Malaysia is a federal constitution monarchy in Southeast Asia which is the one destination that many investors are interested and would like to invest. Malaysia consists of 13 states and 3 federal territories and has a total landmass of 329,847 square kilometers (127,350 sq mi) separated by the South China Sea into two similarly sized regions, Peninsular Malaysia and Malaysia Borneo. In 2010 the population exceeded 27.5 million, with over 20 million living on the Peninsula. Below are tips that investors should know and understand in order to succeed doing business in Malaysia.
- Tip 1
- Malaysia presents the visitor with a myriad of different cultures within its business world. There are, however, certain key similarities which bind the country together.
- Tip 2
- As Malaysia is very ethnically diverse, try to do as much research on your potential contacts as possible before entering into negotiations – these factors can have a telling impact on how things proceed.
- Tip 3
- Although the government has positively discriminated in favour of ethnic Malays, the Chinese and Indian business communities still play a pivotal role in the Malaysian business world.
- Tip 4
- Most business structures tend towards the hierarchical with information flowing to the top and most decisions being made by key senior management figures.
- Tip 5
- It is important to ensure that you are dealing with the key senior figures as a great deal of time can be spent debating issues with people who may play little part in the decision-making process.
- Tip 6
- The manager is expected to manage and to make decisions. Subordinates may feel uncomfortable when given vague, non-specific instructions.
- Tip 7
- Tasks may remain undone, unless specific instructions are issued from the boss – even if it is apparent that the task needs urgent attention.
- Tip 8
- The boss/subordinate role can be likened to the father/son relationship. The boss is expected to take an interest in the overall well being of subordinates. In return for this concern, subordinates will offer diligence and loyalty.
- Tip 9
- Individual aspirations are seen as secondary to the needs of the group. Rewards and motivation come from group success.
- Tip 10
- Meetings can be lengthy, starting with a great deal of relationship- building small talk. It is not unusual for initial meetings to focus solely on non-business related issues.
Negotiation tips
- Malaysians only do business with people that they know. You need to look for a local contact to gain access to the country’s business network and devote time to establishing and maintaining personal relations.
- Politeness and courtesy permeate relations. Nevertheless, this friendly behaviour must not be interpreted as weakness, but quite the reverse. Malaysians are hard negotiators who will try to tip the balance in their favour.
- When you look for a commercial agent, distributor or partner you should bear in mind the ethnic division of the society. If you want to work with the administration or state-owned companies, the Malayan ethnic group is dominant; for business with the private sector Malaysians of Chinese origin offer more opportunities.
Sources of Information
- 1. http://www.worldbusinessculture.com
- 2. http://www.globalnegotiator.com
Jaraswan Jarasjaruwan or Pear is a full-time MIM student. She got a Bachelor’s of Science from Chulalongkorn University in Thailand. After she graduated, she worked as an educational consultant in Thailand for 2 years. Pear chose to study international business at Portland State University because she is interested in the business field and also the reputation of the university. Currently, Pear is studying Chinese as a third language. Also, she will choose Global Marketing as her specialization in the Master of International Management program.
