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.
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:
Renowned for its automotive and motorcycle manufacturing, Honda Motor Company is a distinguished Japanese multinational corporation with a global presence spanning over 30 locations, including Malaysia. Its commitment to innovation is exemplified through its development of environmentally friendly vehicles, such as hybrid and electric models.
6. Intel Corporation, Intel Microelectronics Sdn Bhd:
Intel Corporation, a trailblazer in processor technology, operates globally from California, managing a vast network of over 50 locations, including its Malaysian subsidiary, Intel Microelectronics Sdn Bhd. Recognized for its commitment to research and development, Intel invests heavily in advancing semiconductor technology, driving progress in computing worldwide.
7. Panasonic Corporation:
Headquartered in Osaka, Japan, Panasonic Corporation is a Japanese multinational with a presence in more than 55 locations worldwide, offering a diverse portfolio of products and services, including in Malaysia. Its focus on sustainability is evident through initiatives like eco-friendly product designs and renewable energy solutions.
8. Petroliam Nasional Berhad (Petronas):
Known as “Petronas,” this Malaysian oil and gas giant operates across 11 locations, playing a pivotal role in the energy sector locally and internationally. Petronas’s commitment to corporate social responsibility is demonstrated through various community development projects and environmental conservation efforts.
9. Proton Holdings Berhad:
Proton Holdings Berhad a Malaysian automotive company, collaborates with partners across 23 countries, focusing on automobile manufacturing and innovation. Its emphasis on safety and reliability has earned it recognition in the global automotive market, with Proton cars known for their quality and performance.
10.Sime Darby Berhad:
A prominent Malaysian multinational, Sime Darby Berhad in five key sectors across 25 countries and four territories, solidifying its global presence in plantation, motors, industrial equipment, property, and logistics. The company’s commitment to sustainable practices is evident through its efforts to promote environmental conservation and responsible business operations.
11.Tenaga Nasional Berhad (TNB):
As the largest power company in Southeast Asia, TNB is a leading Malaysian electricity provider, integral to the nation’s energy production and distribution, under the stewardship of Khazanah Nasional. TNB’s focus on innovation includes investments in renewable energy sources like solar and wind power, contributing to Malaysia’s transition to a greener energy future.
12. YTL Corporation Berhad:
YTL Corporation Berhad a Malaysian infrastructure conglomerate, has expanded globally and operates in 10 countries, with ongoing plans for further growth and development. The company’s diversification into telecommunications, utilities, and hospitality reflects its strategic vision for sustainable growth and market leadership.
13. Google:
Google a globally recognized internet giant, serves as a preferred platform for information and services worldwide, including in Malaysia, where it maintains a significant presence. Through initiatives like Google for Startups and Google Digital Skills, the company supports Malaysia’s digital ecosystem and fosters innovation and entrepreneurship.
14. Nestle:
Headquartered in Switzerland, Nestle is the world’s largest food and beverage distributor, operating in 191 countries, including Malaysia, where it produces renowned brands such as Nestle, Maggi, KitKat, and Milky Bar. Nestle’s commitment to nutrition, health, and wellness is evident through its product portfolio, which includes a wide range of nutritious and high-quality food and beverage options.
15. Eco World Malaysia:
Contributing to Malaysia’s real estate sector, Eco World Malaysia is actively engaged in property development, contributing to the nation’s urban growth and infrastructure advancement. The company’s focus on sustainable development includes initiatives to incorporate green building practices and eco-friendly designs into its projects, promoting environmental stewardship and community well-being.
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 product processes across different countries, allowing them to manufacture various components in region that are best suited for specific tasks, as a results, MNCS can optimize their product production efficiency and create products that are tailored to the needs of local markets.
2. Outsourcing Opportunities:
MNCs can leverage outsourcing, especially for labor intensive tasks that can be more costly in their home countries. Outsourcing to regions with lower labor costs can help reduce overall 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, which fosters economic growth and foreign investments in the region.
5. Access to a Wider Consumer Base:
Operating internationally grants MNCs access to a much larger and more diverse consumer market. 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 main 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 are operating in, which impedes on their autonomy.
2. Competition:
Unless an MNC offers products or services that are very unique and difficult to replicate, they will face competition in every country they operate in.
Once local markets become familiar with what they offer, there are risks of local businesses replicating their products and selling them at lower prices. This will intensify 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 profits can sometimes lead to economic exploitation in host countries. And this exploitation can manifest as an excessive use of natural resources and raw materials, paying low wages to local employees, or selling products at high prices to maximize profit.
In summary, while establishing an MNC in Malaysia offers many advantages, it comes with an equal amount of drawbacks. So MNCs should be mindful of where and when they are 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.
Read also: Top 10 Biggest IT Companies in Malaysia
