UNIVERSITI PUTRA MALAYSIA

A STUDY OF PERCEIVED MANAGERIAL COMPETENCIES IN THE TELECOMMUNICATION INDUSTRY: A MALAYSIAN PERSPECTIVE

AMY YEO CHU MAY

GSM 1999 43

A STUDY OF PERCEIVED MANAGERIAL COMPETENCIES IN THE TELECOMMUNICATION INDUSTRY: A MALAYSIAN PERSPECTIVE

By

AMY YEO CHU MAY

Thesis Submitted in Partial Fulfilment of the Requirements for the Degree of Master of Science in the

Malaysian Graduate School of Management

Universiti Putra Malaysia

May 1999

ACKNOWLEDGEMENTS

In completing this thesis, I have been greatly aided by many individuals to

whom I own a debt of gratitude. First and foremost, many thanks due to my

Supervisor, Dr. Nurol'ain Mustapha. She has been exceptionally understanding

especially towards the way I managed my thesis. She was particularly patient during

the times when I was "silent" about the progress of my thesis. But above all, I knew

she would be there when I needed her advice. And indeed, I am very grateful that she

did not give up on me as her student.

I am also especially grateful to Associate Professor Dr. Md. Zabid Abdul

Rashid and Associate Professor Dr. Samsinar Md. Sidin for their invaluable advice,

comments and for being so caring and thoughtful throughout.

I deeply appreciate the wonderful support that I have received from managers

in the five participating companies. This thesis certainly would not be complete

without acknowledging the sponsorship of Tunku Abdul Rahman College. All others

whom I may not have mentioned but who have helped me in one way or another. I

hope they will forgive me if I do not attempt to mention them by name.

11

Last but not the least, I wish to express my deepest appreciation to my

husband and my two children for their tolerance and valuable support throughout my

study especially during the preparation of this thesis.

III

TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . 11

LIST OF TABLES . . . . . . . . , ... ... ... . , . ... ...... ... ... . ,. '" .. , ... ... ... ... . , . .. , ... ... . Vll

LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . , . ......... ...... ... ......... ... ... ........ , ... IX

LIST OF ABBREVIATIONS . . . . . . . , . .. , .. , ... ... ... ... .. , ... . . . ...... . ,. ... ... ... ... X

ABSTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Xl

ABSTRAK .. . . . . . . . . , . ... ... ... ... ... . , . ... .. , ... '" '" '" ... .. , ... ... '" ... ... .. , ....... XlV

CHAPTER

I INTRODUCTION Background .. . . .. '" ... ... ... ... .. , ... ... ... ... ... .. , ...... ... . , . ..... , ... .. . .. . ... 1 Problem Statement. . . . . . . . . . . , ......... '" ... ......... .... , . ................ , ... .. 3

The Scenario of the World Telecommunications Industry .. . . . . . . . . . . . . , . ...... ... ....... , . . , . .. , '" ... ... ... ... ... ... ... ... ....... 3 The Scenario of the Malaysian Telecommunications Industry . . . . . . .. . . , . ... ... ... '" ... ... ... ... ... ... ... . ,. ... ... ... ... ... ... ... .... 6

Objectives of the Study . . . . . . . . . . . . . , . ... .. , ... ... ... . , . . , . .. , ...... '" . .. ... . . . . 11 Conceptual Framework ........ . ... ... '" .. , ... . .. ..... ... . .. . ... ... . . .. ... . .. ... 11 Hypotheses of the Study . . . . . . . . . . . . . . . . .. . . , ... '" ...... ..... , ... ... '" ... . .. ... 19 The Importance of the Study . . . . . . . . . . . . . . . '" ....... , . ... ... ... '" ........ ,. ... 23 Assumptions of the Study . . . . . . '" ......... ........... , ....... .......... , . .. , .. , . 24 Organisation of the Thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , ...... '" .... ,. ... . . . . 24

n LITERATURE REVIEW Introduction . . . . . . . . . . . . . . . . . , ...... .............. , ... ... .... , . .. , .. , ... '" .. . . .. .. 26 Defining Competencies . .. .. . . . . . , ... , ... ... ... . , . . ,. ... ... ....... ... ... ... ... ... 26

Concept of 'Soft Competence' and Threshold Competence . . . . . . . , ....... ... ............ ... ............. ... ..... , 32

IV

PfRPVSTAKAAN SULTAN ABDUL SAMAt UNIVERSITI PUTRA MALAYSIA

Managerial Skills and Competency ...... ... . .. ....... . . , ...... ... . ,. '" ... . . . . 34 Managerial Roles and Competency... ... ... ....... ... ... ... ... ... ... ... ... ... 39 Personal Qualities, Attitude and Value Position ... ......... ... ... '" ... ..... 40 Organisational Climate and Culture... ............... ......... ...... ...... .... 42 Generic Competence versus Specific Competence...... ... ... ...... ... ..... 43

Proponents of Generic Competencies...... ... ... ......... ............ ... 43 Proponents of Specific Competencies...... ... ..... . ...... ... . .. . .. ..... 44 Proponents of Generic Competencies and Specific Competencies... ............ ...... ...... ......... ... .............. 46

Competency Groupings... ...... ......... ... ...... ... ... ......... ....... ... ... ... 47 Summary... ... ......... ..................... ...... ...... ...... ......... ... ...... ... 53

m RESEARCH METHODOLOGY

Introduction ......... '" ... ... .............. , ... ... ... . ,. ... ... ... ... ... .... ... .... 56 Quantitative Research Methodology.. . . . . ... ... ... ... ... ... ... ... ... . .. . .. ... 56 Selection of Companies... .... .. ... ...... ......... ... ...... ...... ....... ... ...... 57

Location of the Companies......... ............... ......... ... ... ...... .... 58 Research Questionnaire ... ................ ... ........ , ...... ... . ,. ... ... ... ... ... 59 Sampling Procedure... .. . .. . ... ... ... ... ... ... ... . .. . .. ... ... .. . ... ... . .. . .. ... .. 60

Telekom Malaysia Berhad ... ........ , ... ... ... . , . ... . ,. ... ... .... ... ... .... 61 DiGi Telecommunications Sdn Bhd.. . .. . ... .. . ... ... ... ... .... ... ... ... .. 62 Celcom (Malaysia) Sdn Bhd ...... ... ..... ' ...... ...... .... , . .. .. ... ... .. . .. 62 Binariang Berhad...... ......... ... ............... ......... ....... ...... ..... 63 Time Telecommuncations Sdn Bhd... ... ... ... ... ... ... ... ... .... .. . . .. .. 63

Procedure for Data Collection ........... , ... .. , ... ... ... . , ........ ........ , . .. . 65 Statistical Analysis Procedure ... ...... .. . ..... , ... ... ... . ,. ... ... ... ... ... ..... 66 The Reliability of the Instrument... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . 69

Pre-reliability Measures... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .. 69 Post-reliability Measures... ............ ...... ... ... ... ...... ...... ... ...... 70 Reliability Test for Ninety-One Competency Elements... ... ... . . . . .. . 70 Reliability Test for Twenty-Three Variables and the Five Factors ... ... ...... ... ...... ... ........... . '" . ... . . . . ... . . " . . . . . . . . . 71

Validity of the Instrument. .. ............. .. ...... '" ., . ....... ... ..... , ..... , ... 72 Validity Test for Twenty-Three Elements and the Five Factors... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . 73

IV DATA ANALYSIS AND DISCUSSION Introduction ... ........ , ... ... .... , .......... ... '" ... ...... .. , ... .. , ...... ... ..... . Profile of the Respondents ... ............... ............ .......... ... ... . , . .... .. Organisation's Characteristics ... ...... ... '" ......... ................. , ... ... ..

v

79 83 86

Hypothesis 1: Managers do not Perceive Generic Competencies to be Necessary in Carrying Out their Jobs . . . . . . . . . . . , ...... ... ... . , .... ... .. , 89 Emergence of Meaningful Dimensions/Structure from the List of Perceived Managerial Competencies . .. . . . . . . . . , ... '" ...... ... ... ... .... " ... . 91 Hypothesis 2: There is no Significant Variation of Competency Elements across Managerial Levels .. . . . . . . . . . . . . , ... . .. . .. ... .. 95 Hypothesis 3: There is no Significant Variation of Competency Elements across Functional Areas . . . . . , ...... ... ... . , .... ..... , 99 Hypothesis 4: There is no Significant Variation of Competency Elements between Organisations within the Industry... ..... 103 Interpretation and Discussion of the Study . . . . . . . . . . . . . .. .. . . , . ........ , ... ... 107

Perceived Importance of Managerial Competencies . . . . " ., . . , . .. , .. , ... 107 Five Dimensions of Managerial Competencies . . . . . . . .. . . . . , . ... ... ... .... 108 Variation across Managerial Levels .. , .. , ... '" .... , .. , . .. , .... ... .. , ... ... . 113 Variation across Functional Areas . . . .. . . . . . . . . . , ...... ......... ... .. , .. , '" 114 Variation across the Participating Companies in the Industry . . . '" .... 116

v SUMMARY, CONTRIBUTIONS AND RECOMMENDATIONS

Introduction . . . . . . .. . . .. .. , .. , ............... ...... '" ... ......... ... .. , .. , ... ... ... 119 Summary of Main Findings ... .. , ......... .... , . .. , ... '" ... ... ... ... ... ... ... .. 119 Limitations of the Study .. . '" .... , .... ......... ... .... , . . , .... .. , ... ... ... ... ... 124

Generalizability of the Findings . .. . . .... . . . . . , ... ... ... ............ ... ..... 124 Sample Size . . . . . . '" ...... . , . .. , ... ... ... ... ... .... ... ... ... ... ... ... ... ... ... 125 Methods of Data Collection . .. . . . ... . .. . . . '" ... . , . ..... , ... '" ... ... ... ... 125

Contributions of the Study . .. . . . . . . . . , ... ... ...... . , .. , ... , ......... '" ... ... ... 126 Recommendations for Further Studies ... . . . . . . . . , ... '" ... ... ... ... ... ........ 128

BmLIOGRAPBY... ... .. ... . ... ... . . . ............ ............... ......... ... ........... 131

APPENDICES A A Sample of Questionnaire on Managerial Competencies

(In English) . . . .... . . . .. . . . . .. . . , '" '" ...... ...... .. , '" '" ... ... . , . . , . ... 144 B A Sample of Letter from UPM to have Access

to the Organisations A Sample of Internal Letter / Memo for Circulation to Respondents . . . . .. . . . . . . . , ....... ... ...... ... . , . . , . ...... '" '" ... ... . , 153

C A List of Local Telecommunications Operators... . . . ... ...... ..... 158 D Corporate Information of the Five Telecommunications

Companies .. . . . . . . . . . , ...... .............. , ... '" ... ... ... ... ... ... ... .... 161

VITA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , ... ... ...... ... ... ... ... ... 172

VI

Table

Table 1.1

Table 1.2

Table 2.1

Table 3.1

Table 3.2

Table 3.3

Table 3.4

Table 3.5

Table 3.6

Table 3.7

Table 3.8

Table 4.1

Table 4.2

Table 4.3

LIST OF TABLES

Title Page

Managerial Competency Elements ... ...... ... ...... . ..... .. , .. . . .. . 15

Conceptual Framework for Managerial Competencies... . .. ... ... 18

Personal Effectiveness: The MCI Model ..... , ......... ... . ,. ... ... 50

Sample Distribution of Respondents by Managerial Levels in the Five Companies ... . , . ... ... .. , ...... ...... . ,. ... ... ..... 64

Responded Samples by Managerial Levels in the Five Companies . .. ... ..... , ... ........ ... ... ... ........ , ... . ,. ... ... ... . 64

Reliability Analysis on Competency Elements .... ,. ... ... ... ... ... 72

Mean, Standard Deviation and Intercorrelation of Problem Solving Variables ...... .. , ... ... ... ... . , .......... ... ... .. , ... 74

Mean, Standard Deviation and Intercorrelation of Personal Management Variables ... ... '" .. , ... ...... '" ... ... ... ..... 75

Mean, Standard Deviation and Intercorrelation of Communication and Integrity Variables ...... ... ... . .. .. , ... ... ..... 76

Mean, Standard Deviation and Intercorrelation of Organisation Knowledge Variables ... '" ... .... , .... .... ,. ... ... .... 76

Mean, Standard Deviation and Intercorrelation of Image and Direction Variables ... ........... , ... ... .. , ... ... ... ... . ,. 77

Five Participating Telecommunications Companies . .... . ... ... '" 81

Summary of the Financial Ratios of the Five Companies as at 31 5t December 1997 ... ... ..... , .... , . ... ...... '" ... ... . . . . . . ... . 82

Demographic Characteristics ...... ..... , .... , . ... ...... ............. , 85

Vll

Table 4.4 Frequency Distribution for Type of Entity, Number of Employees and Ownership... ... ... ... ... ... ... ... ... ... ... ... ... ..... 87

Table 4.5 Crosstab of the Five Companies and the Level of CompetItIveness ... ... ... '" ... ... ... ... ... '" ... ... ... ... .. , ... ... ... ... 88

Table 4.6 Competency Rankings in Descending Rank Order ... . ,. ... ... ..... 90

Table 4.7 Five Factors Structure of Managerial Competencies...... ... ...... 92

Table 4.8 A Five Competency Groupings derived from the Factor Analysis Results............ ... ... ... ............... ............... ...... 96

Table 4.9 Competencies across Managerial Levels ... .... , ... , ... . , . .. , ... .... 97

Table 4.10 Competencies across Functional Areas... ...... ...... ... ... ... ... ... 101

Table 4.11 Competencies across Five Telecommunications Companies ... .. , ...... ... ... ... .. , ... ... ... ...... ... ........ , .... ,. .. . . .. 104

Table 4.12 Competency Groupings... .......... .. ...... ...... ............ .......... 110

Vlll

Figure

Figure 1 .1

Figure 2.1

Figure 2.2

Figure 2.3

Figure 2.4

Figure 2.5

Figure 5.1

LIST OF FIGURES

Title Page

Foreign Equity in local Telecommunications Companies... ... .... 8

Human Competence in the fonn of an 'Iceberg'... ... . . . . . . . . . . . . . . 29

Competence Model... ... ... ... .. . ... ... ... ... ... ... ... ... .. . . .. . .. ... ... 35

Whetten and Cameron's Nine Critical Management Skills... ... ... 37

Competence at different levels . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Generic Managerial Competences... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1

A Model for Managerial Competencies... .. . . . . . . . . . . . . . . . . . . . . . . . . . 1 22

IX

AMA

CEO

CMED

GDP

HRD

KLSE

MCI

MIM

MSC

WTO

NFMED

ROC

ROI

LIST OF ABBREVIATIONS

American Management Associat ion

Chief Executive Officer

Council for Management Education and Development

Gross Domestic Product

Human Resource Department

Kuala Lumpur Stock Exchange

Management Charter Initiative

Malaysian Institute of Management

Multimedia Super Corridor

World Trade Organisation

National Forum for Management Education and Development

Registrar of Companies

Return On Investment

x

ABSTRACT

Abstract of thesis presented to the Senate ofUniversiti Putra Malaysia in partial fulfilment of the requirements for the degree of Master of Science.

A STUDY OF PERCEIVED MANAGERIAL COMPETENCIES IN THE TELECOMMUNICATION INDUSTRY: A MALAYSIAN PERSPECTIVE

By

AMY YEO CHU MAY

May 1999

Chairperson Dr. NuroI'ain Mustapha, Ph.D.

Faculty Malaysian Graduate School of Management

This study was conducted with the aim of providing an insight into the

competency study from the Malaysian point of view, in general, and

telecommunication industry, in particular. Specifically, it is the objective of this study

to identify a list of competency elements and to determine whether they are necessary

or important for manager� to perform their managerial jobs.

Four hypotheses were formulated to achieve the objectives of the study. The

four hypotheses were: 1) Managers do not perceive generic competencies to be

necessary in carrying out their jobs, 2) There is no significant variation of competency

elements across managerial levels, 3) There is no significant variation of competency

Xl

elements across functional areas, 4) There is no significant variation of competency

elements across organisations in the industry.

Data for this study has been collected primarily through structured

questionnaires. The ninety-one competency elements used in this study were based on

the questionnaire developed by Hunt and Wallace ( 1997). Analysis of the data was

performed using the Statistical Package for Social Science (SPSS). Several statistical

tools such as descriptive analysis, factor analysis, analysis of variance and bonferroni

post-hoc multiple comparison were used to analyse the data. The major findings are as

follows:

Using descriptive analysis, the mean score for the ninety-one competency

elements were ranked according to descending order. The findings indicated that

managers perceived all the ninety- one competency elements as necessary for them to

perform their jobs. Of the nine-one competency elements, more than 80% of the

elements were perceived as necessary, pointing to the generic nature of the

managerial competencies. Thus, Hypothesis 1 was supported.

From the twenty-three highly rated competencies, factor analysis produced a

five dimensional competency model. These five dimensions were categorised into 1)

problem solving, 2) personal management, 3) communication and integrity, 4)

organisation knowledge, 5) image and direction.

XlI

Statistical tools such as ANOVA and Bonferroni Post Hoc multiple

companson were used to determine variation of competency elements across

managerial levels, functions and between organisations. From the analysis, it was

evidenced that there were variations across managerial levels. Nine (39%) out of

twenty-three elements were significantly varied between top and lower level

managers. Thus, the hypothesis 2 was less than partially supported.

Some significant results were also shown pertaining to the variation of

competency elements across functional areas. Out of the twenty-three elements, six

elements (26%) were significantly varied. The hypothesis 3 was less than partially

supported. In addition, the analysis produced significant results between organisations

in the industry. A total of fifteen (65%) out of twenty-three competency elements

were significantly varied. Thus, hypothesis 4 was partially supported.

The current study is timely and of importance especially to managers in the

telecommunication industry. They could utilise the competency model for managing

human resources such as in recruitment and selection, training and development, and

performance appraisal. The findings could also provide further information on the

usefulness and value of the generic competency model of Hunt and Wallace and it

could further widen the applicability of the generic competency model across culture

and industry.

xiii

ABSTRAK

Abstrak tesis yang dikemukakan kepada Senat Universiti Putra Malaysia sebagai memenuhi keperluan untuk Ijazah Master Sains

PENGAJIAN KESEDARAN KECEKAPAN PENGURUSAN DALAM INDUSTRI TELEKOMUNIKASI: DARI PERSPEKTIF MALAYSIA

Oleh

AMY YEO CHU MAY

May 1999

Pengerusi Dr. Nurol'ain Mustapha, Ph.D.

Fakulti Pusat Pengajian Siswazah Pengurusan Malaysia

Kajian ini telah dijalankan bertujuan untuk memberi suatu pemahaman

kecekapan dari pandangan perspektif konteks Malaysia amnya, dan industri

telekomunikasi khususnya. Objektif kajian ini ialah untuk meneliti dan memastikan

satu senarai unsur-unsur kecekapan yang perlu atau penting untuk pengurus-pengurus

semasa menjalankan tugas mereka.

Empat hipotesis telah dihuraikan untuk mencapai objektif kajian ini. Ianya

adalah: 1) para pengurus tidak menyedari sifat kecekapan umum adalah perlu semasa

menjalankan tugas mereka. 2) tidak ada perbezaan yang menonjol pada unsur-unsur

kecekapan di antara peringkat pengurusan. 3) tidak ada perbezaan yang menonjol

pada unsur-unsur kecekapan di antara bahagian-bahagian yang berfungsi. 4) tidak ada

XlV

perbezaan yang menonjol pada unsur-unsur kecekapan di antara organisasi-organisai

dalam industri itu sendiri.

Data untuk kajian ini dikumpul terutamanya menerusi penggunaan soalselidik

yang distruktur khas. Sembilan puluh satu unsur-unsur kecekapan yang digunakan

dalam kajian ini berdasarkan kepada soalselidik yang dibentuk oleh Hunt dan

Wallace (1997). Pakaj Perangkaan Sains Sosial (SPSS) telah digunakan untuk

menganaiisiskan data-data yang diperolehi dari soalselidik. Selain daripada itu,

kaedah-kaedah perangkaan seperti analisis deskriptif, analisis faktor, ANOV A dan

sebagainya telah digunakan untuk menganalisiskan data-data tersebut. Hasil kajian

utama adalah seperti berikut:

Dari analisis deskriptif, perhitungan purata untuk sembilan puluh satu unsur

kecekapan telah diatur mengikut susunan urutan menurun. Hasil kajian tersebut

menunjukkan bahawa para pengurus menyedari sembilan puluh satu unsur kecekapan

perlu ketika melaksanakan tugas mereka. Dari senarai sembilan puluh satu unsur

unsur kecekapan, lebih daripada 80% unsur disedari mustahak, menunjukkan sifat

kecekapan pengurusan bersifat umum. Oleh yang dernikian, hipotesis 1 telah

disokongi.

Dari dua puluh tiga unsur-unsur kecekapan yang terpenting, analisis faktor

telah menghasilkan model kecekapan lima dimensi. Kelima-limanya telah

xv

digolongkan kepada 1) penyelesaian masalah, 2) pengurusan perseorangan, 3)

komunikasi dan ketulusan, 4) pengetahuan organisasi, 5) imej dan haluan.

Kaedah-kaedah perangkaan seperti ANOV A dan sebagainya telah digunakan

untuk menentukan perbezaan unsur-unsur kecekapan melintasi peringkat pengurusan,

fungsi dan di anatara organisasi. Dari analisis tersebut, terbukti adanya perbezaan

melintasi peringkat pengurusan. Sembilan (39%) dari dua puluh tiga unsur-unsur amat

berbeza antara peringkat pengurusan atasan dan peringkat pengurusan bawahan.

Maka, hipotesis 2 adalah kurang dari disokongi secara tidak menyeluruh.

Terdapat juga hasil-hasil kajian menonjol terhadap perbezaan unsur-unsur

kecekapan dari aspek bahagian-bahagian yang berfungsi. Di antara dua puluh tiga

unsur ini, enam (26%) daripadanya telah menunjukkan perbezaan menonjol. Oleh

yang demikian, hipotesis 3 disokongi secara tidak menyeluruh. Tambahan juga,

analisis ini mengemukakan hasil menonjol antara organisasi-organisasi dalam industri

ini. Sebanyak lima belas (65%) dari dua puluh tiga unsur-unsur kecekapan menpunyai

perbezaan yang menonjol. Maka, hipotesis 4 telah disokongi dengan separuhnya.

Kajian semasa ini amatlah tepat pada masa ini, dan penting terutama sekali

kepada para pengurus dalam industri telekomunikasi. Para pengurus boleh

menggunakan model tersebut untuk menguruskan sumber manUSIa seperti

pengambilan dan pemilihan, latihan dan pembangunan serta penilaian prestasi. Hasil

kajian tersebut juga boleh menyumbangkan maklumat-maklumat lanjut berkenaan

XVI

dengan faedah dan nilai model kecekapan umum yang dibentuk oleh Hunt dan

Wallace dan penggunaan model kecekapan boleh juga diperluaskan melintasi

kebudayaan dan organisasi.

XVIl

CHAPTER ONE

INTRODUCTION

This chapter presents the background of the study, problem statement,

objectives of the study, conceptual framework and hypotheses of the study. The

chapter also cover importance and assumptions of the study.

Background

Organisations in nearly every sector of the economy in Malaysia were facing

increases in the rate of environmental change, and corporate managers were making

major structural changes so that their organisations were able to adapt to the new

conditions. Increased global competition, technological innovation, and more

sophisticated customers with a wider range of needs, are just some of the forces

which have made the telecommunications industry, in particular, more turbulent and

adaptable to changing conditions.

2

Most organisations probably have tried at least one of the new wave of

human resources strategies that have made a splash in the marketplace in recent

years. Re-engineering, downsizing, total quality management, teams and a wealth of

other processes were being tried as organisations seek a competitive edge in an ever

changing business climate. One of these innovative strategies was the use of

organisational and individual competencies to focus on organisation in its critical

success factors and to develop individual behaviour that support "core

competencies" (Tucker, 1994).

Recently, managers were now encouraged to list the competencies that

organisations needed to operate successfully. These competencies are then used in

selection, promotion, appraisal, counselling and vocational guidance. In fact,

whether it was a very small business or a multi-billion ringgit organisations,

managers were aware of the importance of the competency-based for the said

objectives.

Environmental ''triggers'' precipitating strategic change have included the

impact of new technology, new competitive arrangements such as the growth of

mergers, acquisitions, strategic alliances, take-overs, and joint ventures, and change

to the context in which organisations new operate.

In order to respond to increased customer sophistication and greater

international competition, many organisations attempted to redefine their mission

3

and strategy, to diversify into new areas and to develop new products and services

more rapidly. There has also been more emphasis on product and service quality and

on "customer care", with organisations often introducing cultural change

programmes to emphasize more commercial and less bureaucratic values and

pressure on staff roles, with structural changes introduced to make the organisation

more decentralised, flexible and responsive. All these have been perceived as

requiring new managerial skills and competences.

Problem Statement

The Scenario of the World Telecommunications Industry

On February 15, 1997, the World Trade Organisation (WTO) signed an

agreement that liberalised world wide telecommunications services significantly.

The agreement signed by 69 countries appeared to pave the way for the global use of

mobile telecommunications equipment.

This move has reflected the concerted effort by the parties involved to open

up their markets gradually. The vanous signatories, which accounted for

approximately 90 per cent of the world's telecommunications services, have

addressed a wide range of issues, including future policy directions, legislative

structure, market liberalisation and management of cross-boarder systems.

4

The agreement also provided that signatory countries were to open up their

telecom market to more foreign firms and to grant more licences and allow increased

competition. However, the extent to which countries have committed to open their

markets varies as the terms of the agreements were not unilateral.

In terms of the specific area of market liberalisation in the wake of these

negotiations, the United States of America was moving towards an open market in

all areas of telecommunications while Canada has dropped its requirement for equal

usage in mobile satellite systems and has pledged to remove existing providers'

exclusive operating rights by 2002.

Within the European Union, Spain and Portugal were scheduled to introduce

market liberalisation by the end of 1998 with Ireland and Greece following in 2000

and 2003, respectively elsewhere within the continent, Norway and Ireland were of

course for full liberalisation, and Switzerland had agreed to end monopoly rights

within its telecommunications to competition by 2003. Romania was aiming for

cellular liberalisation by 2002 and Bulgaria was set for full competition by 2003,

Within Africa, Ghana the Ivory Coast and Tunisia have agreed to open up mobile

telecommunications service within their boarders.

A similar situation prevailed in Southeast Asia and the Pacific region where

Australia, Hong Kong, Japan, Mauritius, New Zealand, and Philippines and

PERPUSTAKAAN SULTAN ABDUL SAtM,u UNIVERSm PUTRA MALAYSIA

5

Singapore have signed up for varying degrees of international provider access until

2000.

Malaysia, was no exception. Since 1991, the Government of Malaysia has

liberalised the telecommunication sector. Over the past few years the Malaysian

government had licensed multiple supplier of basic and value-added services in the

industry. These service providers were introducing more state-of-art services

including videoconferencing. telecommerce and teleservice, thus producing

opportunities for joint-ventures for the development of new products and services in

the industry. In July 1996 the Malaysian government decided to allow her seven

existing communication companies to operate without merging or buying each other

out. These seven companies were:

• Telekom Malaysia Berhad (STMB) - (originally a government body with

total monopoly, now corporatise but still partly owned by the

government) offered fixed-line network and mobile services.

• Celcom (Malaysia) Sdn Bhd - offered mobile service, was licensed to

operate a fixed-line service and was about to invest in low-orbit

satellites.

• Binariang Berhad - offered mobile seTVlces, own Malaysia's first

satellite (MEASAT) was licensed to operate a fixed-line network.

6

• Time Telecommunications Sdn Bhd - owned a fibre-optic network along

the length of the peninsula, offered full facilities for fixed and mobile

telephones, payphones and operates an international gateway.

• DiGi Telecommunications Sdn Bhd (Formerly known as Mutiara

Telecoms) - offered mobile services, has an international gateway and

was licensed to operate a domestic fixed-line network.

• Mobikom - offered mobile service.

• Syarikat Telefon Wireless - provided wireless local loop and was

licensed to operate a fixed-line network.

The Scenario of the Malaysian Telecommunication Industry

In developing Malaysia from an agriculture society into industrial society,

and now towards an information-rich society, the development of the information

superhighway, in general, and the Multimedia Super Corridor (MSC) in particular,

through the telecommunication infrastructure, was given priority by the government.

The merging of telecommunications, broadcasting and computer technologies was

expected to improve the quality of telecommunications services as well as bring

changes in lifestyle and the way business is conducted. International strategic

alliances among telecommunications, cable and video, broadcasting and computer

operators were also expected to enhance the benefits of synergy derived from the

merging of these technologies. With interactive multimedia along the information

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superhighway, physical commuting would be reduced with teleconferencing,

telemedicine, distance learning, video on demand, home banking and home

shopping, networking, facilities through development in telecommunications

infrastructure, would lead to improved quality life for the Malaysian public.

Private operators were expected to invest a total ofRM25.4b during Seventh

Malaysia Plan (7MP -1995-2000) whilst development allocation for

Telecommunications and Post amounted to RM25.5 million. The telecommunication

sub-sector was expected to be one of the highest growth sectors of the economy with

advancement of the telecommunication technology.

The industry was expected to see many changes over the next few years. The

prime reason for this was the proposed MSC project, which would feature high

speed telecommunications capabilities. Although the actual impact of MSC project

was yet unknown, it cannot help but cause growth in the sector and strong

competition among the telecommunication providers. However, due to the current

economic crisis. some operators were struggling to survive. To lend them some

assistance, the government recently raised the ceiling on foreign equity shareholding

in local telecom firms to 61 % in the hope that there would be some foreign capital

injection.