Malaysian Business Structures

Malaysia:

After independence was gained in 1957, the Malaysian government placed great emphasis on the development of businesses owned and run by indigenous Malays to counter-balance the fact that up until that time most businesses had been developed by ethnic Chinese and Indian families. However, the last currency crisis in the area saw a relaxation of this policy and restrictions on non-Malays buying into local organisations have been eased.

Despite the positive discrimination policies pursued by the government for a number of years, many local businesses are still dominated by Chinese interests and many senior employees of multi-nationals are also of Chinese extraction.

Most Malaysian businesses are extremely hierarchical in nature and indeed the three main religions of Islam, Confucianism and Hinduism all stress the over-riding importance of respect and duty. This need to show respect to whom it is due will obviously manifest itself in a desire for a clearly defined hierarchy to be established where reporting lines are transparent and where bosses make decisions and then instruct their subordinates accordingly. (Many Western companies have had great difficulties in trying to introduce more of a matrix approach, which can leave local employees feeling confused and vulnerable.)

The impact of this hierarchical approach will form the basis of several of the following sections.
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