exporting problems of malaysian,jumaat
6
Abdul Jumaat Mahaj ar
Mohd Khai r uddi n Hashi m
School of Management Uni ver si t i Ut ar a Mal aysi a
Abst r ak
The not i on t hat expor t i ng pr ovi des f i r i ns wi t h bot h a gr owt h oppor t uni t y and a m
pr oduced an ext ensi ve st r eam of st udi es. Whi l e a good number of empi r i cal st udi es h
t he expor t i ng pr obl ems of f i r ms i n west er n and devel oped busi ness soci et i es, l i mi t ed r e
pr obl ems f aced by Mal aysi an smal l and medi um- si zed ent er pr i ses ( SMEs ) . Thi s st udy
t hi s i ssue. The f i ndi ngs of t he st udy suggest t hat Mal aysi an SMESf aced expor t i ng pr ob
t he l i t er at ur e
Key Wor d : Expor t i ng, Mal aysi an, SMES, Devel oped Busi ness Soci et i es
I NTRODUCTI ON
xpor t s ar e of t en cr uci al t o a f i r m' s f i nanci al heal t h and i t s gr owt
i ndi vi dual f i r ms, devel opi ng expor t mar ket s can be bot h a gr o
and a maj or chal l enge. Mor eover , gi ven t he pr ospect of st r ong
mat ur i ng mar ket s as wel l as l i mi t ed domest i c mar ket oppor t uni t i es, f
and smal l ) must gi ve st r ong consi der at i on t o expandi ng t hei r expor t i n
Gi ven t he maj or cont r i but i on of smal l and medi um- si zed ent er pr
r ecent year s i n t he ar eas of empl oyment enhancement and t he i ncr eas
of expor t s of SME- manuf act ur ed pr oduct s ( cur r ent l y mor e t han 8
manuf act ur i ng f i r ms i n Mal aysi a ar e SMEs) , i t woul d appear vi t al t o
smal l er busi nesses t o expor t , and t o i ncr ease t hei r shar e of t he t ot al ex
Despi t e t he f act t hat f or ei gn mar ket s can of f er f i r ms bet t er oppor t
t er m gr owt h and pr of i t abi l i t y, pr evi ous st udi es have i ndi cat ed t hat t
and chal l enges of t he i nt er nat i onal mar ket pl ace i nhi bi t t he ent r ance
Wi t h r egar d t o t hi s, a good number of st udi es have deal t wi t h var i ous e
f aced by smal l busi nesses i n devel oped count r i es ( Jul i en et . al , 1994
Kat hawal a et . al , 1989) .
E
70
J URNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001
mal l busi ness l i t er at ur e i n Mal aysi a .
espi t e t he i mpor t ance of SMEs and t he
cr ease knowl edge i n expor t i ng act i vi t i es,
er y l i t t l e r esear ch has been done t o
xami ne t he expor t i ng pr obl ems of SMEs
t he Mal aysi an cont ext . Thi s st udy was
conduct ed t o addr ess t hi s i ssue. The st udy
epor t ed i n t hi s ar t i cl e at t empt ed t o
pr ovi de an i nsi ght i nt o t he nat ur e of t he
expor t i ng pr obl ems f aced by Mal aysi an
SMEs . I n doi ng so, t hi s st udy woul d assi st
i n our under st andi ng of t he r easons why
SMEs i n Mal aysi a f ai l t o r each t hei r expor t
pot ent i al .
smal l er f i r ms f aced di f f i cul t i es
expor t i ng . Al exandr i des conc
hi gh i nt ensi t y of compet i t i on
mar ket s, l i t t l e knowl edge of
act i vi t i es, i nsuf f i ci ent under s
expor t payment pr ocedu
di f f i cul t i es i n i dent i f yi ng f or e
oppor t uni t i es as t he maj or r e
f i r ms f ai l t o i ni t i at e expor t i ng .
Si mi l ar l y, Bi l key ( 1978)
some of t he most f or mi dabl e
successf ul smal l busi ness expor
wer e : ( 1) hi gh r i sk ; ( 2) i
f i nanci ng; ( 3) pr ot ect i ve
gover nment r egul at i ons ; ( 4)
di st r i but i on channel s ; ( 4) i
knowl edge of mar ket i ng opp
abr oad ; ( 5) di f f i cul t i es i n und
Ogr am ( 1982) def i ned expor t i ng f or ei gn busi ness pr act i ces; ( 6)
f i r ms as t hose t hat have expor t ed over t he i n conf or mi ng t o f or ei gn
l ast t hr ee year s and t hat t hei r expor t i ng st andar ds and speci f i cat i ons ; ( 7)
sal es r epr esent at l east one per cent of t hei r i n col l ect i ng payment s f r o
gr oss annual sal es . Expor t i ng i s cust omer s ; ( 8) i nadequat e r ep
consi der ed t he most common mode of i n f or ei gn mar ket s ; and ( 9) l ac
ent r y i nt o i nt er nat i onal busi ness among mar ket i ng connect i ons .
SMEs . Accor di ng t o Young et . al ( 1989) ,
Based on a sur vey of f i r ms i
SMEs f i nd expor t i ng at t r act i ve because of i ndust r y i n t he Uni t ed St at es o
mi ni mal busi ness r i sks, l ow r esour ces Bauer schmi dt et . al ( 1985) a
commi t ment and hi gh f l exi bi l i t y of var i ous r easons why f i r ms f ai l e
act i ons . Fur t her mor e, Ter pst r a and These i ncl uded : ( 1) hi gh val ue
Sar at hy ( 1994) suggest ed t hat expor t i ng dol l ar i n r el at i ve t o f or ei gn cur
can pr ovi de i ndi vi dual f i r ms a compet i t i ve hi gh t r anspor t at i on cost s; ( 3)
advant age by i mpr ovi ng t hei r f i nanci al i nvol ved i n sel l i ng abr oad; ( 4) h
posi t i on, i ncr easi ng t hei r capaci t y t ar i f f s on i mpor t ed pr oduct s ;
ut i l i sat i on, and r ai si ng t hei r t echnol ogi cal capi t al f or f or ei gn expansi on;
st andar ds .
gover nment assi st ance ; ( 7) c
Al t hough expor t i ng appear s t o be f r om l ocal f i r ms ; ( 8) l ack
at t r act i ve t o SMEs, pr evi ous empi r i cal channel s of di st r i but i on; and ( 9
st udi es have i ndi cat ed t hat expor t i ng and cul t ur al di f f er ences .
J URNAL STRATEGI
BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
di f f er ences exi st ed bet ween smal l and l ar ge
f i r ms t hat expor t ed . I n compar i son t o l ar ge
f i r ms, t hese aut hor s cl ai med t hat smal l f i r ms
f aced mor e di f f i cul t i es i n over comi ng expor t
pr obl ems such as i n est abl i shi ng f or ei gn
cont act s, get t i ng i nf or mat i on about f or ei gn
mar ket s, est abl i shi ng di st r i but i on net wor k,
pr omot i ng pr oduct s over seas and
empl oyi ng good expor t s sal es per sonnel .
Gr i psr ud ( 1990) f ur t her not ed t hat
expor t i ng obst acl es and oppor t uni t i es var y
f r om pr oduct t o pr oduct even wi t hi n t he
same i ndust r y due t o t he di f f er ences i n
demand and t ar i f f s bet ween pr oduct s . The
aut hor f ound t hat di f f er ences i n t ast e acr oss
di f f er ent count r i es posed pr obl ems f or
expor t er s movi ng i nt o new mar ket s . For
i nst ance, accor di ng t o Gr i psr ud, t he
Japanese f ood pr oduct s mar ket at t ached
much emphasi s on f at cont ent , si ze, col our
and ot her at t r i but es t hat somet i mes do not
f ul f i l l t he r equi r ement s of ot her mar ket s .
The sur vey by Tseng and Yu ( 1991) al so
r eveal ed t hat Tai wanese f i r ms exper i enced
var i ous pr obl ems when expor t i ng . Among
t hese wer e : ( 1) t he l ack of f or ei gn mar ket
i nf or mat i on ; ( 2) l i mi t ed t r adi ng knowl edge
of per sonnel ; ( 3) i nappr opr i at eness of pr i ce/
qual i t y f or t he needs of t he mar ket ; ( 4) l ow
pr of i t pr ospect s; ( 5) t he exi st ence of var i ous
f i nanci al const r ai nt s; ( 6) t he pr eval ence of
f i er ce compet i t i on ; ( 7) per cei ved hi gh l evel
of r i sks ; and ( 8) var i ous l egal const r ai nt s
( ei t her i n home or host count r i es) .
METHODOLOGY
Thi s st udy was based on smal l and
72
was gat her ed f r om 166 sma
si zed ent er pr i ses t hat expo
def i ned as a f i r m wi t h
empl oyees and as one w
managed by i t s owner / s . T
sel ect ed f r om t he 1998
Mal aysi an Manuf act ur er
Quest i onnai r es co
quest i ons wer e sent t o 21
i n t he 12 st at es i n West M
214 quest i onnai r es mai
r esponded ( a r esponse r a
addi t i on t o t he post al ques
t o- f ace i nt er vi ews wer e
wi t h t he t op management
f i r ms .
The pur pose of t he pe
was t o obt ai n an i ndept h
of t he pr obl ems f aced b
smal l and medi um- si zed
Mal aysi a . The i nt er vi
separ at el y wi t h t he Mana
t he Chi ef Execut i ve Of f i c
Manager s or t he per son d
most knowl edgeabl e i n exp
of t he f i r ms . I n t he i
di scussi on quest i ons we
i dent i f yi ng t he pr obl ems
expor t er s .
SURVEY QUESTI ONNA
The st r uct ur ed sur ve
used i n t hi s st udy consi s
t i ons and 44 quest i ons . T
i n sect i ons one and t wo w
t ai n t he i nf or mat i on con
spondent s and t he f i r mcha
r emai ni ng 30 st r uct ur ed
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 200
t he cour se of t hei r oper at i ons . These 30
uest i ons whi ch wer e adapt ed f r om t he
or k by Bauer chmi dt et . a l ( 1985) ser ved
s a basi s f or quer yi ng t he expor t i ng pr ob
l ems as per cei ved by each r espondent . The
r espondent s wer e asked t o r at e each i t em
l i shi ng t he expor t i ng pr obl em
f i r ms conf r ont ed i n t he cour se o
er at i ons . The det er mi nat i on of t
i ng pr obl ems ' f or each case was
t he basi s of t he vi ews and sugg
t he r espondent s . The vi ews an
Tabl e 1 . Fi r ms by t he 12 St at es
St at es
Se
or
Feder al Ter r i t or y
Johor e
Mal acca
Per ak
No . of
Company
50
Per cent age
30 . 1
30
18 . 1
16
9. 6
7
11
4. 2
P
6
3. 6
Pe
Neger i Sembi l an
Kedah
Per l i s
Ter e anu
Kel ant an
Tot al
6
3. 6
6
3. 6
on a f i ve- poi nt scal e r angi ng f r om ( 1)
st r ongl y di sagr ee t o ( 5) st r ongl y agr ee. The
quest i onnai r e was t est ed pr i or t o mai l i ng
t o t he r espondent s . The coef f i ci ent al pha
scor es of t he 30 measur es of expor t act i vi t i es r anged 0 . 68 t o 0 . 90 .
The i nt er vi ews wer e conduct ed t o gener at e i nf or mat i on speci f i c t o t hi s st udy . The
di scussi on quest i ons wer e di r ect ed pr i ma
r i l y at obt ai ni ng det ai l ed i nf or mat i on on
t he pr obl ems f aced by t he f i r ms . The i nt er vi ews whi ch l ast ed f r om one and a hal f t o
t wo hour s i n l engt h began by r evi ewi ng
6. 6
6
3. 6
9
5. 4
5. 4
9
10
166
6.0
100.0
t i ons t o t he i nt er vi ews ar e di s
get her wi t h t he post al sur vey f i
BACKGROUND OF THE
FI RMS
Fi r ms f r om 21 i ndust r i es w
sent ed i n t hi s st udy . A maj or i t
f i r ms ( cl ose t o 50%) wer e f r om
pl ast i c, el ect r oni c, wood, met al a
cal i ndust r i es . Tabl es 1 and 2 p
i nf or mat i on on t he l ocat i ons of t he
t he t ypes of i ndust r i es t hey r epr
I URNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
The aver age annua
Tabl e 3 bel ow di spl ays t he char act er i st i cs of t he 166
t hr ee year s)
f or maj or
f i r ms i n t he sur vey . As
r anged f r om one mi l l
s hown i n Tabl e 3, vast maj or i t y of t he f i r ms
Ri nggi t ) t o 50 mi l l i on . Of
have been i nvol ved i n expor t i ng act i vi t i es
( 44 per cent ) had sal es b
Tabl e 2. Fi r ms by I ndust r i es
e of I ndust r y
Aut omobi l e
Bever age
No . of Fi r m
6
Per cent a g
7
3.6
4.2
Car bon
5
3.0
Cement
6
3 .6
Chemi cal
10
6 .0
El ect r oni c
15
9 .0
Fer t i l i zer
Food
5
23
3. 0
13 . 9
Leat her
Machi ner y
6
3. 6
5
3. 0
Mar bl e
3
1.8
Met al
10
6. 0
Paper
5
3. 0
Pet r ol eum
3
1.8
Phar maceut i cal
Pl ast i c
4
2. 4
18
10 . 8
Rubber
St eel
5
3. 0
7
4. 2
Text i l e
8
4. 8
Wood
14
8. 4
1
0. 6
166
100. 0
Tobacco
Tot al
f or mor e t han f i ve year s ( mor e t han 80%
mi l l i on ; 46 ( 28 per cent )
of t he f i r ms) . Out of t he 166 f i r ms, 112 f i r ms
t han one mi l l i on ; 31 ( 19 p
( 71 per cent ) hav e been expor t i ng f or mor e
bet ween one mi l l i on t o f i v
t han 13 year s . Al t hough t he number of
r emai ni ng 16 ( 10 per cent
74
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 20
gest t hat expor t s account ed si gni f i cant l y
f or mor e t han 68 per cent of t he gr oss sal es
f or 113 of t he 166 r espondi ng f i r ms . For
anot her 20 f i r ms, expor t s account ed f or
l ess 10 per cent of t hei r t ot al gr oss sal es .
cent ( 150 f i r ms) of t he t ot al of
have been i n oper at i ons f or mor e
year s . Out of t he 166 f i r ms, 10
cent ) i ndi cat ed t hat t hey expor
pr oduct s t o mor e t han 30 count
Tabl e 3. The Fi r ms Char act er i st i cs
Fi r m Char act er i st i cs ( n=166)
Year s i nvol ved i n Expor t i ng :
2 and l ess
3- 7
8- 12
Mor e t han 13 year s
Number of Empl oyees :
10- 20
21- 99
100- 300
Aver age Annual Sal es ( past 3 year s) :
Less t han one mi l l i on ( RM)
1- 5 mi l l i on
6- 10 mi l l i on
11- 50 mi l l i on
Expor t Sal es as Per cent age of Tot al Sal es :
Less t han 10%u
1 %- 200/ 6
21%- 300/ o
31%- 40%
41%- 50%
Mor e t han 51 %
Age of Fi r ms ( year s) :
Bel ow 5
6- 10
11- 15
16- 20
Mor e t han 21
Number of Expor t i ng Count r i es :
1- 5 count r i es
6- 10 count r i es
11- 15 count r i es
16- 30 count r i es
Mor e t han 30 count r i es
Fr equency
Per cent age
15
15
18
112
9. 0
9. 0
10. 8
71 . 2
46
36
84
27. 7
21 . 7
50 . 6
46
31
16
73
27 . 7
18 . 8
9. 6
44 . 0
20
16
10
4
3
113
12 . 1
9. 6
6. 0
2. 4
1.8
68. 1
16
35
31
33
51
9.6
21 . 1
18 . 7
19 . 9
30 . 7
43
8
7
3
105
25 . 9
4.8
4. 2
1 .8
63 . 3
URNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
Res pondent s Char act er i st i cs
dent s, 141( 84. 9 per cent ) we
23 ( 13 . 9%) wer e si ngl ed . V
As s hown i n t he f ol l owi ng Tabl e 4, 103
( 62 per cent ) of t he 166 r espondent s had
t hese r espondent s hav e
pr esent f i r ms f or mor e t
at t ended a uni ver si t y and obt ai ned ei t her
Mos t of t hese r espondent s
Tabl e 4. Respondent s Char act er i st i cs
Respondent s Char act er i st i cs n=166
Hi ghest Level of Educat i on :
Secondar y School
Col l ege or I nst i t ut e
Uni ver si t y
Hi ghest Level of Cer t i f i cat e Recei ved :
School cer t i f i cat e
Di pl oma
Bachel or ' s degr ee
Mast er s degr ee
Mar i t al St at us :
Mar r i ed
Si ngl e
Di vor ced
Fr equency
Per ce
32
19
31
103
18
62
32
31
76
27
19
18
45
16
141
23
2
84
13
1.
133
33
80
19
7
17
57
51
34
4.
10
34
30
20
21
47
63
12
28
Sex :
Mal e
Femal e
Lengt h of Ser vi ce ( year s) :
3 and bel ow
4- 6
7- 9
10- 12
13 and above
Age ( year s) :
25 and bel ow
26- 35
36- 45
46 and above
76
35
38
21
) URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 2001
year s .
wer e bel ow 25 year s ol d . Hun
Tabl e 5 . Summar y of t he Sur vey Responses
I t ems.
2. Language andanal di Hesear es
3. Lack of
i dmnel s of di st r buf i on
4. Di f f cul t t o s ewmat i aet m
t he f or ei gn cowvy
.
6. Df f x * ool l act i ng
f r omf or ei gn ai sst omer
.
BDW
M
- wt
012 . 8. Fomgnbusut ess
i
at e di f f i a* t o ut der oat d
" ~ .: s us
. _~_. ~ . .
. I . . . . .
10. Ri sks i nml ved i n sel l i ng abr oad
JI
11
1 7,
r
7
.
.
-
.
: ,
I
r r NI .
ZZ
, i
.
~
.-
I
.
11
.
Di sagr eed
48. 8
46. 0
18. 7
24. 1
30. 7
32 . 6
32. 5
39. 1
38. 6
21 . 7
28. 9
21 . 7
38. 6
12. Rgh cost of set t i ng abr oad
13. Di f f at l t y at r zog a l i eu or j oi xt vmt umagt eet t e9 wi t h
f ot ei gnl nms
7
:~
.
i
7 77- . . I .
.
V
29. 5
15. Faf ow=r i t of l i gh ef f or t t ax by t he home govenmW
42. 2
16. l ade of y mumMassi st mice i n oven~o '
t t bar r i cs
35. 5
17. I F0 val ue of f or ei gn cmmcy i n expor t nes t s
28. 9
,
: , , .: w
:
"
y
.
,
.
,
7
.
:
=
~U
=, .
39. 8
:
19. Cbnpdki onf r oml ocal f i msi nf or dgt madc et s
38. 6
. . = 28. 3
KI N . . . . 7 . I . , 11 : , . . . i ~~ a . , I , g_
21. f mbl mn quot i ng pr i ce wi t h 11ucpat i t t gego r at e
12 . 0
i r , . . : . . r. . . . . . , . =5, L, , , . ,
m
v : .. a y
67 . 5
6. 6
23 . Need t o change pr i ci ng and pr ot mt i on pol i ci es weoxi i t g t o t he
condi t i on of f or ei gn nmkct
10. 8
25. Lade of capaci t y dedi cat ed t o oot i i nagg suppl y of expor t s
29 . 5
26. Lade of t ax i noet i i ve by t he home govenmr t t f or conpani es
29. 5
t hat expor t
i zi mr obor r i l t r ade adr' Wy
42 . 8
28. DUTi cul t y. gat her i t g aeat t at e hf ommf on on f or ei gn nr uket
23 . 5
29.
- _. . I i ,
: " = W,
, - - i mnet t
16. 9
30. Cb
i ' nf nmt f t ms i n hone cowt r y i n f owagn nwket s
51. 9
, ~JURNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 2001[ TAHUN VI / 2002
Agwed
30. 3
25 . 3
54. 3*
18. 7
38 . 6*
37. 3*
20. 5
29. 0
32. 5
54. 8*
44. 0*
52 . 4*
24 . 7
37. 4*
19. 8
24. 7
54. 2*
42. 2*
32. 5
59. 6*
56. 2*
18. 7
21 . 7
19 . 9
43 . 3*
26. 5
36 . 1
29 . 5
30. 7
18. 0
46 year s ol d .
t he sur vey, sever al exp
r ai sed dur i ng t he i nt er
Expor t Pr obl ems
management of t he pa
Accor di ng t o t he r espon
I n t he sur vey, al l t he f i r ms r esponded
compl i cat e t he ent r ance
Tabl e 6 . Summar y of Expor t i ng Pr obl ems Faced by Mal aysi an
Expor t Pr obl ems:
1 . Lack of f or ei gn channel of di st r i but i on
2 . Di f f i cul t y t o sel ect a r el i abl e di st r i but or i n t he f or ei gn count r y .
3 . Ri sks i nvol ved i n sel l i ng abr oad .
4 . Di f f i cul t y i n pr ovi di ng af t er sal es ser vi ces .
5 . Hi gh cost of sel l i ng abr oad .
6 . Hi gh val ue of f or ei gn cur r ency i n expor t s mar ket s.
7 . Management i ndi f f er ence t owar d val ue of expor t i ng
8 . Lack of capi t al t o f i nance busi ness expansi on i nt o f or ei gn mar ke
9 . Pr obl emquot i ng pr i ce wi t h f l uct uat i ng exchange r at e.
10 . Need t o adapt pr oduct s t o meet f or ei gn cust omer pr ef er ences .
11 . Lack of capaci t y dedi cat ed t o cont i nui ng suppl y of expor t s .
12 . Di f f i cul t y i n col l ect i ng payment f or mf or ei gn cust omer s .
Per
54 .
57 .
54 .
44 .
52 .
54 .
37 .
59 .
56 .
69 .
43 .
47 .
t o t he 30 quest i ons on t he bar r i er s t o ex-
ness expor t er s i nt o t he
por t i ng . The f ol l owi ng Tabl e 5 pr esent s t he
ket pl ace. The i ssues gat
i nt ensi t y of t he r esponses t o t he 30 i t ems .
t er vi ews ar e as f ol l ows
The r esul t s of t he sur vey i ndi cat ed t hat t he
The r espondent s st a
166 r espondent s agr eed wi t h 12 i t ems,
t o t he sever e t ar i f f
di sagr eed wi t h anot her 10 i t ems and wer e
st r i ct i ons i mpos ed
undeci ded wi t h t he r emai ni ng ei ght i t ems .
count r i es, t he compl e
i ng pr ocedur es mak e
Based on t he si gni f i cant r esponses
r esponses wi t h t he hi ghest per cent age
expor t er s t o penet r a
val ue) , t he 12 i t ems agr eed by t he r espon-
ket s . Wi t h r egar d t o
dent s as expor t bar r i er s wer e consi der ed
r espondent s expr es
as expor t i ng pr obl ems . Det er mi nat i on of
each of t he expor t i g pr obl ems was made
on t he basi s of t he i nt ensi t y of r esponse by
t he par t i ci pat i ng f i r ms. The 12 expor t i ng
78
por t assi st ance .
2.
Sever al of t he r espo
expor t i ng i s not mea
f i r m. I n compar i son
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 2
money ,
3.
t i me and ef f or t . Accor di ng t o
t hem, not al l smal l busi nesses ar e wi l l -
f r om t hi s st udy i ndi cat es
i ng t o i nvest t he consi der abl e t i me,
money and ef f or t i n devel opi ng as wel l
bar r i er s . I n gener al , t he r es
as r et ai ni ng a f or ei gn mar ket .
var i ous pr obl ems t o SMEs .
Al t hough mos t of t he f i r ms i n t he st udy
cl assi f i cat i on r esul t s of t he
hav e been expor t i ng f or s ome t i me,
count er ed by t he smal l and
expor t i ng busi nesses ar e di
mos t of par t i ci pat i ng f i r ms expr essed
sur veyed conf r ont ed var i
by t hi s st udy suggest t hat ex
t he need f or empl oy i ng peopl e wi t h
k nowl edge and exper i ence i n al l aspect s of i nt er nat i onal t r ade . Dur i ng t he
i nt er vi ews, many of t he r espondent s
4.
5.
Lac k of Capi t al t o Fi nance E
For ei gn Mar k et s
r eveal t hat t hey need peopl e wi t h spe-
Lack of capi t al was f o
ci f i c k nowl edge and exper i ence i n ar -
t he mos t pr essi ng pr obl ems f
eas s uc h as t r anspor t at i on, expor t f i -
busi nesses i n t hi s st udy . Man
nanci ng, t ar i f f s, f or ei gn mar ket s anal y-
sur veyed i ndi cat ed t hat l ack
si s, document at i on, i nsur ance, f or ei gn
cur r ency t r ansact i ons, and f r ei ght han-
pr event ed t hem f r om f ur t
dl i ng.
many of t he f i r ms i n t he s
The i nf or mat i on f r om t he i nt er vi ews
t hat t hey wer e unabl ed t o g
al so i ndi cat ed t hat many of t he par -
nanc i ng
t hei r expor t i ng act i vi t i es .
t i ci pat i ng f i r ms l ack t he per t i nent i n
f or mat i on concer ni ng t he mar ket and
f or t hei r ex por
pr ogr ammes . Wi t h r egar d
spondent s expr essed a desi r
c ons umer r equi r ement s, i mpor t r egu-
nanci al assi st ance . To assi s
l at i ons, and f or ei gn exchange r equi r e-
age expor t i ng among Mal ays
ment s i n cer t ai n count r i es, speci f i cal l y
t he r espondent s suggest ed
i n t he new mar ket s such as i n Af r i ca,
l oans f or oper at i ng expenses
East er n Eur ope and Lat i n Amer i c a .
t er m i nvest ment l oans .
Dur i ng t he i nt er vi ews, sever al of t he
f i r ms suggest ed t hat t hei r i nabi l i t y t o
Di f f er ences i n Pr oduct Us a
c ompet e successf ul l y i nt er nat i onal l y
Mar k et pl ac e
may be at t r i but ed t o out dat ed t echnol ogy and poor mar ket i ng .
Di f f er ences i n pr oduct
ei gn mar ket wer e al so ci t ed
r easons why t he f i r ms hesi t
Accor di ng t o t he r esponden
ences i n pr oduct us age co
The over al l obj ect i ve of t hi s st udy was
i dent i f i cat i on of pr oduct nee
t o i dent i f y t he expor t i ng pr obl ems f aced
mar ket . I n f act , s ome of t h
JURNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
Lack of For ei gn Channel s of Di st r i but i on
I n or der t o access new mar ket i n f or ei gn count r i es, good channel s of di st r i but i on ar e i mpor t ant . However , i r ? t hi s st udy,
maj or i t y of t he r espondent s i ndi cat ed t hat
t hey l ack ef f ect i ve channel s of di st r i but i on.
The r espondi ng f i r ms suggest ed t hat t he
l ack of ef f ect i ve channel s of di st r i but i on
make i t di f f i cul t f or t hem t o penet r at e as
wel l as r et ai n f or ei gn mar ket s .
The pr esent st udy al
many of t he par t i ci pat i ng
f ami l i ar wi t h t he busi ness
ei gn count r i es . Most of t he
t hey l ack speci f i c knowl e
expor t i ng pr ocess i n i nt er n
pl ace . Thi s l ack of knowl ed
f i cul t f or t he Mal aysi an e
der st and expor t r equi r em
oppor t uni t i es .
Hi gh Ri sk I nvol ved i n Se
Di f f er ences i n Pr oduct Speci f i cat i ons i n
I nt er nat i onal Mar ket pl ace
The pr esent st udy al so suggest ed t hat
t he r espondent s wer e concer ned about t he
di f f er ences i n pr oduct speci f i cat i ons i n i n
t er nat i onal mar ket pl ace . Accor di ng t o t he
r espondent s, t he di f f er ences i n pr oduct
speci f i cat i ons makes i t mor e compl i cat ed
f or t hem t o sel l i n cer t ai n mar ket s . For exampl e, t he gar ment manuf act ur er s and
expor t er s wer e not pr epar e t o ent er t he
mar ket s i n west er n count r i es because t hey
wer e not abl e t o pr oduce shi r t s and t r ouser s t hat f ul f i l l t he r equi r ement s of t he
cust omer s i n t hose mar ket s .
Di f f i cul t t o Col l ect Payment f r omFor ei gn
Cust omer s
Al t hough maj or i t y of t he sur vey r espondent s agr eed t hat expor t i ng pr ovi des
a l ucr at i ve sour ce of r evenue f or t hei r busi
nesses, most bel i eved t hat col l ect i ng payment s f r om f or ei gn cust omer s i s a cont i nui ng pr obl emf or many busi nesses .
80
I n t hi s st udy, t he r esp
er s al so expr essed concer
r i sks i nvol ved i n sel l i ng a
t he smal l expor t er s i n t hi s
t hat t hey ar e at a di sadvan
t hei r degr ee of cont r ol over
uct . The pr esent st udy su
concer n may be at t r i but ed
i nf or mat i on and exper i enc
i ng pr ocess .
Di f f i cul t t o Pr ovi de Af t er
Al t hough most r espon
t he i mpor t ance of pr ovi di n
vi ce t o t hei r cl i ent s, commu
cul t i es cont i nue t o compl i c
cat i on of t he af t er sal e ser vi
ei gn mar ket s .
Cost l y t o Sel l Abr oad
Vast maj or i t y of t he Ma
er s i n t he pr esent st udy agr
i ng i s cost l y . Most of t he r e
JURNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 200I
uggest ed t hat t he most i mpor t ant i mr ovement needed t o i ncr ease expor t s
oul d be t he r educt i on of t r anspor t at i on
ost s, f r ei ght char ges, f r ei ght i nsur ance,
: ust om dut i es and t he ot her expenses r et o expor t i ng.
t hei r shar e i n t he ever - expa
mar ket s .
CONCLUSI ONS
-3
anager i al Hesi t at i on Towar ds Expor t i ng
The r esul t s of t hi s st udy showed t hat
smal l busi ness expor t er s i n Mal aysi a have
mi xed vi ews about t he val ue of expor t i ng .
Whi l e some of t he r espondent s bel i eved
t hat expor t i ng coul d hel p t hei r f i r ms t o
di ver si f y i nt o newmar ket s, i mpr oved t hei r
gr owt h pot ent i al and i ncr ease t hei r i ncome, ot her s wer e r el uct ant because of t he
r i sks i nvol ved . The f i ndi ngs of t he pr esent
st udy suggest ed t hat t hei r hesi t at i on may
be at t r i but ed t o l ack of exper t i se and exper i ence i n t he expor t i ng pr ocess .
Di f f i cul t t o Quot e Pr i ce i n For ei gn Cur r ency
The r esul t s of t he st udy suggest ed t hat
f or ei gn cur r ency f l uct uat i ons cr eat e one of
t he most f or mi dabl e bar r i er t o successf ul
smal l busi ness expor t i ng. The l ack of
knowl edge and exper i ence i n f or ei gn cur r ency t r ansact i ons make i t di f f i cul t f or t he
sur vey r espondent s t o quot e t he pr i ces of
t he pr oduct s t hat t hey expor t ed.
Lack of Capaci t y f or Expor t i ng
Fi nal l y, t he pr esent st udy al so i ndi cat ed t hat some of t he smal l Mal aysi an
busi ness expor t er s l ack t he capaci t y t o meet
t he demand i n t he f or ei gn mar ket s . Ac-
Thi s st udy at t empt ed t o i
pr obl ems f aced by smal l and m
expor t i ng busi nesses t hr oug
166 manuf act ur i ng f i r ms . Th
obt ai ned f r om t he par t i ci
i ndi cat e t hat t her e ar e var i o
successf ul smal l busi ness exp
on t he f i ndi ngs of t hi s st ud
concl uded t hat 12 pr obl ems
among t he SMEs sur veyed .
t hat t he expor t i ng SMEs ar e m
have pr obl ems ar e: ( 1) l ack
f i nance expansi on i nt o f or ei g
di f f er ences i n pr oduct usag
mar ket pl ace; ( 3) l ack of f or e
of di st r i but i on; ( 4) di f f er ence
speci f i cat i on i n i nt er nat i onal
( 5) di f f i cul t t o col l ect payment
cust omer s; ( 6) f or ei gn busi n
ar e di f f i cul t t o under st and;
i nvol ved i n sel l i ng abr oad; (
pr ovi de af t er sal es ser vi ce; ( 9)
abr oad ; ( 10) manager i al
t owar ds expor t i ng; ( 11) di f f i
pr i ce i n f or ei gn cur r ency ; an
capaci t y f or expor t i ng .
Anot her concl usi on
dr awn her e i s t hat t he r esul t s
al so gener al l y suppor t t he pr
f i cat i on f ound i n many of t he
i es ( Al exandr i des, 1971 ; B
Bauer schmi dt et . al , 1985 ; K
1986; Gr i psr ud, 1990 and Ts
JURNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001 f TAHUN VI / 2002
compl exi t i es and chal l enges of t he i nt er nat i onal mar ket pl ace i nhi bi t t he ent r ance
under st andi ng t he pr ob
by smal l expor t i ng f i r ms
of many SMEs ( De Nobl e et . al , 1989) .
Fi nal l y, havi ng i dent i f i ed and r ai sed
t he af or ement i oned i ssues, i t i s hoped t hat
er s may bet t er equi p t h
var i ous pr ogr ammes su
t hi s st udy coul d assi st us i n under st and-
t er handl e i ssues f aci ng
sear chi ng, educat i on an
Ref er ences
Al exandr i des, C. G. 1971 . " How t he maj or obst acl es t o expansi on can be over come" . At l a
May, 12- 15 .
Bauer schmi dt , A . , Sul l i van D. , and Gi l l espi e K. 1985 . " Common f act or s under l yi ng
bar r i er s t o expor t st udi es" . I n t he U. S. paper i ndust r y. Jour nal of I nt er nat i onal Busi n
Bi l key, .W
1978
J
. " An At t empt ed I nt egr at i on of t he Li t er at ur e on t he Expor t Behavi our
I nt er nat i onal Busi ness St udi es, ( Spr i ng/ Summer ) , 33- 46 .
Gr i psr ud, G. 1990 . " The det er mi nant s of expor t deci si on and at t i t ut es t o di st ant mar ke
expor t t o Japan" . Jour nal of I nt emat i onal Busi ness St udi es, Thi r d Quar t er .
Jul i en, Pi er r e- Andr e, Joyal , Andr e, Deshai es, Laur ent and Ramangal ahy, Char l es 1
st r at egi c behavi our among smal l and medi um- si zed expor t i ng busi ness" . A cas
Smal l Busi ness j our nal , 15 ( 2) : 33- 49.
Jul i en, Pi er r e- Andr e, l oyal , Andr e, and Deshai es, Laur ent 1997. " Smes and i nt er nat i o
t r ade agr eement or gl obal i sat i on ?" Jour nal of Smal l Busi ness Management , Ju
Kat hawal a, Yunus, Judd, Ri char d, Moni pal l i l , Mat t hew, and Wei nr i ch, Mel i nda 1989 .
and pr obl ems of I l l i noi s f i r ms" . Jour nal of Smal l Busi ness Management , Janua
Kau, A . K. , and Tan, S. l . 1986 . " A St udy of smal l and l ar ge manuf act ur i ng expor t e
Rober t s, G. ( Ed . ) . Pr oceedi ngs of t he 31" Wor l d Conf er ence, I nt er nat i onal Counc
67- 74 .
De Nobl e, Al ex F. , Cast al di , Ri char d M., and Mol i ver , Donal d M. 1989 . " Expor t i
busi ness per cept i ons of ser vi ces and per f or mance" . Jour nal of Smal l Busi ness Man
41 .
Ogr am, E. W
. 1982. " Expor t er s and non- expor t er s : A Pr of i l e of smal l manuf act ur i ng f
Czi nkot a, M. R. , and Tesar , G. ( Eds. ) . Expor t Management An I nt er nat i onal
Pr aeger , 70- 84.
Ter pst r a, V. and Sar at hy, R. 1991 . " I nt er nat i onal Mar ket i ng " ( 6' t i . Ed. ) . For t h Wor t h, T
Dr yden .
Tser i g, J. , and Yu, C. M. 1991 . " Expor t of i ndust r i al goods t o Eur ope : The case of l ar
Eur opean Jour nal of Mar ket i ng, 25( 9) , 51- 63 .
Young, S. J. , Hami l l , C. W
. , Rober t , A. J. , and Davi es, J. R. 1989. " I nt er nat i onal Mar ket
ment " . Engl ewood Cl i f f s, N.l . : Pr ent i ce- Hal l .
82
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 200
Abdul Jumaat Mahaj ar
Mohd Khai r uddi n Hashi m
School of Management Uni ver si t i Ut ar a Mal aysi a
Abst r ak
The not i on t hat expor t i ng pr ovi des f i r i ns wi t h bot h a gr owt h oppor t uni t y and a m
pr oduced an ext ensi ve st r eam of st udi es. Whi l e a good number of empi r i cal st udi es h
t he expor t i ng pr obl ems of f i r ms i n west er n and devel oped busi ness soci et i es, l i mi t ed r e
pr obl ems f aced by Mal aysi an smal l and medi um- si zed ent er pr i ses ( SMEs ) . Thi s st udy
t hi s i ssue. The f i ndi ngs of t he st udy suggest t hat Mal aysi an SMESf aced expor t i ng pr ob
t he l i t er at ur e
Key Wor d : Expor t i ng, Mal aysi an, SMES, Devel oped Busi ness Soci et i es
I NTRODUCTI ON
xpor t s ar e of t en cr uci al t o a f i r m' s f i nanci al heal t h and i t s gr owt
i ndi vi dual f i r ms, devel opi ng expor t mar ket s can be bot h a gr o
and a maj or chal l enge. Mor eover , gi ven t he pr ospect of st r ong
mat ur i ng mar ket s as wel l as l i mi t ed domest i c mar ket oppor t uni t i es, f
and smal l ) must gi ve st r ong consi der at i on t o expandi ng t hei r expor t i n
Gi ven t he maj or cont r i but i on of smal l and medi um- si zed ent er pr
r ecent year s i n t he ar eas of empl oyment enhancement and t he i ncr eas
of expor t s of SME- manuf act ur ed pr oduct s ( cur r ent l y mor e t han 8
manuf act ur i ng f i r ms i n Mal aysi a ar e SMEs) , i t woul d appear vi t al t o
smal l er busi nesses t o expor t , and t o i ncr ease t hei r shar e of t he t ot al ex
Despi t e t he f act t hat f or ei gn mar ket s can of f er f i r ms bet t er oppor t
t er m gr owt h and pr of i t abi l i t y, pr evi ous st udi es have i ndi cat ed t hat t
and chal l enges of t he i nt er nat i onal mar ket pl ace i nhi bi t t he ent r ance
Wi t h r egar d t o t hi s, a good number of st udi es have deal t wi t h var i ous e
f aced by smal l busi nesses i n devel oped count r i es ( Jul i en et . al , 1994
Kat hawal a et . al , 1989) .
E
70
J URNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001
mal l busi ness l i t er at ur e i n Mal aysi a .
espi t e t he i mpor t ance of SMEs and t he
cr ease knowl edge i n expor t i ng act i vi t i es,
er y l i t t l e r esear ch has been done t o
xami ne t he expor t i ng pr obl ems of SMEs
t he Mal aysi an cont ext . Thi s st udy was
conduct ed t o addr ess t hi s i ssue. The st udy
epor t ed i n t hi s ar t i cl e at t empt ed t o
pr ovi de an i nsi ght i nt o t he nat ur e of t he
expor t i ng pr obl ems f aced by Mal aysi an
SMEs . I n doi ng so, t hi s st udy woul d assi st
i n our under st andi ng of t he r easons why
SMEs i n Mal aysi a f ai l t o r each t hei r expor t
pot ent i al .
smal l er f i r ms f aced di f f i cul t i es
expor t i ng . Al exandr i des conc
hi gh i nt ensi t y of compet i t i on
mar ket s, l i t t l e knowl edge of
act i vi t i es, i nsuf f i ci ent under s
expor t payment pr ocedu
di f f i cul t i es i n i dent i f yi ng f or e
oppor t uni t i es as t he maj or r e
f i r ms f ai l t o i ni t i at e expor t i ng .
Si mi l ar l y, Bi l key ( 1978)
some of t he most f or mi dabl e
successf ul smal l busi ness expor
wer e : ( 1) hi gh r i sk ; ( 2) i
f i nanci ng; ( 3) pr ot ect i ve
gover nment r egul at i ons ; ( 4)
di st r i but i on channel s ; ( 4) i
knowl edge of mar ket i ng opp
abr oad ; ( 5) di f f i cul t i es i n und
Ogr am ( 1982) def i ned expor t i ng f or ei gn busi ness pr act i ces; ( 6)
f i r ms as t hose t hat have expor t ed over t he i n conf or mi ng t o f or ei gn
l ast t hr ee year s and t hat t hei r expor t i ng st andar ds and speci f i cat i ons ; ( 7)
sal es r epr esent at l east one per cent of t hei r i n col l ect i ng payment s f r o
gr oss annual sal es . Expor t i ng i s cust omer s ; ( 8) i nadequat e r ep
consi der ed t he most common mode of i n f or ei gn mar ket s ; and ( 9) l ac
ent r y i nt o i nt er nat i onal busi ness among mar ket i ng connect i ons .
SMEs . Accor di ng t o Young et . al ( 1989) ,
Based on a sur vey of f i r ms i
SMEs f i nd expor t i ng at t r act i ve because of i ndust r y i n t he Uni t ed St at es o
mi ni mal busi ness r i sks, l ow r esour ces Bauer schmi dt et . al ( 1985) a
commi t ment and hi gh f l exi bi l i t y of var i ous r easons why f i r ms f ai l e
act i ons . Fur t her mor e, Ter pst r a and These i ncl uded : ( 1) hi gh val ue
Sar at hy ( 1994) suggest ed t hat expor t i ng dol l ar i n r el at i ve t o f or ei gn cur
can pr ovi de i ndi vi dual f i r ms a compet i t i ve hi gh t r anspor t at i on cost s; ( 3)
advant age by i mpr ovi ng t hei r f i nanci al i nvol ved i n sel l i ng abr oad; ( 4) h
posi t i on, i ncr easi ng t hei r capaci t y t ar i f f s on i mpor t ed pr oduct s ;
ut i l i sat i on, and r ai si ng t hei r t echnol ogi cal capi t al f or f or ei gn expansi on;
st andar ds .
gover nment assi st ance ; ( 7) c
Al t hough expor t i ng appear s t o be f r om l ocal f i r ms ; ( 8) l ack
at t r act i ve t o SMEs, pr evi ous empi r i cal channel s of di st r i but i on; and ( 9
st udi es have i ndi cat ed t hat expor t i ng and cul t ur al di f f er ences .
J URNAL STRATEGI
BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
di f f er ences exi st ed bet ween smal l and l ar ge
f i r ms t hat expor t ed . I n compar i son t o l ar ge
f i r ms, t hese aut hor s cl ai med t hat smal l f i r ms
f aced mor e di f f i cul t i es i n over comi ng expor t
pr obl ems such as i n est abl i shi ng f or ei gn
cont act s, get t i ng i nf or mat i on about f or ei gn
mar ket s, est abl i shi ng di st r i but i on net wor k,
pr omot i ng pr oduct s over seas and
empl oyi ng good expor t s sal es per sonnel .
Gr i psr ud ( 1990) f ur t her not ed t hat
expor t i ng obst acl es and oppor t uni t i es var y
f r om pr oduct t o pr oduct even wi t hi n t he
same i ndust r y due t o t he di f f er ences i n
demand and t ar i f f s bet ween pr oduct s . The
aut hor f ound t hat di f f er ences i n t ast e acr oss
di f f er ent count r i es posed pr obl ems f or
expor t er s movi ng i nt o new mar ket s . For
i nst ance, accor di ng t o Gr i psr ud, t he
Japanese f ood pr oduct s mar ket at t ached
much emphasi s on f at cont ent , si ze, col our
and ot her at t r i but es t hat somet i mes do not
f ul f i l l t he r equi r ement s of ot her mar ket s .
The sur vey by Tseng and Yu ( 1991) al so
r eveal ed t hat Tai wanese f i r ms exper i enced
var i ous pr obl ems when expor t i ng . Among
t hese wer e : ( 1) t he l ack of f or ei gn mar ket
i nf or mat i on ; ( 2) l i mi t ed t r adi ng knowl edge
of per sonnel ; ( 3) i nappr opr i at eness of pr i ce/
qual i t y f or t he needs of t he mar ket ; ( 4) l ow
pr of i t pr ospect s; ( 5) t he exi st ence of var i ous
f i nanci al const r ai nt s; ( 6) t he pr eval ence of
f i er ce compet i t i on ; ( 7) per cei ved hi gh l evel
of r i sks ; and ( 8) var i ous l egal const r ai nt s
( ei t her i n home or host count r i es) .
METHODOLOGY
Thi s st udy was based on smal l and
72
was gat her ed f r om 166 sma
si zed ent er pr i ses t hat expo
def i ned as a f i r m wi t h
empl oyees and as one w
managed by i t s owner / s . T
sel ect ed f r om t he 1998
Mal aysi an Manuf act ur er
Quest i onnai r es co
quest i ons wer e sent t o 21
i n t he 12 st at es i n West M
214 quest i onnai r es mai
r esponded ( a r esponse r a
addi t i on t o t he post al ques
t o- f ace i nt er vi ews wer e
wi t h t he t op management
f i r ms .
The pur pose of t he pe
was t o obt ai n an i ndept h
of t he pr obl ems f aced b
smal l and medi um- si zed
Mal aysi a . The i nt er vi
separ at el y wi t h t he Mana
t he Chi ef Execut i ve Of f i c
Manager s or t he per son d
most knowl edgeabl e i n exp
of t he f i r ms . I n t he i
di scussi on quest i ons we
i dent i f yi ng t he pr obl ems
expor t er s .
SURVEY QUESTI ONNA
The st r uct ur ed sur ve
used i n t hi s st udy consi s
t i ons and 44 quest i ons . T
i n sect i ons one and t wo w
t ai n t he i nf or mat i on con
spondent s and t he f i r mcha
r emai ni ng 30 st r uct ur ed
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 200
t he cour se of t hei r oper at i ons . These 30
uest i ons whi ch wer e adapt ed f r om t he
or k by Bauer chmi dt et . a l ( 1985) ser ved
s a basi s f or quer yi ng t he expor t i ng pr ob
l ems as per cei ved by each r espondent . The
r espondent s wer e asked t o r at e each i t em
l i shi ng t he expor t i ng pr obl em
f i r ms conf r ont ed i n t he cour se o
er at i ons . The det er mi nat i on of t
i ng pr obl ems ' f or each case was
t he basi s of t he vi ews and sugg
t he r espondent s . The vi ews an
Tabl e 1 . Fi r ms by t he 12 St at es
St at es
Se
or
Feder al Ter r i t or y
Johor e
Mal acca
Per ak
No . of
Company
50
Per cent age
30 . 1
30
18 . 1
16
9. 6
7
11
4. 2
P
6
3. 6
Pe
Neger i Sembi l an
Kedah
Per l i s
Ter e anu
Kel ant an
Tot al
6
3. 6
6
3. 6
on a f i ve- poi nt scal e r angi ng f r om ( 1)
st r ongl y di sagr ee t o ( 5) st r ongl y agr ee. The
quest i onnai r e was t est ed pr i or t o mai l i ng
t o t he r espondent s . The coef f i ci ent al pha
scor es of t he 30 measur es of expor t act i vi t i es r anged 0 . 68 t o 0 . 90 .
The i nt er vi ews wer e conduct ed t o gener at e i nf or mat i on speci f i c t o t hi s st udy . The
di scussi on quest i ons wer e di r ect ed pr i ma
r i l y at obt ai ni ng det ai l ed i nf or mat i on on
t he pr obl ems f aced by t he f i r ms . The i nt er vi ews whi ch l ast ed f r om one and a hal f t o
t wo hour s i n l engt h began by r evi ewi ng
6. 6
6
3. 6
9
5. 4
5. 4
9
10
166
6.0
100.0
t i ons t o t he i nt er vi ews ar e di s
get her wi t h t he post al sur vey f i
BACKGROUND OF THE
FI RMS
Fi r ms f r om 21 i ndust r i es w
sent ed i n t hi s st udy . A maj or i t
f i r ms ( cl ose t o 50%) wer e f r om
pl ast i c, el ect r oni c, wood, met al a
cal i ndust r i es . Tabl es 1 and 2 p
i nf or mat i on on t he l ocat i ons of t he
t he t ypes of i ndust r i es t hey r epr
I URNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
The aver age annua
Tabl e 3 bel ow di spl ays t he char act er i st i cs of t he 166
t hr ee year s)
f or maj or
f i r ms i n t he sur vey . As
r anged f r om one mi l l
s hown i n Tabl e 3, vast maj or i t y of t he f i r ms
Ri nggi t ) t o 50 mi l l i on . Of
have been i nvol ved i n expor t i ng act i vi t i es
( 44 per cent ) had sal es b
Tabl e 2. Fi r ms by I ndust r i es
e of I ndust r y
Aut omobi l e
Bever age
No . of Fi r m
6
Per cent a g
7
3.6
4.2
Car bon
5
3.0
Cement
6
3 .6
Chemi cal
10
6 .0
El ect r oni c
15
9 .0
Fer t i l i zer
Food
5
23
3. 0
13 . 9
Leat her
Machi ner y
6
3. 6
5
3. 0
Mar bl e
3
1.8
Met al
10
6. 0
Paper
5
3. 0
Pet r ol eum
3
1.8
Phar maceut i cal
Pl ast i c
4
2. 4
18
10 . 8
Rubber
St eel
5
3. 0
7
4. 2
Text i l e
8
4. 8
Wood
14
8. 4
1
0. 6
166
100. 0
Tobacco
Tot al
f or mor e t han f i ve year s ( mor e t han 80%
mi l l i on ; 46 ( 28 per cent )
of t he f i r ms) . Out of t he 166 f i r ms, 112 f i r ms
t han one mi l l i on ; 31 ( 19 p
( 71 per cent ) hav e been expor t i ng f or mor e
bet ween one mi l l i on t o f i v
t han 13 year s . Al t hough t he number of
r emai ni ng 16 ( 10 per cent
74
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 20
gest t hat expor t s account ed si gni f i cant l y
f or mor e t han 68 per cent of t he gr oss sal es
f or 113 of t he 166 r espondi ng f i r ms . For
anot her 20 f i r ms, expor t s account ed f or
l ess 10 per cent of t hei r t ot al gr oss sal es .
cent ( 150 f i r ms) of t he t ot al of
have been i n oper at i ons f or mor e
year s . Out of t he 166 f i r ms, 10
cent ) i ndi cat ed t hat t hey expor
pr oduct s t o mor e t han 30 count
Tabl e 3. The Fi r ms Char act er i st i cs
Fi r m Char act er i st i cs ( n=166)
Year s i nvol ved i n Expor t i ng :
2 and l ess
3- 7
8- 12
Mor e t han 13 year s
Number of Empl oyees :
10- 20
21- 99
100- 300
Aver age Annual Sal es ( past 3 year s) :
Less t han one mi l l i on ( RM)
1- 5 mi l l i on
6- 10 mi l l i on
11- 50 mi l l i on
Expor t Sal es as Per cent age of Tot al Sal es :
Less t han 10%u
1 %- 200/ 6
21%- 300/ o
31%- 40%
41%- 50%
Mor e t han 51 %
Age of Fi r ms ( year s) :
Bel ow 5
6- 10
11- 15
16- 20
Mor e t han 21
Number of Expor t i ng Count r i es :
1- 5 count r i es
6- 10 count r i es
11- 15 count r i es
16- 30 count r i es
Mor e t han 30 count r i es
Fr equency
Per cent age
15
15
18
112
9. 0
9. 0
10. 8
71 . 2
46
36
84
27. 7
21 . 7
50 . 6
46
31
16
73
27 . 7
18 . 8
9. 6
44 . 0
20
16
10
4
3
113
12 . 1
9. 6
6. 0
2. 4
1.8
68. 1
16
35
31
33
51
9.6
21 . 1
18 . 7
19 . 9
30 . 7
43
8
7
3
105
25 . 9
4.8
4. 2
1 .8
63 . 3
URNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
Res pondent s Char act er i st i cs
dent s, 141( 84. 9 per cent ) we
23 ( 13 . 9%) wer e si ngl ed . V
As s hown i n t he f ol l owi ng Tabl e 4, 103
( 62 per cent ) of t he 166 r espondent s had
t hese r espondent s hav e
pr esent f i r ms f or mor e t
at t ended a uni ver si t y and obt ai ned ei t her
Mos t of t hese r espondent s
Tabl e 4. Respondent s Char act er i st i cs
Respondent s Char act er i st i cs n=166
Hi ghest Level of Educat i on :
Secondar y School
Col l ege or I nst i t ut e
Uni ver si t y
Hi ghest Level of Cer t i f i cat e Recei ved :
School cer t i f i cat e
Di pl oma
Bachel or ' s degr ee
Mast er s degr ee
Mar i t al St at us :
Mar r i ed
Si ngl e
Di vor ced
Fr equency
Per ce
32
19
31
103
18
62
32
31
76
27
19
18
45
16
141
23
2
84
13
1.
133
33
80
19
7
17
57
51
34
4.
10
34
30
20
21
47
63
12
28
Sex :
Mal e
Femal e
Lengt h of Ser vi ce ( year s) :
3 and bel ow
4- 6
7- 9
10- 12
13 and above
Age ( year s) :
25 and bel ow
26- 35
36- 45
46 and above
76
35
38
21
) URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 2001
year s .
wer e bel ow 25 year s ol d . Hun
Tabl e 5 . Summar y of t he Sur vey Responses
I t ems.
2. Language andanal di Hesear es
3. Lack of
i dmnel s of di st r buf i on
4. Di f f cul t t o s ewmat i aet m
t he f or ei gn cowvy
.
6. Df f x * ool l act i ng
f r omf or ei gn ai sst omer
.
BDW
M
- wt
012 . 8. Fomgnbusut ess
i
at e di f f i a* t o ut der oat d
" ~ .: s us
. _~_. ~ . .
. I . . . . .
10. Ri sks i nml ved i n sel l i ng abr oad
JI
11
1 7,
r
7
.
.
-
.
: ,
I
r r NI .
ZZ
, i
.
~
.-
I
.
11
.
Di sagr eed
48. 8
46. 0
18. 7
24. 1
30. 7
32 . 6
32. 5
39. 1
38. 6
21 . 7
28. 9
21 . 7
38. 6
12. Rgh cost of set t i ng abr oad
13. Di f f at l t y at r zog a l i eu or j oi xt vmt umagt eet t e9 wi t h
f ot ei gnl nms
7
:~
.
i
7 77- . . I .
.
V
29. 5
15. Faf ow=r i t of l i gh ef f or t t ax by t he home govenmW
42. 2
16. l ade of y mumMassi st mice i n oven~o '
t t bar r i cs
35. 5
17. I F0 val ue of f or ei gn cmmcy i n expor t nes t s
28. 9
,
: , , .: w
:
"
y
.
,
.
,
7
.
:
=
~U
=, .
39. 8
:
19. Cbnpdki onf r oml ocal f i msi nf or dgt madc et s
38. 6
. . = 28. 3
KI N . . . . 7 . I . , 11 : , . . . i ~~ a . , I , g_
21. f mbl mn quot i ng pr i ce wi t h 11ucpat i t t gego r at e
12 . 0
i r , . . : . . r. . . . . . , . =5, L, , , . ,
m
v : .. a y
67 . 5
6. 6
23 . Need t o change pr i ci ng and pr ot mt i on pol i ci es weoxi i t g t o t he
condi t i on of f or ei gn nmkct
10. 8
25. Lade of capaci t y dedi cat ed t o oot i i nagg suppl y of expor t s
29 . 5
26. Lade of t ax i noet i i ve by t he home govenmr t t f or conpani es
29. 5
t hat expor t
i zi mr obor r i l t r ade adr' Wy
42 . 8
28. DUTi cul t y. gat her i t g aeat t at e hf ommf on on f or ei gn nr uket
23 . 5
29.
- _. . I i ,
: " = W,
, - - i mnet t
16. 9
30. Cb
i ' nf nmt f t ms i n hone cowt r y i n f owagn nwket s
51. 9
, ~JURNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 2001[ TAHUN VI / 2002
Agwed
30. 3
25 . 3
54. 3*
18. 7
38 . 6*
37. 3*
20. 5
29. 0
32. 5
54. 8*
44. 0*
52 . 4*
24 . 7
37. 4*
19. 8
24. 7
54. 2*
42. 2*
32. 5
59. 6*
56. 2*
18. 7
21 . 7
19 . 9
43 . 3*
26. 5
36 . 1
29 . 5
30. 7
18. 0
46 year s ol d .
t he sur vey, sever al exp
r ai sed dur i ng t he i nt er
Expor t Pr obl ems
management of t he pa
Accor di ng t o t he r espon
I n t he sur vey, al l t he f i r ms r esponded
compl i cat e t he ent r ance
Tabl e 6 . Summar y of Expor t i ng Pr obl ems Faced by Mal aysi an
Expor t Pr obl ems:
1 . Lack of f or ei gn channel of di st r i but i on
2 . Di f f i cul t y t o sel ect a r el i abl e di st r i but or i n t he f or ei gn count r y .
3 . Ri sks i nvol ved i n sel l i ng abr oad .
4 . Di f f i cul t y i n pr ovi di ng af t er sal es ser vi ces .
5 . Hi gh cost of sel l i ng abr oad .
6 . Hi gh val ue of f or ei gn cur r ency i n expor t s mar ket s.
7 . Management i ndi f f er ence t owar d val ue of expor t i ng
8 . Lack of capi t al t o f i nance busi ness expansi on i nt o f or ei gn mar ke
9 . Pr obl emquot i ng pr i ce wi t h f l uct uat i ng exchange r at e.
10 . Need t o adapt pr oduct s t o meet f or ei gn cust omer pr ef er ences .
11 . Lack of capaci t y dedi cat ed t o cont i nui ng suppl y of expor t s .
12 . Di f f i cul t y i n col l ect i ng payment f or mf or ei gn cust omer s .
Per
54 .
57 .
54 .
44 .
52 .
54 .
37 .
59 .
56 .
69 .
43 .
47 .
t o t he 30 quest i ons on t he bar r i er s t o ex-
ness expor t er s i nt o t he
por t i ng . The f ol l owi ng Tabl e 5 pr esent s t he
ket pl ace. The i ssues gat
i nt ensi t y of t he r esponses t o t he 30 i t ems .
t er vi ews ar e as f ol l ows
The r esul t s of t he sur vey i ndi cat ed t hat t he
The r espondent s st a
166 r espondent s agr eed wi t h 12 i t ems,
t o t he sever e t ar i f f
di sagr eed wi t h anot her 10 i t ems and wer e
st r i ct i ons i mpos ed
undeci ded wi t h t he r emai ni ng ei ght i t ems .
count r i es, t he compl e
i ng pr ocedur es mak e
Based on t he si gni f i cant r esponses
r esponses wi t h t he hi ghest per cent age
expor t er s t o penet r a
val ue) , t he 12 i t ems agr eed by t he r espon-
ket s . Wi t h r egar d t o
dent s as expor t bar r i er s wer e consi der ed
r espondent s expr es
as expor t i ng pr obl ems . Det er mi nat i on of
each of t he expor t i g pr obl ems was made
on t he basi s of t he i nt ensi t y of r esponse by
t he par t i ci pat i ng f i r ms. The 12 expor t i ng
78
por t assi st ance .
2.
Sever al of t he r espo
expor t i ng i s not mea
f i r m. I n compar i son
J URNAL STRATEGI BI SNI S - VOL . 8 DESEMBER 2
money ,
3.
t i me and ef f or t . Accor di ng t o
t hem, not al l smal l busi nesses ar e wi l l -
f r om t hi s st udy i ndi cat es
i ng t o i nvest t he consi der abl e t i me,
money and ef f or t i n devel opi ng as wel l
bar r i er s . I n gener al , t he r es
as r et ai ni ng a f or ei gn mar ket .
var i ous pr obl ems t o SMEs .
Al t hough mos t of t he f i r ms i n t he st udy
cl assi f i cat i on r esul t s of t he
hav e been expor t i ng f or s ome t i me,
count er ed by t he smal l and
expor t i ng busi nesses ar e di
mos t of par t i ci pat i ng f i r ms expr essed
sur veyed conf r ont ed var i
by t hi s st udy suggest t hat ex
t he need f or empl oy i ng peopl e wi t h
k nowl edge and exper i ence i n al l aspect s of i nt er nat i onal t r ade . Dur i ng t he
i nt er vi ews, many of t he r espondent s
4.
5.
Lac k of Capi t al t o Fi nance E
For ei gn Mar k et s
r eveal t hat t hey need peopl e wi t h spe-
Lack of capi t al was f o
ci f i c k nowl edge and exper i ence i n ar -
t he mos t pr essi ng pr obl ems f
eas s uc h as t r anspor t at i on, expor t f i -
busi nesses i n t hi s st udy . Man
nanci ng, t ar i f f s, f or ei gn mar ket s anal y-
sur veyed i ndi cat ed t hat l ack
si s, document at i on, i nsur ance, f or ei gn
cur r ency t r ansact i ons, and f r ei ght han-
pr event ed t hem f r om f ur t
dl i ng.
many of t he f i r ms i n t he s
The i nf or mat i on f r om t he i nt er vi ews
t hat t hey wer e unabl ed t o g
al so i ndi cat ed t hat many of t he par -
nanc i ng
t hei r expor t i ng act i vi t i es .
t i ci pat i ng f i r ms l ack t he per t i nent i n
f or mat i on concer ni ng t he mar ket and
f or t hei r ex por
pr ogr ammes . Wi t h r egar d
spondent s expr essed a desi r
c ons umer r equi r ement s, i mpor t r egu-
nanci al assi st ance . To assi s
l at i ons, and f or ei gn exchange r equi r e-
age expor t i ng among Mal ays
ment s i n cer t ai n count r i es, speci f i cal l y
t he r espondent s suggest ed
i n t he new mar ket s such as i n Af r i ca,
l oans f or oper at i ng expenses
East er n Eur ope and Lat i n Amer i c a .
t er m i nvest ment l oans .
Dur i ng t he i nt er vi ews, sever al of t he
f i r ms suggest ed t hat t hei r i nabi l i t y t o
Di f f er ences i n Pr oduct Us a
c ompet e successf ul l y i nt er nat i onal l y
Mar k et pl ac e
may be at t r i but ed t o out dat ed t echnol ogy and poor mar ket i ng .
Di f f er ences i n pr oduct
ei gn mar ket wer e al so ci t ed
r easons why t he f i r ms hesi t
Accor di ng t o t he r esponden
ences i n pr oduct us age co
The over al l obj ect i ve of t hi s st udy was
i dent i f i cat i on of pr oduct nee
t o i dent i f y t he expor t i ng pr obl ems f aced
mar ket . I n f act , s ome of t h
JURNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001/ TAHUN VI / 2002
Lack of For ei gn Channel s of Di st r i but i on
I n or der t o access new mar ket i n f or ei gn count r i es, good channel s of di st r i but i on ar e i mpor t ant . However , i r ? t hi s st udy,
maj or i t y of t he r espondent s i ndi cat ed t hat
t hey l ack ef f ect i ve channel s of di st r i but i on.
The r espondi ng f i r ms suggest ed t hat t he
l ack of ef f ect i ve channel s of di st r i but i on
make i t di f f i cul t f or t hem t o penet r at e as
wel l as r et ai n f or ei gn mar ket s .
The pr esent st udy al
many of t he par t i ci pat i ng
f ami l i ar wi t h t he busi ness
ei gn count r i es . Most of t he
t hey l ack speci f i c knowl e
expor t i ng pr ocess i n i nt er n
pl ace . Thi s l ack of knowl ed
f i cul t f or t he Mal aysi an e
der st and expor t r equi r em
oppor t uni t i es .
Hi gh Ri sk I nvol ved i n Se
Di f f er ences i n Pr oduct Speci f i cat i ons i n
I nt er nat i onal Mar ket pl ace
The pr esent st udy al so suggest ed t hat
t he r espondent s wer e concer ned about t he
di f f er ences i n pr oduct speci f i cat i ons i n i n
t er nat i onal mar ket pl ace . Accor di ng t o t he
r espondent s, t he di f f er ences i n pr oduct
speci f i cat i ons makes i t mor e compl i cat ed
f or t hem t o sel l i n cer t ai n mar ket s . For exampl e, t he gar ment manuf act ur er s and
expor t er s wer e not pr epar e t o ent er t he
mar ket s i n west er n count r i es because t hey
wer e not abl e t o pr oduce shi r t s and t r ouser s t hat f ul f i l l t he r equi r ement s of t he
cust omer s i n t hose mar ket s .
Di f f i cul t t o Col l ect Payment f r omFor ei gn
Cust omer s
Al t hough maj or i t y of t he sur vey r espondent s agr eed t hat expor t i ng pr ovi des
a l ucr at i ve sour ce of r evenue f or t hei r busi
nesses, most bel i eved t hat col l ect i ng payment s f r om f or ei gn cust omer s i s a cont i nui ng pr obl emf or many busi nesses .
80
I n t hi s st udy, t he r esp
er s al so expr essed concer
r i sks i nvol ved i n sel l i ng a
t he smal l expor t er s i n t hi s
t hat t hey ar e at a di sadvan
t hei r degr ee of cont r ol over
uct . The pr esent st udy su
concer n may be at t r i but ed
i nf or mat i on and exper i enc
i ng pr ocess .
Di f f i cul t t o Pr ovi de Af t er
Al t hough most r espon
t he i mpor t ance of pr ovi di n
vi ce t o t hei r cl i ent s, commu
cul t i es cont i nue t o compl i c
cat i on of t he af t er sal e ser vi
ei gn mar ket s .
Cost l y t o Sel l Abr oad
Vast maj or i t y of t he Ma
er s i n t he pr esent st udy agr
i ng i s cost l y . Most of t he r e
JURNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 200I
uggest ed t hat t he most i mpor t ant i mr ovement needed t o i ncr ease expor t s
oul d be t he r educt i on of t r anspor t at i on
ost s, f r ei ght char ges, f r ei ght i nsur ance,
: ust om dut i es and t he ot her expenses r et o expor t i ng.
t hei r shar e i n t he ever - expa
mar ket s .
CONCLUSI ONS
-3
anager i al Hesi t at i on Towar ds Expor t i ng
The r esul t s of t hi s st udy showed t hat
smal l busi ness expor t er s i n Mal aysi a have
mi xed vi ews about t he val ue of expor t i ng .
Whi l e some of t he r espondent s bel i eved
t hat expor t i ng coul d hel p t hei r f i r ms t o
di ver si f y i nt o newmar ket s, i mpr oved t hei r
gr owt h pot ent i al and i ncr ease t hei r i ncome, ot her s wer e r el uct ant because of t he
r i sks i nvol ved . The f i ndi ngs of t he pr esent
st udy suggest ed t hat t hei r hesi t at i on may
be at t r i but ed t o l ack of exper t i se and exper i ence i n t he expor t i ng pr ocess .
Di f f i cul t t o Quot e Pr i ce i n For ei gn Cur r ency
The r esul t s of t he st udy suggest ed t hat
f or ei gn cur r ency f l uct uat i ons cr eat e one of
t he most f or mi dabl e bar r i er t o successf ul
smal l busi ness expor t i ng. The l ack of
knowl edge and exper i ence i n f or ei gn cur r ency t r ansact i ons make i t di f f i cul t f or t he
sur vey r espondent s t o quot e t he pr i ces of
t he pr oduct s t hat t hey expor t ed.
Lack of Capaci t y f or Expor t i ng
Fi nal l y, t he pr esent st udy al so i ndi cat ed t hat some of t he smal l Mal aysi an
busi ness expor t er s l ack t he capaci t y t o meet
t he demand i n t he f or ei gn mar ket s . Ac-
Thi s st udy at t empt ed t o i
pr obl ems f aced by smal l and m
expor t i ng busi nesses t hr oug
166 manuf act ur i ng f i r ms . Th
obt ai ned f r om t he par t i ci
i ndi cat e t hat t her e ar e var i o
successf ul smal l busi ness exp
on t he f i ndi ngs of t hi s st ud
concl uded t hat 12 pr obl ems
among t he SMEs sur veyed .
t hat t he expor t i ng SMEs ar e m
have pr obl ems ar e: ( 1) l ack
f i nance expansi on i nt o f or ei g
di f f er ences i n pr oduct usag
mar ket pl ace; ( 3) l ack of f or e
of di st r i but i on; ( 4) di f f er ence
speci f i cat i on i n i nt er nat i onal
( 5) di f f i cul t t o col l ect payment
cust omer s; ( 6) f or ei gn busi n
ar e di f f i cul t t o under st and;
i nvol ved i n sel l i ng abr oad; (
pr ovi de af t er sal es ser vi ce; ( 9)
abr oad ; ( 10) manager i al
t owar ds expor t i ng; ( 11) di f f i
pr i ce i n f or ei gn cur r ency ; an
capaci t y f or expor t i ng .
Anot her concl usi on
dr awn her e i s t hat t he r esul t s
al so gener al l y suppor t t he pr
f i cat i on f ound i n many of t he
i es ( Al exandr i des, 1971 ; B
Bauer schmi dt et . al , 1985 ; K
1986; Gr i psr ud, 1990 and Ts
JURNAL STRATEGI BI SNI S - VOL. 8 DESEMBER 2001 f TAHUN VI / 2002
compl exi t i es and chal l enges of t he i nt er nat i onal mar ket pl ace i nhi bi t t he ent r ance
under st andi ng t he pr ob
by smal l expor t i ng f i r ms
of many SMEs ( De Nobl e et . al , 1989) .
Fi nal l y, havi ng i dent i f i ed and r ai sed
t he af or ement i oned i ssues, i t i s hoped t hat
er s may bet t er equi p t h
var i ous pr ogr ammes su
t hi s st udy coul d assi st us i n under st and-
t er handl e i ssues f aci ng
sear chi ng, educat i on an
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Bi l key, .W
1978
J
. " An At t empt ed I nt egr at i on of t he Li t er at ur e on t he Expor t Behavi our
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