There are a substantial number of well-established MNC companies in Malaysia that have maintained a presence in the country for many years.
Serving as a global hub for MNCs, Malaysia offers an appealing prospect for companies aiming to initiate or broaden their operations in different regions. The nation’s cost-effective business environment adds to its attractiveness for MNC companies.
This introductory overview outlines Malaysia’s allure as a prime business location, emphasising its strategic positioning and robust business infrastructure. It lays the foundation for a more in-depth examination of the merits and demerits of establishing an MNC company in Malaysia.
Table of Contents
What Is A Multinational Corporation (MNC)?
As implied by its name, an MNC is a company that operates and oversees the production of goods or services in multiple countries, extending beyond its origin.
According to Black’s Law Dictionary, an MNC is a company or group that generates 25% or more of its revenue from operations outside its home country.
It is also referred to by various other terms, including multinational enterprise (MNE), transnational enterprise (TNE), transnational corporation (TNC), and international corporation.
What Drives MNC Success in Malaysia?
The Prosperity of Multinational Company in Malaysia:
Malaysia’s attractiveness as a thriving business destination in the Asia Pacific region can be attributed to several key factors:
- Strategic Location: Malaysia’s advantageous geographical location places it in the heart of Southeast Asia, with close proximity to Singapore, a vibrant regional business centre.
- Business-Friendly Environment: The World Bank, in its 2014 report, ranked Malaysia as the 6th most business-friendly country globally. Surpassing nations like Australia and the United Kingdom, Malaysia provides an inviting environment for enterprises.
- Robust Infrastructure: Malaysia boasts a well-established infrastructure that supports various industries and sectors.
- Skilled Workforce: The country benefits from a highly educated workforce, and English is widely utilised as a language for business.
- Efficient Transport Network: Malaysia’s exceptional infrastructure and transportation connectivity further enhance its appeal to businesses.
- The nation’s diverse, multilingual, and multicultural society has undoubtedly created numerous opportunities. Furthermore, Malaysia’s favourable World Bank ranking for ease of doing business has bolstered its reputation.
Malaysia is a global hub, particularly for offshore manufacturing and service-based operations. It’s no surprise that over 5,000 companies in Malaysia have attracted investments from multinational corporations in more than 40 countries worldwide.
Additionally, a substantial number of multinational company in Malaysia are bolstered by its foreign business participation regulations, which are notably more straightforward compared to many other Asian countries. This streamlined approach means that foreign enterprises encounter less bureaucratic obstacles when establishing a business presence in Malaysia.
List of Top MNC Company in Malaysia
1. Alphabet Inc:
Alphabet Inc. is a prominent American multinational corporation with its headquarters located in California. Operating in 30 countries, this tech giant is recognized worldwide for its diverse range of services and products.
2. Axiata Group Berhad:
Formerly known as TM International Berhad, Axiata Group Berhad is a leading Malaysian telecommunications multinational corporation. It plays a pivotal role in providing wireless connectivity to a substantial portion of the population, with seven subsidiaries under its umbrella. Over 150 million people rely on their telecommunication services.
3. BASF Malaysia Sdn Bhd:
This organisation, BASF Malaysia Sdn Bhd, is at the forefront of developing innovative solutions through the application of science and technology. They focus on creating sustainable and long-term solutions to meet the needs of society and have a presence in seven locations.
4. Exxon Mobil Corporation:
Exxon Mobil Corporation is a well-known American multinational in the oil and gas industry, headquartered in Texas. With operations spanning 21 locations, it plays a significant role in the global energy sector.
5. Honda Motor Company:
Honda Motor Company is a prominent Japanese public multinational corporation renowned for manufacturing automobiles, motorcycles, and a variety of power equipment. Their broad spectrum of power equipment is produced at over 30 locations worldwide.
6. Intel Corporation, Intel Microelectronics Sdn Bhd:
Intel Corporation, recognized for its cutting-edge processors and technological innovations, is a global leader in addressing complex challenges. Operating from its headquarters in California, this American multinational corporation manages a network of over 50 locations worldwide.
7. Panasonic Corporation:
Panasonic Corporation, headquartered in Osaka, Japan, is a Japanese multinational with a presence in over 55 locations globally. The multinational company in Malaysia is renowned for its diverse range of products and services.
8. Petroliam Nasional Berhad (Petronas):
Commonly referred to as “Petronas,” this Malaysian oil and gas company operates across 11 locations. Petronas is a major player in the energy sector, serving a vital role in Malaysia and beyond.
9. Proton Holdings Berhad:
Proton Holdings Berhad is a multinational company in Malaysia that focuses on automotive and automobile company that collaborates with partners in 23 countries across the globe.
10.Sime Darby Berhad:
Sime Darby Berhad is a prominent multinational company in Malaysia with five key sectors: Plantation, Motors, Industrial Equipment, Property, and Logistics. With a presence in 25 countries and four territories, they have established a significant global footprint.
11.Tenaga Nasional Berhad (TNB):
TNB is a leading Malaysian electricity company operating on the Peninsular of Malaysia. It holds the distinction of being the largest power company in Southeast Asia and is one of the core companies under Khazanah Nasional. TNB plays a crucial role in electricity production and supply value chain.
12. YTL Corporation Berhad:
YTL Corporation Berhad is a Malaysian infrastructure conglomerate. Over the years, it has evolved from a small construction firm into a global infrastructure company. Currently present in 10 different countries, they have plans for further expansion.
13. Google:
Google is a globally renowned internet browser widely used by billions of people. This multinational company in Malaysia stands as a preferred website for acquiring information and services, and it is a coveted workplace for many around the world.
14. Nestle:
Nestle is the world’s largest distributor of food and beverages, with its headquarters in Switzerland. Operating in 191 countries, this multinational company in Malaysia produces a variety of renowned brands, including Nestle, Maggi, KitKat, and Milky Bar.
15. Eco World Malaysia:
Eco World Malaysia is a Malaysian company actively involved in property development, contributing to the real estate sector’s growth and development.
Pros and Cons of MNC Company in Malaysia to Workers
Setting up a multinational company in Malaysia offers a range of benefits, as well as a few challenges that aspiring global companies should consider:
Advantages:
1. Specialisation in Production:
MNCs have the flexibility to distribute production processes across different countries, allowing them to manufacture various components in regions that are best suited for specific tasks. As a result, MNCs can optimise their production efficiency and create products tailored to the needs of local markets.
2. Outsourcing Opportunities:
MNCs can leverage outsourcing, especially for labour-intensive tasks that may be costlier in their home countries. Outsourcing to regions with lower labour costs helps reduce overall production expenses.
3. Economies of Scale:
By expanding production into developing countries like Malaysia, MNCs can capitalise on economies of scale. This expansion enables them to lower long-term average costs and improve overall operational efficiency.
4. Tax Advantages:
Developing countries often offer favourable tax schemes and incentives to attract foreign investors. Establishing a company in countries like Malaysia can lead to tax benefits for MNCs, fostering economic growth and foreign investment in the region.
5. Access to a Wider Consumer Base:
Operating internationally grants MNCs access to larger and more diverse consumer markets. Instead of limiting sales to a single domestic market, companies can tap into a global audience, increasing their sales potential.
Disadvantages:
1. Loss of Sovereignty:
One of the key disadvantages faced by MNCs is their need to comply with the host country’s rules and regulations. While they may be economically influential, they must respect and adhere to the laws and policies of the countries they operate in, potentially impacting their autonomy.
2. Competition:
Unless an MNC offers products or services that are highly unique and difficult to replicate, they face competition in every country they operate in.
Once local markets become familiar with their offerings, there is a risk of local businesses replicating their products and selling them at lower prices. This intensifies the need for MNCs to invest in market development, marketing, and research and development (R&D) to stay competitive.
3. Economic Exploitation:
MNCs are primarily profit-oriented entities, and this drive for profitability can sometimes lead to economic exploitation in host countries. This exploitation can manifest as excessive use of natural resources and raw materials, paying low wages to local employees, and selling products at high prices to maximise profit.
Such practices can indirectly influence policymakers to lower national minimum wage standards to remain attractive to foreign investors, as observed in countries like the Philippines, India, and Indonesia.
In summary, while establishing a multinational company in Malaysia offers numerous advantages, including production specialisation, tax incentives, and access to a broader consumer base, there are also potential disadvantages such as a loss of sovereignty, increased competition, and concerns about economic exploitation that MNCs should be mindful of when expanding their global operations.
Upskilling for the MNC Environment
Essential Skills for the Modern MNC Employee
1. Cross-Cultural Communication Skills:
Effective cross-cultural communication is essential in international business. Whether dealing with colleagues, clients, or customers from diverse backgrounds, it demands sensitivity, respect, and diplomacy.
Embrace an open-minded approach, conduct research, and understand cultural differences. This awareness, from interpreting workplace confrontation to maintaining eye contact, prevents misunderstandings and fosters better workplace communication.
Studies highlight that communication breakdowns are a leading cause of project failure. Listening skills are crucial, especially when working across language barriers.
2. Exceptional Networking Abilities:
Building a strong international network is vital for success in international business. Networking offers access to unexpected global opportunities, with reports suggesting up to 80% of jobs are secured through networking.
While online platforms like LinkedIn facilitate global connections, in-person networking remains crucial. Perfect your “elevator pitch” and attend industry events to meet like-minded professionals.
Diplomacy, tact, and attentive listening are key to nurturing relationships. Business school, especially an MBA or Executive MBA program, offers valuable networking opportunities with diverse peers, professors, and future collaborators.
3. Collaboration:
Collaboration is not just about networking; it’s about working effectively with others towards a common goal. Humility and confidence are vital, as it involves allowing others to lead, sharing credit, tackling problems, and giving/receiving feedback respectfully.
In an international business setting, collaboration with multicultural teams enhances cross-cultural communication skills and exposes you to fresh perspectives for addressing complex challenges. The most successful business leaders excel at collaboration, recognising the power of collective brainpower in driving company success.
4. Emotional Intelligence:
Emotional intelligence is considered a crucial asset in international business as it significantly impacts various aspects of business interactions.
Individuals with high emotional intelligence exhibit self-awareness and emotional control, enabling them to respond calmly in high-pressure business scenarios and adapt adeptly to change. They excel at effective teamwork, displaying strong interpersonal skills and a heightened sense of empathy.
To enhance the professional skills associated with emotional intelligence, researchers from Ashridge Executive Education at Hult International Business School are exploring the role of mindfulness practice in leadership development.
Continuous Learning and Development (L&D)
The pandemic and economic challenges have prompted a shift in Learning and Development (L&D) strategies. Reports indicate that 67% of HR managers are increasing L&D budgets, and L&D leaders now have a stronger presence at the C-suite level.
In the post-pandemic era, four trends can help L&D professionals address new pressures:
1. Upskill & Reskill:
Create Ecosystems: In the digital age, organisations should facilitate active skill acquisition among employees globally.
A robust and user-friendly learning ecosystem that integrates training content, learning analytics, and feedback tools can engage employees in new learning initiatives.
Various companies offer no-code solutions for building learning ecosystems, such as Leapsome and 360Learning.
2. Emphasise Video Content:
According to CIPD, video content is a highly effective and engaging format for corporate learning, as highlighted by increased usage during the pandemic.
However, video production can be time-consuming and costly, especially for multinational teams catering to diverse markets.
Automation tools for video creation, editing, summarization, and transcription are essential for optimising production cycles.
3. Localiser L&D Materials:
Overcoming language and cultural barriers within multicultural teams is crucial. Standardising L&D materials in English may not be the best approach, as not all employees may be proficient in English.
Using English as a shared language can lead to misunderstandings. Multilingual learning content production, aided by services like AI Voiceover, can save time and costs on localization and editing.
L&D’s increased attention from organisational leaders is a positive development, but L&D leaders must focus on effective utilisation of time and budgets. This involves outsourcing, automation, and self-upskilling to meet the evolving needs of the workforce in 2022.
Utilising Online Platforms for Skill Enhancement
To meet the growing demands on L&D departments in a multinational company in Malaysia, choosing the right upskilling tool is vital for data-driven decisions. We’ve compiled a list of top upskilling platforms with subscription details, advantages, user ratings, and more to facilitate informed choices.
1. Udemy:
Udemy is a leading upskilling platform offering eLearning courses for individuals and organisations. With 15,000+ courses in ten languages, it helps employees enhance their skills and stay adaptable. Udemy also allows businesses to host their content on the platform.
2. Coursera:
Coursera provides massive open online courses, fostering individual and workforce upskilling. Coursera for Businesses offers unlimited access, skill metrics, user analytics, and integrations for organisations. Managers can use Coursera courses to guide employees in skill development through engaging content, including guided Projects for hands-on training.
3. LinkedIn Learning:
LinkedIn Learning, part of the professional networking platform, offers eLearning courses to individuals. It also provides customised online learning for businesses to efficiently upskill their workforce. Tailored courses enhance learner engagement.
4. FutureLearn:
FutureLearn offers a diverse range of courses for career advancement and knowledge refreshment. It includes micro-credential programs, certifications, online degrees, and short courses.
Collaborating with 175 partners, including prestigious UK universities, FutureLearn covers various subjects with the involvement of non-university partners like Amnesty International and UNESCO.
Building Global Mindset
Employees with a ‘global mindset’ outperform their peers, as per CultureWizard’s Global Mindset Index Study. This mindset allows individuals to adapt effectively to different cultures, enhancing business interactions.
Companies emphasising intercultural skills are more likely to achieve their strategic priorities. ‘Overachieving’ companies acknowledge cultural diversity in business, in contrast to ‘underachievers.’ Promoting a global mindset as a corporate value is a key differentiator. Overachievers actively support employees in developing a global perspective and value a global mindset.
Cultural missteps, such as Walmart’s experience in Germany, highlight the importance of understanding cultural differences when expanding internationally. A global mindset doesn’t mean changing values but adjusting behaviour to interpret others’ actions accurately. CEOs must maintain authenticity while adapting their leadership style. Companies can foster a global mindset through events, recognition, and ongoing reinforcement.
The Working Culture in MNCs – Is It Right for You?
When it comes to work culture and practices, MNCs usually prioritise formal processes and procedures. Choosing the right job is one of life’s critical decisions, and in the following sections, we’ll explore the cultures of a multinational company in Malaysia.
1. Abundant Resources:
MNCs typically offer competitive compensation, bonuses, and benefits like insurance subsidies. They invest in employee training, including international conferences and skill development.
2. Structured Environment:
MNCs have well-established processes and clear policies, simplifying decision-making. Comprehensive training programs ensure employees are well-prepared for their roles.
3. Diversity:
A multinational company in Malaysia tends to have more diverse workforces, offering professional and personal networking opportunities.
4. Office Perks:
MNCs often provide additional perks like gym memberships, social events, and on-campus amenities.
When considering a multinational company in Malaysia, be sure to check Glassdoor reviews for insights into their work culture and employee experiences.
Read also: 10 Best Banks in Malaysia
Conclusion
In conclusion, Malaysia is an enticing hub for prominent MNC company, many of which have a well-established global presence spanning across 30 or more countries.
These companies enjoy a strong reputation and are highly sought after by job seekers in the country. Despite the intense competition for positions within these MNC company, Malaysia offers a conducive environment for both professional development and entrepreneurial initiatives.
The nation’s strategically advantageous location in the heart of Southeast Asia further solidifies its appeal to multinational corporations seeking to expand their operations. This distinctive combination of opportunities for career advancement and business expansion underscores Malaysia’s position as a top destination for professionals and entrepreneurs.
