex.

THE CHANGING SCENE

Historically, 'sex-stereotyping' attitudes can also be accredited to theBritish administration's system of education. This has further reinforcedattitudes that due to women's nurturing traits, they are, thus, much betteroff in domestic occupations.

In the last two generations however, women have managed to breakthrough barriers that have prohibited them from developing careers in thepast. They have managed to infiltrate into almost every profession likeengineering, the legal system, architecture etc., where previously, it wasalmost unheard of for women even to consider entering into certain fields.Marriage and childen are not viewed as a barrier anymore for women toprogress in their careers.

In the Asian scene in general, women are increasingly making theirmark in the male-dominated management field. She has managed toovercome obstacles such as reluctance from male employees, workingconditions which are more oriented to the male workforce, lack of femalerole models and discouragement from the Asian society in general. She hascarved a niche for herself in the corporate world. However, women whoactua'ly reach the top are still comparatively small in number.

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Women are becoming aware of the opportunity to occupy toppositions and have begun to take advantage of all the opportunities open tothem in an effort to heighten their promotabihty in their respective careersIn fact, most women have successfully combined marriage, family and acareer and some are even holding positions of responsibility m socialorganisations Interestingly, women who have had to overcome thehurdles of marriage are considered to be more mature in their outlook andmore resilient towards the heavy demands of their profession

A common pattern has emerged which characterises women'sprogression in the management field They proceed into the lower andmiddle levels m the hierarchy in a fairly orderly fashion This is true forboth the public sector and business organisations Although someorganisations are less discriminating by involving women in their trainingand development programmes, however, after this stage the prospect ofadvancement becomes almost nil What is going wrong3 Rosabeth MossKanter in her book, "Men and Women of the Corporation" theorizedthat increasing the number of women in management would cause sexdiscrimination to vanish naturally as a critical mass of women enteredmanagement at every level However, contrary to this, researchers, haveshown that sex discrimination decreases initially as more women becomemanagers and then gradually increases again 3

Ruth Gilbert Shaeffer,4 was of the opinion that sex is not necessarilythe only barrier and that changes in the economic conditions such as thehigh unemployment rate is also a causal factor hindering women in themanagement field

Noticeably many women who have successfully entered into themanagement field have limited themselves to a narrow range of fields Inshort, they are well represented in fields such as personnelmanagement/human resource management, finance and trainingHowever, in these areas too, many of these women are in middlemanagement and very few have actually reached the top in their chosenprofession

BARRIERS FACED BY WOMAN EXECUTIVES

There are certain traits associated with A successful manager in ouiculture which is a masculine one A good manager is one who is consideredaggressive, competitive, firm and just He is not soft and yielding ordependent or intuitive in the womanly sense To express emotion is viewedas a feminine trait that would interfere with effective business practicesAlthough this stereotype seems to be weakening somewhat, it is still strongenough to represent a real barrier for women trying to break into topmangement posts

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Employers' assessment of women's work are sometimes quiteiniquitous and they do not credit women enough with managerialcapabilities. The general misconceptions about women are, that womenshould only be employed if there is a shortage of qualified men. Mennaturally assume that women work mainly to gain extra income and thatwomen's family responsibilities are bound to interfere with their work,hence they should only be employed on a short term basis. Women areconsidered more suited in professions such as that of typist, secretary, nurse,teacher etc., in line with their nurturing traits. They are thus thoughtunsuitable in jobs requiring hard decision-making and shrewd businessskills since they tend to over-react emotionally and are considered as ficklewhen it comes to making decisions.

It has been said that women are not overly concerned with careeradvancement since they are more interested in work that is not toodemanding as it will not interfere with their family responsibilities. Manyemployers feel that women do not have what it takes to be a leader sincethey are very concerned with pleasant surroundings and the socio -emotional aspects of the jobs; they cannot withstand too much pressure;they are not forceful enough when inplementing policies and they aregreatly lacking in confidence when negotiating or making decisions on along term planning basis.

One of the great failures attributed to women is that they are lackingin business exposure and are not endowed with business acumen and aresaid to be short term in their outlook. They are also accused as bad teamplayers and of not being able to work cooperatively with their colleagues asa team. Consequently, employers tend to look upon women as a poor riskgroup with regard to positions with a high degree of responsibility. It canbe argued however, that many of the misconceptions acquired byemployers about highly qualified women are mainly concluded fromobservations of the attitudes and conduct of the general clerical and factorywomen staff.

As mentioned earlier, there are a large number of women clustered inmiddle management positions. One contributory factor to this problem isthe fear that women will leave upon marriage or due to familyresponsibilities. Hence, the organisation will incur losses due to the costand time expended in training these women in their respective jobs. Inreality however, this does not necessarily constitute a major problem sincein recent times, men and women tend to look upon their first jobs as a basefrom which to move on. Obviously because so few women have yet hadthe chance to reach management positions, the self-fulfilling prophecyoperates most strongly; the tendency is to force low levels of aspirationson women and for women themselves to live down to them. Not-

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withstanding this however, both men and women are beginning to breakout of the stereotyped moulds that they have been fofced into.

SOME COMMON CHARACTERISTICS OF MALAYSIANWOMAN EXECUTIVES

Recently, quite a number of management experts are of the opinionthat many of the factors which were labelled as 'feminine traits' will belauded as the essentials for the future success of management. Hence,women who are commonly attributed with traits such as concern forpeople, inter-personal skills, intuitive management and creative problem-solving will be better prepared in facing future challenges than the typicalmale manager. Whatever success of Malaysian women executives have beencontributed by several factors. Like men, women who had an earlyexposure to the professional world and people through their parents,usually the father, and guidance from mentors have the advantage. Theyhave an early start in understanding the professional environment.

Malaysian woman executives from my observations, maintain theirsocietal values by being very people-oriented and yet expecting resultsfrom subordinates. She may not be very aggressive but certainly veryassertive. However, they would prefer to examine all the facts beforemaking any decisions.

Contrary to the common prejudice that women see their role astaking a number two seat after family and home, my observation ofMalaysian women executives, is as a group of people who work very hardand are always striving for better goals and ways. They are veryindependent and have great confidence in themselves.

However, subordinates may to a certain extent feel uneasy because it isalso common for woman superiors to keep a close supervision of their staffto ensure that everything is carried out according to what was decided.

PROBLEMS MALAYSIAN WOMEN IN MANAGEMENTMUST OVERCOME

In the past, women faced difficulties in trying to get organisations toemploy them. In future however, the biggest dilemma will be in trying toget employers to give them positions of greater responsibility. The bestchance of advancement in a woman's career is during her twenties and earlythirties, once past this mark, it is difficult indeed for a woman to seekpromotion. These women should prevent interrupting their careersexpecially during this critical age gap. And yet this is the stage when theyhave to care for young children. A major decision here is to get the rightkind of support. Some Malaysian woman executives are fortunate to

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receive help from members of the extended family, while the others getsalaried domestic help.

One of the major factors employers worry over is the geographicalimmobility of women. When more responsible positions involving jobrotation from department to department in various branches of theorganisation is offered to them, women are quite hesitant to accept it, sinceit will involve leaving their family behind or familiar surroundings. Thereluctance to shift from their comfort zone, be it a certain town or evendepartment, work against them. Consequently employers tend to relegatewomen to relatively subordinate posts. The question is, whether it ispossible to develop a job exchange programme where both husband andwife could move together regardless of whether they are under differentorganisations.

Employers also argue that many women do not have enoughqualifications in order for them to reach the top. And because of thedifferent upbringing of women compared to men, their opinion andoutlook will be at complete variance with the organisation's interest. Evenif a particular woman is highly qualified enough to be recruited for a seniorpost, she will still not be treated accordingly. Most men do not know howto adapt to a situation where a woman is either their colleague or their boss.It is not so much prejudice as confusion that has made men either to ignorewomen or merely to tolerate them in their workplace.

Employers are also wary of criticising or giving their honestevaluation concerning 'the performance of woman executives. They areafraid that women will start being emotional and thus put them in anernbarrasing position. Due to this, many women do not get enoughfeedback on their performance as managers, so much so, that there are nogrounds for further growth. Consequently, they remain ignorant of thequalities needed to make them 'promotion material'.

Women tend to feel guilty when they start devoting more time totheir careers since they feel that they are shirking their familyresponsibilities. A large number of women opt out of the 'race forpromotion1 because of this and end up with stagnating careers.

The woman executive's over investment in 'specialization' asHeining and Jardim term the tendency to become obsessed with technicalcompetence, limits the career potential in two ways. Not only does it makethe transition to management that much tougher, it also keeps her soclosely focused on the job at hand that she fails to view things in the generalperspective.5 She does not often wonder whether she is happy with whereshe is in her career.

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A common characteristic that has been observed to be true among themajority of women in Malaysia is that the decision to commit themselvesto their careers is made relatively late in life The career that they eventuallygo into might not necessarily be their chosen one When first joining theemployment market, they accept whatever position that is given to themwithout giving so much as a thought as to whether it is what they reallywant. It is only at a later stage in their career that they become more awareof their inclinations and interests In contrast, men start visualising abouttheir career and gathering information and developing their skills earlier inlife This late start often means that women may not have a chance todevelop to their fullest potential at work

Woman executives seldom talk about the organisationalenvironment, an area in which the ability to control outcomes is far lesscertain. They do not feel that it is necessary to know people holdingpositions of power within and without the organisation and to informthem of their plans, not only to be in good terms with bosses, peers andsubordinates but also to gain their support and respect for their managerialcapabilities Woman executives in general are not very good at 'playingpolities' They are at times ignorant of the political system of theorganisation and subsequently they fail to recognise the 'power bases'within the organisation which might possibly help them to boost theircareers Mere hard work and competence alone would not get them veryfar in the competitive world today In fact employers might just retainthem in their respective posts since they are doing a good job of it

In Women in Charge, Aileen Jacobson describes women as beingmore prone than men to exhibiting 'close' styles of supervision This is alsocommon among woman executives in Malaysia, who find it difficult todelegate work to their subordinates for fear that the end result would notquite meet with their standards Suffice to say that, this has also earned themthe reputation of being task-oriented Hence, they rather do everything bythemselves which takes up so much time that they miss out on all theprojects or important assignments within the organisation which couldenhance their careers Very often, not only do women find it difficult toassert their authority for fear that they might hurt someone but they arealso afraid to relinquish control For a woman manager who has struggledto get where she is today, she feels that if she were to risk letting someoneelse do the work and if mistakes happen, this will reflect upon her integrityand ability as a manager

Most women who do achieve managerial positions are usuallyrelegated to low power positions or middle management posts Theirperspective of the organisation as a whole is quite idealistic in natureUnlike women, men usually have specific, clear cut plans from which theycan move on to greater heights of power in the organisation Most

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importantly, in most cases they will find a sponsor or mentor who will helpthem and teach them all the technical know-how within the organisation.

However, women seem to have overlooked these factors when theyare constructing their career plans. Rosabeth Moss Ranter has observedin her book Men and Women of the Corporation that to "create anetwork of supporters out of individual clout requires that a person pass onand share power that subordinates and peers be empowered by virtue oftheir connection with that person".6

Quite a number of women managers exhibit inferior traits or arecontinuously seeking approval and reassurance during meetings ordiscussions with her superiors. It has been argued that because women ingeneral are considered by most men as being inferior to them, they, thusfind it difficult to assert themselves under the critical eye of their male peersand bosses. It is important that women lose these negative attitudes andbuild up their confidence in order for them to gain the respect of their malecounterparts.

Although organisations are being pressured to change their policies,change is slow in coming within the business evironment. Hence womenare becoming impatient and leaving their companies in an effort to look for"greener pastures" within the corporate world. What women fail torecognize is that success depends on performance and handling problemsand it takes a number of years to understand an organisation and establishyour own personal track record. However, many women today feelentitled to be promoted "or otherwise, some will leave and join a "better"organisation in the hope that the new organisation will recognize howgood they are. This may be true in some cases but switching jobs ever sooften may not be a very wise move since the employer, who will becognizant of their work history, will not be especially interested in seeingthat they are promoted.

In general, women often attribute more external factors which workas a catalyst to their success or failure. Whereas, men are mote likely toassume that their success is the fruit of their own ability and competence,the same cannot be said for the majority of women, who attribute theirsuccesses to a stroke of luck. Studies conducted in other countries have alsoshown that, women regard their failures as a direct result of their ownliability and internal factors such as lack of confidence, emotionalism andguilt feelings towards the neglect of her family.

BUILDING THE TOP WOMAN EXECUTIVE

Before a woman executive embarks on her career plan to reach thetop, she should ask herself first whether this is what she really wants;

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whether she is willing to face whatever odds that should come in her way.Before she can actually reach the top, she should realise that she would haveto face many frustrations and the sacrifices that have to be made. She shouldbe very specific when planning her career and anticipate whateverproblems that she would encounter and be alert to recognize theopportunities presented to her. However, this does not constitute changingher whole personality but merely to adapt herself most effectively with theenvironment in which she must work.

What are the costs and what are the rewards of a management career?Women should also ask themselves several questions in order to realisewhat a career in management really involves. She should start by askingherself, 'Do I expect to work regardless of what else I may do, whether ornot I am married, whether or not I have children? If I expect to work overthe long term, what do I want out of it? What do I really want to achieve?Where do I want to be five years, ten years, twenty years from now? Whatkind of job do I want to be in by then? What do I need to know to be able todo it? What level of experience does it require? What kind of knowledgebase? What are the skills needed? At what level of competence? What kindsof relationships will be important in getting it? Who are these people?7

It has been claimed by manyv experts that, in future many of thefeminine traits will be critical for management success. In short, instead oftrying to emulate ^man and his style of management, women shouldnurture their own dominant traits, characteristics such as sensitivity topeople's feelings, creative problem-solving and their unconventional wayof approaching things. More importantly men and women should realisethat instead of working at cross purposes, they should work together. Notonly should they acknowledge each other's ability and try to inporve onit, they should also work towards complementing each other weak-nesses.

Women who wish to move ahead must publicize their career goals.They need to discard their innate reserve and learn to be more "visible"through work and non-work related activities. This self-promotion neednot be offensive if done in a tasteful manner. One possibility is to be willingto take up new challenges and extra responsibilities work wise or in extra-curricular activities. It is important for them to get to know the rightpeople not only within the organisation but also outside of it. She has tokeep in mind that if there's no prospect of growth within her organisation,then she could always fall back on her contacts outside the organisationwho will be able to help her get a job that she really wants. Women shouldalso learn to read the signs that will tell them that they are being consideredfor promotion.

17

It is not easy for women executives to be blessed with a mentor toguide them in their career path. In succeeding in their careers, they wouldeither have to rely on their own ability or they could add an extra edge intheir careers, by working towards acquiring a mentor. Thus, women couldget to know the criteria looked for in a protege by prospective mentors andthen work towards fulfilling these criteria.

There is a lot to be said about networking within the organisation. Inlarge organisations usually there exist a support network called the oldboy's network, but this is slowly being replaced by a peer pals networkirrespective of sex. There is potentially two prospects for the people withinthis group. The ambitious ones would probably move up and becomeleaders tomorrow while the rest might just remain as subordinates.Whatever the outcome, women who are part of this group should not losethe friendship made within the group, since their support would be adefinite advantage later on. Women should also draw from the entiresystem of the organisation; not only from her superiors, mentors and rolemodels within the organistion but also her peers as well. The few womenwho have already reached the top, should also provide themselves as rolemodels to women further down the management ladder.

Women in management should learn how to delegate effectively. Ifshe does not have enough trust in the ability of her subordinates, then sheshould improve upon that by coaching them towards the standards sheexpects from them. Superiors also judge managers' competence by lookingat the performance of their subordinates; whether she has been able toempower her people and make them achieve good results in their work.In fact, it has been commended that succesful senior level womenhave exploited their nurturing and collaborative skills with goodresults.

Organisations themselves could turn this 'problem' to advantage byinforming men, that one of the criteria used to assess them as goodmanagers is how he solves this problem as regards taking orders fromwoman superiors or woking with women peers. Thus, management couldprovide the necessary system in changing attitudes and encouraging maleemployees to share their perceptions, stereotypes and prejudices, so thatthey may become more supportive of one another.

Woman executives will have to build upon their internal imagebecause it can have a compelling external effect. Hence, the optimistbelieves power or control comes from within herself, that she is ultimatelyresponsible for her own success. It is necessary to know how to keep thepower going. Understanding how these forces operate can help themharness their feelings to make their career take off.

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When given the opportunity to obtain further education or training, awoman should be smart enough to accept it She stands an even greaterchance of moving up when in possesion of not only practical and technicalknow how, but also the theoretical aspects of the field she is interested in

However, women should not forget that flexibility seems to be thekey to manoeuvering in today's work world and tomorrow's. Flexibilityto work in differentjobs with different people not only managers, but alsosubordinates, flexibility to roll with the punches and still come upswinging, and ready to try something else At the same time, it is alsoworthwhile to cultivate a side line career, that has the potential of carryingyou further up the career ladder If the present career seems to be a dead-endjob, then you could always switch to your sideline career. This is also aninsurance against any major upheaval in the economic trend within thecountry, and also a chance to acquire new skills and accomplishments thatare important for your own personal growth It is true that beingrecognized as a specialist especially m fields where there is not much scopefor employment can seriously limit your advancement opportunities

Needless to say,, woman executives do need to acquire the necessaryleadership skills to take over top posts Planning in advance the trainingneeded and the courses to attend with relevance to their profession is adefinite edge towards career-building

CONCLUSION

In the past, in the various organisational levels especially in positions ofpower, women have been and still are the minority group Thus, it hasbeen natural for many of them to leave things as they are, to refuse to battertheir heads against the ceiling and to settle for a less responsible positionthan their abilities deserved

It is mainly due to the personal efforts of women, that they havemanaged to get thejobs they really want. We cannot altogether dismiss thefact that employers who have taken the 'risk' and employed women despitethe dictates of the business world have also given women their chance

In future, would not be wrong to say that women's right to top jobson the merit of their own qualifications and skills, will be most effectivelypressed Considenng the shortage of qualified men and the over abundanceof qualified women, organisations in this country would have no otherchoice than to employ women or to promote them to superior positionsHence, organisations would have to be flexible with a lot of its rules,review its employment policies and in general, employ qualified womenon equaitable terms

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NOTES

1. Colnill, Nina L. The New Partnership: Women and Men inOrganisation, Mansfield Publishing Co., U.S.A., 1982.

2 Alternative Asia/Pacific Report On The Impact Of The U N. DecadeFor Women — Malaysia.

3. Zeitz, Balla., 'The Crisis in Middle Management' WorkingWomen, September, 1983.

4. Zeitz, Balla., Ibid.5. Rivers, Caryl., 'Reaching For The Top', Working Woman,

September, 1983.6. Kanter, Rosabeth Moss., Men And Women Of The Corporation

Basic Books, 1977, New York.7. Hennig, Margaret and Jardim, Anne., The Managerial Woman, Pan

Books, London, 1979.

REFERENCES

Fogarty, Michael., Women And Top Jobs, George Alien & Unwm Ltd.,1971

A PEP Report, Women And Top Jobs, An Interim ReportHemig, Margaret and Jardim, Anne , The Managerial Woman, Pan

Books, London, 1979.Colnill, Nina L., The New Partnership: Women and Men In

Organisations, Mansfield Publishing Co., U.S.A , 1982Ferguson, Lawrence L., Better Management of Managers' Careers,

Harvard Busmess'Review, Executives in Mid-Career, March — April,1966

Rivers, Caryl., Reaching For The Top, Working Woman, Sept. 1983Schwartz, Felice N., From Getting In, To Getting On, Working

Woman, Sept 1983Rice, Berkeley., Why Am I In This Job? Psychology Today, January,

1985Stamell, Marcia., Is Your Job Meeting Your Needs, Career Workshop,

Working Woman, June, 1985Schwartz, Judith and Anderson, Robert C., Moving Up Not Out,

Success! June, 1986Kagan, Julia., Taking Charge of Change, Working Woman, August,

1987Ciabattan, Jane., Managing Nine Critical Career Turning Points,

• Working Woman, October, 1987Korn, Lester , Plotting Your Next Career Move, Working Woman,

January, 1988.Tooley, Reva., Handling Setbacks, Working Woman, February 1988.Hellwig, Basia., How To Build Career Security, Working Woman,

June 1988

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Swain, Madeileine and Robert., How Long A Job Search Takes (AndHow You Can Speed It Up), Working Woman, August, 1988

Ciabattari, Jane., Managerial Courage, Working Woman, Sept. 1988Cole, Diane., Getting Your Name on Everyone's Lips, Working

Woman, August, 1989

21

BIODATA

Pcnulis ialah Pcnsyarah Pentadbiran Perniaga-an, Fakulti Ekonomi, Universiti Islam Antara-bangsa. Bcliau pcrnah bcrkhidmat di sebuahfirrna audit dan Bank Ncgara Malaysia. YusofIsinail adalah anggota sidang pengarangjowrttii/of Islamic Economics.

Pcnsyarah UIA ini dilahirkan di Tg. Tokong,Pulau Pinang. Beliau mcmiliki DiplomaPcrakaunan dari Institut Tcknologi MARA,

kemudian niclanjutkan pelajaran kc Indiana University dan Murray StateUniversity, Amerika Syarikat, untuk mcndapatkiin BS(Financc) danMBA(Manageinent/Marketing), masing-masing.

Bcliau telah banyak tnctiterjeniah buku. Judul-judul yang dijangka ditcrbitkanpada tahun 1989 ialah: Islam dan Keusakawanan (M.N. Siddiqi, 1989). HubunganMajikan-Pi'kerja (Hakim Mohamcd Said, 1989) Islamic Labour Relations (Labib alSaid, dalam proses suntingan), Beauty of the Modem Women Some Reflections(Ni'mat Sidqi, 1989), Fiqli Islam dan Prinsip Dharnrah dan Hajah (Muslchuddin,1989) Ekonomi Islam Suatu Perbandingan (Al Lababidi, 1988) dan Bentnk dan Ciri-ciriPendidikan Islam (Muslchuddin, 1988) telah ditcrbitkan. Pcnulis sedangmenyunting sebuah buku mcngcnai Keusahawanan dan sedang mcnyiapkansebuah buku mcngcnai Kerjaya.

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MUTU SEBAGAI ASAS KEKUATANPERNIAGAAN - SATU ANALISIS

Yusof Ismail

PENGENALAN

Pada zaman moden masyarakat pengguna lebih teliti dan berhati-hati terhadapmutu barangan dan perkhidmatan yang mereka beli. Pengeluar dan pemberiperkhidmatan tidak boleh memandang ringan faktor mutu kerana persainganlambat laun akan memaksanya memperbaiki mutu barangan dan perkhidmatanyang diberikannya. Persoalan mutu bukan sahaja timbul dalam sektor swasta,tetapi juga dalam sektor awam. Kita sering mendengar sungutan penggunaterhadap layanan pekerja haunter di pasaraya dan mutu perkhidmatan jabatan-jabatan kerajaan. Malah di kalangan pengguna-pengguna sendiri pun wujudpersoalan mutu-pengguna yang bermutu (yang bersifat kritikal) dan tidakbermutu.

Rencana ini akan membincangkan perkara-perkara berikut:

(1) Defwisi Mutu(2) Contoh-contoh Mutu Barangan dan Perkhidmatan(3) Mutu Dan Pembuat Mutu(4) Pembentukan Manusia Bermutu(5) Kawalan Mutu(6) Cabaran Mempraktikkan Islam Dalam Bidang Pembinaan dan

Lain-Lain(7) Proses Melahirkan Usahawan Muslim dan(8) Panduan Mempertahankan Mutu.

DEFINISI MUTU

The Random House Dictionary of Current English memberikan beberapadefmisi mutu (kualiti): "sifat atau bentuk yang dimiliki atau membezakansesuatu benda" ("character or nature, as belonging to or distinguishing athing") "sifat kehalusan atau taraf ketinggian" ("character with respect tofineness or grade of excellence") dan "pencapaian" ("an accomplishmentor attainment" (h. 1080).

Donald Delmar mengatakan mutu sesuatu barangan atauperkhidmatan ditentukan pada tahap rekabentuk (design stage), manakalamutu sebenar dilakukan semasa tahap pengeluaran. Dan mutu, tambahnya

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lagi, ialah apa yang difikirkan oleh pengguna. Delrnar memberikan satupandangan yang menarik apabila beliau mengaitkan mutu dengan semuakegiatan sesebuah organisasi — polisi pengurusan, prestasi pekerja, tatacarayang digunakan oleh pekerja, peralatan, dan imej yang diwujudkan olehorganisasi pada pandangan pekerja, pembekal, pemegang saham, danpengguna (Delmar, 380).

Mutu ialah satu penilai atau kayu ukur kemajuan (Delmar, 380), sebabitulah syarikat-syarikat besar di Amerika Syarikat terlalu ghairah('obsessed') dengan mutu, kata Peters dan Waterman, dua orangpengarang buku yang paling laris dijual ('bestseller') In Search of Excellence.Untuk menjaga mutu perkhidmatannya syarikat Caterpillar Tractormenjanjikan penghantaran barang gantinya dalam tempoh 48jam di mana-mana bahagian di dunia. Barang-barangnya tahan lasak. Dan ia menjagamutu barang-barang buatannya: "Anda menghendaki jentera yangberfungsi pada setiap masa" ("You want machinery that works — all thetime"). In Search of Excellence memberikan banyak lagi contoh-contohamalan syarikat-syarikat besar mengenai mutu (Peters dan Waterman, 171-172). Usaha-usaha syarikat-syarikat besar tersebut didasarkan kepadapengalaman mereka sendiri dan pengalaman syarikat-syarikat lain.

Pendirian umum mengenai mutu dalam Islam dijelaskan oleh sebuahHadith:

Allah menyukai seseorang yang membuat pekerjaannya denganmemperelokkannya (Baihaqi)

CONTOH-CONTOH MUTU BARANGAN DANPERKHIDMATAN

Pembaca sendiri dapat menilai barangan dan perkhidmatan yangbermutu dan yang tidak bermutu. Dalam sektor swasta kita menyaksikanlayanan buruk dari pembekal (supplier) kepada kontraktor: Bahan-bahanyang tidak bermutu atau cacat dibekalkan kepada kontraktor, kurangtimbangan dan sukatan berleluasa, perbuatan khianat (sabotaj) dilakukandengan cara melambat-lambatkan pembekalan. Malah di kalangan parakontraktor sendiri ada yang menghasilkan kerja yang tidak bermutu('substandard'). Misalannya penutup 'man-hole' dijalanraya didapati tidakseparas dengan jalan bertar. Ini boleh disaksikan di jalanraya-jalanrayaKuala Lumpur dan Petaling Jaya. Satu contoh lagi ialah siling asbestos tidakdipasang dengan kemas, akibatnya pengeluar tender terpaksa mendapatkanperkhidmatan dari kontraktor bukan Muslim untuk menyelesaikan kerjaberkenaan.

Sektor awam juga memperlihatkan kekurangan dalam memberikanperkhidmatan bermutu. Permohonan untuk mendapatkan permit tertentu

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dilewatkan, kecualilah kalau kontraktor berkenaan adalah orangberpengaruh atau mempunyai hubungan dengan orang-orang yangberpengaruh. Aduan dan komentar pengusaha, kontraktor dan orangawam dalam akhbar-akhbar harian menggambarkan paras mutuperkhidmatan jabatan-jabatan kerajaan secara umum.

Setengah-setengah projek menunjukkan tidak terdapat keselarasanantara sektor awam dan swasta. Misalnya, dalam pembinaan dan pembaikanmasjid sektor awam masih belum berjaya memberikan dorongan danmengawasi prestasi kontraktor Muslim manakala sebahagian dari parakontraktor Muslim pula merasa leka dan seronok mengambil "wangmalas" dari kontraktor bukan Muslim yang menggunakan namasyarikatnya. Masih banyak perkara yang boleh difikirkan oleh parausahawan. Satu soalan yang boleh dikemukakan ialah: Adakah terdapatdikalangan orang-orang Muslim arkitek, jurutera dan kontraktor yangsedang membuat rekabentuk masjid yang nyaman dan tidak terlalu panas didalamnya?

MUTU DAN PEMBUAT MUTU

Jackson dan Musselman sependapat dengan Delmar (Delmar, 380)mengatakan bahawa mutu ditentukan oleh rekabentuk barangan,penyelenggaraan peralatan dan orang yang melakukannya (Jackson danMusselman, 275). Dalam lain-lain perkataan, mutu ditentukan olehmanusia. Teknologi direkabentuk oleh manusia, mesin dijalankan dandiselenggarakan oleh manusia. Manusia' juga yang merekakan mesinatau membuat perancangan yang sofistikated. Masalah-masalah yangdiwujudkan oleh manusia secara langsung atau ditaqdirkan (ditentukan)oleh Allah perlu diselesaikan oleh manusia. Ringkasnya, mutu dan manusiaadalah dua unsur yang berkait rapat. Rajah I menunjukkan kaitan antarapembuat mutu, mutu dan hasil kerja.

RAJAH I Kaitan Antara Pembuat Mutu, Mutu Dan Hasil Kerja

PembuatMutu

Pembaikan —— *

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Apakah bentuk mutu yang dikehendaki? Semestinya mutu yang tahanlama dan lebih balk dari mutu yang dihasilkan oleh pesaing-pesaing dalamindustri yang sama. Atau sekurang-kurangnya mutu piawai ('standard').Apakah mutu boleh dipertahankan oleh manusia atau firma pada tempohyang lama? Usahawan atau firma past! berhajat kepada mutu yang tahanlama, tetapi hakikat kehidupan menunjukkan bahawa ini tidak mungkindicapai berpanjangan. Sebabnya ialah tabiat manusia itu sendiri. la pelupadan lalai, ia menghadapi masalah harian yang mempengaruhi pekerjaannyauntuk mempertahankan mutu, mutu barang mentah berbeza-bezameskipun pihak pembekal ingin mengawal perbekalannya, dan lain-lainlagi.

Teknologi semata-mata tidak dapat memastikan mutu yang tinggisecara berterusan. Perbekalan yang bermutu pada masa-masa yang lepasmungkin tidak akan berterusan — perubahan boleh berlaku dalam sekelipmata. Allah SWT menguji sesiapa sahaja di mana-mana tanpa mengiramasa.

Pembaikan dan penjagaan mutu barangan dan perkhidmatansebenarnya bergantung kepada peningkatan mutu dalam diri manusia itusendiri.

PEMBENTUKAN MANUSIA BERMUTU

Ada dua bentuk mutu yang perlu dilengkapkan pada diri manusia:(1) mutu secara umum, dan (2) mutu secara khusus.

Di dalam Islam, setiap orang Muslim, tanpa mengira kerjayanya.wajib melengkapkan dirinya dengan mutu umum, minima dan asasmengenai Islam. Ini ialah syarat yang diberikan oleh Allah, Penciptamanusia, Pemberi sistem kehidupan, Yang Maha Mengetahui bahawamanusia yang diciptakanNya mampu melaksanakan tanggungjawabminima, sebagaimana FirmanNya:

Aku tidak memberatkan kamu melainkan sekadar mana yangkamu mampu.

(Al Baqarah 2: 286)

Dan Allah SWT mengetahui bahawa manusia mampu melaksanakantanggungjawab minima. Asas minima inilah yang menjadi pendorong ataupenggerak bagi individu Muslim untuk menjaga mutu dirinya secara umumdan menjadikannya mangkin ('catalyst') untuk mempertingkatkan lagimutu dalam barangan dan perkhidmatan yang dikeluarkannya.Ringkasnya, hamba Allah yang memahami dan melaksanakantanggungjawab minimanya akan memperkukuhkan mutu pekerjaannya.Perkara ini digambarkan dalam rajah di sebelah:

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RAJAH II

Pembentukan Mutu Yang Tidak Seimbang

KefahamanUmumMinima

KefahamanKhususKerjaya

Mutu DEENI

KETIDAKSEMPURNAAN

Mutu Kerjaya

KefahamanUmumMinima

KefahamanKhususKerjaya

RAJAH III

Pembentukan Mutu Yang Seimbang

Mutu DEENI

KETIDAKSEMPURNAAN

Mutu Kerjaya

Rajah II menunjukkan seorang Muslim yang tidak menghubungkankehidupannya sebagai Muslim dengan pekerjaan atau perniagaannya. Olehkerana tiada hubungan langsung antara pekerjaannya dengan Islam makapekerjaannya tidak tergolong sebagai ibadah. Rajah III pula menunjukkanbahawa kontraktor Muslim menyedari tanggungjawabnya sebagaiseorang Muslim tidak terbatas pada aspek-aspek ibadah khusus, malahpekerjaannya sebagai kontraktor termasuk juga dalam ruang lingkupibadah. Menurut definisi Islam, amalan kontraktor dalam Rajah III lebihsempurna dan seimbang berbanding dengan amalan kontraktor dalamRajah II. Proses pembangunan dan latihan sumber tenaga manusia secaraumum digambarkan dalam Rajah IV di sebelah:

Rajah di atas menunjukkan bahawa Islam memberikan kekuatanaqidah, dorongan dan sistem bertindak yang bersepadu kepada seorangMuslim, usahawan atau pemakan gaji, suri rumahtangga atau penuntutsekolah (Untuk keterangan lanjut sila rujuk Ismail, "PembangunanSumber...")

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RAJAH IV

Proses Pembangunan Dan Latihan Sumber Tenaga Manusia

Islam(Matlamat)

KAWALAN MUTU

Mutu perlu dikawal kerana faktor-faktor lain boleh mengurangkanparas mutu yang sedia ada. Proses kawalan rnutu ditunjukkan dalam RajahV. Mutu ditentukan oleh berbagai-bagai pihak. Paras mutu dalam kerja-kerja pembinaan ditentukan oleh pemilik (Coldhaber, 2, 3, 6), arkitek,jurutera, undang-undang, peraturan dan kontraktor. Mutu piawai ialahsyarat minima yang mesti dipenuhi (nombor 1). Kontraktor tidak bolehmenggunakan batu bata yang tidak kukuh (nombor 2) kerana ia berada dibawah paras mutu piawai. Jika kontraktor tidak dapat mengelakkanperkara ini dan ada cara lain yang boleh diguna untuk mengukuhkansusunan batu bata itu seperti.menggunakan lebih kuantiti simen, tindakanini akan menukarkan kedudukan sebelum ini (nombor 2) kepadakedudukan yang dapat memenuhi syarat minima (nombor 3).

Kawalan mutu wujud pada peringkat-peringkat yang berlainandalam sesuatu projek. Dalam pekerjaan atau projek-projek tertentukawalan mutu lebih bersifat kritikal, oleh yang demikian cara-cara yanglebih sofistikated digunakan.

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RAJAH V

Kawalan Mutu

Paras Atas ————————————————

Mutu piawai j-

Paras Bawah

CABARAN MEMPRAKTIKKAN ISLAM DALAM BIDANGPEMBINAAN DAN LAIN-LAIN

Mempraktikkan tuntutan Islam dalam setengah-setengah pekerjaanatau bidang pekerjaan dan perniagaan adalah lebih mencabar berbandingdengan bidang-bidang yang lain. Keadaan ini berlaku kerana suasanakelslaman tulen serta rneluas tidak wujud. Orang-orang Muslim yangterlibat dalam urusniaga pembinaan dari pembekal, peniaga, pelanggansampai kepada pegawai agensi awam yang berkenaan tidak mengamalkancara-cara mu'amalah (perhubungan perniagaan) Islam. Pembaca tidak bolehmembuat kesimpulan bahawa sekiranya suasana kelslaman wujud, masalahtidak akan timbul. Masalah akan timbul dalam mana-mana sistem, tetapimasalah yang lahir dalam suasana Islam adalah berbeza kerana Islam mampumenyelesaikan masalah-masalah yang lahir di bawah pengawasannya!Seorang mujahid Islam terkenal, Syed Qutb berkata:

Laksanakanlah Islam itu sebagai suatu keseluruhan, dalam sistemhukurn dan pemerintahan, dalam dasar perundangan dan dalamprinsip-prinsip pendidikan, baru setelah itu kita dapat melihatapakah masalah-masalah yang ditanyakan itu masih ada dalammasyarakat atau menghilang dengan sendirinya (S.Qutb, 115)

Pendapat Syed Qutb tidak anih kerana ia adalah selaras denganpendirian Islam. Masyarakat Islam pada zaman awal (zaman RasulullahSAW) bukanlah satu masyarakat khayalan (utopia), masyarakat angan-angan, masyarakat hipotesis seperti masyarakat dogmatik komunis atausosialis dan rakan-rakannya. Kitab Panduan orang-orang Islam lengkapdan sesuai untuk mana-mana zaman, sebagaimana yang Allah SWT akui:

Tidak Kami alpakan sesuatu pun di dalam al kitab (al Quran)(AI An'aam 6:38)

Sebagai orang-orang Islam, kita semestinya menginginkanketenteraman untuk melicinkan kegiatan kita mencari najkah. Kita yakin

29

Islam sahajalah yang mampu memberikan suasana ini. Islam tidakmenyuruh kita melarikan diri dari realiti (kenyataan) kehidupan ini.Sebaliknya ia menuntut supaya kita menghadapinya dengan berbekalkankefahaman Islam yang tulen. Kita perlu melakukan perubahan secara tabi'i,perlahan-perlahan, sesuai dengan kemampuan, persediaan, dankesungguhan kita masing-masing. Sekiranya kita berusaha dengan tabahdan sabar, insya Allah, golongan usahawan dan kontraktor Muslim bolehmewujudkan suasana yang sihat untuk kebajikan masyarakat kontraktor,Muslim dan bukan Muslim.

Harus diingat bahawa perubahan hendaklah dilakukan menurut caratertentu.

PROSES MELAHIRKAN USAHAWAN MUSLIM

Rajah VI memberikan rangka proses untuk melahirkan usahawan dankontraktor Muslim:

RAJAH VI

Proses Melahirkan Kontraktor Muslim

Kefahaman Asas Islam

Prinsip-Prinsip Perniagaan Islam

Ilmu Teknikal

Pekerjaan Sistematik

i

Kefahaman Asas: Meningkatkan kefahaman asas mengenai Islam. Iniialah kerana kefahaman asas menjadi penggerak dan pembentukfikiran serta tindakan seseorang kontraktor. Oleh kerana itu kegiatanini hendaklah dijadikan usaha sepanjang hayat kerana kekuatan yangsebenar terletak di sini.

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Apabila ramai dikalangan usahawan dan kontraktor memahamiIslam dengan cara yang betul, maka tindakan mereka akan berubah.Tidak ada tindas menindas, tidak ada rasuah dan lain-lain lagi.Sekiranya penyelewengan berlaku di dalam agensi kerajaan, makamasyarakat kontraktor sendiri akan mengambil langkah yangsewajarnya untuk mengatasi perkara ini.

2. Prinsip-Prinsip Perniagaan: Mempelajari prinsip-prinsip mu'amalat(perniagaan dan perusahaan) secara Islam. Kitab Majjalahi al Ahkam al'Adliah misalnya mengandungi peraturan-peraturan mengenaikontrak, hukum jualbeli, sewa menyewa, jaminan, pemindahanhutang, amanat, hadiah, pemilikan, dan lain-lain lagi.

3. Ilmu Teknikal: Menambahkan ilmu dan mempertingkatkan diridalam bidang yang diceburi. Perkara ini boleh diperolehi melalui (a)pemerhatian (b) pembacaan (c) menghadiri kursus-kursus yang sesuai,dan (d) berbincang dengan rakan-rakan kontraktor lain.

4. Pekerjaan Sistematik: Berusaha melakukan kerja secara sistematik(tersusun) dan kemas. Seorang kontraktor pembinaan memberiperingatan kepada rakan-rakannya supaya:

Pengurusan Pejabat

(a) Menyimpan rekod kemajuan kerja seharian dengan baik.

(b) Menyimpan kounterfoil cek, resit pembelian dan dokumen-dokumen lain.

(c) Merancang baki wang tunai di tangan, menyimpan lebih bukucek untuk menghadapi keadaan kecemasan (Ludman, 74-75).

Pengurusan Teknikal

Kontraktor harus berusaha mengetahui secara umum mengenai setiapaspek yang berkaitan dengan kerja-kerjanya:

(d) Mempelajari teknik-teknik pengurusan melalui rakan-rakan ataukursus-kursus tertentu.

(e) Sekiranya ia tidak berpengetahuan langsung mengenai akaun, iaharus berusaha mempelajari asas-asas akaun.

5. Perubahan: Jika kebanyakan kontraktor Muslim gigih menyerap-kan ajaran Islam dalam pekerjaan mereka sehari-hari, tanggapanpelanggan terhadap kemampuan, kebolehan dan mutu kerja mereka

31

akan berubah. Kontraktor juga bertanggungjawab memberikanpelajaran dan pendidikan Islam kepada para pekerjanya. Sebagaimanayang diterangkan oleh sebuah Hadith: Tiap-tiap kamu pemimpin dantiap-tiap kamu akan disoal mengenai apa yang kamu pimpin (Bukharidan Muslim, Riadhus Salihin, 287 - 288). Perubahan yang menyeluruhdalam industri pembinaan semestinya mengambil masa yang panjang.Meskipun demikian ia perlu dimulakan. Jika tidak ada permulaanmaka tidak akan ada kesudahan.

PANDUAN MEMPERTAHANKAN MUTU

Oleh kerana ada banyak faktor yang mempengaruhi mutu, makadisenaraikan di bawah ini unsur-unsur berkenaan.

(a) Menentukan piawai: Piawai hendaklah ditentukan terlebih dahulu.

(b) Kepakaran dan pengalaman: Orang-orang yang terlibat dalam sesuatupekerjaan hendaklah mempunyai kepakaran dan pengalaman dalambidang yang diceburinya. (Kepakaran tidak semestinya bersamaandengan kelayakan akademik).

(c) Bahan mentah Jentera dan peralatan: Sedapatnya bahan mentah, jenteradan peralatan yang digunakan hendaklah yang bermutu, bergantungkepada perjanjian pembinaan yang telah dimeteraikan.

(d) Mengutamakan orang-orang Muslim'. Untuk melicinkan pekerjaan,kontraktor hendaklah mengutamakan perkhidmatan orang-orangMuslim yang berkemampuan.

KESIMPULAN

Berdasarkan perbincangan di atas beberapa kesimpulan dapat dirumuskan:

1. Kedudukan mutu: Mutu ialah satu syarat wajib dalam pengeluaranbarangan dan pemberian perkhidmatan. Sama ada termaktub atautidak di dalam kontrak, seorang Muslim mempertahankan mutu ataskesedarannya sebagai hamba Allah.

2. Teras sebenar: Yang menjadi "asas" kekuatan perniagaan ialahkeyakinan dan pegangan seorang Muslim kepada aqidahnyz, bukannyamutu. Oleh kerana itu penekanan hendaklah diberikan kepadapembentukan seseorang Muslim terlebih dahulu, kemudian dengansendirinya kontraktor Muslim yang berkalibar dan bertanggungjawabdilahirkan.

32

3. Pendidikan berterusan: Oleh kerana mutu barangan danperkhidmatan bergantung kepada mutu individu, maka individuhendaklah dididik secara Islam berterusan. Penekanan utama ialahmembulatkan aqidah Tauhid, yang menjadi penggerak utama tindakandan usaha-usaha seorang kontraktor atau peniaga Muslim.

4. Ilmu teknikal: Seseorang ahli perniagaan hendaklah mempersiapkandirinya dengan ilmu pengetahuan yang berkaitan dengan bidangperniagaannya.

5. Bekerjasama: Kontraktor-kontraktor Muslim hendaklah bekerjasa-ma untuk merubah budaya kerja dunia perniagaan.

Wallahu A'lam

RUJUKAN

Delmar, Donald. Operations and Industrial Management Disigningand Managing for Productivity. McGrawHill. 1985.

Goldhaber, Stanley, JHA, Chandra K, and Macedo, Jr., Mandel C.Construction Management Principles and Practices. (JohnWiley & Sons). 1977.

Ismail, Yusof. "Pembangunan Sumber Tenaga Manusia DalamOrganisasi Menurut Perspektif Islam." Dibentangkan di KursusPembangunan Sumber Daya Manusia anjuran bersama InstitutKajian Dasar dan Lembaga Letrik Negara di Institut Sultan AhmadShah (ILSAS), Kajang pada 20hb Oktober, 1988.

Jackson, John H and Musselman, Vernon A. Business: ContemporaryConcepts and Practices. (Prentice-Hall). 1987.

Ludman, Kim. Running Your Own Building Business. (Kogan Page).1985. The Mejelle An English translation of Majjallahi al AhkamAl'Adliah. (Lahore: Law Publishing Co.)

Peters, Thomas J and Waterman Jr. Robert H. In Search of Excellence(Warner Books). 1982.

Qutb, Syed. Beberapa Studi Tentang Islam. (Banding: Penerbit MediaDakwah). 1981.

The Random House Dictionary of the English Language, CollegeEdition. 1977.

Riadhus Salihin. Terjemahan H. Salim Bahreisy. (Bandung P.T. AIMa'arif). 1977.

33

BIODATA

Profesor Madya Dr. Hj. Mohd. Amir Sharifudinbin HashimLahir: 29-3-47 Kelantan

Sekolah:1. Sck. Menengah Sultan Ibrahim, Pasir

Mas2. Maktab Tentera DiRaja Sungai Bcsi -

Cawangan Putera

Univcrsiti1. B.A. dalam Business Management (Victoria University - N.Z.)2. Dip. Ed., B. Ed. Studies (Victoria University - N.Z.)3. M.A. (Hons) Educ. (Massey University, N.Z.)4. Ph.D. (Entcrprcneurship and Small Business Dcv't). Massey University, N.Z.

Jawatan SckarangPcnsyarah Pendidikan Perdagangan dan Kcusahawanan mcrangkap

Timbalan Dekan, Fakulti Pendidikan, UKM.

Perundingan- Penasihat Pembangunan Usahawan Jabatan Perdana Mcnteri- Penasihat Kclab Usahawan Malaysia- Penasihat Sukatan Pelajaran Perdagangan dan Kcusahawanan, Kcmcntcrian

Pendidikan.

34

TAHAP-TAHAP KRITIKAL DALAMPERTUMBUHAN PERNIAGAAN -

PANDUAN PEMILIK PERNIAGAANKECIL

Hj. Mohd Amir Sharifudm Hashim

Pengenalan

Masalah kegagalan peniaga-peniaga kecil sudah mendapat perhatianoleh bukan sahaja kerajaan di negara-negara maju tetapi di negara-negarakurang maju (lihat Bannock, 1980). Peniaga-peniaga kecil juga mendapattumpuan masyarakat akademik dan kajian-kajian mengenainya sudah punada (lihat Devin, 1977, Williams, 1975, Mohd Amir Sharifudin, 1984,1990).

Walau bagaimana banyak sekalipun kajian yang pernah dibuat hasil-hasilnya mestilah sampai kepada usahawan-usahawan berkenaan sebelumhasil-hasil itu benar-benar bererti dan dapat memberi manfaat. Selaindaripada jurnal-jurnal yang barangkali jarang sampai ke tangan usahawan^usahawan berkenaan, seminar-seminar adalah penting digunakan sebagaisumber maklumat sebegini.

Di dalam kertas kerja ini penulis memilih untuk menyampaikanmaklumat mengenai tahap-tahap kritikal dalam perkembanganperniagaan-perniagaan kecil seperti yang dilaporkan oleh Steinmetz(1969). Maklumat ini akan ditokok tambah dengan beberapa maklumatlain dengan harapan supaya kertas kerja ini menjadi lebih sempurna danbererti. Dalam konteks ini penulis akan menyentuh tentang kedudukanperniagaan kecil dari segi kelemahan mereka, membicarakan maklumatmengenai punca-punca kegagalan, dan seterusnya menyentuh tajuk utamakertas kerja ini.

Kelemahan Peniaga-Peniaga Kecil

Berbagai tafsiran pernah dibuat mengenai perniagaan kecil. DiMalaysia tafsirannya mengikut defmisi oleh Bank Negara ialah pertubuhanperniagaan yang mempunyai modal terkumpul tidak melebihi $500,000.

Kertas kerja ini dibentangkan di Seminar Program Pembangunan Ekonomi, UsahawanMelayu, Kelab Usahawan Malaysia, Kota Bharu 24 Mac, 1990.

35

Apapun definisi yang diberikan perniagaan kecil biasanya diuruskan olehseorang atau dua orang pemilik di mana kedua-duanya pemilik danpengurus terdiri dari orang yang sama.

Salah satu kelemahan terbesar peniaga-peniaga kecil berkait rapatdengan tugas yang hendak dijalankan. Tidak seperti perniagaan yangbesar-besar di mana pengurusan tertentu seperti pemasaran atau kewanganditugaskan kepada orang-orang tertentu sedangkan pemilik perniagaankecil mesti membuat kesemua tugas pengurusan dan teknikal. Dialahpengarah urusan, pengurus pemasaran, pengurus iklan, penguruspersonalia, akauntan dan sebagainya. Misalnya seorang pengurusperniagaan kecil mesti tahu dan mempunyai pengetahuan dan pengalamandalarn bidang:

a) membeli barang-barang atau bahan mentahb) meningkatkan mutu hasil pengeluaran atau servisc) pasaran dan pemasaran serta perubahan-perubahan dalam pasarand) pengambilan, latihan dan motivasi pekerjae) pengurusan maklumat dan laporan pengurusan kewangan dan

perundangan.

Oleh kerana tidak semua pemilik perniagaan kecil dapat memenuhisyarat-syarat di atas maka di sinilah bermulanya krisis dan kegagalan.Perkara ini hanya timbul beberapa tahun selepas perniagaan dimulakanseperti yang dilaporkan oleh seorang Profesor dari Australia, A.J. Williams(1975). Ini dibincangkan di dalam bahagian berikut.

Umur dan Kegagalan Perniagaan Kecil

Profesor A.J. Williams (1975) mendapati bahawa peratus kegagalanperniagaan kecil di Perth dan Melbourne adalah lebih tinggi di kalanganfirma yang berumur lima tahun ke bawah. Hasil kajian ini dapat dilihatdalam Jadual I.

Sementara itu di Amerika Syarikat, laporan Dunn dan Bradstreet(1970) menunjukkan bahawa 90% daripada kegagalan berpunca daripengurusan yang lemah. Kedudukan ini dapat dilihat dalam Jadual 2.

Hasil kerja Williams (1975) dan Dunn dan Bradstreet (1970)mempunyai kaitan rapat dengan tahap-tahap kritikal perkembanganperniagaan kecil yang diperhatikan oleh Steinmetz (1969). Pengurusanyang cekap sudah tentu dapat mengenalpasti bila tahap-tahap kritikal iniberlaku dan langkah-langkah yang wajar diambil. Berikut inidibincangkan bila, bagaimana dan sifat-sifat tahap kritikal berkenaan.

Tahap Kritikal Perkembangan Perniagaan

Steinmetz (1969) mengenalpasti tiga tahap p rkembangan dalam usia

36

Jadual 1Umur Kegagalan Perniagaan Kecit

(Perth dan Melbourne)

Umur Firma (tahun) Kegagalan (%)

Bawah 1 27.61 - 2 13.82-3 11.23-4 10.14-5 6.45-10 9.3

10 - 20 8.7

Melebihi 20 12.9

(Sumber: Williams, 1975:18)

Jadual 2Sebab Kegagalan Perniagaan Kecil

(Amerika Syarikat)

Sebab Kegagalan Peratus Kegagalan (%)

1. Cuai 2.3

2. Penipuan 0.9

3. Pengurusan lemah

a) Kurang pengalaman dalam barang 10.2dijual

b) Kurang pengalaman mengurus 13.5c) Pengalaman tidak seimbang 18.6d) Tidak cekap 47.8

90.1

4. Malapetaka 1-2

5. Tidak tahu sebab 5.5

(Sumber: Dunn dan Bradstreet Inc. 1971: 11 -12 dipetik dalam Meredith,1977:21)

37

perniagaan kecil kecuali firma-firma yang stagnant dan kekal pada tahapbertahan iaitu tiada perubahan dari mulanya firma berkenaan ditubuhkan.Tahap-tahap ini terdiri daripada fasa 1 di mana pengurusannya adalahsecara terus, fasa 2 di mana pengurusan diawasi dan fasa 3 di manapengurusan adalah secara tidak langsung (indirect).

Ketiga-tiga tahap kritikal ini dapat dilihat melalui Rajah 2 berbentukS. Satu ringkasan mengenai sifat dan kelakuan di tiap-tiap tahap diberikandi dalam Rajah 3.

Rajah 2

Tahap-tahap Kritikal Perniagaan Kecil

Fasa 1

Pen-guru sanTerus

T Ka rh ia tP i

kx/r^/ i

Fasa 2

Pengurusandiawasi

T K

/h i/ a t

/ P '/ k

a1

2

Fasa 3

PengurusanTIDAKlangsung

^^"~~TahaP

20 - 30 250 - 300Pekerja Pekerja

Kritika1

3

Fasa 4

Pengurusanmengikut

750-100Pekerja

(Sumber: Steinmetz, 1969:31)

Penulis tidak bercadang berbincang satu persatu sifat-sifat bagi satu-satu tahap di dalam perkembangan perniagaan kecil seperti yang terdapatdi dalam Rajah 3 kerana ianya memakan ruang yang panjang. Lagi punkesan sifat-sifat berkenaan dirasakan senang difahami kerana telahdipermudahkan persembahannya daripada sumber asal. Walau bagai-manapun ulasan secara menyeluruh kepada tiap-tiap tahap tersebut di atasdiberikan berikut ini untuk dijadikan panduan.

38

Daripada tingkahlaku firtna seperti yang dapat dilihat di dalam Rajah3, penulis ingln menegaskan bahawa perniagaan kecil sebenarnya bukanperniagaan besar yang kecil saiznya (big business in miniatures) tetapiperniagaan kecil mempunyai sifat-sifat tersendiri seperti yang disebutkandi awal rencana ini. Mungkin ungkapannya lebih berkesan di dalam bahasaInggeris berbunyi:

"Small business are not little adults but like children they havetheir own personalities and needs"

Dan sebagai anak-anak perniagaan kecil juga membesar dan dalamproses pembesaran ini mereka menghadapi berbagai cabaran yangmenentukan mati atau hidupnya. Sebahagian daripada cabaran-cabaran iniboleh dilihat di dalam Rajah 3.

Rajah 3

Ringkasan Mengenai Sifat-Sifat KritikalDi Dalam Perniagaan Kecil

TAHAP SATU : HIDUP ATAU MATI

a) Firma rnula berkembang-keperluan berubah.

b) Ketidaksesuaian pengurusan secara terus.

c) Pekerja mulai resah kerana tiada motivasi.

d) Persaingan daripada firma yang sama bidang.

e) Pemilik mula menurunkan kuasa mengurus.

f) Pasaran bagi hasil yang kecil-kecil mulai dikuasai oleh firma yang lebihbesar.

g) Kesuntukan masa bagi melayani kesemua permintaan.

h) Timbul kebuntuan dan akhirnya wujud masalah dan krisis yangmengancam pertumbuhan.

(Rajah 2 sambungan)

TAHAP DUA : PERANAN SEBAGAI PENGURUS

a) Pemilik mula berperanan sebagai pengurus dan dibantu olehpembantu dalam bentuk delegasi kerja.

39

b) Pemikiran pemilik tidak lagi fleksibel kerana dipengaruhi olehkejayaan pada tahap satu. Pemilik gagal membuat penyesuaian.

c) Tingkahlaku pembantu-pembantu pengurus mula negatif ditambahdengan sifat tamak dan irihati terhadap pemilik asal.

d) Kos 'overhead' bertambah-gaya hidup semakin mewah, alat-alatpejabat semakin moden dan mahal.

e) Peranan Kesatuan Pekerja sebagai pembela kerja.

f) Wujudnya organisasi non-formal yang berpengaruh.

g) Masalah 'diseconomies of scale' hasil pembesaran, 'economies of scale'tidak berlaku.

h) Masalah keluarga berpunca daripada pendapatan yang zahirnya tinggi— kewajipan sosial meningkat.

(Rajah 2 sambungan)

TAHAP TIGA : PENGURUSAN TIDAK LANGSUNG

a) Tamak - pengurus bahagian letak jawatan dan menjadi pesaing.

b) Pemilik-pemilik kecil dalam bidang yang sama mengambil alihpasaran (kemungkinannya terdiri daripada bekas pekerja).

c) Kesan pembesaran di peringkat nasional di mana kos iklan bertambahhasil daripada strategi pemasaran yang baru — 'diseconomies of scale'mula menyerap.

d) Hasil pulangan menurun berpunca daripada pelaburan mod.il yangberkurangan.

e) Masalah organisasi yang berat sebelah hasil daripada terlalu ramaiPenolong Pengurus bagi mendapat maklumat.

f) Perkelahian dalaman (staff infighting) menuju kepada masalah mo-ral. Prestasi ikut menurun.

g) Masalah terlalu banyak jenis barangan atau servis yang tidakmenguntungkan.

Sifat-sifat kritikal pada tahap satu merupakan masalah yang belumpernah dirasai oleh peniaga kecil pada peringkat permulaan berniaga.

40

Kalau dahulu pemilik perniagaan kecil pernah membuat kerja sendiriankini beliau terpaksa menghadapi bukan sahaja buruh yang bekerja tetapiaspek-aspek lain di dalam organisasi. Beliau mulai berhadapan dengan satuorganisasiyanghiduppenuhdengan personaliti dan keperluan tersendiri.Disamping itu permintaan dari segi pelanggan mula bertambah. Perniagaanmesti membesar supaya dapat bersaing. Pemilik mula merasai tekanan-tekanan baru dalam dunia perniagaan.

Di tahap dua pula sifat-sifat kritikal mula dirasa apabila pemilik benar-benar menjadi pengurus di mana kebanyakan kerja diserahkan kepadapenolong. Perhatian secara peribadi tidak lagi mungkin dilakukan.Kejayaannya pada tahap pertama membuatnya angkuh. Ancaman baruakan timbul hasil daripada pemikiran pemilik yang tidak fleksibel padatahap dua.

Di tahap dua juga komponen-komponen dalam organisasi mulamempunyai peranan tersendiri. Sebagai contoh pembantu-pembantupengurus sudah pandai tamak dan irihati terhadap pemilik asal. Merekamula merasai bahawa titik peluh mereka tidak memberi mereka hasil yangsetanding. Begitu juga dengan kesatuan pekerja yang menjadi pembela danbukan lagi sebagai pencari kerja. Berbagai masalah lagi timbul termasukharapan yang tinggi daripada keluarga pemilik sendiri. Pendapatan yangbesar pada tahap dua tidak setanding dengan kewajipan sosial pemilik yanglebih besar menyebabkan beliau mungkin dipulau oleh keluarganyasendiri kerana disangka kedekut. Anggota-anggota lain di dalamorganisasinya akan turut sama bersifat kritikal terhadap pemilik.

Setelah kedua-dua tahap kritikal ini diatasi ancaman terbesar mungkindatang dari perasaan tamak daripada kalangan pengurus-pengurusbahagian yang meletak jawatan dan menubuhkan perniagaan sendirisehingga mereka pula menjadi pesaing pada tahap tiga. Bekas-bekaspekerja organisasi berkenaan tentu sekali akan cuba mengambil alihpasaran dalam bidang yang paling menguntungkan dan yang mereka tentusekali tahu.

Selanjutnya masalah dalaman organisasi mungkin berlarutan keranapada tahap tiga pihak pengurusan menjadi 'top-heavy'. Ini berpuncadaripada pengambilan pengurus-pengurus yang bertambah ramai bagimemenuhi kepentingan mendapat maklumat dan nasihat. Pakar-pakaryang ada di dalam organisasi berkenaan lambat-laun berselisih fahammenyebabkan staff-infighting yang akhirnya menuju kepada masalahmoral dan prestasi kerja yang menurun.

Penutup

Pada awal kertas kerja ini penulis telah mengenalpasti bahawa lebih

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50% daripada peniaga kecil gagal dalam masa kurang daripada lima tahunperniagaan. Juga dikenalpasti bahawa 90% daripada kegagalan berpuncadaripada pengurusan yang lemah.

Salah satu cara mengatasi masalah pengurusan yang lemah ini danmenentukan supaya perniagaan kecil maju dan membesar ialah denganmengenalpasti tahap-tahap kritikal yang akan mereka lalui supaya pemilik-pemilik tidak terperangkap dengan keadaan yang seringkali mencabar.

Dengan mengenalpasti terlebih awal masalah yang bakal dihadapipemilik-pemilik adalah diharapkan supaya mereka dapat bersedia denganmenambah lagi ilmu yang mereka ada dan supaya mereka tidak terlalubergantung semata-mata kepada nasib. Memang sukar bagi pemilikperniagaan kecil mendapat pengalaman tetapi dengan adanya kemajuandalam teknologi pergantungan kepada pengalaman dapat dikurangkan.Pemilik-pemilik perniagaan mesti bersedia menghadiri kursus-kursus khassamada yang diberikan percuma ataupun dengan membiayainya sendiri.

Seperkara lagi yang perlu diingatkan ialah sifat pemilik itu sendiri.Sungguhpun pada awal perniagaan identiti pemilik sebagai tuan punyayang serba boleh dan kepimpinan secara autokratik senang diterima dandidapati sesuai tetapi akhir-akhirnya kejayaan akan bergantung kepadasamada beliau dapat membuat penyesuaian menjadi seorang pengurusyang profesional.

Akhir sekali semua pemilik harus ingat bahawa tahap-tahap kritikalyang disebutkan ini tidak akan melanda peniaga-peniaga yang statik.Mereka yang tidak berjaya tidak akan merasai kesiksaan ini kerana tahap-tahap kritikal ini hanya mejadi pengalaman kepada pemilik yang berjayadan yang meningkat daripada satu tahap kepada tahap yang lebih tinggi.lanya merupakan masalah yang akan wujud secara berterusan kerana iaberkait rapat dengan kejayaan. Keupayaan anda merentas tahap-tahapkritikal itulah tanda-tanda kejayaan yang sebenar.

Bacaan-bacaan Lanjutan

Bannock, G, (1980). The Promotion of Small Business: A 7 - CountryStudy Economist Advisory Group for Shell U.K.

Colins, O.S. MOORE, D.G. & Unwalla D.G. (1964). The EnterprisingMan, Michigan State University Graduate School of BusinessAdmin.

Devlin, M.H. (1977). Needs and Problems of Small Business - SomeResearch Findings, Massey University Dept. of Business StudiesOccational paper No. 15 N.Z.

Dunn &.Bradstreet Inc. (1970). The Failure Record Through 1969, N.Y.

42

Lupton, Charles (1962). "Watch Your Management Weight",Management of Personnel Quarterly, I Winter pp 11 — 17.

Meredith G.G. (1977). Small Business Management in Australia,McGraw-HiU.

Mohd. Amir Sharifudin (1984). Bumiputera Enterpreneurship, Ph.Dthesis, Faculty of Business Massey University N.Z. 1990. Daya SaingUsahawan Bumiputera Lapbran untuk Jabatan Perdana Menteri.

Steinmetz L.L. (1969) Critical Stages of Small Business Growth,Business Horisons Py wol. 12, No. 1, February.

Steinmetz L.L., Kline, J.B., Stegall, D.P. (1966). Managing the SmallBusiness, Home wood III Richard D, Irwin Inc.

Williams, AJ. (1975). "Small Business Failure - A NationalChallenge", Real Estate Journal April: 16 - 22.

43

BIODATA

The author has extensive experience in thearea of organisational development and Per-formance Management.

Prior to joining Hay in 1984, he was forseveral years the Group Personnel Manager forDunlop Malaysia Industries. He was responsiblefor the Installation of an Integrated HumanResource Management system with emphasison higher managerial productivity.

Farouk obtained his service industry experience when he was the director ofPersonnel and Training of the Kuala Lumpur Hilton.

He has been with the Ministry of Education, Curriculum Development Centrewhere he was responsible for the development and implementation ofprogrammes to improve teacher performance. He had for sometime served as ateam member of a UNESCO project, directed at producing multi-media self-instructional materials for teacher performance in Asean.

Farouk has presented several public papers on Strategic RemunerationManagement and a recent presentation was on getting employee commitment in a"privatised organisation".

In his consulting role in Hay, Farouk has worked with all the major multinationals,guiding projects to improve Human Resource efficicncy,involving systemsdiagnosis, structural review, process redesign and implementation. Farouk was theProject Manager for the Bank Negara and Pctronas studies. He is now guiding theS.T.M. Remuneration Project.

44

FLEXIBLE WAGES

Abdul Farouk Ahmed

What's too painful to remember we simply choose to forget. 1985:Recession Retrenchments. Liquidations. Cut-backs. 1987: The marketcrash. Fears of a US recession and collapse of the global financial system.Talk of a corning depression.

Today, the doom and gloom has long passed. Our fears are receding asthe Malaysian economy recovers rapidly, sales go up, and orders mount.While this buoyant mood is a welcome change, it will do us well toremember that the problems which contributed to the '87 crash, especiallythe US debt and her huge budget and trade deficits, remain unsolved.

Given this scenario, some economists are convinced that the recessionis bound to recur — sooner or later; so one should be prepared. The best wayto prepare for uncertaintly is to become flexible. For it is flexibility thatensures consistency of action in a fluid economic environment.

Human resources will become a more strategic and costly factor ofproduction in coming years, and the success and survival of a companyhinges on the flexibility of its human resource policies.

One way to achieve flexibility in this is to adopt a flexible wagesystem. This system, widely practiced in Singapore, Taiwan, South Koreaand Japan, has proved to be a critical tool in controlling wage costs andmotivating employees.

In essence it involves a compensation package containing one or morecomponents which vary according to employee performance, groupproductivity or company profit.

While its principles are elementary, the system in its full form invol-ves a new relationship between capital and labour, and demands a newindustrial relations structure and management style. For in this systemworkers and employers are partners rather than adversaries, sharing profitsand bearing losses together.

However, the present industrial relations environment in Malaysia isquite different. Employers and workers tend to see themselves as

45

adversaries in a win-lose situation As a response to worker insecurity,which grows easily m such an adversarial relationship, trade unions haveover the years pushed for wage increases and fringe benefits to bepermanently entrenched into collective agreements. Employers, reluctantto risk work stoppages in high growth years, relented to these demands,which were affordable then

Escalating Wage Costs

So we now have a system where increments are permanent and arenot varied downwards when there's a downturn Bonuses are contractual,and companies are obliged to pay them out even when they are makinglosses, open ended salary scales are designed to reward experience, serviceand loyalty rather than performance

The result an inflexible wage system, unresponsive to performance,productivity, and profits, growing at a compounding rate and imposing afinancial burden on companies

It is also hurting the economy1 Bank Negara adviser Dr Jaafar Ahmadtold a seminar last year that in 1981-85, average wages per worker rose 12per cent while productivity rose 9 per cent, thus pushing labour costs up 3per cent An inflated wage bill at the height of the recession contributed toshrinking profits, a loss of market share, an erosion of internationalcompetitiveness, closures and retrenchments

This inflexible wage system has survived only because it was insulatedby many years of high economic growth, today's fluid economicenvironment and mercurial markets demand a more flexible system Whilethe last recession shocked a few companies into adopting flexible wages, themajority of Malaysian companies persist with this outdated system

Danger Ahead

The danger is that when the recession recurs, those clinging on to theold system will tend to be reactive rather than responsive; having littleroom to manoevre, they are likely to slash wages, retrench workers, andimplement other drastic short-term measures that permanently damagemorale, performance and profits This is because unlike firms practisingflexi-wages, these companies will not have the option of reducing avariable portion of their compensation package

Most Malaysian companies are therefore likely to buckle under theweight of another recession Malaysia is especially vulnerable since labourcosts amount to 40 per cent of national income, and 60 per cent of GrossDomestic Product is exported

46

The need for change is therefore urgent. It is the companies whichreform their wage system now and do it right that will survive and succeedin the nebulous nineties.

Some change is alreadly in the 31*-. Data from the 1989 HayCompensation Comparison show that 38 per cent of participants now linkbonuses to performance and profits in some way. There's also a trendtoward paying more cash and less fringe benefits, especially for top jobs.

Among the established and forward-looking Malaysian companiesthat have begun moving toward some form of flexi-wage is Shell, the oilgiant.

"Our executive staff are eligible for variable performance bonuses,"explains Henry Lian-Aran, Executive Director (Personnel) for tht ShellCompanies in Malaysia. "Top performers may get up to a month's salary,some may get half, while others may only get an increment."

"Our aim is to differentiate reward for performers, from those whojust keep their heads above water," he informs. Top performers like thesystem, while the average performers are not so excited about it. But wesay this is company policy; if you want to get your bonus you have to workfor it."

What are the results of the programme so far? "It's too early to say."observed Henry, "but we're sure we're heading in the right direction."

C.I. Holdings, a public-listed firm in the volatile building materialindustry, is another company that has successfully tried out a flexible paysystem, for both blue-collar and executive staff. "Our bonus has a fixedbase, but the actual quantum varies with performance," explains PersonnelManager S. Nagalingam.

"The system has worked very well and we want to refine it further.We'd like to monitor performance throughout the year and relate pay risesto productivity more closely, perhaps every quarter."

The concept of flexi-wages is not really new to Malaysia, and has infact been applied in certain industries for many years. The hotel sector forexample has long practised a form of variable pay, where up to 45 per centof remuneration varies with service charges and revenue. This explainswhy the hotel industry is more resilient in a recession, and why motivationlevels tend to be relatively higher in this industry. In addition to increasingmotivation, a flexi-wage system also helps communicate company goalsand monitor performance.

47

It provides companies with an invaluable communication tool since itgives them an opportunity to specify desired results and establish what it iswilling to pay for these results.

Confronted with a target, knowing what is expected of them, andgiven tangible rewards, many employees are likely to be highly motivated.This is especially true of younger, educated Malaysians who seek jobswhere there is a real chance to have an impact, limited only by competenceand capacity.

Unlike salary increases and job promotions, which tend to be basedupon longer term performance, variable incentive payments increasemotivation by immediately recognising current achievement andresponding with prompt payment.

"It's nice to get more than just a pat on the back," says MohamedKamar, Managing Director of International Computers (ICL), Malaysia,another local company which practises flexi-wages.

"We believe such incentive payments contribute to productivity,especially if it is something way and above the normal compensation."

Other companies have discovered that flexi-wages also ensure moreeffective development and utilisation of human resources. Having tocompute an employee's performance payment forces review andcommunication on a regular basis.

Performance in turn has to be tied to corporate strategy. This demandsan effective planning process, one that can get together a strategy, analyseit, and assign the contributions of each individual and unit toward itsattainment. A consequent prerequisite is the installation of an effectiveperformance appraisal system.

Flexi-wages therefore improve Human Resource performance byinducing a strong integration of strategy, structure, people and processes.

Given its distinct advantages, it's surprising that so few companies inMalaysia practise a flexi-wage system. Many employers say their hands aretied until the government takes the lead in reforming the wage and taxstructure. But despite employer-pressure for reform, the governmentseems unwilling to change the status quo for now.

Companies should therefore take the lead by working within theexisting industrial relations structure and introducing a greater degree offlexibility into collective agreements.

The introduction of some element of flexibility will not only cushionthem from economic vagaries, but put them in an advantageous positionwhen the wage and tax system becomes more supportive.

In some cases, sheer market pressures will eventually force companiesto switch to flexi-wages. This is especially so for labour intensive electronic,textile, and rubber product industries, which will need to control wagecosts to remain competitive.

Change Overdue in Banking

The same applies to highly competitive industries such as banking andfinance, which will have to find ways to motivate and retain their high-fliers. The conventional notion of career structures in financial institutions,with their steady promotion, salary based on rank, perks and gratuity, willbe challenged.

"Such a far-reaching change follows the logic of the marketsthemselves," notes Barry Curnow, Managing Director of Hay-MSL. "Inthe fast moving, big and increasingly ingenious contemporary financialmarkets, a single individual can make an extraordinary difference to afirm's profits."

The problem, however, is that most financial institutions are nowrun like bureaucracies, where high-fliers are not easily recognised andrewarded. The situation is worse in Malaysia where controls on job-hopping within the banking sector have segmented salary levels for topexecutives, and "trapped" the high-fliers.

With deregulation, controls on job mobility may ease. When thatoccurs the restless high-fliers will take off, and certain banks alreadystruggling with high staff turnover will be in deep trouble.

Financial institutions must therefore reform their traditional,bureaucratic compensation structures if they want to secure a competitiveedge. Success will come to those who change first and change right.

An important prerequisite to implementing a successful flexi-wagepolicy is to tailor it to the specific needs of an organaisation. Each companyvaries in strategy, structure, management processes, people and values. Allthe factors, real and perceived, which spur people on to produce desiredresults must be understood and captured in an incentive program.

Should you stress teamwork or individual contribution? Should youemphasise asset management or growth? Should incentives be completelymechanical and quantitative or is there room for management discretion indetermining awards? These are some of the many questions that managersmust answer before designing and implementing a flexible wage system.

49

BIODATA

Ir. Hj. Arshad Hj. Marsidi is currently Direc-tor of National Productivity Centre (NPC), Pe-taling Jaya, Malaysia. He joined NPC as a Train-ing & Investigating Officer in 1968 and was ap-pointed as Deputy Director in 1973 and Direc-tor of the Centre in 1981. Prior to joining theNPC he was with the mining industry where heobtained practical working experience after gra-duating as a Production Engineer. His post-gra-duate qualifications are in Management Consul-

tancy and Quality Control. He has wide-ranging experience in management andsupervisory development, research and consultancy in the public and private sectors. He haspresented numerous papers at the national as well as international levels, published articles inboth local and foreign journals and chaired several national and international conferences onproductivity related issues.

For his invaluable contribution to the nation he was awarded the K.M.N. (1979) and J.S.M.(1985) by His Majesty the King.

RALATDi dalam Jurnal Produktivlti Bil. 7, 1989 yang lain, kami telah

menyiarkan scbuah rencana bertajuk 'Linking Wages to Profit — RelatedMeasurements' ditulis olch Ir. Hj. Arshad Hj. Marsidi, Pengarah PusatDaya Pengeluaran Negara.

Di dalam rencana tersebut pihak redaksi telah gagal menyiarkansemua 'Appendix' yang sepatutnya disertakan bersama rencana berkenaan.Olch itu kami siarkan semula rencana tersebut beserta dengan'appendix'nya untuk memudahkan anda membuat rujukan. Dengankesilapan ini pihak redaksi memohon maaf — Pengarang.

50

LINKING WAGES TOPROFIT-RELATEDMEASUREMENTS

Ir Hj Arshad Hj Marsidi

INTRODUCTION

The idea of linking wages to profits is new in this country and itconstitutes a big departure from current practices. Traditionally, the issueof wages has been the major focus in any collective bargaining. It had beenaccepted that wages should reflect the increasing cost of living and as sucheach collective agreement would attempt at all costs to include the elementof annual increments which results in spiralling salary allocations, waybeyond the performance element. On top of this, the payment of bonus ismade contractual making it unrealistic in the sense that bonus would bepaid irrespective of the performance of the company.

In the earlier days, these issues were not addressed analytically norrationally. Situations then were different. High growth and high profitswere the norm rather than the exception. Unfortunately the good timescould not continue. It has become evident that many organisations can nolonger afford to provide continuous upward revision of salaries indefinitelyand continue to pay the high bonuses of the good old days.

CURRENT SITUATION

The scenario of the eighties has been one of general recessionworldwide. Malaysia is no exception and has been plagued with lowgrowth rates, rising unemployment, continued low commodity prices,growing protectionism and growing competition overseas. Despite somerecent positive developments and signs, we cannot afford to becomplacent, rather, it is imperative for us to come to grips with thesituation. We must take action to prepare ourselves for the unpredictablefuture and not be caught with our pants down so to speak. To stay inbusiness we need to be competitive in order to sell our goods and services.

51

We are given to understand that more and more Malaysian productsare finding their way into the international markets. It would be interestingas well as pertinent for us to make a comparison of the productivity, level ofMalaysia with those of the New Industrialised Economies (NIE). Pleaserefer to Graphs 1-4 (Appendix 1 - 4). Referring to the same graphs we canalso make a comparison of Malaysia with other developing countries in theAsian region. You would have noticed that Malaysia is doing not too badlyfor the period 1980 - 1985. We can take comfort from the fact that we arejust below the Republic of Korea and way above the other developingcountries in Asia, excluding the other NIEs. This is one instance when theperformance of others is interesting but irrelevant. We should not allowthis to lull us into a state of complacency.

There is a great deal more that needs to be done to improve ourproductivity if we wish to transform our aspiration of joining the ranks ofthe industrialised economies. We need to develop and build up a morecompetitive edge for our industries in order to survive. Our strategy shouldbe to emphasise on productivity and quality of our products and services. Inorder to achieve this, closer and more effective co-operation of the twopartners in business, namely the employers and employee/trade unions aswell as the government must be developed. We can no longer afford toconfront one another and for long term mutual overall benefits we mustwork together as partners in progress.

REACHING OUR GOALS

Creating A Bigger Cake To Share

In order to achieve our goal of linking wages to profits we must createthe profits first. How do we achieve this?

i) We need to create wealth through expanding the cake so that there issomething more to share. This calls for greater and more effective co-operation between the employers and the employees. Productionthrough economies of scale must be coupled with more efficientperformance through a change in attitude.

ii) Co-operation can pave the way for innovations and improvedprocesses and systems leading to flexibility in utilising capitalresources.

iii) The concept on human resource development can be re-examinedand refocused; the workforce should be regarded as a form ofinvestment and an asset rather than purely as a cost. Creativity andfirm commitment to the goals can be further developed to the full in

52

order to draw out the infinite human capabilities throughinvolvement and decision-making.

Towards Mutual Gains

The link between wages and profit can be illustrated in Appendix 5. Itis definitely very clear that both parties will reject the situation in Quadrant4 when both parties will suffer. In Quadrant 2 it will not be sustained asworkers would not be supportive in the long-run. Similarly in Quadrant 3situation, the survival of the organisation and the security will bejeopardised. So the only situation will be Quadrant 1 where both partieswill enjoy mutual benefits and growth. Once we accept this in principlethen it is only a matter of quantum which needs be worked out equitablyby the two parties concerned.

Approach By Productivity

Of late, much has been written and said on productivity. Basically,the definition is relatively simple:

_ , . . OutputProductivity = ————Input

Basing on the above equation there will be five ways to improveproductivity, namely, (refer Appendix 6)

i) reducing costii) managing growth

hi) working smarteriv) pare downv) working effectively

Factors In Productivity

Appendix 7 states the three main factors in productivity, viz. Human,Process and Product. On closer examination, the key is Human, in the sensethat ultimately, it is the Human who controls, utilises and improves theProcess and Products.

Being so, the equation can be redefined as follows:-

i) PRODUCTIVITY = (CONCEPT + SKILL) x ATTITUDE

ii) PRODUCTIVITY = (SCIENCE + TECHNOLOGY) xENTHUSIASM(where enthusiasm is equal to motivation)

53

Building Competitiveness Through Quality

We must realise that the situation has changed and we must therefore,change our ways of thinking. Gone are the days when we thought wewere in a sellers market. Under the old situation any company couldproduce goods for sale. The selling price would be:-

SELLING PRICE - COST + PROFIT

The company would determine the total cost of manufacturing theproduct and top it up with the profit margin and then sell it at that price.

The situation has now changed. It is no longer a sellers market butinstead a buyers market. The customer knows what he wants and he canchoose the types of products or from whom he buys. Under such asituation, quality is stressed and the selling price no longer exists. Insteadthere is the market price which is dictated by the consumer:

MARKET PRICE-COST = PROFIT

Marketing strategy has to be changed from "product out" to "marketin" concept. The emphasis is on full customer' satisfaction. Therefore, inorder to expand profits under such circumstances would be to contain andreduce the costs. The above formula stresses on the need for the reductionof the cost.

Broadly speaking the cost can be divided into two parts. One partconsists of the operation which can be defined as "every action whichincreases the added value". In the past we had concentrated on such actionslike automation, innovation and technology which were intended toincrease the performance of the operation. We have largely forgotten thatthere is a second part i.e. wastages which can be defined as activity or actionwhich does not increase additional value. For example, transportation,inspection, rework, stocks, storage and so on are forms of waste and shouldbe eliminated.

The emphasis in quality has been highlighted again and again. PhilipCrosby says that by improving quality almost any company can increaseprofits by 5% to 10% of the company sales without any additional cost.Juran says that the causes of quality problems can be divided into twogroups:

54

a) "management controllable" which is estimated to be about 80%caused within the systems.

b) "worker controllable" which is 20% caused during the application ofthe system.

According to Juran these 20% of problems ought to be solved by theworkers themselves ideally under the voluntary basis. Examples of suchactivities are Quality Control Circles (QCC) and suggestion schemes.QCC for example, has demonstrated the feasibility and excellent resultsin cost reduction and process improvement. Of course, these activities canonly take place in the presence of suitable climate and management styles aswell as with sufficient motivation and recognition. Effective humanresources development should aim at obtaining employee involvement,employee participation, information sharing, constructive feedback,teamwork and collaboration, creating meaningful and challenging work aswell as employment security.

CASE FOR PROFIT SHARING SCHEMES

Motivation Towards Common Goals

One main objective of compensation schemes is to motivateemployees to perform if not excel at their jobs. Numerous programmes forUnking employees' wages with their performances have been tried sinceTaylor introduced his famous piecework incentive system.

With such individual merit payment schemes, individual employeesare motivated only to make more money; they have no interest in raisingproductivity or in management's productivity/organisational goals.However, under the proposed profit sharing scheme tied toproductivity/performance, which is a group-based reward system, theemployees will get the share of the company's profit due to an overallimprovement in productivity.

In most organisations with traditional incentives, only employeesinvolved in production, are covered; those not on the incentive scheme arealienated because they do not have an opportunity to increase theirearnings. Traditionally, incentives are usually designed for individualemployees or small groups; this encourages workers to build protectivewalls around their operations to maximise their earnings at all costs. Thesetypes of incentives fractionalise the work force and create conditions whichaccentuate employees' individual interests. Since employees are measuredonly on their output, they have little interest in overall quality, spoilage andplant-wide problems.

55

Profit sharing changes these attitudes. Employees will then beinterested in company-wide improvement as all employee are rewarded asa group for total gains achieved. Rewarding all workers for theproductivity (profit related) gains over a base period, will enable them tofocus their attention on the need to collectively reduce total costs of inputsand improve quantity of output.

Under the profit sharing system, employees will now be moreinterested in how the operations and systems work in the company,attending to more details and the production problems that occur aroundthem which in the past they had ignored or even encouraged. Since profits-related gains are shared, all innovations by workers or by management,will be welcomed because workers will gain from all improvement efforts.It will realign management and workers'interests and needs towards thecommon goal.

TO STAY COMPETITIVE

As shown in Graph 5, (Appendix 8) there are still many companieswhich find themselves in an uncompetitive position, with their labourcosts increasing and labour productivity lagging behind the labour costper employee, with and average annual increase of 4.23% and 18.01%respectively. If they want to be competitive and succeed, they should notcontinue to practise the conventional automatic yearly increment in paywithout regard to their company's performance and profitability. Profitsharing is a means of substituting this practice, where employees are able toearn higher pay through improved organisational performance and profit.In this way, with wages directly linked to profits, the wage system is morerational. One can receive more as the company becomes more and morecompetitive.

During the current business slowdown and increased competition,many companies turned to cutting 'heads' to reduce costs in the guise ofproductivity. In the short term this measure can be seen to be effective butunfortunately, this will be counter productive in the long run. Theemployees will be demoralised and pre-occupied in worrying 'who is next'thus affecting their work performance.

Profit sharing will be a scheme to minimise the need for work-forcereductions during difficult times as it provides for a built-in financialadjustment to reduce financial liabilities.

Since wage costs are partly variable, these input costs will be lower.These adjustments coupled with the employee efforts to reduce other inputcosts will lessen or eliminate the need for lay-offs.

56

However reduction in workforce can still take place through naturalattrition under normal circumstances.

TOWARDS DEVELOPING A PROFIT SHARING SCHEME

Objectives to be achieved by such a scheme:

O To increase employee output/performance;O To improve general attitudes towards work;O To improve co-operation between employees and management;O To reduce operating costs;O To develop employee identity with the company;O To encourage employees to continuously seek improvements and

innovations in work methods;O To link labour costs to company performance i.e. reducing liability

during bad times and increasing liability in good times;O To enable employees to contribute to the enterprise.

Current Labour-Management Relationship

The labour-management relationship must be right with a goodelement of trust and cooperation. The Union representatives must bebriefed on the objectives of the scheme to get their participation andinvolvement in designing the scheme. This would eliminate doubts,rumours and objections towards the scheme.

Establishing the Coverage

The question that is often asked regarding such profit sharing schemeis "Who are to be included?" The most common practice is to includeeveryone. With this, it encourages a sense of sharing common goalsamongst all the employees (Management and Workers) and focuses onteamwork and co-operation in improving organisational performance.

The Sharing Formula

Once the coverage on who are to be included is established, the profitsharing formula can then be worked out. Though there are physicalformula based on the improvement of the relationship of physical units ofoutput and physical units of input, the profit sharing schenie is bestadministered based on financial performance. With the financial approachto calculation of distribution of gains, part of the employee's wages will beaffected by market prices and conditions as well as by productivityperformance. This creates a sense of involvement and responsibility and afeeling of "mutual interest'. Part of the employee's wages will be flexiblerising and falling according to the overall financial and productivity

57

performance of the company. The other part is fixed in order to providefor a guaranteed minimum level of living standard for the employee.

There are various gain sharing plans, like the Scanlon Plan, RuckerPlan, Improshare and the Japanese flexible wage system, which can be usedto formulate an equitable formula.

The payout frequency may be weekly, monthly, quarterly orannually depending on

i) data availability for computationii) magnitude of the share

iii) administrative costs

NPC'S PRODUCTIVITY MEASUREMENT MODEL*

Financial And Productivity Ratios

For profit sharing to be equitably done, one must be able to accuratelymeasure the gains. The present hesitation of management to share a part ofits financial gain is due, partly to the lack of confidence in coming up withaccurate performance measures.

There are many ways of measuring performances, but not many linkoutput and input costs, profitability and productivity all in one model.Majority of the performance measures focus on either profitability orproductivity.

The National Productivity Centre, with the assistance of Dr. M.R.Ramsay, an ILO expert, has successfuly adapted his models whichcalculates partial and total productivity/performance measures and alsolinks productivity with return on investment and capital rotation. Thismodel can be extended to be used for computation in the profit sharingscheme.

Total Productivity Measurement Approach

It is important to develop a profit-related productivity base thatprovides an accurate measurement of productivity for an organisation. TheScanlon Plan and Improshare Plan consider only labour productivity. TheRucker Plan, though using value added in its computation, is still relatedonly to gains in labour productivity.

*adapted from Dr. M.R. Ramsay's RAPMODS Model

58

Take for example, a saving of $10,000 in labour costs may be achievedthrough lay offs but at the same time, energy and material costs is allocatedto increase by the same amount, therefore no real improvement inproductivity is achieved. On the other hand, a $7,000 increase in labourcosts together with a savings of $8,000 in materials and energy will give anett positive result.

The essence of a practical Productivity Measurement Model is itsability to objectivate and adjust the consequences of changes in inputfactors to give the best nett result to the organisation. The NPC Model iscapable of doing just that. Furthermore,it can be used as a tool for linkingprofits to productivity, as illustrated, in a simplified manner, in Appendix9. Appendix 10 shows the complete NPC Productivity MeasurementModel with its simulation capabilities.

CONCLUSION

The proposed concept of profit-related sharing scheme is a way tobring about a long-term comprehensive change in an organisation'smanagement philosophy by creating new roles for all employees includingmanagers, breaking down barriers to communication, enhancing co-operation and teamwork, greater employee involvement, and giving thema sense of responsibility and a role in the organisation's success. This willresult in better quality of working life of employees and increasedcompetitiveness for the company.

It is needless to say we have lost much time and opportunity and if weare to compete successfully, some drastic steps must be taken to redress theunhealthy situation of the past. As mentioned earlier this conceptconstitutes a big departure from traditions and it will take a lot of courageto take this new step. Nevertheless we must take this bold step and with alot of understanding, sincerity, commitment and trust from all parties, Ibelieve we can succeed for succeed we must if we want to survive.

59

Appendix 1

(A) Industrialized and Upper - Income EconomiesIndex (1980 = 100)

135

130-

125-

120-

Republic of Korea

Singapore

Republic of ChinaJapan

Malaysia

Hong Kong

95 Year1980 1981 1982 1983 1984 1985

Graph 1: Comparison of Labour Productivity Indexes — National Level

(Source: Asian Productivity Organisation)

60

Appendix 2Index (1980 = 100) FF

125" (B) Middle and Lower — Income Economies

120-

115-

85-

80

Malaysia

Indonesia

Bangladesh

Philippines

Year1980 1981 1982 1983 1984 1985

Graph 2: Comparison of Labour Productivity Indexes - National Level(Source: Asian Productivity Organisation)

61

(U.S. Dollars) Appendix 3

(A) Industrialized and Upper — Income Economies

Japan

20,000-

15,000-

10,000

5,000-

Hong Kong

Singapore

Singaporei in ̂~ -«

Hong Kong

Republic of China^—————'

Republic of Korea——-•" K

Malaysia

——————I———————i———————i————————i——————————Year1980 1981 1982 1983 1984 1985

GraphS: Comparison of Productivity Level in Constant Prices (in U.S.Dollars) — National Level

(Source: Asian Productivity Organisation)

62

(U.S. Dollars)Appendix 4

5,000-

2,000-

1,500-

1,000-

500

(B) Middle and Lower - Income Economies

Malaysia

PhilippinesThailand

Indonesia

•Pakistan

——BangladeshIndia

Year1980 1981 1982 1983 1984 1985

Graph 4: Comparison of Productivity Level in Constant Prices (in U.S.Dollars) - National Level

(Source: Asian Productivity Organisation)

63

Appendix 5

WAGES

WAGES AND PROFITS WINDOW

PROFITS

3LOW PROFITSHIGH WAGES

4LOW PROFITLOW WAGES

1HIGH PROFITSHIGH WAGES

2HIGH PROFITSLOW WAGES

Appendix 6

What is Productivity?

PRODUCTIVITY:

OUTPUTINPUT = PRODUCTIVITY

Five Ways To Improve ProductivityOUTPUT —

1. Reduce Costs

2. Manage Growth

3. Work Smarter

4. Pare Down

5. Work Effectively

INPUT IOUTPUT | *

INPUT tOUTPUT |INPUT —

OUTPUT |INPUT f **

OUTPUT TINPUT |

64

Appendix 7

CAUSAL FACTORS AFFECTINGPRODUCTIVITY CHANGE

PRODUCTIVITYCAUSAL

FACTORSPRODUCT V S PROCESS

65

78

GRAPH 5: LABOUR INDICES(By Major Group)

G Lab. ProdyYear 80

Lab. Cost

Appendix 8

Labour CostPer PersonEngaged{18.68% p.a)

Unit Labour Cost(12.07% p.a)

LabourProductivityPer PersonEngaged(4.94% p.a)

O Unit Lab. Cost

Appendix 9(i)

NPC PRODUCTIVITY MEASUREMENT MODELFOR COMPUTATION OF PROFIT SHARING

Column A ItemsB Base Month Actual Financial FiguresC Computation of Factors Productivity Measures

(FPM) and Multifactor Productivity Measure(MPM)

D Current Month Projected Figures based onFPM/MPM of base month

E Current Month Actual Figures

Row 1 Monthly Sales Figures

2 Finished Goods Inventory (FG) — increase(decrease)

3 Work-in-Process Inventory — increase (decrease)

4 Total System Ouput [Row (1) + Row (2) +Row (3)]

5 Monthly Labour Costs

6 Monthly Material Costs

7 Other Related Costs Like Energy, Fuel,Transportation etc.

8 Aggregate Costs [Row (5) + Row (6) + Row (7)]

9 Gain over Base Month (Aggreate Projected Costs— Aggreate Actual Costs)

10 Contingency Fund (say 10% kept in reserve)

10100

x Row (9)

11 Share for Distribution = Row (9) - Row (10)

12 Employees' Share (say 50%)

50100

67

x Row (11)

Appendix 9(ii)

Computation of Profit Sharing Scheme

Col

Row

1

2

3

4

5

6

7

8

9

10

11

12

A

Item

Sales

FinishedGoodsInventory( + /-)Work-in-processInventory( + /-)

Total SystemOutput

Labour

Materials

OtherRelatedCosts

AggregateCosts

Gain

ContingencyFund (10%)

Share forDistribution

Employees'Share of50%

B

BaseMonthActual

80,00

11,000

(1,000)

90,000

25,000

40,000

15,000

80,000

C

FPM/MPM

3.600(B4 +• B5)

2.250(B4 4 B6)

6.000(B4 4 B7)

1.125(B4 4- B8)

D

CurrentMonth

Projected

95,000

7,000

(2,000)

100,000

27,778(D4 - C5)

44,444(D4 - C6)

16,666(D4 - C7)

88,889(D4 - C8)

E

CurrentMonthActual

95,000

7,000

(2,000)

100,000

27,778

40,000

15,873

83,651

5238(D8 - E8)

524(10%*E9)

4718(E9 - E10)

2359(50%*E11)

68

1986 INDEX 1987

NPC PRODUCTIVITY MAESUREMENT MODEL

MANUFACTURING EXPENSES (INPUT)

1 Raw materials consumed2 Direct Labour3 Indirect Labour4 EPF/Social Security

Contribution/Relief Allowance5 Medical Expenses6 Travelling Expenses7 Telex, Telephone, Postage8 Repairs & maintenance9 Stationary

10 Interest on term loans11 Quit rent & assessment12 Water & Electricity13 Professional fees14 Insurance15 # Course expenses16 Entertainment/canteen expenses17 Depreciation of fixed assets18 * Interest on hire purchase19 * Hire purchase charges20 # Various expenses21 Total of items marked #

S.OUTPUTTOTAL GAINROITPM

13,717,581

1.94481.0243

100100100100

13,717,5810.00

1.94481.0243

1986ACTUAL

6,841,5202,345,6211,059,430

148,42821,52459,36317,878

195,0809,191

116,28237,517

399,9191,138

23,086164

4,414916,337

17,6381,5872,5162,680

1986FPM

2.005045.84816129480

92.4189637,308231.079767.29470.31751492.50177.968365.64034.300912059.4594.20083745.93107.4514.9700777.7458643.505451.815118.59

1987FPM

2.005045.8481612.9480

92.4189637.308231.079767.29470 31751492.50177.96836564034.300912059 4594.2008374593107.4514.9700777.7458643.505451.815118 59

IND

100100100

100100100100100100100100100100100100100100100100100100

1987PROJECT

6,841,5202,345,6211,059,430

148,42821,52459,36317,878

195,0809,191

116,28237,517

399,9191,138

23.086164

4,414916,337

17,6381,5872,5162,680

1987BUD/ACT

6,841,5202,345,6211,059,430

148,42821,52459,36317,878

195,0809,191

116,28237,517

399,9191,138

23,086164

4,414916,33717,638

1,5872,5162,680

1987GAIN

000

000000000000000000

j^*on8a.

MANUFACTURING EXPENSES (INPUT)

22 Total of items marked *23 Sub-total 1 (include change of WIP)24 Sub-total 1 (as per A/C)

TRADING & P/L A/C INPUTS

25 Salaries & allowances26 Special relief allowances27 EPF & Social Security Contribution28 Medical expenses29 Commission30 Freight Charges31 Travelling expenses32 Sales promotion & advertising33 Bad debts34 Postage & telephone charges35 Repairs & maintenance36 Printing & stationary37 Interest on overdraft38 Int on short term borrowings39 Quit rent & assessment40 * Auditors' remuneration41 * Professional fees42 Bank charges & commissions43 Electricity & water44 Insurance45 # Subsciptions46 # Course Expenses47 Directors' fees & emoluments48 Entertainment49 Foreign exchange gain (realized)50 # Various expenses

1986ACTUAL

19,22512,218,63312,215,156

299,69714,76332,20215,72920,774

102,63661,60336,35976,66922,71419,35821,289

198,24024,44621,56416,3804,732

60,3052,289

17,5133,590

651134,559,361

(47,777)4,488

1986FPM

713.5401.122671.12299

45.7715929,190425.983872.100660.312133.652222.675377.281178,918603.936708.277644.33769.1968561.132636.125837.4592898.89227.4705993.74783.2823821.1021082.8101.9471465.37(287.12)3056.42

1987FPM

713.5401.122671.12299

45.7715929.190425.983872.100660.312133.652222.675377.281178.918603.936708,277644.33769.1968561.132636.125837.4592898.89227.4705993.74783.2823821.1021092.8101.9471465.37287.11

3056.42

IND

100100100

100100100100100100100100100100100100100100100100100100100100100100100100100100

1987PROJECT

19.22512.218.63312,215,156

299,69714,76332,20215,72920,774

102,63661,60336,35976,66922,71419,36821,289

198,24024,44621,56416,3804,732

60,3052,289

17,5133,590

651134,555

9,361(47,777)

4,488

1987BUD/AC

19,22512.218,63312,215,156

299,69714,76332,20215,72920,774

102,63661,60336,35976,66922,71419,36821,289

198,24024,44621,56416,3804,732

60,3052,289

17,5133,590

651134,559,361

(47,777)4,488

1987

5152535456

575859606162

63

64

65

66

67

68

69

7071

Total of items marked *Total of items marked #Subtotal 2 (exclude extra-item)Subtotal 2 (as per A/C)SALES

COMPUTATIONS SECTION

SYSTEM OUTPUT (SO)VALUE ADDEDTOTAL SYSTEM INPUT (TSI)% MATERIALS OF TSISURPLUSAPM (manufacturing)

(Aggregate Productivity Measure)APM (trading)

(Aggregate Productivity Measure)TPM

(Total Productivity Measure)OPM1

(Overall Productivity Measure 1)OPM2

(Overall Productivity Measure 2)OPM3

(Overall Productivity Measure 3)Finished goods

Increase/DecreaseWORK-IN-PROGRESS (W1P)

ClosingOpening

ClosingOpening

Increase/DecreaseSALES VALUE OF PRODUCTIONFIXED ASSETS Closing

OpeningAVERAGE

21,1128,728

1,174,1411,165,89113,260,187

13,717,5816,876,06113,392,77451,0837324,8071,1227

11.6831

1.0243

1.04%

0.5134

2.0939

892569438652453,917560,927557,4503,477

13,714,1048,595,9858,593,0838,594,534

649.7521571.5411.683011.76571.03449

3070.41

295.048

3365.45

3284.24

6714.01

1646.25

15.368631.272130.220424.455224.60773945.101.000251.595811.596351.59608

649.7521571.5411.683011.76571.03449

15.368631.272130.220424.455224.60773945.101.000251.595811.596351.59608

100100100100100

100100100100100100

100

100

100

100

100

100100100100100100100100100100

21.1128,729

1,174,1411,165,89113,260,187

13,717,5816,876,06113,392,77451,0837324,8071,1227

11.6831

1.0243

1.0496

0.5134

2.0939

892,569438,652453,917560,927557,4503,477

13,714,1048,595,9858,593,0838,594,534

21.1128,729

1,174,1411,165,89113,260,187

13,717,5816,876,06113,392,77451,0837324,8071,1227

11.6831

1.0243

1.04%

1.5134

2.0939

892,569438,652453,917560,927557,4503.477

13,714,1048,595,9858,593,0838,594,534

MANUFACTURING EXPENSES (INPUT)

72

73

74

75

76

77

78

7980

81

8283848586

CURRENT ASSETSStocks: Raw materials

WIP

Finished goods

Total stocks

Trade debtors

Other debtors

Cash & Bank-balances

ClosingOpening

AVERAGEClosing

OpeningAVERAGE

ClosingOpening

AVERAGEClosing

OpeningAVERAGE

ClosingOpening

AVERAGEClosing

OpeningAVERAGE

ClosingOpening

AVERAGETotal current assets AVERAGETOTAL CAPITAL EMPLOYED AVERAGE

CAPITAL PRODUCTIVITY (based on average

FIXED ASSETS (NFA)CURRENT ASSETS:

NCA 1 - Raw materialsNCA 2 - WIPNCA 3 - FG

1986ACTUAL

1,921,5312,370,0752,145,803

560,927557,450559,188892,569438,652665,610

3,375,0263,366,1763,370,6011,272,8101,294,8891,283,849

82,02974,66978,349

3,4173,4773,447

8,106,84816,701,382

capital employed)

1.5961

6.392824.531220.6090

1986FPM

7.138885,787826.3927524.455224.607724.532115.368631.272120.60904.064434,075124.0697710.777410.593610.6847167.227183,711175,0824014.453945.103979.471.692090.82134

2159.71

539.217140.517167.260

1987FPM

7.138885.787826.3927524,455224.607724.531215.368631.272120.60904.064434,075124.0697710.777410.593610,6847167.227183,711175,0824014.453945.103979.471.692090.82134

140.517167.260

IND

100100

100100

100100

100100

100100

100100

100100

100100

100

100100100

1987PROJECT

1,921,5312,370,0752,145,803

560,927557,450559,188892,569438,652665,610

3,375,0263,366,1763,370,6011,272,8101,294,8891,283,840

82,02974,66978,349

3,4173,4773,447

8,106,84816,701,382

1.5961

6.392824.531220.6090

1987BUD/AC'

1,921,5312,370,0752,145,803

560,927557,450559.188892,569438,652665,610

3,375,0263.366,1763,370,6011,272,8101,294,8891,283,849

82,02974,66978,3493,4173,4773,447

8,106,84816,701,382

1987GAIN

87 NCA 4 - Total Stock88 NCA 5 - Trade debtors89 NCA 6 - Other debtors90 NCA 7 - Cash/bank bal91 TOTAL CURRENT ASSETS (NCA)92 TOTAL CAPITAL EMPLOYED (N)

93 RETURN ON INVESTMENT (ROI)94 DIFFERENTIAL SALES MEASURE

4.069810.6847

175.08263979.4786

1.69210.8213

1.94480.9667

846.995322.61719.68830.866212037.164196.87

17772.463565.98

846.995322.61719.68830.866212037.164196.87

1772.463565.98

100100100100100100

100100

4.069810.6847

175.08263979.4786

1.69210.8213

1.94480.9667

MLA/case2/25.11.88

BIODATA

DR. R.P. Mohanty is currently a professor atNational Institute for Training in IndustrialEngineering (NITIE), Bombay, India. Previ-ously he was a visiting professor in the division ofIndustrial Engineering and Management atAsian Institute of Technology, Bangkok. He wasHead of Production Management Departmentas well as Dean of Research Programmes atNational Institute for Training in IndustrialEngineering (NITIE). He was also the National

Chairman of Indian Institution of Industrial Engineering. He has very wideranging experiences in education, management development, research,consultancies in both government and industries. He has published more than 120papers in various reputed. International journals and has also completed somenational level research projects. He has written a book on works management andalso guided several Ph. Ds. He is the editor-in-chief of Industrial EngineeringJourn.il (India) for the last 5 years, and also represents in the editorial board ofseveral journals. He has received 'National Awards' for his outstandingcontribution in the field of industrial engineering and management. He has alsochaired in several international conferences.

74

HOW DEVELOPED ISMATERIALS MANAGEMENT:

AN INDIAN SURVEY

R.P. Mohanty

India is one of the developing countries in the world which has a very largeindustrial base and over the last few years, there has been a very rapid rise in thegrowth of industries and consequently in the professionalisation of management.Materials management functions have also witnessed a change over the past decade.This paper tries to highlight the findings of a survey to identify the current status ofsuch functions and to depict what lies for the future.

INTRODUCTION

Materials management is considered today as one of the significantand challenging management function in the overall context of businessmanagement. Materials management systems are more challenging todaythan ever before. It may be interesting to highlight here that such arealisation has taken place in India over a period of the last 10 years.Thisauthor, when he conducted his first management development pro-gramme in Materials Management in the late 70's, it was observed that,materials management is merely viewed as managing the Store's activities.Today, such a narrow view has almost disappeared and managers arerecognising the need for concepts and methods to improve materials-related productivity in the overall context of the business. In view of thisupsurge over the past few years, it was felt necessary to assess the activitiesand responsibilities of Indian materials managers and to identify the criticaldicision areas in Indian corporate setting and hence to examine howdeveloped the pactices of materials management?

THE SURVEY FRAMEWORK

This survey was conducted in 56 companies who are reputed for theirproducts inside the country. The sample, although small, but truly arepresentative sample to reflect the status of materials management which

75

can be worthy of assessment and comparison. The sample considers bothprivate limited, public limited and public sector companies and alsoencompasses large, and medium industrial enterprises, and further takesinto considerations wide ranging products from Engineering, consumergoods and electronics. A structured questionnaire was utilised to obtain therequired information. The respondents are basically materials managersrepresenting various age/experience/professional qualification groups.

The survey intends to highlight the following aspects of materialsmanagement in India:

* The objectives of materials management* The decision areas of materials management department* The techniques used in decision making* The attributes required to manage materials functions* The factors influencing productivity and quality* Interactions required with other management functions* The changes that are likely to affect the jobs of materials managers in

the next 10 years.

RESULTS AND DISCUSSION

The following points are worth mentioning here:

Profile of materials managers:

A large percentage of materials managers belong to engineering andelectronics industries which are growing over the years. Most materialsmanagers belong to the age group of 30 to 40 years and having jobexperience in materials functions for the last 10 years. Most managers areboth technical graduates with management degree.

Status of materials management department:

In 85% case, the materials department is having an independent statusin the organisation. The materials managers of these organisation reportdirectly to either the General Manager or the Chief Executive. Further,these managers are in overall charge of raw materials, WIP and finishedgoods.

Involvement in Corporate Decisions:

Out of 56 respondents, 12 managers reported that they are involved toa great extent in long-range corporate decision making such as technologytransfer, collaboration, upgradation and modernisation. 20 managersresponded that they are concerned a lot in corporate decision making with

76

reference to import substitution, research and development, and long-termcontract decisions.

Critical Decision Areas in Materials Management:

Three principal decision areas emerged as critical to the functioning ofmaterials department. They are procurement, production and inventorycontrol, and distribution. The weighted average method was used toobtain the dominance. It was noticed that fifty two managers responded tosuch a querry. 16 managers are of the opinion that procurement function isranked as 1, 24 managers rank it as 2 and twelve managers rank it as 3 (theorder of importance: 3 as the highest weight and 1 as the least weight). Onthe basis of weighted average method, the total weight for procurement isestimated as (1 x 16) + (2 - 24) + (3 x 12) = 100.

Out of 52 respondents, 4 managers rank production -and inventorycontrol functions as 1, 16 managers rank as 2, and a 32 managers rank as 3.The weight for production and inventory control is estimated to be 132.For distribution, 28 managers rank as 1, 8 managers rank as 2 and 16managers rank as 3. The overall weight for distribution is 92. Comparingthe overall weights for procurement, production and inventory anddistribution, it can be seen that production and inventory control is themost important areas, followed by procurement and distribution. One ofthe reason why procurement is not considered as most important is thatmany companies have fixed sources of supply and a significant number ofcompanies are used to obtain imported raw materials for the manufactureof their products.

Further, the procurement decision area was split up into three sub-areas (Lead time, Quantity and Price). 16 respondents ranked lead time as 1and 16 managers ranked as 2, whereas 20 managers ranked as 3 (the mostimportant). 12 respondents ranked quantity as 1 and an equal numberranked it as 2. 28 respondents ranked it as 3. In case of price, 12 respondentsranked it as 1 whereas 24 ranked it as 2.16 of them ranked price as 3. On thebasis of weighted average method, quantity was more important of thedecision areas having secured 120 points while lead time and price secured108 points. But this difference seems to be marginal and hence all of themmay be treated as equally important.

In production and inventory control, two sub-areas were selected(Inventory and Turns). The turn is meant as the internal processing time. 32respondents ranked inventory as 1, while 20 ranked it as 2. From theweighted averages, it can be seen that the internal processing time is moredominating than the inventory.

77

In distribution, two sub-areas were considered (costs and movementof goods). Some managers gave equal importance to both. 36 managersranked costs as 1 and 16 ranked it as 2. Movement of goods was ranked as 1by 20 managers and 2 by 32 managers. In terms of the overall weight, costsscored 68 and movement of goods scored 84.

Objectives of Materials Management:

The following objectives were considered:

- To support company operations with an uninterrupted flow ofmaterials and services.

- To buy competitively and wisely. This includes two distinctconsiderations. To buy competitively involves keeping abreast of theforces of supply and demand that regulate prices and availability ofmaterials. To buy wisely involves a constant search for better valuesthat yield the best combination of price, quality and service. It is thecombination of competitive buying and wise buying that contributemost for maximising profitability of the enterprise.

- To keep inventory losses due to deterioration, obsolescence andpilferage to a minimum.

— To develop reliable alternate sources of supply.

— To develop harmonious, and continuous relationships with vendors.

— To achieve maximum integration with the other departments of thefirm. This requires understanding the needs and can be translated intomaterials support actions. The most common areas of support are indeveloping favourable reciprocity agreements, effective standardisati-on programs, forecasts of future prices and general business conditions,economic make on buy decisions and a repository of information andknowledge from suppliers regarding new materials processes andprices.

The managers were asked to rank the objectives in the following 5-Point scale.

Littlei

Somei

Fairi

Highi

Very1

Objective 1 wasoverall weight of 208. Objective 2 was

78

ranked highest by 28 managers. This objective scored. Objective 2 was ranked highest by 16 managers, but

the overall weight is almost equal to objective 1. The weights for objective3, 4, 5 and 6 were found to be 192, 128, 100, 116 respectively. For Indianmaterials managers, facilitating efficient materials support to themanufacturing and maintenance is considered to be the most significantfunctional objective. Sound and harmonious vendor relationships is theleast important of the objectives.

Interactions with other Departments:

The relationship with Production is generally stated to be very highfollowed by finance, engineering and sales. Materials managers share acommon concern with production managers in order to improve materialsproductivity, capacity utilisation and quality improvement. Materialsmanagers conflict with production managers for the lack of advancedtentative schedules so as to minimise the manufacturing lead time and toavoid last minute rush. Materials managers share the common concernwith finance in order to reduce the purchase price variances but conflictwith them for the inadequate consultation for budget allocation.Engineering and materials department conflict for lack of communicationwith respect to demand, improper specification, and supply of spuriousmake spare parts occasionally.

When it was discovered that there is a very strong interaction betweenproduction and materials, it was thought proper to identify whethermaterial flow cost is larger, equal or smaller than the production cost. It wasestablished in almost all cases materials 'flow cost is higher than theproduction cost. This trend has taken place over the last few years. Forexample, material cost as a percentage of the total product cost has grownfrom 30% to 85% in some engineering industries over a period of 10 years.

Attributes Needed to be a Materials Manager:

Five attributes were chosen to know the managerial characteristic.

They are as follows:

integrity, dependability, initiative, human relations skills, analyticalskills, inquiring mind. These attributes we,re measured in a 5-pointscale.

The aggregated weighted scores are as follows:

Initiative : 200Inquiring mind : 168Dependability : 144Human Relations Skills : 144Integrity : 140

79

Techniques Needed for Successful Materials Management:

Indian materials managers mostly follow subjective assessment to agreat extent. Quantitative techniques are rarely used. Computers areslowly entering into decision making field and quantitative methods willfind its way in future. Very large number of managers recognise budgetingas a basic tool in materials planning and control. Departmental operatingbudgets and their efficient allocation are considered as effective methodsfor inventory management. Purchasing research is used in case of fewcompanies for price negotiation. ABC analysis is very effectively used by28 materials managers. Many managers base their estimation of carryingcost simply on interest on inventory investment. Few companiesincorporate transportation and facility costs along with interest oninvestment.

Factors Influencing Quality:

The following factors were selected:Management responsibilityMaterials availabilityNew sources of supplySubstitute MaterialsSuggestion of the sellersStandardisationCost considerations

28 managers rated standardisation as the most significant factor, 20managers responded to materials availability as the most significant factor,and only 8 managers rated the management's responsibility as the mostsignificant factor.

Various reports adopted in Indian Companies:

It is found that the following reports are adopted by the companies forplanning and monitoring purposes:

Materials lead timeMaterials stock positionMaterials usageStockout listReports on slow moving itemsScrap controlMaterials acceptance control

Stock position is the most prevalent report adopted by almost allcompanies.

80

Factors affecting selection of suppliers:

Assurance of supply was found to be the most significant factor.Suppliers catalogue ranks the most important source of information forpurchasing. Competitive bidding is used extensively by companies ratherthan negotiation or any other method. Life cycle costing method is yet tobe used in India for deciding a high value purchase contract. Although alarge percentage of materials managers feel that quality considerationshould be a dominant factor in supplier selection, but due to lack of aproper demand forecast, assurance of supply supercedes any otherconsideration in real practice. For example, in case of spare parts, it becomesvery difficult to control quality. Some companies are now evaluatingsuppliers based on multiple factors, but such practices are very rare.Particularly, the large sectors are using elaborate vendor evaluationschemes, but small sectors do not have the expertise to use such elaborateprocedures. Large private sectors are following reciprocity traderelationships and very often control the market price, quality and supplysituations.

WHAT ABOUT THE FUTURE?

From the above survey, it may be said that Indian materialsmanagement is improving, but still not at a fast enough rate. The basicissues arise from the lack of competitiveness in quality and price. Lowquality and relatively high costs have prevailed over a long period of time.The lack of use of quantitative techniques and established data bases andalso continuous auditing of materials systems have caused excessinventories and ineffective materials management in many companies.Although India has made significant strides towards professionalisingmaterials management functions, a lot more need to be done to improveplanning capability to avoid economic stagnation and inflations.

The future of materials management in India is likely to witness achanging technological environment due to the Government Policies oftechnology transfer and collaboration. Market competition and emergenceof export orientation will place increasing demands on the procurementfunctions towards the search of quality-cost effective materials. The topmanagement will focuss on managing materials from strategic point ofview. For example, the following scenario is envisaged:

Mission — To ensure a long-term availability of suppliesand avoid risks in the continuity of flow, andto broaden the search for alternative sourcesof supplies.

Strategies — To reduce the number of vendors and at the

81

same time, to develop long lastingrelationship in a continuing basis.

— To reward reliable vendors with adequateand reasonable profit margins.

— To implement cost-savings by carrying outvalue analysis and purchasing research.

— To make backward integration of long termcontrol of supply of key raw materials.

— To make joint venture with suppliers.

— To search for global sourcing

— To implement product life cycle (PLC)oriented purchasing techniques.

— Combination of centralized Vs. decentralizedapproach.

— Effective co-ordination with other manage-ment functions.

— Make or buy decisions.

— Product specifications with technical sound-ness.

— Minimizing stock requirements.

— Obtaining market research information.

— Specialization of purchasing assignmentsinside the organization.

Systems — Materials management systems throughintegrated computer networks.

- PC based data-base and spread sheet typemanagerial aids.

- Long range planning systems for strategicmaterials.

82

- Forecasting systems to determine materialrequirements.

- Inventory systems incorporating multi-dimensional requirements.

Staffing - Highly qualified personnel.

- On-the-job training.

- Salaries in line with other functions such asmarketing or finance.

- Well defined career paths.

- Product-oriented practical training.

Attitudes — Active, motivated

- Internationally oriented

- Probing every purchase request.

Skills — Commercial (terms and conditions, legalaspects)

- Technical (product applications, materials,production technology, etc.)

- Strategic (company direction, key successfactors, market trends, etc.)

- Managerial (administration and control).

- Computer-based information systems design.

The top managemenmt has to continuously monitor the followingparameters:

Price Management - Improving systems and procedure withskilful negotiation.

- Wider use of systems contracting.

- Setting purchase price targets for non-repeatable and strategic materials.

83

Product Management — Close interaction with R&D and technolo-gical innovations.

— Cost-effective programmes through applica-tion of value engineering techniques.

— Using supplier's special abilities in complextechnical areas.

— Assisting suppliers in developing newmaterials for use in products beingmanufactured.

Supplier Management — Constant search for new and internationalsources.

— Long term supplier relationships.

— Vendor ratings from cost-quality-reliabilitypoints of view.

— Quality maintenance at supplier's premisesand quality assurance programmes.

— Supplier billing on periodic basis enablingsteady and predictable cash flow.

— Ownership interest in a supplier.

Logistics Management — Better freight management with carrieragreements.

— Scheduling inbound freight and consolida-tion.

— Delivering directly at the production shop orassembly areas.

— Multiple deliveries of small quantities.

84