Provide evidence of the comment given
3.0 Findings and Discussions
Nature of organisation – profit or non-profit
Proton is a profitable company.Proton is the national car manufacture set up to produce cars and revenue use to boost the Malaysia economy.Its create jobs opportunities for thousand people in Malaysia and received revenue from the sales every years. Proton producing average quality car and sales at lower price targeting local people.The strategies Proton using is working because local consumer especially average income level consumer in Malaysia capable to buy the product even though in average quality.It is proven by Product such as Proton Wira and Proton Saga which contributing high sales and revenue for Proton.Proton also had listed in Bursa Malaysia and gaining more revenue with the majority market shared with high price.
Management Systems
Describe and comment each of the
characteristic:-Planning
A plan is a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions. A planning is often called the primary management function because it establishes the basis for all the other things managers do as they organize, lead and control. A planning encompasses defining the organization’s objectives or goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities.
Proton stategy was to become the cheaper, lower price car manufacture for the local consumer in Malaysia but over the years Proton had produce many product with cheaper price which has been enough for proton to gain knowledge in the automotive industries in terms of technologies and innovative.On 2012 it has been decided that Proton need to be step further as world-class car maker and they had proceed the new planning with launching new model such as Proton Suprima S. Proton immediate plan would be to change its strategy from being a maker of cheap
cars to become a world-standard car manufacture to increase the interest of local consumers who tends to have more standards cars as trend.They first production was Proton Saga which is target at local consumer at lower price but changing its production line with producing more standard car with standard price .Proton is also trying to gain consumers confidence by changing public perception of the brand.
Organizing (Culture, Structure)
Assign responsibility for task accomplishment includes a performance to attain goals, products, services, efficiency and effectiveness.
i) Organizational Structure
In making structural decisions, managers have some common designs from which to choice between two types that a traditional organizational designs and contemporary organizational designs. Traditional organization designs include a simple structure, functional structure and divisional structure. Another one, contemporary organizational designs include team structure, matrix-project structure and boundaryless structure.
ii) Organizational culture
Other than quality management system, advancement in research and development and high financial capitals, organizations need a corporate culture that constantly reminds its employees of the company's main objectives. According to Proton, each employee practices the company's shared values of guiding their behaviour with other employees and customers. Their corporate culture which is highlighted in their value below is an essential police for internationalizing as customers need quality products and customer oriented services in order to make purchases, while Proton needs to innovation, teamwork and speed as a way of maintaining and gaining competitive advantage, and finally caring and honesty is essential to gain the full trust of the stakeholders in international markets.
Quality - Proton ensures continuous quality improvements for its customers through
delivering of products that positively conceptualized and manufactures.
Customer focus – the company maintains that customers' remains their priority and they
Innovation – Proton continues to challenge automobile conventions by seeking new and
better ways to undertake their day-to-day activities through viewing change as an opportunity.
Teamwork – the workforces trust, share and respect knowledge as a means of fostering
productivity through teamwork.
Speed – Proton claims to operate on a "can-do" attitude and will never rest until they
find solutions to each challenge.
Caring – in their quest to always be a responsible corporate citizen, Proton invest in
safety and health of its workforce and the environment.
Honesty – Proton allows transparency in their organizational system and takes
responsibilities for their own actions.
Leading
Use influence to motivate employees. Leadership is the ability to influence people toward the attainment of goals.
There is probably no topic more important to business success than leadership because it occurs among people, involves influence, and is used to attain goals. Influence means that the relationship among people is not passive. Influence is designed to achieve some end or goal.
Leadership evolves as the needs of the organization change. Leadership has evolved with technology, economic, labor, social, and cultural changes
Theory of Michigan Studies is choosen by Proton Holdings Berhad which is introduced by Rensis Likert, a researcher at University of Michigan. He identified two basic forms of leader behavior.
Proton Holdings Berhad focuses most on Employee-centered leader since we think that this type of behavior tends to be more effective. This is because the welfare of the employees is guaranteed by Proton Holdings Berhad. Form this action, Proton Holdings Berhad tends to increase the production of the car produced.
Employee-centered leader
The managers are interested in developing a cohesive work group and ensuring that employees are satisfied with their jobs. Their primary concern is the welfare of subordinates.
The inspire action that proton have taken in the past year and the courage step that Proton keep taking is responsible by the creator, de facto who is still leading Proton until now.Tun Dr Mahathir Mohammad, ex-Prime Minister of Malaysia currently the newly appointed Chairman of proton Holdings Bhd.Tun Dr Mohathir have the gut to make Proton, the national car manufacture whichneed a lot efforts and a lot miracle to be successful since Malaysia have small internal market.Mahathir manage to overcome some strategies to make Proton acceptable by local cosumer and also the stategis to exported Proton product to overseas.However a great leader need great supporter around him which is the only things Mahathir don’t have.The executive ang the Top management are not corporativeand not capable to help Proton survive in this crucial industries.
Proton also used leadership development as strategies to develop their potential leaders in the organization. There are six elements in this strategy:
1. Training & development (development programs congruent to the needs of job competency)
2. Career development (define a career path for development)
3. Performance management (plan objectives, performance coaching and review between manager & subordinate)
4. Succession planning (Identify top candidates for the organization’s most important value-added jobs)
5. Reward & compensation (Measure job related behaviours required to meet job responsibilities)
6. Recruiting & selection (attracting top talent)
Controlling
Monitors activities and make corrections. Control is the management function that involves monitoring activities to ensure that they being accomplished as planned and correcting any significant deviations. The control process is a three steps process of measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards
Proton Holdings Berhad use pre-action control to make sure their car has quality and always sold well. Proton always survey the type and model in high ranked and as what buyer like it. For example, if the car engine have a bit fault in wire ring and make the car broken, Proton would not accept the car to be in their showroom because for them quality is important.
Post-action Control
Proton Holdings Berhad use post-action control to focus on the outputs of their company after the transformation process is complete. It is known as corrective control. For example, Proton always surveys their buyer if they satisfied with the car or not.
Internal Controls
The Board of Proton acknowledges its overall responsibility for maintaining a system of internal controls that provides assurance of effective and efficient operations and compliance with laws and regulations and also its internal procedures and guidelines. The size and complexity of the operations may give rise to risks of unanticipated or unavoidable losses. The system of internal controls is designed to provide reasonable but not absolute assurance against the risk of material errors, frauds or losses occurring. The Board Audit Committee reviews the effectiveness of the system of internal controls, which covers financial, operational and compliance controls, and also risk management.
The Board also recognizes the importance of sound internal controls and risk management practices to good corporate governance. The Board has an overall responsibility for the Group’s system of internal controls and its effectiveness, as well as reviewing its adequacy and integrity. The Group’s system of internal controls is designed to manage the principal business risks that may interfere with the Group from achieving its business objectives. The system, by its nature, can only provide reasonable but not absolute assurance against any material misstatement or loss occurrence.
Code of conduct and disciplines
Proton has in place a Code of Conduct and Discipline. Every Employee is required to comply with this said code and as may be determined by the Board,
from time to time. This code consists of matters, prohibitions, duties or procedures relating to his/her employment. Such code may be modified, added to, substituted for or otherwise amended from time to time as the Board deems fit. An employee is also required to comply with the penal code of the country.
The Proton Group has established specific rules and regulations to govern the conduct of its employees called as Code of Ethic. The Directors and employees of Proton Group are expected to obey all laws in conducting business and to always act with honesty, integrity, loyalty, trustworthiness, fairness and responsibility. It is Proton’s policy and Management’s responsibility to apply these rules fairly and equitably to all employees.
1. Establish standards
Proton has establish not very quality but good product in order togiven lower price to the product that they sold.They establish standards at average quality for all the product that had been produce by them but past few years Proton had made changes over their standards where they establish new standards with more quality and better improvement.
1890, Proton has produce its first car Proton Saga which is in average quality with more cheaper price compare to the imported cars.Since then Proton had producing more cars model but still in average quality such as 1990,Proton Saga Iswara and Proton Wira, on 2000,Proton Waja ,Proton Gen-2,Proton Persona and on 2010 with ProtonExora and Proton Saga(second generation). In 2012, Proton has change their standards quality with Proton Preve which are of good and better quality along with stategy change made bu Tun Dr Mahathir for proton to become a world-standard car manufacture an on 2013 they prove it by producing another good quality car ,Proton Suprima S.
2.Measuring Performance
Proton performance through the years is a little bit rough but with their experts,they measuring every performance of the years and Proton manage to survive thanks to measuring and making more strategies to boost their performance.
Proton Saga lauched on 1985 it got positive response from the Malaysian but poor sales due to Proton inability to meet the high demand.However on 2002, Proton manage to bounce back and recorded its highest ever sales volume with Proton Wira. After that Proton sales gradually decreased in the following five years due to competitive offerings from Produa. Through the yeas 2008 and so on the sales for Proton product had recovered slightly.
3.Compareperformance against established standards
Proton good performance when producing their first product is because they had established standards that could attract the local consumer.They cheaper price due to the average quality standards manage toincrease their sales.However when there is a competitors establish the same standard its cause Proton sale to drop much that expected.Then Proton change they standard on 2012 and it is manage to increase Proton performance a little.
4.Determine need for corrective action.
Proton improving their product with new generation and more types to offer and more better saloon car design with the same quality and price.It manage to caught consumer and other media eyes with the design and with more convenient and family friendly designProton steping futher on 2012 when Tun Dr Mahathir made change strategies to established more quality product to increase Proton performance not dramatically but increasing bit by bit every years.
Decision Making
Decision making is the process of identifying opportunities. A decision is a choice made from available alternatives. Decision making can take longer, as many of the companies are family owned and the tradition is for the family to thoroughly discuss a particular proposition before committing the business to it. Equally, the chief executive is often also the head of the family, and securing time with this individual may be difficult. Face-to-face meetings are considered to be very important. Decision making is typically described as choosing among alternatives, but this view is overly simplistic because decision making is a process rather than the simple act of choosing among alternatives. Decision making as a set of six steps that begins with identifying a problem, it moves through selecting an alternative that can alleviate the problem and concludes with evaluating the decision’s effectiveness.
Six Steps in the Managerial Decision Making Process
1. Recognition of Decision Requirement – identify problem or opportunity
Proton sales performance and profit has been identified inreducing manner. Although the firm is making good sale but they still not reached a good sale. The main factor that contributing to the firm’s profit is the product and services. Besides that, image is an overall view and perception people have of Proton, based on certain factors have affected the image of proton. By this case, its affects the Proton’s name.
2. Diagnosis and Analysis – analyze underlying causal factors
Governments statistic on accidents show high number of accident , most of the accidents involves Proton cars which caused by the defective elements of the car parts. investigators also provide proofs that the accident happen due to failure of the car parts such as break failures, engine failure, and control failure. These failures caused by poor controlling and monitoring in production activities.
3. Develop Alternatives – define feasible alternatives
Proton is facing in both product line as well as after-sale services is ethical practices which involves marketing ethics, productions ethics, human resource ethics, accounting ethics and intellectual property ethics.
4. Selection of Desired Alternative – alternative with most desirable outcome
Maintaining the quality and services should be superior in Proton’s responsibility. Employee and staff employed should improve their skill and knowledge about the product and businesses. Marketing staff can improve knowledge of the cars they are promoting and the management should give a proper training.
5. Implementation of Chosen Alternative – use of management persuasive abilities to execute
Proton should be more concern on ensuring the product is fully functioning in the proper order before executing the assembly of it. production emphasizes the responsibility of Proton to ensure the safety of the product to its customers regardless on either it manufacture the car parts or not. However, management have to appreciate the
contribution made by Proton with the employee to pay them higher salaries and allowances.
6. Evaluation and Feedback – gather information about effectiveness.
Proton’s immediate plan would be to change its strategy from being a maker of cheap cars to become a world-standard car manufacturer. Besides that, Proton has introduced automobile car that is not too polluting the air with emissions, carbon dioxide and monoxide. This is shows that the proton has increased the level of quality of their production
To facing certainty and uncertainty Proton have to facing risk factor. Various risk assessments were performed in the year under review specifically for their operations in every market. Updates on mitigation plan are reported to the GRMC and BRMC respectively on a quarterly basis. As the Group’s future lies in expanding into the export markets, it is imperative that efforts are taken to ensure that all risks factors faced by the organisation are effectively managed:
i) Industry and Business Risks
The global automotive market is highly competitive. Intense competition from other automotive manufacturers is constantly being faced by Proton in the segments which it operates. Competition has intensified amidst difficult overall market conditions due to the weak global economy. Each market that Proton competes in has been subjected to considerable volatility in demand. The large extent of social, political and economic conditions in those markets including the introduction of new technologies and vehicles are the main elements in the competition war. The future success depends on the ability to offer new innovative competitively priced products that meet customer demand timely particularly relating to quality, safety and reliability. The timely introduction of new models, offered at competitive prices, meeting customer preferences and demand is crucial.
ii) . Financial Market and Economic Risks
The overall business operations are subjected to currency and interest rates fluctuations which may affect the pricing of the end product sold, raw materials and components. Use of certain derivative financial instruments including interest rate swaps and increased localised production
helps reduced the effects. Escalation of prices for raw materials used in the Group and its suppliers in manufacturing the end products and components may lead to higher production costs and subsequently pose a negative impact to the projected profit and adversely affect the ability to raise capital for future growth.
iii) Political, Regulatory and Legal Risks
The automotive industry is subjected to various laws and government regulations including vehicle safety and environment pressure such as emission levels, fuel economy, noise and pollution. This has exposed the Group to risks related to recalls for vehicle that may not comply with the safety standards within the law and regulation. In addition, new tariffs, trade barriers, taxes and levies, enact price and exchange control and local protection imposed by government or countries in which Proton operates, has also influenced the Group’s strategic objectives and decision making. Global issues and events such as political instability, natural calamities, epidemics, terrorism and country sentiments may also affect Group business operations.
Apart from risk management activities, the Board and Management have established other processes for identifying, evaluating and managing significant risks faced by the Group. They continue to strive in enhancing and implementing the internal control system to manage those risks that could affect the Group’s growth and financial viability. These processes include updating the system of internal controls when there are changes to the business environment or regulatory guidelines. The key elements of the Group’s control environment include:
Board Committees Board Audit Committee
Organisation Structure and Management Committees Group Internal Audit Division (GIAD)
Staffing
Proton used the simple belief that every effort shall never go unrewarded. They continue to thrive and share on the basic qualities of honesty, enthusiasm, creativity and respect for
co-workers and customers. As a brand that is committed to be better, they provide extensive training in pursuit of enhancing the fullest potential in every employee to his or her optimum capacity. Their management ensures that every deserving employee receives equal opportunity to advance and progress within the organisation.
For Proton employees are the company's assets. It is not beyond reason to realise that the wisest investment would be in the employees' development. The employee benefits at Proton were structured to acknowledge individual effort, stimulate new ideas, encourage outstanding sales performance and last but not least, to promote teamwork and character building.
The management has carefully crafted an employee benefits plan that comprises of areas such as salary increments, variable pay and performance incentives, a retirement scheme, health insurance, life insurance and accidental insurance with regards to financial protection for the employee's beneficiaries.
Proton also provides a solid support system in assisting each employee to develop a successful business relationship internally and integrating the functions in the corporation, leading to a more culminated sales record and delivery. In other words, the Management conducts its business with the utmost transparency in aspiring to ensure that a mutual objective is achieved.
Proton used Talent Management System as to cater the right talents at the right places and the right time. This system will enable the executives to realize their full potentials and talents. Recruitment of expatriates and International employees are a process of assimilating new skills, knowledge & culture. It is tailored to individual role profile and it is divided into 2 programs, which are:
Career Accelerator is the Executive Development Program training and development program.
Functional Breath is Multi business exposure via staff transfers, secondment, special assignments to give global experience and corporate exposure.
Proton is name that is familiar to everyone in Malaysia. The success of Proton is no different as it started as a joint-venture business with Japanese automotive big brother Mitsubishi Motors in the early 1985 and quickly climbed the success ladder due to huge price cuts compared to foreign brands and government's protectionism polices meant to protect local automotive brands. Proton quickly internationalized into the global market through a distribution and wholly owned subsidiaries, strategic alliance, joint venture and foreign direct investments across the globe. Each chosen strategy was discovered to be a choice based on numerous researches designed to find the most effective and efficient entry mode in the respective market. Planning and managing change, both cultural and technological, is one of the most challenging element in organisation. Although proton faced numerous setbacks during internationalization, such as the perception of the brand as being low quality and low residual value, changing government policies and huge competitions, Proton was quick to identify this issue and establish solutions towards finding the right way forward in order to maintain and increase their financial and intellectual benefits. In other to ensure consistent productivity and maintenance of their brand quality, Proton has developed numerous human resource management strategies which are closely related to those adopted by Japanese automobile manufacturers. Such strategies includes recruitment of the best and brightest, classification of their job positions into two main categories to ensure efficiency and inculcating dedication through human resource education and training.
