AN ANALYSIS OF BUSINESS

APPROACH AMONG

MALAYSIAN MALAYS,

CHINESE AND INDIANS

Global Business
Environment

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 A CONTRASTIVE ANALYSIS OF BUSINESS APPROACH AMONG MALAYSIAN MALAYS,

CHINESE AND INDIANS

There is a story told and retold in this country that we love, Malaysia, and which I have heard as far

as my memory takes me. It is the story of a community of sea-crabs. These crabs were of Malay,

Chinese and Indian origin. One day these crabs were travelling across the sea and suddenly came to

a wall. One Malay crab climbed to the top and called out to the other Malay crabs to follow him. The

others told him they will not be able to climb to the top, and they wished him all the best. A Chinese

crab climbed to the top, and pulled up every other Chinese crab one by one, each new one helping

the one behind him. Finally an Indian crab climbed to the top, and the others tried to follow. Every

time, either the one above tried to push the new one down or the new one tried to pull down the

one on top. This is how, I have been taught, business is conducted in Malaysia. This is how I see it

today, in real life.

It is a known fact that different cultures all over the world conduct business differently; either

because of their environment, the culture of their country, or perhaps due to the way each of these

races or ethnic groups brings up their young (Hofstede, 1991).

For a country like Ireland, France, or Germany it is quite plain to see or relatively easy to deduce,

because of their almost undiluted culture. Same should be the case for the USA and UK, except for

the pockets of communities of other races who have their own ways, scattered across the countries.
Countries in the ASEAN region are mostly dominated by a particular race and the business culture of

that country is clearly defined by the culture of that particular race; Chinese in Singapore, Thais in

Thailand. But surely there are countries within the ASEAN who are multicultural and the dominant

businesses are not from the dominant race, e.g. Philippines, Vietnam and Malaysia. Occasionally this

‘arrangement’ has led to political turmoil, such as the ‘May 13 th’ incident in Malaysia, the kind of

which is clearly predictable.

So far, no kind of integration has been possible in any country as far as I know. Even in Indonesia,

where there is very little difference between the races, because of years of intermingling,

intermarriages and commonality of people’s names, an Indonesian Malay can easily pick out an

Indonesian Chinese from a crowd. The Malaysian government claims that this country is the only

‘one-stop’ Asia, as stated in their campaign, “Malaysia Truly Asia”. Such claims aside there is

definitely a difference in the business makeup of among the various races comprising Malaysia.

Malaysia has a unique multi-ethnic and multi-religious population, a similarity shared only by

Singapore. Historically, by the time of the founding of Malacca in 1402, it was already known that

the Malay Archipelago had been part of the trading route spanning India, The Arab lands and China

for centuries. Thus the Malays, Chinese and Indians have been living and working in Malaysia for a

long time. Over a period of time, population increases created three dominant ethnic groups:

Malays, Chinese and Indians. According to the 1990 Malaysian census, Malays comprise 61.7% of the

population. The Chinese make up 29.6% and Indians 8.1%. The Malays are Muslims; the Chinese are

a mixture of Confucianists, Taoists, Buddhists and Christians. The Indians can be Muslims, Hindus, or

Christians. British colonization in mid-1800s attracted migrant workers from Southern China and
South India. The Chinese and Indians later became prominent in retail and wholesale trades (Dixon,

1991).

In the post-colonial era, Malaya experienced rapid economic development and with economic

development a predominantly Chinese (and some Indian – especially the Guajaratis, Chettiars, and

the mostly Ceylonese and Malayalee professionals) urban middle class emerged (Tan, 1982). (Note:

Just to mention here that, the Malays meanwhile established themselves as farmers, fishermen, and

security personnel; because they were never involved in trading to start with and neither were they

highly educated, as they did not have the finances. It was later that those who were sent overseas by

the government to study came back as administrators, in keeping with their role as power bearers).

The emergence of the middle class created demand for housing and consequently the growth of

industries to support the rapidly growing housing construction industry in urban areas.

Independent Malaya adopted a laissez-faire economic model that encouraged foreign trade and

investment, that came mainly from the British (Lim and Canak, 1981). The Chinese became

intermediaries to these foreign companies and several Chinese enterprises grew from small-scale

family owned trading firms into large and diversified business conglomerates with interests in

construction, plantation, trading, finance and other sectors. The growing economic position of the

Chinese was becoming a big concern among the predominant Malay community groups and

politicians regarding the increasing disparity in wealth distribution between the Chinese and Malays,

the two major ethnic groups in Malaysia (Sundaram, 1986, 1990). This came as shocking news to the

country, especially following release of the first ever economic census conducted by the National

Statistics Department.
Inter-ethnic discontent and tensions, and the victory of the Chinese majority Gerakan party in

Penang at the 69’ elections, finally culminated in widespread race riots in 1969 – the May 13 th

incident. Immediately following the race riots, the Malaysian government formulated a program

called the new economic policy (NEP) aimed at increasing the economic role and position of Malays

(Second Malaysia Plan, 1991). Under the NEP, the Malaysian government adopted a highly

interventionist stance and invoked wide-ranging programs that gave substantial preference to

Malays, by now referred to as Bumiputra to give them a sense of pride, privilege and superiority

over the non-Bumiputra, in business, employment, housing, education and other areas.

The government established large “trust” companies (also called GLCs – Government Linked

Companies) with the longer term vision of transferring these companies to Malay entrepreneurs:

companies like Maybank, Telekom Malaysia, Tenaga Nasional, Malaysian Airlines, Gamuda and

PETRONAS. The senior managers of these “trust companies” were almost exclusively highly

educated Malays who were seconded to the positions from various government agencies. The “trust

companies” were awarded preferential licenses and contracts and in-turn gave preferential

contracts to Malay suppliers and service providers. The “trust companies” also acquired foreign

companies (such as Guthrie taking over its parent in the UK, Bank Bumiputra buying over United

Asian bank), established joint-venture operations with foreign companies (Boon Siew-Honda, Cycle

& Carriage) and purchased shares in public listed companies. From the mid-1980s the government

initiated an aggressive privatisation program under which “trust companies” were “sold” to Malay

entrepreneurs (MAS, Proton). The privatisation program was facilitated through generous support

including low interest loans, official sponsorship and “management buy-out”.

Faced with the changing political, economic and social environment, some Chinese business groups

transformed their operations. From the early 1980s, Chinese family enterprises such as Kuok Bros.,

Yeo Heap Seng, Lam Soon and See Hoy Chan started to modernize their businesses including

employing managers who were not family or clan members. Notwithstanding the transformation,

the management team in most Chinese companies was almost exclusively made-up of individuals

from Chinese background. Chinese intellectuals and business groups expressed fears that the

Chinese were loosing their economic position in Malaysia. The following statement from the

Associated Chinese Chambers of Commerce and Industry Malaysia captures the growing sentiment

within segments of the Chinese community (Chin, 1978; Jesudason, 1989, p. 132):

… [the Chinese business community is] terribly “sick”, like a patient suffering from “economic

diabetes”, which if not diagnosed timely and cured speedily would culminate in disastrous

consequences endangering substantially national economic development.

The modernization initiatives of Chinese enterprises appear to have been motivated by competitive

threats from the “new generation” of Malay and government corporations. Chinese firms entered

into partnerships with foreign companies. The management changes (engaging professional

managers from outside the family) and changes to the stakeholders in the companies impacted on

the traditional beliefs, values and orientations of the “new age” Chinese enterprises, perhaps, often

taking-on a hybrid-culture (Resorts World, Star Cruise). The dominant Chinese political party in

Malaysia, the Malaysian Chinese association (MCA), too became active in business. The MCA

established a business arm. Originally incorporated as Multi-Purpose Holdings Berhad and later

changing its name to Mulpha International Berhad, the company set-up a national chain of

supermarkets and departmental stores. Mulpha also acquired some British trading companies and,
over time, became a diversified corporation with interests in trading, construction and infrastructure

development both in Malaysia and overseas.

Some Chinese family companies transformed even more and incorporated as public listed

companies. However, in most instances the management control of these public companies

continued to be in the hands of the family members of the founders. For example, Yeo Hiap Seng

(Malaysia) Berhad became a public listed company in 1975. Government corporations and Malay

trust agencies such as Lembaga Tabung Angkatan Tentera and Lembaga Tabung Haji acquired

sizeable but minority shareholding in these public listed Chinese companies. It appears that the

traditional Chinese family business accommodated to the changing business environment and

pressure to offer shares to Malay entities but continued to control the business because of its

majority shareholding.

The Indian community in the meantime was left behind in business, because the Chinese were

dominating the private sector and the Malays were dominating the Government sector. Indians

doing well were mostly professionals, dominating the legal profession, accountancy and medicine.

That domination has now been diluted by the government, by sending thousands of Malay

government scholars to do medicine both locally and overseas. Other higher level education is not

attainable for the masses of Indians because of their financial situation. A few Indian businessmen

have made it big on their own: Anantha Krishnan (Maxis, Astro, Measat), Tan Sri Gill (Gill Sports

Stores), Tan Sri Kishu (Globe Silk Stores).

Review and analysis of the socio-economic and political environment in Malaysia suggests that

externalities (colonial heritage, the economic policies of the British colonial government, the

economic position of the Chinese minority, The NEP and other national policies in the post

independence era) could have influenced the growth and development of “national culture” based

business entities. Other influences such as the educational background of the key decision makers,

reference group influence, business orientations etc could also have impacted on the “culture” of

these business entities.

The question arises how the differences in the way the Chinese, Malays and Indians got into this

situation of their respective business culture status in the first place. A study was conducted on the

first two, but not the Indians (Storz 1999). Storz states that the Malays culture’s value system is

based on the Budi complex system, while the Chinese value system is based mainly on Confucianism.

The Malay word ‘Budi’ means ‘behaviour’. The so called complex refers to a set of behaviours that

can be found in any book teaching Moral values. Budi embodies all the virtues ranked in the system

of values of the society . . . the structure of budi is composed of virtuous qualities such as murah hati

(generosity), hormat (respect), ikhlas (sincerity), mulia (righteousness), timbang-rasa (discretion),

malu (feelings of shame at the collective level), and segan (feeling of shame at the individual level).

The Budi complex also includes the ‘polite system’ which includes all aspects of verbal and non-

verbal communication. The way language is used, the intonations of speech and the ways people are

addressed according to a status hierarchy are part of the polite system. It further encompasses how

the body is conducted in terms of posture, giving things and receiving things.
Given its complexity, budi like the most fundamental and profound of all cultural phenomena, is

deeply embedded unconsciously in the Malay psyche, but nevertheless its manifestation is apparent

in the Malay culture. Side by side with the budi complex is also the Islam religion. There is no doubt

that the budi complex and Islam are interwoven in a deeply profound way insofar as one reinforces

the other, for example, the spiritual and ethical aspect of the budi complex and the Muslim belief

that ones destiny lies ultimately with Allah. The budi complex, instead of Islam, is used here as a

more appropriate analogy to Confucianism, especially since the latter is taken to be a philosophical

teaching rather than a religion.

In the case of the Chinese Malaysians who call themselves Buddhists, intrinsic in their way of life are

the influences of three teachings – Taoism, Buddhism and Confucianism, but it is all referred to

mostly as Confucianism, because even though the other two religions do have their own teachings, it

is the third that has been found embedded in the thoughts of almost all Chinese, passed down

through the generations. It is probably safe to make the observation that even in the case of the

Chinese Christians, Confucianistic values can be found in their way of life.

The writings of Tu Wei Ming (Tu, 1979) describes the feature most relevant to this discussion. The

core values of Confucianism are derived from the concept of ren (goodness, humanity). Ren is the

highest concept of personal morality in classical Confucianism. The social and moral process of

becoming human can be seen as a drive towards the achievement of ren. Intrinsic in the process of

learning to be human is the never ending process of attaining selfhood. As Confucius advocated,

learning is for the sake of the self.

In order to understand this notion of learning how to be a human being (ren), it is also important to

grasp simultaneously Confucius notion of the self. For Confucius, the self is never an isolated atom. It

does not exist as a single entity. It exists related to five social spheres: family, neighbourhood,

community, society and the cosmos, a world beyond which is the replica of the existing one. It

emerges out of being engaged in relationship with others. Thus the self is the sum of its

relationships.

Comparing both the Budi complex and Confucianism, the values which focus on reciprocity and

mutuality are manifested in business attitudes and practices. Business relationships tend to be more

primary than secondary. People are socially engaged more as total personalities than segmented

role players. The Malay and the Chinese would find it more important to focus on the social and

relational aspects of the business transaction rather than simply on the facts of the business.

Values such as mutuality and reciprocity also point to a negotiation style which veers towards a win-

win outcome rather than a win-lose one, or what is known as the zero sum negotiation style. For the

Malays and the Chinese, the ideal business deal is one where everyone wins.

This is all very nice to hear and read but going back to history, and the NEP, and the government

intervention, Bumiputra – Non-Bumiputra issues etc. the concepts of commonality of cultures and

the win-win deals are not always there; what with politics, bribery, power play all rearing their ugly

head.. They do explain why each culture does business the way it does, and that’s it. The Malays are

very respectful of each other in dealings, a handshake settles it all. They do always go for the win-
win in a deal – at least where the negativity does not exist. Length of business terms are not always

an issue.

On the other hand the Chinese, because of the respect of the self both ‘mine and yours’ tend to go

also for the win-win, again with negativity aside. They are also known to go for long-term

relationships rather than short-term.

Why is it that the Indian is of no consequence here, and don’t they have their morals and business

ethics? There is no literature available on the business culture of Indians in Malaysia. I can only

suggest the ‘what’ and ‘why’.

The Indians in Malaysia mostly come from South India. Majority of them are from Tamilnadu, with

the next biggest groups coming from Kerala and Andhra Pradesh. There is also a big representation

from Punjab (who refuse to be considered as Indians in Malaysia – they classify themselves as

‘others’), and from Gujarat. Even in India these races, ethnic entities, religious groups or whatever

we may want to call them are having problems, then why not here. Confusing the issue are

Ceylonese Singhalese and Tamils who are sometimes classified as Indians for census purposes.

The next headache comes from their religious background. Indians can be Hindus; among them

Vaishnavites – who pray to Vishnu, and Shivites – who pray to Siva; the Punjabis are Sikhs, the

Ceylonese are either Buddhists or pray to Ganapathy. Some among all these are Muslims or

Christians. Almost all of them are highly religion conscious and cannot get along.
The third problem comes from their employment background. Malayalees (from Kerala) and

Ceylonese are mostly professionals. The Punjabis, Gujuratis, Sindhis and Chettiars (a group of

Tamilians) are mostly businessmen and professionals. The majority Tamilians and Andharites were

those who came in as labourers and therefore are poorer and less educated.

The fourth problem comes from the caste system which still shows itself occasionally. The better

educated now are the business class and the Brahmin class. Therefore in present Malaysia, where

the caste system is supposed to be irrelevant, there are still lots of hatred of the ‘upper classes’ by

the ‘lower class’.

When we put all these together, from the above four groups can be created hundreds of

permutations and computations, to sow the seed of hatred for one and another resulting in the

story’s Indian crabs pushing and pulling at the top of the wall in the sea.

THANK YOU.

REFERENCES:
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New York, NY.

 Bhaskaran S., Victoria University, Melbourne, Australia; Nishal Sukumaran, The

Melbourne Business School, Melbourne, Australia; Cross Cultural Management: An

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 Dixon, C.J. (1991), South East Asia in the World-Economy: A Regional Geography,

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 Tan, T.W. (1982), Income Distribution and Determination in West Malaysia, Oxford

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