Malaysian Management Capability Index

Under the auspices of : Survey jointly conducted and reported by :
Asian Association of
Management Organisations
Malaysian Institute of Management
Malaysia
Productivity Corporation
MCI Model by NZIM:
Institut Pengurusan Malaysia (22978-D)
Management House, 227 Jalan Ampang, 50450 Kuala Lumpur, Malaysia
Tel: 603-2172 5555 Fax: 603-2172 5563
E-mail: enquiries@mim.org.my Website: www.mim.org.my
Malaysia Productivity Corporation
Perbadanan Produktiviti Malaysia
P.O.Box 64, Lorong Produktiviti, Off Jalan Sultan,
46904 Petaling Jaya, Selangor Darul Ehsan, Malaysia
Tel: 603-7955 7266, 7955 7050, 7955 7085
Fax: 603-7957 8068, 7955 1824, 7954 0795 (Marketing)
Email: marketing@mpc.gov.my Website: www.mpc.gov.my
Malaysian Institute of Management (MIM) &
Malaysia Productivity Corporation (MPC)
MCI Research Team
October 2010
MALAYSIAN
MANAGEMENT
CAPABILITY
INDEX
MIM-MPC-AAMO Management Capability Index (MCI) 2010 Survey
2010
Malaysian Management Capability Index 2010
Copyright 2010 Malaysian Institute of Management
2
1. Message from President of Malaysian Institute of Management 3
2. Message from Chairman of Malaysia Productivity Corporation 4
3. Joint Message from CEO of MIM and Director General of MPC 5
4. Executive Summary 6
5. Transforming Management Capability For Organisation Excellence & 7
Sustainable Business Growth
6. How Malaysian Management Fared 11
Approach to the Malaysian MCI Index 2010 Research Study
Malaysian MCI Index 2010
Interpretation of the Malaysian MCI Index 2010
Comparison of the Malaysian MCI Index in 2008 and 2010
Respondents by Type of Organisations, Industry Sectors and
Services Sub-Sectors
7. Transforming Malaysias Management Performance 20
Findings on Malaysian MCI 2010 Index Research Study
Recommendations for Improvement for Malaysian Organisations
Overall Summary on the Malaysian MCI 2010 Index Research Study
8. Benchmarking Malaysian Organisations 22
9. Countries MCI Index New Zealand, Canada and Malaysia 24
10. Way Forward 25
11. Appendices
A. Overall Results of Malaysian MCI Index 2010 27
B. MIM-MPC-AAMO Malaysian MCI Index Questionnaire 2010 28
C. Management Competencies, Competence & Capability 35
D. MIM Holistic Integrated Management Model 36
E. MCI Categories & Recommended Training & Development Programmes 37
Contents
The MIM MCI Research Team:
Dr Nazily Noor, Chief Executive Ofcer, MIM
Lai Wai Lin, Manager, Business Research & Development, MIM
Nur Amaleena Haza Muhammad Zain, Assistant Manager, Business Research & Development, MIM
The MPC MCI Research Team:
Mohd Razali Hussain, Director General, MPC
Ab Rahim Yusoff, Senior Director, Service Research Division, MPC
Sharifah Normah Syed Omar, Senior Manager, Service Research Division, MPC
Nor Fazila Hashim, Senior Consultant, Service Research Division, MPC
Raja Ainul Bismi, Consultant, Service Research Division, MPC
The NZIM MCI Research Team:
Kevin Gaunt, CEO NZIM Northern Region
Doug Matheson, former NZIM National Chairman, Author of MCI & President of AAMO 2002-2004
Ken-Fink Jensen, Partner, Research New Zealand
Copyright 2010 Malaysian Institute of Management Copyright 2010 Malaysian Institute of Management Copyright 2010 Malaysian Institute of Management
3
The Malaysian Institute of Management (MIM) and
Malaysia Productivity Corporation (MPC) would like to
thank all the Malaysian MCI 2010 survey participants
for their support.
Entering its third year of research undertaken by MIM
with the rst MCI survey in 2006 and the second in
2008, the research has again been conducted with
the continued support of the Asian Association of
Management Organisations (AAMO) and MPC.
The MCI was initiated with the objective for member
organisations within the AAMO set-up to ascertain their
own management capability index which can be used
for inter-organisation and regional comparison and
benchmarking for improvement.
These ndings will allow Malaysian organisations to
assess their current management capability whilst at
the same time put them on the pulse of our neighbouring
countries progress and learn from their best practices
in improving business capability.
As the professional national management organisation
that has been providing Malaysian managers and
industries with more than 40 years of excellence in
management development and practice, MIM has taken
on this research study with a view to seeing Malaysia
produces world-class management leaders capable
and committed to uplifting our countrys management
capability to greater heights of excellence.
Besides the support of AAMO and MPC, MIM also worked
together with the New Zealand Institute of Management
(NZIM) where the MCI study was developed and
undertaken for the past seven years (2003-2009).
With MCIs third year research study, the index has been
strengthened and now we are able to see the trend of
performance in the ten major drivers of management
capability for organisation and industry while this year,
we are recognising organisations for their continued
participation for three years in a row.
MIM and MPC extend our heartiest thanks to those
organisations that have taken part in this research
survey and hope that with more support forthcoming
from sponsors and participating organisations, this
study can be continued on an alternate year basis to
gather data to identify trends and areas for continuous
improvement.
We hope that many more organisations will come
forward to participate and contribute to this study thus
enabling our efforts to continuously monitor the progress
of Malaysian organisations in terms of improvements
in management capability and performance results
enabling us to move towards our 1Malaysia and
Wawasan 2020.
1. Message from President of Malaysian Institute of Management
TUN MOHAMMED HANIF BIN OMAR
4
Malaysia Productivity Corporation (MPC) has undertaken
the Malaysian Management Capability Index (MCI) study
together with the Malaysian Institute of Management
(MIM) since 2008. This 2010 report marked the second
synergistic collaboration between both public and
private sectors to consolidate their efforts in identifying
and promoting best practices in management capability
performance.
Companies that participated in this study benet by
assessing and benchmarking themselves with the
index of management capability comprising ten drivers
or thrust that deliver protable business growth.
As the fndings highlighted in this report provide a
comprehensive analysis by types of organisation and
industry sectors, this would put them in good stead to
take on the challenges of the dynamic global marketplace
and in strengthening management capabilities towards
a culture of excellence, enhanced competitiveness and
achieving world-class performance.
I would like to extend my appreciation to all the
CEOs, Managing Directors and General Managers
of participating companies for their commitment
in making this study a success. It is hoped that the
ndings of the study will be useful in providing the
organisations a benchmark of their performance vis--
vis the national average. Any gaps in performance could
be addressed through various improvement initiatives
including benchmarking against the best, human capital
development programmes and knowledge sharing
initiatives.
We look forward to your continued support and active
engagement with MPC and MIM towards achieving
our Governments aspiration to transform the nation
into a high income economy through higher value
added activities, innovation and creativity. Together
we endeavour to facilitate business transformation
to greater heights through enhanced management
capability competencies for the desired outcomes of
sustainable business growth and competitiveness.
2. Message from Chairman of Malaysia Productivity Corporation
TAN SRI AZMAN HASHIM
5
MIM and MPC would like to express our gratitude and
appreciation to all respondents of this years study. The
study is an excellent platform for gathering benchmarks
and best practices on management capability among
participating companies with further support from
organisations to undertake this survey on a regular
basis. We are confdent that through time, these fndings
can be useful for Malaysian organisations to benchmark
themselves against the national management capability
index as well as with the regional countries indices.
The ndings from this years study demonstrate
that Malaysian organisations perceive themselves
to be good in Integrity & Corporate Governance and
Financial Management as they identify integrity and
ethical business as good for long term business and
protability and practice sound and effective nancial
management.
The ndings also indicate that Malaysian organisations
observe themselves as being inept in Innovation in
Products and Services and Organisation Capability.
These urge the management to continuously create and
encourage innovation and continuous improvement as
part of the organisations culture.

Further collaboration of MIM and MPC will give the
right drive for this research to move to a higher level to
provide a credible and encompassing coverage. MIM and
MPC hope to continue this collaboration to continuously
deliver through the research study, a comprehensive
management capability index which will in turn provide
organisations with the recommendations and initiatives
that they can undertake to advance themselves from
mediocre to good and to great companies.
MIM and MPC trust that the Malaysian organisations
are now able to observe a trend in their management
capabilities performance. Greater efforts to provide
organisations with recommendations and initiatives to
better themselves in management capabilities will be
benecial for them to become greater companies.
DR NAZILY NOOR
Chief Executive Ofcer
3. Joint Message From CEO of MIM and Director General of MPC
MOHD RAZALI HUSSAIN
Director General
6
4. Executive Summary
Management Capability has been an important indicator
of performance in management at it indicates beyond the
individuals skill level to refect the impact of these skills at
organisational level.
Capability measures the application of management to
the total organisation and to the resulting organisational
performance that is achieved. Excellent in management
capability performance leads to sustainable performance
and business growth.
This years Malaysian Management Capability Index (MCI)
research study has established a better ground on the
performances of Malaysian organisations in terms of
management capability and we are pleased to recognise
companies which have participated three years in a row.
The Malaysian MCI 2010 Index has improved to 72.0
as compared to 67.7 of the potential 100 capability in
Malaysian MCI 2008 Index in all management capability
categories. The Malaysian MCI 2010 index shows that the
organisations observe themselves as good in Integrity &
Corporate Governance and Financial Management
and average in Innovation in Products and Services
and Organisation Capability.
The Malaysian MCI 2010 index is generated by tabulating
and averaging the responses where prescribed weightings
were applied to each of the numbers and the weightings
refect the relevant importance of each area. Each number
is tabulated to produce an index out of 100.
The report consists of four parts. The rst features
the approach of the research study, the Malaysian
MCI 2010 Index and its interpretation, comparison of
the Malaysian MCI Index between 2008 and 2010,
and organisational, sectoral and services sub-
sectors analyses of Malaysian MCI 2010 Index. The
second part consists of ndings of the Malaysian MCI
2010 Index, recommendations for improvements
and overall summary of the report. The third part
indicated the organisations MCI Index benchmarked
against the Malaysian MCI 2010 Index. The nal part
covers countries MCI Index which indicates New
Zealand and Canada MCI Indices against Malaysias
MCI Index.
In a global environment characterised by business
sustainability and growth, the Malaysian MCI 2010
Index highlights that further improvement can be
made to achieve 80 (on a base of 100) of potential
management capability.
7
5. Transforming Management Capability For Organisation Excellence and
Sustainable Business Growth
Denition of Management Capability
Management capability stems from an individuals
competences and it embraces sound processes, practices
and structure. This, in turn, results in the improvement in
management capability of an organisation, which directly
infuences the countrys capability for long term economic
and growth performance.
It is important to understand that management capability
is much more than management competencies. While
competencies are general descriptions of the abilities
necessary to perform successfully in a particular job or
position, capability is the degree to which management
uses its skills, abilities and competencies to achieve
results. In examining capability, we are moving up a level
beyond competencies.
Management capability is demonstrated in business
/ organisational performance, and is the result of
management leadership and competence in the key
management practices that lead to sustainable business
performance and business growth.
Of course, there are other factors beyond management
that also infuence business / organisational performance
i.e. government policy, infation, labour market, etc.
Management capability is the ability to deliver performance
by applying your competencies in the environment you face,
with the resources you have and addressing the challenges
encountered in achieving organisation excellence.
Highly capable managers respond to changing
environments and are adaptable in applying their
competencies in practice in different and challenging
environments and producing superior results. They have
inspiring visions and clear strategic goals, and are capable
of growing the organisation by continually improving the
performance of the organisation.
The important aspect of capability is how effectively
management applies and practises its competencies to deal
with external and internal infuences to achieve the highest
levels of business and organisational performance.
All competencies are important. But without the ability
to apply them to actually have the organisation, the
people and the processes in the organisation deliver
performance in order to make things happen towards
some purpose, vision, strategic goals and shorter
term performance goals these competencies would
not be of much value to the organisation one leads
and manages, or to the individual in growing himself
or herself. Capability is how CEO performance, or any
management performance, is evaluated or assessed.
When the environment gets real tough, the highly
capable managers win through and deliver in spite of it.
The best managers are those capable of applying their
competencies in different and challenging environments
to produce superior results. We all have skills, abilities,
personal attributes and competencies. But can we
apply them to deliver superior business performance in
the organisation we lead?
In practice, some of us are very good at applying our
skills, abilities and personal attributes, and through
management leadership, deliver superior business
performance. Others with essentially the same set of
skills, abilities and personal attributes may not. We
are dealing with the practice and the application of
management leadership not the theory.
So, capability is the ability to deliver performance by
applying your competencies in the environment, with
the resources you have, managing the challenges you
face to achieve desired outcome.
The measurement of management capability must
therefore link the application of management
competencies and abilities to the results achieved by
the business or organisation.
8
Management Capability Index (MCI)
Categories
The MCI converts the evaluation of management
performance into an Index. The index then is a useful
measurement and indicator of how capable, or inadequate,
one CEO, organisation, group, sector or even country is
performing against the criteria. Thus, the MCI enables
useful comparison or benchmarking between individual
CEOs, organisations, sectors or even countries.
The Malaysian MCI 2010 research study is based on the
following ten major drivers of management capability
that deliver protable business growth and comparative
performance to create an index of management capability.
The weighting of the ten categories indicating their degree
of importance in the nal index are as follows:
For each of the ten categories that make up the MCI, CEOs
/ Managing Directors / General Managers assess what
they consider to be their organisations current position.
The indices are on a scale of 100.
Defnition of the ten categories that make up the MCI are
as follows:
1. Visionary & Strategic Leadership
Articulates a clear and inspiring vision for the organisation
and team, and identifying the best ways to move towards
the organisations vision, mission, objectives and
goals while at the same time taking into account
the needs of all stakeholders. Demonstrates a global
perspective and understanding of global markets and
global thinking.
2. Performance Leadership
Ensures an achievement oriented organisation and
team that is able to manage risks and constant
changes, while consistently striving for performance
excellence and continuous improvement.
3. People Leadership
Makes human resource planning and talent
management and development an integral part of
the organisation. Maintains an open structure that
encourages growth and empowerment of its people.
4. Financial Management
Practises sound and effective nancial management
of the organisation. Leads and manages the
organisation to consistent performance improvements
and protable growth.
5. Organisation Capability
Builds a culture of innovation and research with
emphasis on continual improvement and learning
both for the individual and organisation. Maintains
a boundary-less organisation with effective
application of best management practices to achieve
organisational goals and objectives.
6. Application of Technology & Knowledge
Brings about a knowledge driven organisation that
understands and exploits information technology and
knowledge management to improve performance of
organisation.
7. External Relationships
Builds effective relationships with all stakeholders
and develops and maintains networks and spheres of
infuence.
Category Weightage
1. Visionary & Strategic Leadership 15%
2. Performance Leadership 10%
3. People Leadership 10%
4. Financial Management 10%
5. Organisation Capability 5%
6. Application of Technology & Knowledge 5%
7. External Relationships 5%
8. Innovation Products & Services 10%
9. Integrity & Corporate Governance 5%
10. Results & Comparative Performance 25%
Total 100%
9
8. Innovation Products & Services
Encourages continuous innovation in products and
services in creating new value for the organisation.
9. Integrity & Corporate Governance
Consistently adheres to ethical principles having set
specifc rules and procedures for making decisions
on organisations affairs. Has an established standard
of ethical behaviour for directors and stakeholders
based on trustworthiness and values that are
accepted or upheld. Adheres to legislation, regulations
and guidelines in administering the business of the
organisation.
10. Results & Comparative Performance
Measures and monitors business performance
and goals as the key performance indicators and
scorecard of the organisation. Recognises that
performance results are the most important measures
of management capability.
Category Weightage
1. Visionary & Strategic Leadership 15%
2. Performance Leadership 10%
3. People Leadership 10%
4. Financial Management 10%
5. Organisation Capability 5%
6. Application of Technology & Knowledge 5%
7. External Relationships 5%
8. Innovation Products & Services 10%
9. Integrity & Corporate Governance 5%
10. Results & Comparative Performance 25%
Total 100%
Malaysian MCI 2010 Weightage
Malaysian organisations assess their current
position in respect to the ten major drivers of
management capability that deliver protable
business growth and which can be used to create
an index of management capability.
The ten major drivers and the corresponding
weightage on these ten categories are as follows:
10
Scoring Statements
The scoring statements for the rst nine major drivers of management capability are scored as follows:
The scoring statements for the tenth major driver of management capability are scored as follows:
Legend Score Current position of the organisation
1 100 Fully practised throughout the organisation. Continually rened and improved as the way things are done round here.
2 80 Being practised consistently across the organisation with further improvements being made.
3 60 Being practised across most of the organisation with further improvements being made.
4 40 Being practised but only in parts of the organisation with further improvements being made.
5 20 This has just started.
6 0 This is not in place.
1 100 Excellent performance in most areas. Strong evidence of industry leadership in many areas.
2 80 Good to excellent performance in most areas. Most trends compared against benchmarks show areas of leadership and
very good performance.
3 60 Good performance in many areas. Many trends compared against benchmarks show areas of good performance.
4 40 Improving trends in many areas. Some trends compared against benchmarks show areas of strength.
5 20 Early stages of developing trends, many results not reported.
6 0 No results, poor results.
how effectively management applies and practises its competencies to deal with external and
internal threats and opportunities, to develop and motivate employees to innovate and achieve the
highest levels of performance that is management capability. Doug Matheson
11
6. How Malaysian Management Fared
6.1 Approach to the Malaysian MCI 2010 Research
Study
The Malaysian MCI 2010 Index survey was conducted
from January June 2010. Questionnaires (Appendix
B) were mailed out to 4000 companies. A total of 240
responses (6%) from CEOs, Managing Directors and
General Managers of companies in Malaysia were
received of which 222 were analysed.
The responses for each of the ten areas were tabulated
and averaged. The prescribed weightings were applied
to each of these numbers and the weightings refect the
relevant importance of each area. Each of the numbers
from the ten areas was then tabulated to produce an
index out of 100 (where 100 would be a perfect score).
6.2 Malaysian MCI 2010 Index
The Malaysian MCI 2010 Index is registered at 72.0 of
100 capability as compared to 67.7 of 100 capability in
2008. Table 6.2.1 shows the ranking of Malaysian MCI
2010 Index from the highest to the lowest management
capability as indicated by Malaysian organisations.
Figure 6.2.1: Malaysian MCI 2010 Index Compass
12
Based on the overall response, the ranking of the ten categories are as follows:
Table 6.2.1: Ranking of Malaysian MCI 2010 Index
Figure 6.2.2: Ranking of Malaysian MCI 2010 and Malaysian MCI 2010 Index
Rank Category Scores
1. Integrity & Corporate Governance 80.0
2. Financial Management 75.1
3. Performance Leadership 73.1
4. Visionary & Strategic Leadership 72.4
5. Application of Technology & Knowledge 71.8
6. External Relationships 71.0
7. Results & Comparative Performance 70.5
8 People Leadership 70.5
9. Innovation Products & Services 70.0
10. Organisation Capability 69.1
Malaysian MCI 2010 Index 72.0
13
6.3 Interpretation of Malaysian MCI 2010 Index
The Malaysian MCI 2010 Index at 72.0 suggests
that Malaysian management is performing at 72 of
its potential 100 capability which shows that the
criteria statements are practised across most of
the organisations with further improvements being
made.
Table 6.3.1 shows the overall response where
Malaysian organsations scored the highest in
Integrity & Corporate Governance followed
by Financial Management, Performance
Leadership, Visionary & Strategic Leadership,
Application of Technology & Knowledge,
External Relationships, People Leadership
and Results Comparative Performance with
scores over 70. This suggests that the management
The primary value of the Management Capability Index for any organisation is in identifying where management
performance improvements can be made, and through that the performance of the organisation, with the aim of
the organisation ultimately achieving its potential.
The frst step is for CEOs / Managing Directors / General Managers to benchmark their own organisation against
the Malaysian MCI 2010 Index and then to identify opportunities and development initiatives for improvement in
each individual category.
is consistently practising good processes, practices and
structures with further improvements being made.
Organisation Capability is the area below 70 which
can best be described as a level of mediocrity.
Top management is not achieving the potential of the
organisation it leads. There are needs for greater focus
on lifting management performance by boards and chief
executives for management capability to be practised
consistently across the organisations. This also implies that
further improvements can be made by demonstrating strong
commitment to continuous learning for individuals and
organisations.
The most heavily weighted category in Malaysian MCI, the
Results and Comparative Performance, has improved
to 70.5 which suggests good measuring and monitoring of
business performance by Malaysian organisations.
Table 6.3.1: Management Capability Individual Category Results
Malaysian organisations assess their capability to be highest (i.e. Above 75 of potential) in:
Next range of results of categories (i.e. Between 70-75 of potential) include:
The nal range of results of categories (i.e. Below 70 of potential) in:
Integrity & Corporate Governance 80.0
Financial Management 75.1
Organisation Capability 69.1
Performance Leadership 73.1
Visionary & Strategic Leadership 72.4
Application of Technology & Knowledge 71.8
External Relationships 71.0
Results & Comparative Performance 70.5
People Leadership 70.5
Innovation Products & Services 70.0
14
6.4 Comparison of 2008-2010 Malaysian MCI
This section highlights the comparison between 2010 and 2008 results, variance for each of the ten categories
and the index ranking.
Figure 6.4.1 indicates that Malaysian MCI 2010 Index surpasses that of 2008 in all categories. This suggests an
improvement of management capabilities for Malaysian organisations in many areas. However, organisations are
yet to achieve organisation excellence as they should aim to achieve 80 of 100 capability where excellence business
practices are consistently applied throughout the organisations.
Figure 6.4.1: Comparison of 2010 and 2008 Malaysian MCI Index
15
Categories 2008 Malaysian MCI 2010 Malaysian MCI Variance
Visionary & Strategic Leadership 69.3 72.4 +3.1
Performance Leadership 70.0 73.1 +3.1
People Leadership 66.2 70.5 +4.3
Financial Management 71.7 75.1 +3.4
Organisation Capability 65.6 69.1 +3.5
Application of Technology & Knowledge 67.8 71.8 +4.0
External Relationships 67.1 71.0 +3.9
Innovation Products & Services 64.9 70.0 +5.1
Integrity & Corporate Governance 75.2 80.0 +4.8
Results & Comparative Performance 65.0 70.5 +5.5
Malaysian MCI 67.7 72.0 +4.3
Table 6.4.1: Variance of 2010-2008 Malaysian MCI Index
Table 6.4.2: Ranking of Malaysian MCI Index Categories in 2010 and 2008
Table 6.4.1 shows positive variances and improvement in all categories. Results & Comparative Performance
(5.5) shows the largest variance, followed by Innovation in Products & Services (5.1), and Integrity &
Corporate Governance (4.8) while Visionary & Strategic Leadership and Performance Leadership show
the smallest variance (3.1).
The improvements in Results & Comparative Performance suggest that organisations regarded performance
results as the most important measures in management whereas improvements on Innovation in Products
& Services imply that organisations recognise innovation as an important aspect of business and processes.
Improvements on Integrity & Corporate Governance suggest that the organisations promote an established
standard of ethical behavior for the management and employees.
Table 6.4.2 shows that the ranking remains unchanged for the frst 7 categories. There are improvements in ranking
for Results & Comparative Performance and Innovation in Products & Services from 9th in 2008 to 8th in
2010 and from 10th in 2008 to 9th in 2010 respectively.
There is a slip in ranking for Organisation Capability from 8th in 2008 to 10th in 2010. This suggests that in order
to achieve organisational goals and objectives, it is important for management to have sound understanding and
effective application of best management practices.
Categories Ranking Ranking
(2010 Malaysian MCI) (2008 Malaysian MCI)
Integrity & Corporate Governance 1 1
Financial Management 2 2
Performance Leadership 3 3
Visionary & Strategic Leadership 4 4
Application of Technology & Knowledge 5 5
External Relationships 6 6
People Leadership 7 7
Organisation Capability 10 8
Results & Comparative Performance 8 9
Innovation Products & Services 9 10
16
Figure 6.5.1: Respondents by Type of Organisations
Table 6.5.1: Malaysian MCI 2010 According to Type of Organisations
Categories
Malaysian
MCI 2010
Multinational
Corporations
(MNCs)
Local Large
Corporations
(LLCs)
Small &
Medium
Enterprises
(SMEs)
Visionary & Strategic Leadership 72.4 80.0 74.7 69.2 77.1
Performance Leadership 73.1 80.5 76.5 69.4 74.3
People Leadership 70.5 72.4 74.4 68.3 74.3
Financial Management 75.1 83.2 78.2 71.4 77.1
Organisation Capability 69.1 74.1 70.5 67.0 77.1
Application of Technology & Knowledge 71.8 77.8 72.3 69.8 74.3
External Relationships 71.0 74.6 76.8 67.3 77.1
Innovation Products & Services 70.0 75.7 67.0 69.7 74.3
Integrity & Corporate Governance 80.0 87.6 86.0 75.2 88.6
Results & Comparative Performance 70.5 74.6 74.7 67.5 77.1
MCI 72.0 77.5 74.8 69.1 76.7
Government
Linked
Companies
(GLCs)
6.5 Respondents by Type of Organisation, Industry Sectors and Services Sub-Sectors
6.5.1 By Type of Organisation
The Malaysian MCI 2010 research study respondents are shown in Figure 6.5.1 which indicates that majority of
the respondents are from the Small & Medium Enterprises (SMEs) (57.7%) followed by the Local Large Companies
(LLCs) (25.7%), Multinationals Corporations (MNCs) (16.7%) and Government Linked Companies (GLC) (3.2%).
Table 6.5.1 indicates that MCI for the Multinational Corporations (MNCs), Government Linked Companies (GLCs)
and Local Large Companies (LLCs) are comparatively higher than the 72.0 index. However, the Small and Medium
Enterprises (SMEs) fared lower at 69.1.
17
The MNCs and GLCss performance which are above
75 suggests that they are moving towards 90 0f 100
capability where best business practices are applied
fully across the organisations.
LLCs score at 74.8 implies that best management
practices are applied consistently across the
organisations with further improvements being made.
The SME needs to make further improvements in all ten
drivers of Management Capability in order to be at par
with the Malaysian MCI Index.
Multinational Corporations (MNCs)
The MNCs are performing at 77.5 of potential 100
capability which suggests that the criteria are being
practised across most of the organisations with further
improvements being made.
The MNCs group surpasses the Malaysian MCI in
all categories, indicating strongest performance in
Financial Management (variance +8.1), Visionary
& Strategic Leadership (variance +7.6) and
Integrity & Corporate Governance (variance +7.6).
Government Linked Companies (GLCs)
The Government Linked Companies surpasses the
Malaysian MCI in all categories of comparison. The
Government Linked Companies group indicated
strongest performance in Integrity & Corporate
Governance (variance +8.6), Financial Management
(variance +8.1), and Visionary & Strategic Leadership
(variance +7.6).
Local Large Corporations (LLCs)
The LLCs group surpasses the Malaysian MCI in all
categories, except for Innovation Products and
Services (variance 3.0). The LLCs indicated strongest
performance in Integrity & Corporate Governance
(variance +6.0), External Relationship (variance +5.8)
and Results & Comparative Performance (variance
+4.2).
Small and Medium Enterprises (SMEs)
The SMEs group recorded lower overall assessment
in all the categories, with the widest disparities in
the Integrity & Corporate Governance (variance
4.8), Financial Management (variance -3.7),
Performance Leadership (variance 3.7) and
External Relationship (variance -3.7).
The general perception is that all organisations are
performing well in Integrity & Corporate Governance
with scoring above 75. However, Innovation Products
& Services was scored lowest at 67.0 by LLCs and
Organisation Capability was scored lowest at 67.0
by SMEs.
18
6.5.2 By Industry Sectors
Figure 6.5.2 indicates that the largest number of respondents by sector is from Services (49%), followed by
Manufacturing (35%), Others (10%), Construction (5%) and Agriculture (3%).
The MCI for each of the industry sectors are as follows:
Figure 6.5.2: Respondents by Industry Sector
The Agriculture and Services sectors surpassed the Malaysian MCI at 76.3 and 73.3 respectively while Manufacturing,
Others and Construction fared below the Malaysian MCI 2010 Index of 72.0.
Industry
Categories
V
i
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Agriculture 74.3 77.1 74.3 80.0 77.1 74.3 74.3 71.4 85.7 77.1 76.3
Construction 60.0 70.8 64.6 70.8 67.7 66.2 70.8 60.0 78.5 67.7 66.7
Manufacturing 71.5 72.8 67.4 75.9 66.2 69.7 66.2 70.0 76.9 69.7 70.7
Services 74.5 73.8 73.8 75.2 70.8 73.6 73.9 71.4 82.4 70.8 73.3
Others 72.0 69.3 66.7 72.0 69.3 73.3 73.3 68.0 77.3 72.0 71.1
19
6.5.3 By Services Sub-Sectors
Further analysis of 117 organisations from 10 services sub-sectors were carried out. Figure 6.5.3 shows the
participating services sub-sectors in the Malaysian MCI 2010 research study. Majority of the respondents are from
Business and Professional Services (26%), followed by Tourism (14%), Finance (12%), Education and Trade (11%),
Healthcare (10%), ICT and Transportation (5%) and Telecommunication and Utility (3%).
Figure 6.5.3: Services Sub-Sectors Representation
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Categories
Industry
Transport 76.7 73.3 80.0 86.7 70.0 76.7 76.7 73.3 86.7 73.3 76.7
Telecommunication 85.0 80.0 75.0 80.0 70.0 75.0 50.0 75.0 90.0 80.0 78.0
Trade 70.8 72.3 75.4 75.4 66.2 72.3 72.3 67.7 76.9 70.8 71.8
Finance 73.8 73.3 70.8 72.3 73.8 66.2 78.5 67.7 86.2 75.4 73.5
Business &

Professional Services

72.1 70.0 75.0 73.6 70.0 71.4 72.1 67.9 81.4 65.7 70.6
Tourism 71.3 73.8 72.5 73.8 68.8 72.5 73.8 72.5 80.0 70.0 72.2
Healthcare 78.2 76.4 69.1 76.4 71.0 74.5 72.7 70.9 83.6 72.7 74.3
Education 71.1 73.3 68.9 68.9 75.6 77.8 80.0 80.0 80.0 68.9 72.7
ICT 93.3 93.3 90.0 83.3 86.7 93.3 83.3 90.0 86.7 80.0 87.2
Utility 73.3 66.7 60.0 80.0 53.3 73.3 73.3 60.0 86.7 66.7 68.7
The MCI for each of the service sector as follows:
Among the services sub-sectors, ICT scored the highest at 87.2 while Utility registered the lowest at 68.7. The service
sub-sectors which fared below the Malaysian MCI of 72.0 were Trade, Business & Professional Services and Utility.
20
7. Transforming Malaysias Management Performance
7.1 Findings
From the Malaysian MCI 2010 results, it is evident
that Innovation in Products and Services and
Organisation Capability are the two areas for
improvements by Malaysia organisations to ensure
they remain competitive and sustainable locally and
globally.
The criteria for innovation of products and services are:
Creates the climate for and encourages continuous
innovation in products and services.
Innovation is recognised by everyone as important for
all aspects of the business and for all its processes -
innovation is part of the culture. Innovation leads the
business to new dimensions of performance.
Innovation creates new value for the business, its
customers and its shareholders.
The criteria for organisation capability are:
Builds organisation capability, a culture of innovation
and research, and an organisation dedicated to
continuous improvement.
Brings about and maintains a boundary-less
organisation, is confdent and effective in leading
and managing a non-hierarchical structure.
Effectively balances strong effective teams with free
individuals.
Sound understanding and effective application of
best management practices to achieve organisational
goals and objectives.
Demonstrates strong commitment to continuous
learning for both individuals and the organisation.
7.2 Recommendations for Improvement
The following are some programme recommendations
for improvement in the two areas identied:
Instill a culture that encourages innovation in the
organisation.
Introduce internal programmes that reward employees
for their creativity and innovation in the workplace.
Practise constant brainstorming sessions to innovate
existing products and services.
Always ask What if?, Why?, Is there a better way
of doing it? and How can it be done better?
Conduct formalised innovation training
Establish systematic innovation and change
management programme in the organisation
Introduce organisation and research training
programmes to instill a culture of innovative
development, organisational and change management
in the organisation.
Introduce programmes on team building and
organisation structuring and dynamics.
Inculcate continuous learning, training, development
and identication of applications of best management
practices.
Attend management conferences or seminars to
keep up with the latest trends in management both in
Malaysia and overseas.
Learn and practise diversity management.
Adopt the MIM Holistic Integrated Management Model
for organisation and management development.
Adopt MPC Business Excellence Framework towards
achieving superior business performance and
competitiveness.
21
7.3 Overall Summary
Malaysian MCI 2010 Index
Based on the Malaysian MCI 2010 Index fndings, it can
be summarised that overall Malaysian organisations
have fared well and moving towards achieving
organisation excellence at 80 of 100 capability.
The increase in the MCI from 67.7 (in 2008) to 72.0
(in 2010) and the overall higher assessment in all
categories for 2010 indicate an improvement in
Malaysian organisations management capability.
There is signicant improvement by Malaysian
organisations to move towards more than 75 to achieve
good to great levels in management capability
performance. In the immediate term, Malaysian
organisations would need to strengthen their innovation
and creativity and organisational capability.
Refer to Appendix E for a comprehensive list of training
and development programmes offered by MIM and
Business Excellence Framework by MPC to assist in
developing and improving on the ten categories of the
MCI.
Organisation Index
The MNCs are performing at 77.5 of capability which
suggests that they are on the way to achieving the
potential 100 capability. GLCs and LLCs have shown
improvement by hitting the 76.7 and 74.8 of capability
respectively. Although SMEs has improved by 4.6 points,
the index is still below 70.
Sectoral Index
In the sectoral MCI fndings, the industry that fared
below 70 of capability is Construction at 66.7 which
will need to focus on improving their management
capability particularly in Innovation in Products and
Services, Visionary & Strategic Leadership and
People Leadership areas.
The other sectors which registered above 70 of capability
are Agriculture, Manufacturing, Services and Others. These
sectors should continue to make further improvements in
their management capability and strive towards achieving
the potential 100 of capability in their respective industry
sectors. The results augur well for these sectors which
are contributing strongly to Malaysias economy.
Services Sub-Sector Index
In the services sub-sector MCI fndings, the sector that
fared below 70 of capability is Utility which will need
to focus on improving their management capability in
Organisation Capability, Innovation in Products and
Services and People Leadership areas.
The other services sub-sectors which registered above
70 of capability should continue with their improvement
measures in management capability and strive to achieve
100 management capability in their respective industry
sectors. The results are evidence of their contributions
towards Malaysian economic growth.
Based on the organisation, sectoral and services sub-
sectors indices, the areas for improvement for all are
consistent with the categories indentied in the Malaysian
MCI 2010 Index which are Innovation in Products &
Services and Organisation Capability.
22
8. Benchmarking Malaysian Organisations
8.1 Comparison of Organisations Results with the Malaysian MCI
The following illustrates how an organisations results can be compared to the Malaysian MCI 2010 Index and to
identify the gaps in each of the ten individual categories. This sample result is taken from one of the 222 responses.
Company As performance is as follows:
Category Malaysian MCI Company Variance
2010 Index A Scores
1. Visionary & Strategic Leadership 72.4 80.0 +7.60
2. Performance Leadership 73.1 72.0 -1.10
3. People Leadership 70.5 68.0 -2.50
4. Financial Management 75.1 92.0 +16.90
5. Organisation Capability 69.1 64.0 -5.10
6. Application of Technology & Knowledge 71.8 64.0 -7.80
7. External Relationships 71.0 72.0 +1.00
8. Innovation Products & Services 70.0 52.0 -18.00
9. Integrity & Corporate Governance 80.0 100.0 +20.00
10. Results & Comparative Performance 70.5 60.0 -10.50
MCI 72.0 70.4 -1.60
23
8.2 Company As Performance
The Management Capability Index for Company A is
70.4. This suggests that Company A is performing at
70.4 of its potential 100 capability. Company As MCI
of 70.4 is lower than the Malaysian MCI 2010 Index of
72.0.
Company A registered highest score in Integrity
& Corporate Governance followed by Financial
Management and Visionary & Strategic
Leadership and weakest in Innovation Products
& Services.
In its strongest areas, company A should continue its
efforts to set the industry standards in these areas.
Company A should now focus on its weakest area
Innovation Products & Services which has
the widest gap of (-18.0) followed by Results &
Comparative Performance (-10.5) and Application
of Technology & Knowledge (-7.8).
Company A should address these weak areas by
examining each relevant criteria and implement
various improvement initiatives to improve organisation
performance. The way forward for company A is to
benchmark themselves against the best performing
company in their excellence practices through forming
of the Community of Practice (CoP) in Management
Capability.
A comprehensive list of training and development
programmes offered by MIM and Business Excellence
Framework by MPC to assist in developing and improving
the ten categories of MCI are outlined in Appendix E.
A further comparison of Company As type of organisation
and industry sector with the respective type of organisation
MCI and corresponding industry group MCI will give an
indication of Company As performance within its own
organisation type and industry sector as well.
For organisations that have participated in the 2010 MCI
Research Study, individual reports of your organisations
MCI and interpretation of ndings can be done upon
request. Please contact MIM Customer Service at (603)
2172 5555 or email enquiries@mim.org.my for further
details.
24
9. MCI Results New Zealand, Canada and Malaysia
MCI Results International Comparison
The following table shows a comparison of the MCI results of New Zealand, Canada and Malaysia.
Categories New Zealand MCI Canada MCI Malaysia MCI
Visionary & Strategic
Leadership

70.7 71.0 72.4
Performance Leadership 71.9 75.0 73.1
People Leadership 70.4 72.3 70.5
Financial Management 77.5 80.0 75.1
Organisation Capability 68.2 71.3 69.1
Application of Technology & Knowledge 67.5 69.9 71.8
External Relationships 74.3 78.2 71.0
Innovation Products & Services 65.9 70.2 70.0
Integrity & Corporate Governance NA NA 80.0
Results & Comparative Performance 67.3 74.8 70.5
MCI 69.9 73.9 72.0
25
10. Way Forward
Malaysias MCI 2010 fared well and moving towards
achieving organisation excellence at 80 of 100 of
capability performance. There is a need for improvement
in all the management capability drivers to strive for
above 75 of capability performance which would be
termed good and eventually, all organisations should
aspire to achieve above 90 of capability to become
great companies.
Benchmarking Malaysian Organisations
The Malaysian MCI provides ndings for the individual
Malaysian organisations to benchmark themselves
against the Malaysian MCI 2010 Index. A further analysis
can be done to compare against the industry sector that
they are in. Recommendations for improvement in each
of the areas of management capability are outlined
and also a comprehensive training and development
programme can be undertaken to assist in developing
and improving the ten categories of the MCI.
Malaysian organisations can be categorised into
performance levels of mediocre (below 75), good (75-
90) and great (above 90) based on their management
capability performance assessment. With regular
participation in the survey, Malaysian organisations can
gauge their performance improvement over the years
through this performance level categorisation. This will
also provide data for the industry organisations to assist
the various business organisations, particularly the
small and medium enterprises, to identify the companies
that are ready to go global and those companies that
require nurturing and development to be ready for the
global market. These data would help Malaysia to build
good-to-great companies that can increase Malaysias
productivity and competitiveness through excellence in
management capability.
Conclusion
MIM and MPC are pleased that the Malaysian MCI is
continued in 2010. We hope to continue our collaboration
to conduct this research study every alternate year.
Through time, the compilation of data will provide a
trend analysis for all Malaysian organisations and come
up with recommendations for areas of improvement in
terms of management capability and performance.
The information from the ndings of the Malaysian MCI
can be used two-fold i.e. either nationally as a country or
individually for the organisation. The overall country index
will help gauge Malaysian organisations in performance
of the ten major drivers of management capability and
identify areas for improvement. By having a comparison
with other countries in the region, it will help identify the
areas where Malaysian organisations are doing well and
where they are lacking. The countries comparison would
also enable Malaysian organisations to learn from those
countries that have improved in their rankings.
For the individual organisation, the fndings will help
identify performance gaps with the Malaysian MCI Index
and also identify best practices within organisations
that can be shared for the overall improvement of the
organisations. The sectoral analysis will also enable
organisations to benchmark against those within their
industry group and organisation type. The training
and development recommendations given are in line
with the MIM Holistic Integrated Management Model
(refer following section) which presents a holistic and
systematic training and development plan. MIM and MPC
have the expertise in this area to assist organisations in
the development of their capability and competencies at
each level of the organisation.
We hope that all the organisations that have taken part
in this research study will continue this endeavour on a
regular basis and in the long run, the MCI will beneft
all organisations within the Malaysian enterprises. By
strengthening our management capability we can then,
in turn, strengthen our national competitiveness and
business efciency internationally.
26
11. Appendices
Page
Appendix A. Overall Results of Malaysian MCI Index 2010 27
Appendix B. MIM-MPC-AAMO Malaysian Management Capability Index 2010- Questionnaire 28
Appendix C. Management Competencies, Competence & Capability 35
Appendix D. MIM Holistic Integrated Management Model 36
Appendix E. MCI Categories & Recommended Training & Development Programmes 37
27
Overall Results of Malaysian Management Capability Index 2010
The Malaysian MCI was calculated from the following assessed scores and weighting of the ten categories.
Appendix A
Categories Assessed Weightage Index
Visionary & Strategic Leadership 72.4 15% 10.9
Performance Leadership 73.1 10% 7.3
People Leadership 70.5 10% 7.1
Financial Management 75.1 10% 7.5
Organisation Capability 69.1 5% 3.5
Application of Technology & Knowledge 71.8 5% 3.6
External Relationships 71.0 5% 3.6
Innovation Products & Services 70.0 10% 7.0
Integrity & Corporate Governance 80.0 5% 4.0
Results & Comparative Performance 70.5 25% 17.6
Malaysian MCI 2010 72.0
28
MIM-MPC-AAMO Malaysian Management Capability Index 2010 Questionnaire
OBJECTIVE
Management capability is demonstrated in business performance, and is the result of management leadership and
competence in the key management practices that lead to sustainable business performance and business growth. To
measure the capability of management and to track improvement, we have adopted a Management Capability Index
originally developed by the New Zealand Institute of Management (NZIM).
Capability is dened as the demonstrated capability to achieve or accomplish through effective use of abilities for a
particular purpose.
There are ten (10) major drivers of management capability that deliver protable business growth and which can be
used to create an index of management capability.
We at MIM, MPC and AAMO are now inviting you to participate in a regional survey of benchmarking management
capability by accessing the current position with organisations in Malaysia in respect to these ten drivers.
The results will help Malaysian organisations benchmark themselves against other organisations in other countries in
Asia. The overall results will be made available to you based on contact information provided by you to us as follows:
Appendix B
Name:
Title:
Designation:
Organisation Name:
Organisation Address:
Organisation No.
Tel No.: Fax No.:
Email Address:
Dato Datin Prof Dr Mr Mrs Ms Encik Puan Cik
WHO SHOULD COMPLETE THIS SURVEY FORM?
The survey form should be completed by the CEO or General Manager of the organisation.
Kindly return duly completed questionnaire by mail, fax or email to:
Contact Person: Nur Amaleena Haza Muhammad Zain, Senior Executive, Research and Business Development
Address: Malaysian Institute of Management, Management House, 227 Jalan Ampang, 50450 Kuala Lumpur
Tel: 603-2172 5555 ext. 1005 Fax: 603-2172 5573 Email: amaleena@mim.org.my
29
Please answer the following questions about your organisation.
Circle one number for each question. For questions 5 & 6, please ll in the gures.
1. Which of the following best describes your managerial level?
Level 1 - CEO/MD 1
Level 2 - report to CEO/MD 2
Level 3 - report to Level 2 3
Not in a managerial position 4
3. Type of organisation:
Multi National Corporation (MNC) 1
Local Large Organisation 2
Small and Medium Enterprise (SME) 3
Government Agency 4
4. Ownership of your organisation:
Fully local (0% foreign ownership) 1
Majority local (1 49% foreign ownership) 2
Equal ownership (50% local & 50% foreign) 3
Majority foreign (51 99% foreign) 4
Fully foreign (100% foreign ownership) 5
Agriculture 1
Construction 2
Petroleum and gas - upstream 3
Manufacturing
Food, beverage & tobacco 4
Textiles & wearing apparel 5
Rubber products 6
Wood & wood products 7
Paper & paper products 8
Chemical & chemical products 9
Non-metallic mineral products 10
Iron & steel 11
Fabricated metal products 12
Electrical & electronics products & machinery 13
Transport equipment 14
Transport
Air 15
Land 16
Water 17
Telecommunications 18
Trade
Wholesale 19
Retail 20
Finance
Banking 21
Insurance 22
Stockbroking 23
Business & professional services
Law rms 24
Accounting 25
Architects 26
Management consulting 27
Advertising 28
Tourist & leisure services
Hotels 29
Restaurants 30
Tour agencies 31
Health 32
Education 33
ICT 34
Others 35
Please specify ___________________
2. Which sector / sub sector is your organisation classied:
5. Year established: ______________
6. Total number of employees in your organisation: ______________ employees
30
HOW TO COMPLETE THE SURVEY FORM
Using the following six-point Likert scale, please circle the relevant score for the following statements. The following
scale refers to the rst nine parts.
PART I: VISIONARY AND STRATEGIC LEADERSHIP
6 100 Yes, fully practised throughout the organisation.
Continually rened and improved as The way things are done round here
5 80 Yes, being practised consistently across the organisation with further improvements being made.
4 60 Yes, being practised across most of the organisation with further improvements being made.
3 40 Yes, being practised, but only in parts of the organisation, part of the time.
2 20 Yes, this has just started.
1 0 No, this is not in place.
In my organisation:
1. Management articulates a clear and inspiring vision that is well understood. 1 2 3 4 5 6
2. Management actively fosters and encourages ownership of the vision by staff. 1 2 3 4 5 6
3. The vision and supporting goals underpin and guide managerial decisions and
behaviours.
1 2 3 4 5 6
4. Management plans with a view to growing the business while meeting the
needs of shareholders/owners, taking into account employee, supplier,
customer and other stakeholder interests.
1 2 3 4 5 6
5. Management demonstrates an international / global perspective and has
a good understanding of global markets and global thinking.
1 2 3 4 5 6
Overall our current position for Part I
1 2 3 4 5 6
PART II: PERFORMANCE LEADERSHIP
In my organisation:
1. Management ensures the organisation is strongly goal, performance and
achievement focused.
1 2 3 4 5 6
2. Management demonstrates the ability and attitude to lead the achievement
of challenging goals and change.
1 2 3 4 5 6
3. Management balances risk with achievement, not risk avoidance
(i.e. management is not risk averse.)
1 2 3 4 5 6
4. The organisation consistently meets its performance goals and has a
performance track record of growth and of continually improving performance.
1 2 3 4 5 6
5. The organisation consistently performs better than its competitors or other
comparable organisations.
1 2 3 4 5 6
Overall our current position for Part II 1 2 3 4 5 6
31
PART III : PEOPLE LEADERSHIP
Legend Score Current position of the organization
In my organisation:
1. Management attracts, retains, develops, motivates and leads an effective team
capable of achieving company objectives.
1 2 3 4 5 6
2. Human resource planning is an integral part of the annual business planning
process.
1 2 3 4 5 6
3. Management provides enhanced leadership acts as a role model, committed
to developing subordinates and leading people.
1 2 3 4 5 6
4. Management is strong on empowerment allows scope for people to grow
and contributes toward employees growth therefore enhancing their CV.
1 2 3 4 5 6
5. Management maintains a culture supportive of todays employee values
not stifed by structure and hierarchy.
1 2 3 4 5 6
Overall our current position for Part III 1 2 3 4 5 6
PART IV : FINANCIAL MANAGEMENT
In my organisation:
1. Management develops and commits to plans and goals that support sound
growth and continuing performance improvement.
1 2 3 4 5 6
2. Management leads and manages the business to consistently achieve or
exceed these goals.
1 2 3 4 5 6
3. Management practises sound and effective management of the organisation
including fnancial planning, accounting, cash fow management, investment,
nancial reporting and liaison with nancial institutions.
1 2 3 4 5 6
4. Management has experienced accounting and nancial personnel for its
nancial management.
1 2 3 4 5 6
5. Management has in place sound and effective internal control systems
through supervision and internal audit.
1 2 3 4 5 6
Overall our current position for Part IV 1 2 3 4 5 6
32
PART V : ORGANISATION CAPABILITY
In my organisation:
1. Management builds organisation capability, a culture of innovation and research,
and an organisation dedicated to continuous improvement. 1 2 3 4 5 6
2. Management brings about and maintains a boundary-less organisation, is
condent and effective in leading and managing a non-hierarchical structure. 1 2 3 4 5 6
3. Management effectively balances strong effective teams with free (independent)
individuals. 1 2 3 4 5 6
4. Management has a sound understanding and effective application of best
management practices to achieve organisational goals and objectives 1 2 3 4 5 6
5. Management demonstrates strong commitment to continuous learning for
both individuals and the organisation. 1 2 3 4 5 6
Overall our current position for Part V 1 2 3 4 5 6
PART VI : APPLICATION OF TECHNOLOGY AND KNOWLEDGE
In my organisation:
1. Management exploits information technology and brings about a knowledge
driven organisation. 1 2 3 4 5 6
2. Management understands the impact of technology on organisations and on
work itself. 1 2 3 4 5 6
3. Management understands the value and application of knowledge in
organisations. 1 2 3 4 5 6
4. Management applies effective knowledge and information management. 1 2 3 4 5 6
5. Management practises knowledge management and promotes a learning
organisation culture. 1 2 3 4 5 6
Overall our current position for Part VI 1 2 3 4 5 6
33
PART VII : EXTERNAL RELATIONSHIPS
In my organisation:
1. Management develops networks and spheres of infuence with stakeholders. 1 2 3 4 5 6
2. Management maintains networks and spheres of infuence with stakeholders. 1 2 3 4 5 6
3. Management ensures the organisation has a positive external image
through the building of effective relationships with all stakeholders including
customers and suppliers.
1 2 3 4 5 6
4. Management ensures the organisation has a positive external image through
the fulllment of community and social obligations.
1 2 3 4 5 6
5. Management practises corporate social responsibility. 1 2 3 4 5 6
Overall our current position for Part VII 1 2 3 4 5 6
PART VIII : INNOVATION PRODUCTS AND SERVICES
In my organisation:
1. Management and employees create the climate for and encourage
continuous innovation in products and services.
1 2 3 4 5 6
2. Management and employees recognise innovation as an important
aspect of business and for all the organisations processes
innovation is part of the organisations culture.
1 2 3 4 5 6
3. Management and employees recognise that innovation leads
the business to new dimensions of performance.
1 2 3 4 5 6
4. Management and employees practise innovation to create new
values for the business, customers and shareholders.
1 2 3 4 5 6
5. Management and employees practise innovation to expand its market
and increase its market share.
1 2 3 4 5 6
Overall our current position for Part VIII 1 2 3 4 5 6
34
PART IX : INTEGRITY AND CORPORATE GOVERNANCE
THANK YOU FOR COMPLETING THIS QUESTIONNAIRE. YOUR PARTICIPATION COUNTS!
PART X : RESULTS AND COMPARATIVE PERFORMANCE
In my organisation:
1. Management and employees understand ethical principles in making decisions
on organisations affairs.
1 2 3 4 5 6
2. Management and employees follow ethical rules and procedures for making
decisions on organisations affairs.
1 2 3 4 5 6
3. Management and employees adhere to legislation, regulations and guidelines
in administering the business of the organisation.
1 2 3 4 5 6
4. The organisation promotes an established standard of ethical behaviour for
directors, management and employees based on integrity and code of proper
conduct
1 2 3 4 5 6
5. The organisation practices integrity and ethical behaviour as being good
for long term business and protability.
1 2 3 4 5 6
Overall our current position for Part IX 1 2 3 4 5 6
In my organisation:
1. The performance results are the most important measures of management
capability. (The results should include performance relative to competitor(s)).
1 2 3 4 5 6
The key measures* of business performance and business growth in the context
of the Management Capability Index could be:
(* NOTE : The key measure of the particular organisations performance should
be used to assess results and comparative performance).
2. Growth in revenue over past 5 years.
1 2 3 4 5 6
3. Prot performance over past 5 years. 1 2 3 4 5 6
4. **EVA (economic value added) performance over past 5 years.
(** EVA a measure of a companys fnancial performance based on the residual
wealth calculated by deducting cost of capital from its operating prot
(adjusted for taxes on a cash basis.))
1 2 3 4 5 6
5. The organisations management capability determines performance results. 1 2 3 4 5 6
Overall our current position for Part X 1 2 3 4 5 6
Please use the following scale for Part X.
35
Management Competencies, Competence and Capability
The relationships between management skills and abilities, management practices, management competencies,
management competence and management capability are important aspects of management performance. It is
helpful to understand the defnitions of competencies, competence and capability in this regard:
Competencies are general descriptions of the abilities necessary to perform successfully in a particular
job or position. Competency profles synthesise skills, knowledge, attributes and values, and
express performance requirements or competencies in behavioural terms.
Competence is having the requisite or adequate ability or qualities to perform well or to a required standard.
Capability demonstrated capability to achieve or accomplish through effective use of abilities for a particular
purpose.
The relationship between management skills, abilities, qualifcations, practice, competencies, competence, capability
and organisational performance can usefully be depicted as follows:
Appendix C
Management capability is demonstrated in business / organisational performance, and is the result of management
leadership and competence in the key management practices that lead to sustainable business performance and
business growth. The important aspect is how effectively management applies and practises its competencies to deal
with external and internal infuences to achieve the highest levels of business / organisational performance.
BASE / CORE MANAGEMENT
SKILLS & ABILITIES
MANAGEMENT PRACTICE
(DIFFERENT IN DIFFERENT ORGS /
ENVIRONMENTS)
COMPETENCIES
(REQUIRED ABILITIES EXPRESSED
IN
BEHAVIOURAL TERMS)
CAPABILITY
(ORGANISATIONAL PERFORMANCE,
RESULTS / OUTCOMES
Qualifcations refect this
against a standard
The abilities necessary to
perform successfully in a
particular job or position.
Demonstrated management
capability,refected in organisation
/ business performance.
36
MIM Holistic Integrated Management Model
Appendix D:
with other people becomes important in terms of getting
work done. With more than one person working together,
there is a need to work as a unit and a team, which is
effectively a group of individuals working and respecting
each other to achieve a group task or assignment.
The team is the work unit, and with other groups, will
then form the third level which is the functional group or
department. A combination of functions will then form
a division or a business unit. A business unit on its own
or a number of business units make up the corporation
or organisation, and this corporation must have the
competency to deal with the industry challenges, and to be
a successful company in the industry, the organisation has
to deal and manage effectively in the global environment
or economy.
The HIMM is a systemic approach of total management
and is based on the premise that if each enterprise or
organisation competency is developed and strengthened
as the individual worker and organisation grows, then the
total organisation with each of its parts will function in a
more synergistic manner.
Similarly, the management capability of an organisation is
also dependent on the ability of the individual managers
take action and make the desired results come to pass.
It is the application of their management capability to
their work unit (team) that brings about an environment
that inspires the department and business unit, and
motivates employees to strive for the vision and superior
performance of the organisation as a whole.
The science, art and practice of management are to
develop and ensure that all integral parts are functioning
in an optimal and productive way. Similarly, management
capability is also the practice of the application of the skills,
knowledge and abilities of individuals in the organisation in
order to strive for achievement of superior performance.
MIM has a comprehensive suite of developmental
programmes to assist organisations in developing and
strengthening their respective areas within the HIMM
concept. Refer Appendix E for the list of recommended
training and development programmes in the ten MCI
categories.
The
M I M
Hol i st i c
I n t e g r a t e d
Management Model (HIMM) rstly identies the
various organisational capability and competencies
required to build a strong, growing and proftable
enterprise or organisation. Most growing organisations
fall into the HMM as they move through their organic
growth phases. The HMM also shows the interface
and management dynamics within and between each
level or function of management which requires them
and their people to gain the relevant competences to
adequately deal with their growth stages and learning
needs.
An organisation or enterprise is formed as a group or
conglomeration of people. Hence, the base productive
unit is the individual worker. Each individual must
be capable and strive to be competent and achieve
personal mastery in his/her own area of work and
responsibility to produce the best results. Each
worker needs to possess the relevant competences
to perform his/her job well. Accompanied by the
relevant competences, the individual worker should
also internalise their values, ethics and pride of work
irrespective of the role and tasks they are performing
as part of the whole in general accountability to help
the organisation perform well.
The individual worker has to work and co-exist with
other workers, hence the understanding of how to work
37
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MCI Categories
MIM Programmes
PERSONAL MANAGEMENT
COMMUNICATION
Delivering Powerful Presentations Including NLP Tips for Results
Effective Business Writing Skills
Excellent Communication With NLP
Kemahiran Berkomunikasi
Presenting With Impact & Purpose
Results Driven Communication & Infuencing Skills
The Write Way To Effective Report Writing
Write It Right, Say It Correctly
PERSONAL DEVELOPMENT
Becoming A Confict Competent Leader The Challenge!
Dealing Confdently With Diffcult People At Work
Dynamic Personal Development
Effective Problem Solving & Decision Making
Emotional Intelligence @ Work
Kepintaran Emosi (Dalam Mengharungi Cabaran Di Tempat Kerja)
Maintaining Successful Attitudes
Personal Empowerment with NLP
Personal Success and Leadership Programme - Creating A Success Mindset
Professional Personality Profle A Fantastic Leader Driven Team!
Strategic Negotiation For Effective Results
Time Management & Personal Effectiveness
WORKPLACE MANAGEMENT
Administrative Series 1: Developing Positive Attitudes & Habits for
Administrative Professionals
Administrative Series 2: Enhancing Key Skills for Administrative Professionals
Kemahiran dan Amalan Pentadbir Professional
UNIT/TEAM MANAGEMENT
SUPERVISORY MANAGEMENT
Kemahiran Menyelesaikan Masalah
Penyeliaan Berkesan
Towards Supervisory Excellence
FUNCTIONAL MANAGEMENT
CUSTOMER MANAGEMENT
Customer Service Above and Beyond
Effective Telephone Skills in Customer Service
Perkhidmatan Kakitangan Barisan Hadapan Yang Cemerlang
Turning Service Into Lifetime Loyalty
FINANCE
Managerial Finance
Essentials of Taxation
Finance for Non-Finance Managers
MCI Categories & Recommended Training & Development Programmes
Appendix E
38
MARKETING & SALES
Achieving Outstanding Sales Results Professionally (For Big Sales)
Art of Selling - How to sell the SMART way!
Branding As An Effective Market-driven Business Strategy
Delivering Customer Satisfaction
Effective Sales Training With NLP
Effective Telesales Techniques
Key Account Management - Growing Your Business Against Competition
Power Negotiation Using Psychological Tools
Strategic Marketing Management: Winning Strategic Analysis and
Competitive Advantage Development
QUALITY MANAGEMENT
Continuous Improvement (Kaizen)
Managing for Excellence in Quality and Productivity
7 Management & Planning Tools (7MP)
HUMAN CAPITAL MANAGEMENT
Basics in Managing People
Coaching & Counseling for Performance
Engaging Employees for Higher Performance and Retention
How To Design, Assess and Implement Your Training Modules Creatively
HR For Non-HR Managers
Identifying & Analysing Training Needs
Manager As Coach
Successful Interview Techniques for Managers
Talent Management For High Performance Organisations
ORGANISATIONAL MANAGEMENT
CORPORATE SOCIAL RESPONSIBILITY
CSR Reporting
MIM-ARM Foundation Certifcate in CSR
THE MIM MANAGEMENT HOW-TO SERIES
Financial Management Strategies To Reduce Costs, Improve Liquidity
and Increase Revenue
How To Enhance Customer Service & Retention
How To Increase Sales & Develop Effective Marketing Strategies
Specifc HR Strategies in Challenging Times
MANAGEMENT LEADERSHIP
Advanced Leadership Skills (inspiring, Leading and Managing Organisations
Towards Peak Performance)
Assertiveness Skills for Management Leaders (Leading People For Results)
Building A Cohesive Team Using Persuasive Leadership Skills
Building Strong Management Skills
Developing Effective Managerial Skills
Effective Middle Management
Fundamentals of Management
Job of Executives (JOE)
Job of General Managers (JOGM)
Job of Managers (JOM)
Team Dynamics using NLP for Managers and Team Leaders
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MCI Categories
MIM Programmes
39
Using Neuro Linguistic Programming (NLP) To Improve Your Leadership Skills
PROJECT MANAGEMENT
Managing Project Risks
PMP Exam Preparation
Project Management for Beginners
Project Management Leadership
Project Management Tools for Executives
Successful Project Management
STRATEGIC MANAGEMENT
Business Model Innovation - How To Break The Rules and Change The Game
of Doing Business
Making Strategy Work - The Balanced Scorecard Way
Market-Driven Business Planning
Scenario Thinking For Strategic Planning
Strategic Thinking, Planning and Implementation
Winning Organisational Change Paving the Way for Your Future Business
Growth
INDUSTRY MANAGEMENT
CREATIVITY & INNOVATION
Enhancing Analytical & Creative Thinking Skills
Generating Ideas Through Organised Creativity
How To Unleash Your Creativity and Innovation At Your Workplace
Thinking Outside The Box
GLOBAL MANAGEMENT
Job of The Chief Executive
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MCI Categories
MIM Programmes
40
The Business Excellence Framework (BEF) is about adopting a holistic approach to strengthen the management practices,
systems and processes of an organisation towards achieving superior business performance and competitiveness.
This framework is based on internationally comparable and holistic models for managing enterprise excellence and
innovation. BEF has seven dimensions of excellence namely Leadership, Planning, Information, Customers, People,
Processes and Results.
The implementation of BEF focuses on leadership ability in guiding and sustaining organisations to address issues on
corporate governance that includes ethical, legal and community responsibilities.
The systems approach of this framework covers the following dimensions: Planning, Information, Customers, People
and Processes. These dimensions evaluate how organisations determine requirements, expectations and preferences
of customers and markets.
The business outcome is measured using organisations performance and improvement in key business areas such
as product and service outcomes, customer satisfaction, fnancial and marketplace performance, human resource
capabilities, operational performance, leadership and social responsibility.
MPC Business Excellence Framework
41
The implementation of BEF requires involvement of all spectrum of employment in an organisation as well as
effective partnership with suppliers and customers. Good management systems and processes need to be employed
organisation-wide, beginning with a clear vision to maintaining a safe and healthy workplace. This requires well-
trained and motivated employees, standardised work procedures, effective production control as well as ensuring the
quality of external suppliers and operating a fast and effcient after-sales service. In essence all parties are important
contributors to the successful implementation of BEF which eventually promote and enhance business innovation.
The Business Excellence Journey
42
43
Under the auspices of : Survey jointly conducted and reported by :
Asian Association of
Management Organisations
Malaysia
Productivity Corporation
MCI Model by NZIM:
Institut Pengurusan Malaysia (22978-D)
Management House, 227 Jalan Ampang, 50450 Kuala Lumpur, Malaysia
Tel: 603-2172 5555 Fax: 603-2172 5563
E-mail: enquiries@mim.org.my Website: www.mim.org.my
Perbadanan Produktiviti Malaysia
P.O.Box 64, Lorong Produktiviti, Off Jalan Sultan,
46904 Petaling Jaya, Selangor Darul Ehsan, Malaysia
Tel: 603-7955 7266, 7955 7050, 7955 7085
Fax: 603-7957 8068, 7955 1824, 7954 0795 (Marketing)
Email: marketing@mpc.gov.my Website: www.mpc.gov.my
Malaysian Institute of Management (MIM) &
Malaysia Productivity Corporation (MPC)
MCI Research Team
October 2010
MALAYSIAN
MANAGEMENT
CAPABILITY
INDEX
MIM-MPC-AAMO Management Capability Index (MCI) 2010 Survey
2010

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