THE INFLUENCE OF INTELLECTUAL CAPITAL ON THE PERFORMANCE
OF TELEKOM MALAYSIA
MAZLAN BIN ISMAIL
UNIVERSITI TEKNOLOGI MALAYSIA
BAHAGIAN A – Pengesahan Kerjasama
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kerjasama antara ____________________ dengan________________________
Disahkan oleh:
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Nama
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Jawatan
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Tarikh:……………….
(Cop rasmi)
BAHAGIAN B – Untuk Kegunaan Pejabat Sekolah Pengajian Siswazah
Tesis ini telah diperiksa dan diakui oleh :
Nama dan Alamat Pemeriksa Luar
: ……………………………………………
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Nama dan Alamat Pemeriksa Dalam
: …………………………………………….
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Nama Penyelia Lain
: ……………………………………………
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Disahkan oleh Penolong Pendaftar di SPS:
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THE INFLUENCE OF INTELLECTUAL CAPITAL ON THE PERFORMANCE
OF
TELEKOM MALAYSIA
MAZLAN BIN ISMAIL
A dissertation submitted in partial fulfilment of the
requirements for the award of the degree of
Doctor of Engineering
(Engineering Business Management)
Business & Advanced Technology Centre
Universiti Teknologi Malaysia
OCTOBER 2005
ii
I declare that this thesis entitled “ The influence of Intellectual Capital on the
performance of Telekom Malaysia” is a result of my own research excepts as cited in
the references. The thesis has not been accepted for any degree and is not concurrently
submitted as a candidate of any other degree.
Signature
:
…………………………
Name
:
…………………………
Date
:
…………………………
iii
Dedication
To my beloved mother, father and wife for their prayers, patience,
support and encouragement and to my seven children –
‘InsyaAllah’(with Allah’s help), if you believe enough, a man can
do anything.
iv
ACKNOWLEDGEMENT
I would like to thank and express my gratitude to my supervisors - Prof. Dr.
Nooh Abu Bakar, Prof. Madya Dr. Ahmad Rahman Songip, En. Abd. Halim Abd
Razak, and my dearest adviser En. Raduwan Safperwan for giving their valuable
guidance, advice and motivation, a long the way, for me to accomplish the task.
Thank you to Prof. Dr. Hamdani Saidi, the academic team members and the
supporting staff at Business & Advanced Technology Centre for giving their support
and assistance during my study at BATC.
My special thanks to Telekom Malaysia especially YBhg Dato Dr. Abd Rahim
Hj.Daud and Dato Syed Mustaffa Syed Ali who have decided to provide scholarship
and study leave for me to pursue this study. To General Manager of Human Resource
Development and the Yayasan Telekom team members, Puan Sharifah, Puan Rohana
and En. Shaharudin for their continuous support and cooperation during my study leave
period, other Telekom Malaysia management team and executives for providing
confidential information, sincere valuable thought and support. This study would not
have been possible without their assistance.
To my mother, Tok Puan for her continuous prayer and encouragement, to my
wife Fadhilah Abdullah and my children Muslihuddeen Rabbani, Ahmad Uzair, Abbasi
Madani, Faatihah, Najmuddeen Erbakan, Putri Naajihah and our new born 7th child,
Ahmad Yassin Rantissi for their prayers, patience and sacrifices. Last but not least to
my brother, En. Mohd Fahmi, my uncle En. Wanchee Jusoh and family, Ustaz Hassan
Abdul Razak and my close friends for their motivation, assistance and updates
especially during my busy and tired times.
All of the abovementioned individuals and many others have presented an
additional component of intellectual capital - the spiritual capital - to me. I have started
to slowly understand it, develop it, think more about it, and research about it. I have
become that much better and richer, intellectually and spiritually. Alhamdullillah
(Thanks to Allah). My sincerest and heartfelt thanks to all of you good people.
v
ABSTRACT
This case study investigates the influence of intellectual capital on the
performance of Telekom Malaysia. It consists of investigating the level of intellectual
capital, the effect and influence of spiritual capital, the importance of knowledge
management and managing and leveraging of intellectual capital on the performance. A
mixed method research approach is used with strategies of inquiry that involve
sequential quantitative and qualitative data collection. With broad intellectual capital
theoretical perspective guides including the spiritual capital, the data collection is done
sequentially in phases beginning with a questionnaires survey, followed by secondary
data analysis and finally the interview sessions. Independent variables are human
capital, structural capital, relational capital, spiritual capital, knowledge management
and managing and leveraging of intellectual capital and dependent variable is
performance improvement in the aspect of organisational and business leadership,
operating efficiency and business performances. The survey involves the executives to
assistant general manager levels working at various departments at the 14 states
business areas and headquarters level and the interviewees are from the general
manager to senior vice-president and CEO. Statistical techniques such as means of
variance, factor analysis, ANOVA test, regression analysis, path analysis and narrative
passages are used in analysing the data. The study indicates a positive significant
relationship between relational, human, spiritual and structural capital and managing
and leveraging of intellectual capital on the performance whereas knowledge
management has indirect relationship to the performance. This research makes
important theoretical and empirical contributions to the literature on the influence of
intellectual capital, on the effect and influence of spiritual capital and the importance of
managing and leveraging of intellectual capital on the performance of the organisation.
By having a stronger spiritual capital within the higher management to manage and
leverage the present intellectual capital, Telekom Malaysia will achieve further
performance improvement in the future.
vi
ABSTRAK
Kajian kes ini melibatkan pemeriksaan terhadap pengaruh modal intelek ke atas
prestasi Telekom Malaysia. Ianya meliputi pemeriksaan terhadap tahap modal intelek,
kesan dan pengaruh modal kerohanian, kepentingan pengurusan ilmu dan pengurusan
serta daya percungkilan modal intelek terhadap prestasi. Pendekatan kaedah bercampur
digunakan didalam kajian ini dengan strategi penyiasatan melibatkan pengumpulan
maklumat secara kuantitatif yang kemudiannya dituruti pula dengan secara kualitatif.
Dengan berpandukan kepada teori modal intelek termasuk modal kerohanian, fasa
pengumpulan data bermula dengan penggunaan borang kajiselidik dituruti dengan
maklumat sekunder dalaman syarikat dan diakhiri dengan sesi temubual. Pembolehubah
tidak bersandar terdiri dari modal insan, modal kestrukturan, modal perhubungan,
modal kerohanian, pengurusan ilmu dan pengurusan serta daya percungkilan modal
intelek, manakala pembolehubah bersandar ialah peningkatan prestasi yang terdiri dari
kepimpinan perniagaan dan organisasi juga kecekapan operasi serta prestasi perniagaan.
Borang kajiselidik melibatkan anggota diperingkat eksekutif sehingga peringkat
penolong pengurus besar dari 14 pejabat perniagaan negeri dan diperingkat ibupejabat,
manakala sesi temubual melibatkan anggota di peringkat pengurus besar, naib presiden
kanan serta ketua pegawai eksekutif Telekom Malaysia. Teknik statistik seperti Analisa
Min, Analisa Perbandingan Min, Analisis Faktor, Analisis Varian, Analisis Regresi,
Analisis Lorongan serta analisa perjalanan penceritaan di gunakan didalam proses
analisa maklumat. Kajian menunjukkan hubungan positif yang signifikan antara modal
perhubungan, kerohanian, insan dan modal kestrukturan juga pengurusan dan daya
pencungkilan modal intelek terhadap prestasi, manakala pengurusan ilmu mempunyai
hubungan yang tidak langsung dengan prestasi. Kajian ini telah memberikan
sumbangan teori dan empirikal terhadap keilmuan disegi pengaruh modal intelek, kesan
dan pengaruh modal kerohanian dan kepentingan pengurusan serta daya pencungkilan
modal intelek terhadap prestasi organisasi. Dengan mempunyai modal kerohanian yang
lebih kuat dikalangan pengurusan atasan untuk mengurus serta daya mencungkil modal
intelek yang sedia ada, Telekom Malaysia akan dapat mencapai tahap peningkatan
prestasi yang lebih baik dimasa depan.
vii
TABLE OF CONTENTS
CHAPTER
TITLE
PAGE
Declaration of the Status of Thesis
Letter regarding status classification of thesis
Supervisor’s declaration
Declaration on cooperation
1
Title page
i
Declaration of originality and exclusiveness
ii
Dedication
iii
Acknowledgements
iv
Abstract (English)
v
Abstrak (Bahasa Melayu)
vi
Table of Contents
vii
List of Tables
xii
List of Figures
xix
List of Symbols/Abbreviation/Notation/Terminology
xxi
List of Appendices
xxii
INTRODUCTION
1
1.1
Background
1
1.2
Research Problem
4
1.3
Research Objectives
5
1.4
Justification for Study
6
1.5
Organization of Thesis
8
1.6
Key Definitions and Concepts
9
Summary
10
viii
2
LITERATURE REVIEW
11
2.1
Introduction
11
2.2
Intellectual Capital and Business Performance
13
2.3
Definition and Classification of Intellectual Capital
17
2.4
The Need for a Redefinition of Intellectual Capital
26
2.5 Deficiency of Contemporary Definition of
3
Intellectual Capital
29
2.6
Spiritual Capital in Practice
30
2.7
Knowledge Management and Intellectual Capital
34
Summary
38
THE DEVELOPMENT OF A NEW MODEL OF
INTELLECTUAL CAPITAL BY INCLUDING
SPIRITUAL CAPITAL
40
3.1
Metaphor of Spiritual Capital
40
3.2
What is Spiritual Capital
41
3.3
3.2.1
Spiritual and Intelligence
43
3.2.2
Spiritual, Culture and Religion
45
3.2.3
Spiritual and Servant-Leadership Concept.
50
3.2.4
Spiritual and the New Sciences Theory
51
Organization’s Intellectual Capital Central-Triangle
Model
3.4
The Potential Relation of Spiritual Capital to
Other Forms of Capital
3.5
4
53
56
Ten Clues to the Presence of Spiritual Capital
Within Individual or Organization
57
3.6
Analysis and Comments
59
3.7
New Definition of Intellectual Capital
61
Summary
63
RESEARCH DESIGN AND METHODOLOGY
65
4.1
Research Framework
65
4.2
Research Model
67
ix
4.3
5
Questionnaire
71
4.3.1
Questionnaire Pilot-test
79
4.3.2
Sample
80
4.3.3
Data Collection
81
4.4
Secondary Data
82
4.5
Interview
86
Summary
88
DATA ANALYSIS AND DISCUSSION
90
5.1
90
Questionnaire Survey Data
5.1.1
Reliability of Measures
91
5.1.2
Respondent’s Characteristic
91
5.1.3
Accounting for Bias.
94
5.1.4
Descriptive Statistic of Variables
95
5.1.5
Survey Results
96
5.1.5.1 Human Capital
96
5.1.5.2 Structural Capital
97
5.1.5.3 Relational Capital
98
5.1.5.4 Spiritual Capital
100
5.1.5.5 Knowledge Management
101
5.1.5.6 Managing and Leveraging of
Intellectual Capital
5.1.5.7 Performance Improvement
103
105
5.1.5.8 Factor Analysis for Intellectual
Capital
106
5.1.5.9 Factor Analysis for Knowledge
Management
114
5.1.5.10 Factor Analysis for Managing
and Leveraging of Intellectual
Capital
115
5.1.5.11 Factor Analysis for Performance
Improvement
117
5.1.5.12 Test Analysis
119
x
5.1.5.13 One Way ANOVA Test for
Independent Variables Against Age
119
5.1.5.14 One Way ANOVA Test for
Independent Variables Against
Qualification
121
5.1.5.15 One Way ANOVA Test for
Independent Variables Against
Job-grades
132
5.1.5.16 One Way ANOVA Test for
Independent Variables Against
Department
137
5.1.5.17 One way ANOVA Test for
Independent Variables Against
Place of Work
142
5.1.5.18 One way ANOVA Test for
Independent Variables Against
Length of Service
151
5.1.5.19 Summary of Tests
158
5.1.5.20 Relationship Amongst Variables
163
5.1.5.21 Regression Analysis
165
5.1.5.22 Path Analysis
176
5.2
Secondary Data
180
5.3
Interview
183
5.3.1
5.4
Interview Data
Analysis and Discussion
5.4.1
Intellectual Capital
183
187
187
5.4.1.1 Human Capital
188
5.4.1.2 Structural Capital
195
5.4.1.3 Relational Capital
198
5.4.1.4 Spiritual Capital
201
5.4.2
Knowledge Management
5.4.3
Managing and Leveraging of Intellectual
Capital
209
214
xi
5.4.4
Causal Relationship
5.4.4.1 The Effect of Spiritual Capital
225
225
5.4.4.2 Human Capital, Structural Capital,
Relational Capital and Managing
and Leveraging of Intellectual
Capital
5.4.4.3 Knowledge Management
5.4.5
6
227
229
Overall Finding
230
Summary
232
RECOMMENDATION AND CONCLUSION
235
6.1
Benefits to Telekom Malaysia
235
6.2
Conclusion
236
6.3
Limitation of the Study
237
6.4
Recommendation
238
REFERENCES
6.4.1 Spiritual Capital Enhancement
238
6.4.2 Theoretical and Deployment Framework
239
6.4.3 Consequence Management System
240
6.4.4 Employees Test Profiles
240
6.4.5 Long-term Structured Training
241
6.4.6 Knowledge Management
241
242
xii
LIST OF TABLES
TABLE NO.
TITLE
2.1
Definitions of intellectual capital
2.2a
Top 20 ‘Global Most Admired Knowledge Enterprise’
yearly report
2.2b
PAGE
18
26
Top 20 ‘Global Most Admired Knowledge Enterprise’
yearly report (continue)
27
3.1
Features and characteristic of recovery or rebound
60
4.1
Human capital
72
4.2
Structural capital
73
4.3
Relational capital
74
4.4
Spiritual capital
75
4.5a
Knowledge management
76
4.5b
Knowledge management (continue)
77
4.6
Managing and leveraging of intellectual capital
77
4.7a
Performance improvement
78
4.7b
Performance improvement (continue)
79
4.8a
Evaluation check-list for secondary data
84
4.8b
Evaluation check-list secondary data (continue)
85
5.1
Cronbach’s Alpha Coefficient of instrument for pilot
and actual studies
91
5.2a
Demographic data of the respondents
92
5.2b
Demographic data of the respondents (continue)
93
5.3
Non-responded questionnaires
94
5.4
Descriptive statistic: Central tendencies
96
5.5
The mean and percentage of respondents on human
capital
5.6
97
The mean and percentage of respondents on
structural capital
98
xiii
5.7
The mean and percentage of respondents on
relational capital
5.8
The mean and percentage of respondents on
spiritual capital
5.9a
105
The mean and percentage of respondents on
TM’s performance improvement
5.12a
103
The mean and percentage of respondents on
managing and leveraging of intellectual capital
5.11
102
The mean and percentage of respondents on
knowledge management (continue)
5.10
101
The mean and percentage of respondents on
knowledge management
5.9b
99
106
Factor Analysis of Intellectual capital (human capital,
structural capital, relational capital and spiritual
capital)
5.12b
108
Factor Analysis of Intellectual capital (human capital,
structural capital, relational capital and spiritual
capital) (continue)
5.12c
109
Factor Analysis of Intellectual capital (human capital,
structural capital, relational capital and spiritual
capital) (continue)
5.12d
110
Factor Analysis of Intellectual capital (human capital,
structural capital, relational capital and spiritual
capital) (continue)
5.12e
111
Factor Analysis of Intellectual capital (human capital,
structural capital, relational capital and spiritual
capital) (continue)
112
5.13
New scales of intellectual capital variables
113
5.14a
Factor analysis for knowledge management.
114
5.14b
Factor analysis for knowledge management (continue)
115
5.15
New scales for knowledge management variables
115
5.16a
Factor analysis for managing and leveraging of
intellectual capital.
5.16b
116
Factor analysis for managing and leveraging of
intellectual capital (continue)
117
xiv
5.17
New scales for managing and leveraging of
intellectual capital variables.
117
5.18
Factor analysis for performance improvement
118
5.19
New scale for performance improvement
118
5.20
T-Test result for independent variables against gender
119
5.21
One Way ANOVA test result for independent and
dependent variables against age
5.22a
One Way ANOVA test result for human capital
against qualification
5.22b
132
One Way ANOVA test for structural capital
against job-grades
5.31
131
One Way ANOVA test for human capital
against job-grades
5.30
130
One Way ANOVA test result for performance
improvement against qualification (continue)
5.29
129
One Way ANOVA test result for performance
improvement against qualification.
5.28b
128
One Way ANOVA test result for managing and
leveraging of intellectual capital against qualification.
5.28a
127
One Way ANOVA test result for knowledge
management against qualification (continue)
5.27
126
One Way ANOVA test result for knowledge
management against qualification
5.26b
125
One Way ANOVA test result for spiritual capital
against qualification
5.26a
124
One Way ANOVA test result for relational capital
against qualification (continue)
5.25
123
One Way ANOVA test result for relational capital
against qualification
5.24b
122
One Way ANOVA test result for structural capital
against qualification
5.24a
121
One Way ANOVA test result for human capital
against qualification (continue)
5.23
120
133
One Way ANOVA test for relational capital
against job-grades
134
xv
5.32
One Way ANOVA test for spiritual capital
against job-grades
5.33
One Way ANOVA test for knowledge management
against job- grades
5.34
136
One Way ANOVA test for performance improvement
against job- grades
5.36
135
One Way ANOVA test for managing and leveraging
of intellectual capital against job-grades
5.35
134
137
One Way ANOVA test for relational capital, spiritual
capital knowledge management, managing and
leveraging of intellectual capital and performance
against department
5.37
One Way ANOVA test for the human capital against
department
5.38a
140
One Way ANOVA test for structural capital against
department (continue)
5.39
139
One Way ANOVA test for structural capital against
department
5.38b
138
141
One Way ANOVA test for human capital, relational
capital, managing and leveraging of intellectual capital
and performance improvement against place of work
5.40a
One Way ANOVA test for structural capital against
place of works
5.40b
147
One Way ANOVA test for spiritual capital against
place of works (continue)
5.42a
146
One Way ANOVA test for spiritual capital against
place of works
5.41b
145
One Way ANOVA test for structural capital against
place of work (continue)
5.41a
144
One Way ANOVA test for structural capital against
place of work (continue)
5.40d
143
One Way ANOVA test for structural capital against
place of work (continue)
5.40c
142
148
One Way ANOVA test for knowledge management
against place of works
149
xvi
5.42b
One Way ANOVA test for knowledge management
against place of works (continue)
5.43
150
One Way ANOVA test for human capital, relational
capital and managing and leveraging of intellectual
capital against length of service
5.44a
One Way ANOVA test for structural capital against
length of service
5.44b
156
One Way ANOVA test for performance against
length of service
5.47b
155
One Way ANOVA test for knowledge management
against length of service (continue)
5.47a
154
One Way ANOVA test for knowledge management
against length of service.
5.46b
153
One Way ANOVA test for spiritual capital against
length of service
5.46a
152
One way ANOVA test for structural capital against
length of service (continue)
5.45
151
157
One Way ANOVA test for performance against
length of service (continue)
158
5.48a
Summary of the variables tests against demographic items
159
5.48b
Summary of the variable tests against demographic
items (continue)
5.48c
160
Summary of the variable tests against demographic
items (continue)
161
5.49
Pearson Correlation between variables
166
5.50
Regression analysis for human capital, structural
capital, relational capital to spiritual capital
5.51
Regression analysis for structural capital and relational
capital to human capital
5.52
166
Regression analysis for relational capital to structural
capital
5.53
166
167
Regression analysis for knowledge management and
managing and leveraging of intellectual capital to
human capital
167
xvii
5.54
Regression analysis for knowledge management and
managing and leveraging of intellectual capital to
structural capital
5.55
168
Regression analysis for knowledge management and
managing and leveraging of intellectual capital to
relational capital
5.56
168
Regression analysis for knowledge management and
managing and leveraging of intellectual capital to
spiritual capital
5.57
Regression analysis for knowledge management to
managing and leveraging of intellectual capital
5.58
169
169
Regression analysis for human capital, structural
capital, relational capital and spiritual capital to
performance
5.59
170
Regression analysis for human capital, structural
capital, relational capital and spiritual capital to
performance – operating efficiency and business
performances (profit, market share, revenue, CSI,
products/services launch)
5.60
171
Regression analysis for human capital, structural
capital, relational capital and spiritual capital to
performance – organisational leadership and business
leadership
5.61
172
Regression analysis for human capital, structural
capital, relational capital, spiritual capital, knowledge
management, management and leveraging of
intellectual capital to performance
5.62
173
Regression analysis for human capital, structural
capital, relational capital, spiritual capital, knowledge
management, managing and leveraging of intellectual
capital to performance – operating efficiency and
business performances
174
xviii
5.63
Regression analysis for human capital, structural
capital, relational capital, spiritual capital, knowledge
management, management and leveraging of
intellectual capital to performance – organisational
leadership and business leadership
175
5.64
List of secondary data
180
5.65a
Salient features of secondary data
181
5.65b
Salient features of secondary data (continue)
182
5.66
List of interviewees
183
5.67a
Salient features of comments from interviewees that
are directly related to subjects being studied.
5.67b
Salient features of comments from interviewees that
are directly related to subjects being studied (continue)
567c
184
185
Salient features of comments from interviewees that
are directly related to subjects being studied (continue)
186
xix
LIST OF FIGURES
FIGURE NO.
TITLE
PAGE
2.1
Metaphor of intellectual capital
23
3.1
The proposed “Intellectual Capital Central-Triangle” model
53
4.1
Knowledge claims, strategies of inquiry and methods
leading to approaches and the design process
65
4.2
Research model
67
5.1
Path analysis of HC, SC, RC and SpC
176
5.2
Path analysis of HC, SC, RC, SpC and Performance(P)
176
5.3
Path analysis of HC, SC, RC, SpC and
Performance – Operating Efficiency and Business
Performances (OEBP)
5.4
177
Path analysis of HC, SC, RC, SpC and
Performance – Organisational Leadership and
Business Leadership (OBL)
5.5
177
Path analysis of HC, SC, RC, SpC, KM, MLIC and
Performance – Operating Efficiency and Business
Performances (OEBP)
5.6
178
Path analysis of HC, SC, RC, SpC, KM, MLIC and
Performance – Organisational Leadership and
Business Leadership (OBL)
5.7
Path analysis of HC, SC, RC, SpC, KM, MLIC and
Performance (P)
5.8
178
179
Overall Path analysis amongst HC, SC, RC, SpC,
MLIC, KM and Performance (P)
179
xx
LIST OF SYMBOLS/ABBREVIATIONS/NOTATION/TERMINOLOGY
AGM
-
Assistant General Manager
CEO
-
Chief Executive Officer
C&B
-
Consumer Business Sales
CKO
-
Chief Knowledge Officer
CMO
-
Change Management Office
CNO
-
Customer Network Operation
CTS
-
Corporate Strategy
Dev.
-
Development
ELDP
-
Executive and Leadership Development Program
GM
-
General Manager
HC
-
Human Capital
HQ
-
Headquarters
HR
-
Human Resource
HRD
-
Human Resource Development
HRM
-
Human Resource Management
HSC
-
Higher School Certificate
IC
-
Intellectual Capital
ISI 2020
-
Generic standards based on universal ethic, moral
Values and on the tenets of Islam
KM
-
Knowledge Management
KPI
-
Key Performance Indicator
MAPS
-
Managing and Assessing Performance System
MBS
-
Major Business Sales
MLIC
-
Managing and Leveraging of Intellectual Capital
MSC
-
Multimedia Super Corridor
MTI
-
Malaysian Telecommunication Instructions
MCE
-
Malaysian Certificate of Education
MCM
-
Management Committee Meeting
MLDP
-
Management Leadership Development Program
xxi
MPP
-
Manual Prosedur Perniagaan
NITA
-
The National Information Technology Agenda
NWO
-
Network Operation
NWD
-
Network Development
OEBP
-
Operating Efficiency and Business Performance
OBL
-
Organisational Leadership and Business Performance
P
-
Performance
PGS
-
State of Penang
Potentia M
-
Potential for Manager
QIBE
-
Quality Improvement and Business Excellence
RC
-
Relational Capital
SC
-
Structural Capital
SD
-
Standard Deviation
SGM
-
Senior General Manager
SMAC
-
Senior Management Assessment Centre
SMDP
-
Senior Management Development Program
SNO
-
State Network Operation
SPM
-
Sijil Tinggi Pelajaran
SpC
-
Spiritual Capital
STP
-
Sijil Tinggi Persekolahan
SVP
-
Senior Vice-President
TM
-
Telekom Malaysia
TMBEA
-
Telekom Malaysia Business Excellence Assessment
TSY
-
Telco Strategy
TTC
-
Telecom Training College
VP
-
Vice-President
VSS
-
Voluntary Separating Scheme.
xxii
LIST OF APPENDICES
APPENDIX
TITLE
PAGE
A
Cover Letter from Scholarship Division
256
B
Questionnaire Survey
257
C
Structured Interview Questions
271
CHAPTER 1
INTRODUCTION
1.1
Background
The telecommunication industry has entered a very competitive environment for
the past few decades and the industry has been deregulated. The Malaysian government
has established a vision to be a developed nation by year 2020 and the deregulation of
telecommunication services is one of the most important steps towards achieving that
vision. The era when the Government, first through it’s Jabatan Telekom Malaysia, and
then
through
Telekom
Malaysia
Berhad,
held
the
monopoly
over
the
telecommunication services effectively ended by 1992. Presently, there are four
telecommunication services operators to serve the 25.58 million Malaysian populations
as at December 2004 (Department of Statistic, Malaysia, 2004). At that same time,
there were 4.60 million fixed telephone services, 11.43 million mobile services and 2.89
million dial-up internet customers (Malaysian Communication & Multimedia
Commission, 2004).
To achieve the aspiration and realise the vision of making Malaysia a developed
nation, and to survive in this highly competitive and challenging business environment,
Telekom Malaysia has to be competitive, dynamic and robust. With the advancement
made in the telecommunication technology, with the formation of various forms of
business coalitions between local telecommunication services operators and other
world-class telecommunication companies, the challenge for the business survival of
Telekom Malaysia is inevitable. Thus Telekom Malaysia that holds 97% of the market
share of the fixed telecommunication services, 39% of the mobile services and 54% of
the internet customers in Malaysia customers (Malaysian Communication &
Multimedia Commission, 2004) has to maximize the utilisation of Telekom Malaysia’s
2
resources, especially it’s intellectual capital. Intellectual capital is defined as an
identifiable non-monetary asset without physical existence held for use in the
production or supply of products or services, for rental to others or for administrative
purposes (IAS 38, 1998). As an established leader of the nation’s telecommunication
services industry, Telekom Malaysia’s intellectual capital has grown, because it has
been developed and nurtured for the past few decades.
In his keynotes address during Global Knowledge II Conference 2000, Dr.
Mahathir Mohamad (2000), former Prime Minister of Malaysia says:
“Vision 2020 emphasizes that in the information age which we have
entered – our society must be information rich. There was a time when
land was the most fundamental basis for prosperity and wealth, then
came the second wave, the age of industrialisation. Now, increasingly
knowledge will not only be the basis of power but also
prosperity…Through the shift to k-economy, where the knowledge
content and the knowledge contribution will see a quantum leap in
every area, the Malaysian economy and Malaysia’s society will not be
quite the same again”
Malaysia’s development vision, as outlined in Vision 2020, is to become a fully
developed nation with a “values-based society”. The National IT Agenda (NITA)
interprets this, as the roles of information, knowledge and techno-preneurship are
important to leapfrog the developmental stage from industrial economy to the Keconomy. NITA’s mission is “…knowledge must be translated into value and wealthcreation for the property of Malaysians” (Wan Mohamad, 1999). President and CEO of
MIMOS Berhad Malaysia says:
“Malaysia needs to leverage on knowledge economy, where intellectual
capital becomes a primary factor of growth. Because of this, the high
density of the repositories of this intellectual capital, knowledge workers
become vital to every country’s success” (Shariffadeen, 2000).
Blair (2000) of Brooking Institute suggests that tangible assets have continued to
tumble in value:
“If you just look at the physical assets of the companies, the things that
you can measure with ordinary accounting techniques, these things now
account for less than one fourth of the value of the corporate sectors.
3
Another way of putting this is that something like 75 percent of the
sources of value inside corporations is not being measured or reported on
their books”.
In yet another demonstration of the importance of intangible assets, the Sloan
School of Management at MIT and the consulting firm Arthur Anderson recently
announced the joint formation of the New Economy Value Research Lab – the think
tank study – and develops quantitative valuations of the intangible assets Wall Streets
finds increasingly important in the new economy. Lab co-chair, Boulton (2000) says:
“Even the Coca-Colas and Disney’s of the world are actually creating
most of their value from assets that don’t appear on their Balance
Sheets”.
The new knowledge economy places a high premium on human capital.
Davenport (1999) cogently describes this new paradigm as, “People posses innate
abilities, behaviours, personal energy and time. These elements make up human capitalthe currency people bring to invest in their jobs. Workers not organizations own this
human capital…and decide when, how and where they will contribute it.”
As a former government department, Telekom Malaysia has inherited the
28,000 employees, all the systems, technologies, business network and customers of
Jabatan Telekom Malaysia. In 1996, the value of the human capital in Telekom
Malaysia which in this case refers to only the salaries and allowances to the employees,
stood at RM 836 million and in 2003, the value of its human capital was RM 1,412
million, an increase by 69% within seven years (Telekom Malaysia Annual Report,
1996, 2003). That is only in term of salaries and allowances, how about long-term
relationship, know-how and others? This means that the only way for Telekom
Malaysia to have an edge over its competitors will be to develop and put greater the use
of its intellectual assets.
In this “new economy” or “knowledge economy” one principally driven by
information and knowledge, the true value of Telekom Malaysia can only be achieved
by developing its intellectual capital. This is the critical aspect of its present and future
4
value – no longer confined to the managing of network, systems and physical assets of
Telekom Malaysia. Indeed, for the first time in business history, the workers, not the
organization, owns the means of production, the knowledge and capabilities they
possess and they decide how and where to apply it.
1.2
Research Problem
In 2001, the nation’s regulatory requirements have created five new-licensed
telecommunication services operators. Accordingly, to remain competitive, Telekom
Malaysia has reorganised itself into five major business groups to response to this new
challenge. Also, under it’s “Change Program” Telekom Malaysia has spent a lot of
effort, time, money and other related resources worth estimated at RM 10 million since
2001 to 2003 to provide the infrastructure and implementing projects and programs,
such as employee training and development, customer relations management, quality
improvement activities and culture transformation programs in order to achieve it’s
vision (Telekom Malaysia, 2003). The vision is to become “The Communication
Company of Choice”, which focuses on delivering exceptional value to its customers
and other stakeholders.
In attempting to achieve Telekom Malaysia’s vision of being the communication
company of choice, it faces these major-problems in the area of intellectual capital:
(i)
The deteriorating trend of fixed network telecommunication services
customers and market share of telecommunication services. Could this
be due to the degree of availability and utilisation of intellectual capital?
(ii)
The information on the effective management and leveraging of
intellectual capital is either not available or not utilised for
determining Telekom Malaysia’s strategic direction. It’s as if
intellectual capital does not matter in the realisation of its business
strategy.
(iii)
The
influence
of
intellectual
capital
to
Telekom
Malaysia’s
performance, in the present as well as in the future competitive
business environment and K-economy is not being addressed at all.
5
(iv)
The effectiveness in implementing the “Change Program” and the
results from the budget spent, times and effort for the program and
other related activities are not known for further actions and
improvements.
Hence this study aims to address the importance of intellectual capital on the
performance of Telekom Malaysia and this study also intends to show that the
dimension of spiritual capital is integral to the development of intellectual capital that
will contribute to the outstanding performance of Telekom Malaysia as proven in many
‘world-class’ corporations.
1.3
Research Objectives
The purpose of this two-phase, sequential mixed methods case study will be to
obtain statistical and quantitative results from a sample, secondary data and then follow
up with few individuals to explore those results in more depth for following research
objectives:
(i)
So far, few empirical studies of intellectual capital conducted such as by
Bontis (1998), Youndt (1998), Bontis et al. (2001), Shook (2002) and
Hayton (2002), provide some general evidence that intellectual capital or
a component of intellectual capital is positively associated with
measures of various organizational performance. In this study further
investigation is to be done on the influence of intellectual capital on the
performance of Telekom Malaysia specifically on the organizational and
business leadership, operating efficiency and business performances
through the ‘case study’ of Telekom Malaysia.
(ii)
It is also necessary to investigate the effect and influence of the newly
defined 4th component of intellectual capital in this study – the ‘Spiritual
Capital’ on the performance of an organization. This study is timely with
the eagerness of all parties in Telekom Malaysia to know the results
from the implementation of the ‘Change Management Program’ for the
culture transformation of Telekom Malaysia, which started since year
2000.
6
(iii)
To identify what is the level of intellectual capital availability and
which component of the intellectual capital has a more profound
effect or critical influence on the performance of Telekom Malaysia.
(iv)
To investigate the importance of knowledge management, managing
and leveraging of intellectual capital in Telekom Malaysia, to achieve
business
competitiveness,
in
the
present
and
future
business
environment as well as to bring out relevant and significant
performance improvement, in its critical business issues. The
accurate information on the degree of effectiveness, in managing and
leveraging of intellectual capital in Telekom Malaysia will form the
major issues, for Telekom Malaysia to develop its strategy and future
business direction.
(v)
To propose to Telekom Malaysia, to accept, adopt and apply the
recommendations proposed in this study, with the appropriate
modifications and business performance problems, as well as use them
in their future business planning processes to their current management.
In the first phase, quantitative research questions with respondents from
Telekom Malaysia’s executives will address the relationship of intellectual capital,
knowledge management, managing and leveraging of intellectual capital to Telekom
Malaysia’s performance. In the second phase, the secondary data will be analysed for
the relationships and corroboration amongst variables in the survey, and qualitative
methods will be used to probe significant quantitative results by exploring aspects of
the whole relationships and corroboration of the research subject with the participation
from higher management of Telekom Malaysia. Finally triangulation through the
multiple data provides comprehensive perspectives of the research subject.
1.4
Justification for Study
The justifications for this study are:
(i)
Many of the past researchers in the field of intellectual capital have
confined their efforts to only using mainly the quantitative research
methodology. Very few have combined their studies with the case study
approach, and very few still have used the mixed method methodology to
7
study this subject, to gain much deeper insights into the subject, to learn
about the many idiosyncrasies within an organization that may hamper its
prosper use, and the full benefits that an organization can benefit if it is
used correctly.
(ii)
Although Gillett (2002) and Zohar (2004) use the term ‘spiritual capital’
in their articles and books, their spiritual term is not within the intellectual
capital framework discussed in all the available literatures. A study on the
subject does exist, but it is not done empirically. A case study is not done
on the subject and as yet, there is no theoretical framework being offered
to explain its conceptual framework. The present studies, give a
comprehensive meaning to the term ‘spiritual capital’ as the 4th
component of intellectual capital.
(iii)
The past studies mostly investigate the components of intellectual capital
– human capital, structural capital and relational capital and their
influence on performance. None of them has studied the importance of
managing and leveraging the intellectual capital, only the components of
intellectual capital themselves. The importance of managing and
leveraging the intellectual capital becomes one of the major interests in
this study. In general, this research offers significant contributions to the
available literature on intellectual capital.
(iv)
There has been no study done on the intellectual capital available in
Telekom Malaysia before this, whether on the level of its presence or it’s
utilisation in the company neither for further planning and actions nor to
leverage it to achieve all-rounds benefits for Telekom Malaysia. As
explained earlier, despite the efforts, time, and other resources Telekom
Malaysia has spent on its ‘Change Management Program’, the results
have not seen favourable. Since intellectual capital could be effectively
managed and leverage, for the improvement of Telekom Malaysia’s
performance, this study is important and timely for Telekom Malaysia to
gauge the effectiveness of the implementation of the change management
program. This cost includes the professional fees for the consultants,
producing the numerous reports generated by them and the various
internal departments, benchmarking exercises, and other study groups,
which should finally result in significant improvement to the performance
of Telekom Malaysia.
8
(v)
As such this case study involves an investigation into the ‘what’, ’how’
and ‘why’ such phenomena occur in Telekom Malaysia, the outcomes
then will provide the necessary required strategies and actions to
strengthen it’s capital management, to enable it to compete and succeed in
the current and future competitive knowledge economy. Furthermore,
since intellectual capital management involves every employee in
Telekom Malaysia, it would be beneficial to ascertain whether the overall
objective of its ‘Change Management Program’ has affected every
employee in Telekom Malaysia and whether the expected ‘change’ will be
achieved, sustained and improved in the future.
1.5
Organization of Thesis
The whole thesis comprises five chapters. Chapter 1 introduces the research
problem and objectives of the study. Chapter 2 presents the related literatures on
intellectual capital management and knowledge management. Chapter 3 presents the
development of a new model of intellectual capital by including the spiritual capital.
Chapter 4 discusses the research design and methodology used in the study. It covers
the theoretical framework and data collection processes. Chapter 5 talks about the
analyses and discussion done on the data collected from the survey conducted, other
secondary sources referred to and from the interviews conducted. The result – in the
forms of descriptive statistic, as well as, the explanations on the relationships amongst
the variables identified in the theoretical framework – is presented. Finally, Chapter 6
concludes the thesis by discussing the benefits of this study to Telekom Malaysia,
followed by conclusion of this study, its limitations and some suggestions for further
research to follow and finally the recommendations to Telekom Malaysia, as to what it
can gain from these findings, to enhance its competitiveness.
9
1.6
Key Definitions and Concepts:
“Intellectual capital”(IC) is defined as an identifiable non-monitory asset
without physical existence held for use in the production or supply of products or
services, for rental to other administrative purposes. There are four components of
intellectual capital:
(i)
“Human capital” (HC) is the ‘tangible’ tacit knowledge embedded in the
minds of individuals which include employee competence, know how,
education, innovativeness, capabilities, work related knowledge and
changeability.
(ii)
“Structural capital” (SC) is the organizational capabilities and routines in
performing business which include organizational structures, operating
manual and procedures, databases, documents, information system,
networking system, research and development capabilities, patents,
copyright and trade marks, system and technologies.
(iii)
“Relational capital” (RC) is the relationship between the organization and
the outside environment, which includes alliances, and relationship with
customers, partners, suppliers, investors, franchiser, distribution networks,
government bodies and agencies, image and brand, communities, public
and environment.
(iv)
“Spiritual capital” (SpC) is the “intangible knowledge”, faith, belief and
emotion embedded in the minds and hearts of individuals and in the heart
of organization, which includes vision and direction, principles, values
and culture. The individual and organization behave and act with honor,
integrity, sincerity, honesty, truth, trust, love, moral and ethic. It also
includes motivation, self-esteem, courage, strength, commitment,
teamwork, determination, desire, enthusiasm and team spirit. It focuses on
interrelationships, interconnectedness and interdependency for sustainable
development with the view to achieve final prosperity and happiness for
all. It governs how the other three capitals should be used.
10
Summary
Telekom Malaysia has inherited many systems, technologies, types of
business network, customers and 28,000 employee of Jabatan Telekom since 1996. As
at 31st December 2004 Telekom Malaysia had 20,000 employees, 4.6 million of fixed
network customers supported by various systems and technologies. In order to be
competitive in the present business and in the ‘knowledge economy’, the only way for
Telekom Malaysia to do so, is to have an edge over its competitors by developing and
leveraging its intellectual capital. Intellectual capital consist of – human capital,
relational capital, structural capital and the newly proposed component, spiritual capital.
This study aims to address the importance of intellectual capital on the
performance of Telekom Malaysia and intends to show that the dimension of spiritual
capital is integral to the development of intellectual capital that will contribute to the
outstanding performance of Telekom Malaysia. This has been proven in many worldclass organizations. This study also will identify what is the level of intellectual capital
availability and which component has a more profound effect on the performance of
Telekom Malaysia, the importance of knowledge management and managing and
leveraging of intellectual capital on the Telekom Malaysia’s performance.
CHAPTER 2
LITERATURE REVIEW
2.1
Introduction
Economists frequently describe the basic resources necessary for an industrial
enterprise in terms of the three classic kinds of assets – land, labour and financial or
other economic assets (Sullivan, 2000). During the last two decades, the business
environment have progressively moved into a knowledge-based fast-changing,
technology intensive company in which investments in human resource, information
technology and research and development have become essential in order to strengthen
the firm’s competitive position and ensure its future viability (Canibano,2000). Itami
(1997) suggests that resources consists of physical, human and monetary resources that
are needed for business operations to take place and information-based resources, such
as management skills, technology, consumer information, brand name, reputation and
corporate culture. In many cases, knowledge firms such as Microsoft, Xerox, Dow
Chemical, Hewlett-Packart, Eastman Chemical and others have their marketplace value
at a price far higher than their balance sheets warrant (Sullivan, 2000) and in many
instances there are companies being bought for amounts far in excess of market
capitalisation due to the market capitalisation is not the true worth reflection of their
companies (Guthrie and Petty, 1999). The company’s value is more than the tangible
assets, the source of its value and wealth is no longer the production of material goods
but the creation and manipulation of its intangible assets (Goldfinger,1997) and its
ability to systematically leverage it and convert those assets into revenues (Sullivan,
2000). Conventional assets – financial and physical capital – have not disappeared and
will not, but given how important knowledge has become, as a product and process that
add value to work, it’s inevitable that intangible asset would become a more important
12
asset for organizations – their most important assets (Stewart, 2001) comparable to the
traditional land, labour and tangible assets (Sulivan, 2000).
The current business environment cannot be predicted with relative ease as
before due to the messy and complex challenges that are happening now and in the
future. Many organizations believe that, embarking into the knowledge economy is one
of the best business strategies to making sure for the organization to survive in the very
competitive and turbulent environment. Companies have recently given focus on
knowledge and intellectual capital by managing and leveraging their intellectual capital
with the hope to improve their immediate and long term business performance.
The works of Sveiby (Sveiby, 1989), Brooking (Brooking, 1996), Edvinson
(Edvinson and Malone, 1997), Stewart (1997), Saint-Onge (Saint-Onge, 1997), Lev
(Lev, 1997) Sullivan (1998), Johan and Roos (Roos et al., 1998) have influenced the
thinking about the non-tangible factors, the ‘weightless wealth’ that determine the
success of a company (Andriessen, 2001). Generally intellectual capital is considered to
be the stored knowledge possessed by an organization, which may be tacit knowledge,
personal knowledge possessed by an employee and may be explicit knowledge, codified
and stored by the organization and available to individuals throughout the structure
(Nonaka & Takeuchi, 1995). Various convincing justifications have been forwarded for
the need of measuring, reporting and managing intellectual capital (Brooking, 1996;
Petty and Guthrie, 2000; Sveiby, 1998; Edvinson, 1997; Edvinson and Malone, 1997;
Mouritsen, 1998; Allee, 2000; Marr et al., 2003) and various research projects have
been made to explore other related details of this subject such as ‘Measuring and
reporting intangibles to understand and improve innovation management’ (Meritum)
then E*KNOW-NET (Petty and Guthrie, 2000), which are supported by the European
Commission. The importance of intellectual capital is emphasised in the revolution in
information technology and the information society, the rising importance of
knowledge and the knowledge-based economy, the changing patterns of interpersonal
activities and the network society and the emergence of innovation as the principle
determinant of competitiveness (Petty and Guthrie, 2001). All the above efforts,
researches and developments, show the importance of intellectual capital as a major
instrument in the determination of enterprise values and national economic performance
(Mouritsen, 1998).
13
Telekom Malaysia as a former government department, since 1996 has inherited
the systems, technologies, business network, customers and 28,000 thousands
employees of Jabatan Telekom Malaysia and in this ‘new economy’ or ‘knowledge
economy’ – one principally driven by information and knowledge. The true value of
Telekom Malaysia can only be achieved by developing its intellectual capital. This is
the critical aspect of its present and future value – no longer confined only to the
managing of network, systems and physical assets of Telekom Malaysia. This means
that the only way for Telekom Malaysia to have an edge over its competitors will be to
develop and put greater use of its intellectual capital.
2.2
Intellectual Capital and Business Performance
Measuring performance is something that all organization do (Parker, 2000).
B.W. Associates (1994) defines performance as the manner or quality of functioning,
which implies that management of performance is concerned with the manner or quality
of managing and Kaydos (1991) defines performance as how well something does what
it is supposed to do. In principle, two basic objectives of performance are –
accountability and improvement (Foster, 2001).
Performance measurement is essential for achieving and maintaining high levels
of productivity and quality (Sinclair & Zairi,1995), its provides the link between
strategies and actions (Dixon et al, 1990), for good management control and planning,
and for developing and motivating an organization (Nanni et al.,1990, Roberts,1994).
It can encourage transparency, integration of processes, internal communication, a
culture of improvement (Foster, 2001) and motivate managers to act in a way that is
consistent with the organization’s plan. The underlying theory is that, what gets
measured get done (Roberts, 1994). Through performance measurement, organization
can have the answer to – what was happened, why has it happened, is it going to
continue and what we are going to do about it? (Nooreha, 2002).
Performance measurement involves the systematic gathering, analysis and
reporting of information to management (Mokhtar, 2002) and it is the process of
quantifying past actions (Neely, 1998).A good performance measurement system must
14
link operations to strategic objectives, integrate financial and non-financial information
and must be customer focussed (Mokhtar, 2002). Some of the performance dimensions
are competitiveness, financial, quality of service, flexibility, resource utilisation and
innovation (Nooreha, 2002).
Generally organizations measure performance due to various reasons such as –
to identify success, to identify achievement, to understand the processes, to identify
where problems are and the necessary improvements needed, to confirm improvements,
to ensure decisions made are based on facts not on emotion or intuition (Parker, 2000).
Intellectual capital has been identified as a key resource and driver of
organizational performance and value creation (Itami, 1991; Teece, 1998; Mayo, 2000).
Narver and Slater find that market orientation, relational capital and business
performance (ROA) are strongly related (Narver and Slater, 1990) and Jaworski and
Kohli (1993) find that market orientation is an important determinant of performance on
his study of 222 US business units. Intellectual capital, which is considered the most
important intangible asset in the company, significantly affects the valuable change and
success of the organization through understanding, developing and managing the
company’s intangible assets (Nonaka & Takeuchi, 1995).
Youndt (1998) empirically shows the following relationships between
intellectual capital and performance:
(i)
Human capital is positively related to sales growth but is not
significantly related to financial returns.
(ii)
Relational capital is negatively related to sales growth and shows
no significant relationship with financial returns.
(iii)
Structural capital is not significantly related to sales growth but is
positively related to financial returns.
(iv)
Human capital is not significantly related to reduced organizational
costs but it significantly relates to increased customer benefits.
(v)
Relational capital shows no significant relationship to increase
benefits but is significantly related to reduced organizational costs.
15
(vi)
Structural
capital
is
not
significantly
related
to
reduced
organizational costs, but is positively related to increased customer
benefits.
Using a survey data, Bontis (1998) shows the following relationships between
Likert-type measures of intellectual capital and business performance:
(i)
Human capital is significantly related to structural capital.
(ii)
Human capital is significantly related to relational capital.
(iii)
Structural capital is significantly related to business performance.
(iv)
Relational capital is significantly related to business performance.
Again using a survey data, Bontis et al. (2000) show the following relationships
between Likert-type measures of intellectual capital and business performance for
Malaysian industries:
(i)
Human capital is significantly related to relational capital for
service industries and non-service industries.
(ii)
Human capital is significantly related to structural capital for nonservice industries.
(iii)
Human capital is not significantly related to structural capital for
service industries.
(iv)
Relational capital is significantly related to structural capital for
service industries and non-service industries.
(v)
Structural capital is significantly related to business performance
for service industries and non-service industries.
Walker (2001) empirically shows the following relationships between human
capital and performance measurement:
(i)
The value of human capital is significantly related to the firm’s
performance measurement of human capital market value in the low
knowledge-base industry.
(ii)
The value of human capital is significantly related to the firm’s
performance measurement of human capital market value in the high
knowledge-based industry.
(iii)
The value of human capital is not significantly related to the
performance measurement of productivity, profitability or market
16
evaluation in either low knowledge-based industry or high knowledgebased industry.
Shook (2002) shows the following relationships amongst intellectual capital, the
analyst and investment broker attitudes:
(i)
Intellectual capital value is a factor of investment decision with at least an
equivalent importance to traditional financial and physical asset values.
(ii)
Intellectual capital value is at least a perceptual value to the analyst
or investment broker making value determinations for company
growth, development or valuation
Shell International verifies the impact of intangible assets such as employee
satisfaction, organizational culture, environmental and social responsibility on their
corporate strategy and financial performance (Marr et al. 2002, 2003).
Beside intellectual capital, knowledge which has a strong relationship with
intellectual capital also forms the foundation of company business performance (Marr
et al., 2002), it is a strategic resource for the company to develop its sustainable
competitive capability (Davenport & Prusak, 1998) and knowledge stocks, flows and
creation are closely related to business performance (Grant, 1996; Bontis, 1999).
However the most knowledgeable firms are not always the most profitable. Knowledge
only leads to superior performance if the industry characteristics enable the
knowledgeable company to appropriate the profits from the new ideas (Bierly and Daly,
2002).
The survival and performance sustainability of an organization in the long run
will be determined by how the right capital mix between physical and intellectual
capital of the organization is leveraged to satisfy the interest of its stakeholders –
shareholders, creditors, suppliers, customers, communities, employees including the
whole human race, present and future and the planet itself. Intellectual capital which
includes of human capital, structural capital and relational capital will play a central
role in fuelling the success of companies in this century (Zohar, 2004).
17
2.3
Definition and Classification of Intellectual Capital
In the past, in line with the maturity of intellectual capital (also considered as an
intangible asset), there are many definitions of intellectual capital, which have been and
are still being offered and discussed in various literatures, especially in the Journal of
Intellectual Capital. Webster Dictionary defines ‘capital’ as anything which can be used
to increase one’s power of influence. The Oxford English Dictionary defines ‘capital’
as ‘that which confers wealth, profit, advantage or power’ and Dictionary.com defines
‘capital’ as the entries of balance sheet showing all properties both tangible and
intangible which includes cash, stock, inventories, property rights and goodwill. The
International Accounting Standard Committee (IAS 38, 1998) defines intellectual
capital or intangible asset as, “an identifiable non monetary asset without physical
substance held for use in the production or supply of goods or services, for rental to
others or for administrative purposes. An asset is a resource, (a) controlled by enterprise
as a result of past events, and (b) from which future economic benefits are expected to
flow to the enterprise”. Klein (1998) suggests that intellectual capital is knowledge,
experience, expertise, and associated soft assets, rather than their hard physical and
financial capital. In most cases, intangible assets are defined as (capital) assets that lack
physical substance but which are likely to yield future benefits (Canibano et al., 2000).
A summary of most of these definitions is listed in Table 2.1 for the purpose of
comparison amongst the contemporary definitions of intellectual capital(IC)/ intangible
asset.
18
Table 2.1: Definition of intellectual capital (IC)
Skandia (1994)
Intellectual Capital
IC is the aggregate sum of intangible
values which comprises of:
Human Capital
(i)
(ii)
Human capital – knowledge,
skills and capability
Structural capital – everything
that remains when the
employees go home:
databases, software, manuals,
trademarks, organization
structures, etc. Customer
capital, is the relationship
built up with the customers,
and is a significant part of
structural capital.
Structural Capital
Customer Capital
Organization Capital
Innovation Capital
Intellectual property
Process Capital
Intangible assets
Brooking (1996)
IC components are:
(i)
(ii)
(iii)
(iv)
Market assets
Human-centered assets
Intellectual property
Infrastructure asset
Intellectual Assets
Humancentered
assets
Market
Assets
IP
Infrastructure asset
Bontis (1996)
Intellectual
Capital
IC includes three sub-domains:
(i)
(ii)
(iii)
Human capital
Structural capital
Customer capital
Structural
Human
Customer
With two supporting drivers:
(i)
(ii)
Trust
Culture
Culture
Trust
Drivers
19
Roos et al (1997)
Intellectual
Capital
IC includes:
(i)
(ii)
Thinking assets - human
capital
Non-thinking assets –
structural capital
Thinking assets
– human capital
Non-thinking
Assets –
structural capital
Sveiby (1997)
IC consists of three invincible assets:
(i)
(ii)
(iii)
Internal
Structure
Individual
Competence
Employee competence
Internal structure
External structure
$
External
Structure
Stewart (1997)
IC as intellectual material which consists
of:
(i)
Knowledge
(ii)
Information
(iii) Intellectual property
(iv)
Experience
That can be put to create wealth
Intellectual
Capital
Knowledge
Information
Intellectual
Property
Experience
Sullivan (1998)
Complementary
Business Asset
IC is knowledge that can be converted
into profits. IC comprises three elements:
(i)
(ii)
(iii)
Human capital
Intellectual assets
Structural capital
Human
Capital
Intellec
tual
Assets
Manufacturing,
Distribution,
Sales
IP
Structural Capital
20
Edvinson & Malone (1997)
IC consists of:
Values
(i)
(ii)
(iii)
Human capital - what people
can do individually and
collectively.
System component –
knowledge in firms, which is
independent of people,
includes patents, contacts &
databases.
Market component –
relationship between
organization & outsiders
Human
capital
Market
component
System
C
Haanes & Iowendahl (1997)
RESOURCES
IC is intangible resources of :
(i)
Competencies – various
abilities to perform and are
reflected at individual &
organization level.
(ii)
Relationship – reflected in the
reputation of the company –
customer loyalty.
Both of these exist in an individual &
collective fashion.
TANGIBLE
COMPETENCE
. Information based
. Skills
Capabilities
. Aptitudes
INTANGIBLE
RELATIONAL
. Reputation
. Loyalty
. Relations
Saint-Onge (1997)
Prefers knowledge capital to IC.
Knowledge capital is the sum of :
(i)
(ii)
(iii)
Human capital – capabilities
of individual to provide
solutions to customers.
Relational capital – the depth,
width, attachment &
profitability of franchise.
Structural capital – the
capabilities of organization &
on to meet market
requirements
Values
Human
Capital
Relational
Capital
Structural
Capital
21
Andriessen & Tissen (2000)
Five categories of intangible assets:
A&E
(i)
(ii)
(iii)
(iv)
(v)
Skills and tacit knowledge
(STK)
Collective values & norms
(CVN)
Technology & explicit
knowledge (TEC)
Primary management
processes.(PMP)
Assets & Endowments (A&E)
STK
CVN
TEC
PMP
Guthrie & Petty (2000)
IC consists of:
Values
(i)
(ii)
(iii)
Internal: Organization
(structural) capital
External: Customer
(relational) capital
Employee competence:
Human capital
Organization
Capital
Customer
Capital
Human
Capital
Mayo (2000)
Most common forms of IC :
(i)
(ii)
(iii)
Customer (External) capital –
customers’ relationship,
loyalty, satisfaction & image.
Organizational (Internal
structure) capital – systems,
patents, know-how, database,
knowledge, culture.
Human capital – individual
competence & experience,
judgment, leadership and
motivation
Values
Customer
Capital
Human
Capital
Organizational
Capital
22
Allee (2000)
Expanded view of IC:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Business relationship –
alliances & business
relationship with customers,
partners, suppliers, investors
and government (BR)
Internal structures – systems,
work processes that leverage
competitiveness including IT,
communication &
technologies (IS)
Human competence(HC)
Social citizenship (SC)
Environmental health (EH)
Corporate identity (CI)
Identity, Vision
& Values
EH
SC
BR
HC
IS
McElroy (2002)
Modifies Edvinson’s IC model:
Intellectual Capital
(i)
(ii)
(iii)
Human capital
Structural capital
Social innovation capital
Social
Capital
Human
Capital
Process
Capital
Social
Innovation
Capital
Structural
Capital
Innovation
Capital
Intrasocial
Capital
Intersocial
Capital
IP
Other IA
Edvinson and Malone (1998) and Grafstrom and Edvinson (1999) use a
metaphor as shown in Figure 2.1 to explain the idea of an intellectual capital. The tree
as a metaphor of intellectual capital is partly a story of interlinked activities that happen
all over the tree at any particular moment in time, and illustrates not only the relation
23
between past and future, but also the intervention that is necessary in order to make
fruition maximally efficient (Mouritsen et al., 2001). As they further explain:
“If we compare the intellectual capital to a tree, the ripe fruit of the
season’s effort can be seen in the crown – i.e. in the annual report’s
income statement and balance sheet. The human core in the trunk is
protected by the bark of customer relations and work routines.
Research and planning, which the tree needs in order to survive future
droughts and colds spells, is carried out in the root system. At a time
marked by quick and capricious changes in business environment, it is
at the roots where the most crucial activity may take place, for future
fruition.”
Figure 2.1 : Metaphor of intellectual capital
Sveiby (1989) describes intellectual capital as a know-how capital, which
consists of individual capital, and structural capital. Individual capital means the
personal and social abilities, experience, professional competence, schooling and other
skills of the employees. The structural capital is the organization’s competence, which
includes organization’s history, experience, documented handbook, computer programs
and toolboxes. Skandia (1994) suggests that intellectual capital is the aggregate sum of
intangible values, which comprises both human capital and structural capital.
Human capital is a thinking assets (Roos et al., 1997), it represents the
knowledge, skills and capability of the individual employees to provide solutions to the
customers (Skandia, 1994, Sullivan 1999), it represents the individual knowledge stock
24
of an organization (Bontis et al, 2001) and it is the firm’s collective capability to extract
the best solutions from the knowledge of its individuals (Bontis, 1998). Saint-Onge
(1997) defines human capital as capabilities of individual to provide solutions to
customers and what people can do individually and collectively (Edvinson & Malone)
whereas Allee (2000), Sveiby (1997) and Guthrie & Petty (2000) define human capital
as an individual competence and experience, judgment, leadership and motivation
(Mayo,2000). Human capital has also been defined on an individual level as a
combination of genetic inheritance, education, experience and attitudes about life and
business (Hudson, 1993). OECD (1999) defines human capital as the knowledge, skills,
competencies and other attributes embodied in individuals or groups of individuals
acquired during their life and used to produce goods, services or ideas in market
circumstances. Haanes & Lowendahl (1997) who categorize intangible resources into
competence and relational resources defines competence as the ability to perform a
given task which includes knowledge, skills and aptitudes. Human capital is important
because it is a source of innovation and strategic renewal, whether it is from
brainstorming in a research lab, re-engineering new processes or improving personal
skill and the essence of human capital is the sheer intelligence of the organizational
member (Bontis, 1998).
Structural capital is a non-thinking asset (Roos et al., 1997) which consists of
everything that remains when the employees go home – databases, customer files,
manuals, trademark and organizational structure (Skandia, 1994). It is the knowledge in
the firms, which is independent of people, which includes patents, contacts and
databases (Edvinson & Malone, 1997) and it is the capabilities of organization to meet
the market requirements (Saint-Onge, 1997). Sullivan (1998) defines structural capital
as the support that firms provide to their human capital such as information systems,
computer software, work procedures, marketing plan and company know-how. Mayo
(2000) and Guthrie & Petty (2000) instead term it as organizational capital –
information systems, networking system, management processes, patents, database and
Allee (2000) term it as internal structures – systems, work processes that leverage
competitiveness including information technology, communication and technologies.
Sveiby (2001) classify the internal structure as a result of people work internally in an
organization such as patents, concepts, model and administrative system which is
owned by the organization and some of it will remain even if a large number of
employees leave. Structural capital arises from processes and organizational value,
25
reflecting the external and internal focuses of the company, plus renewal and
development value for the future. Organization with strong structural capital will reach
its fullest intellectual capital potential and will have a supportive working culture for its
employee to learn and be innovative (Bontis,1998, Bontis et.al,1999), it provides the
environment that encourages the human capital to create and leverage its knowledge
(Sullivan, 1998). The essence of structural capital is the knowledge embedded within
the routines of an organization (Bontis, 1998)
Relational capital is the relationships which include internal and external
stakeholders (Roos et al., 1997). It exists in an individual and collective fashion
reflected in the reputation of the company especially in the relationship with its
customers. It is customer’s loyalty (Haanes & Lovenahl, 1997). It is the depth, width,
attachment and profitability of franchise (Saint-onge, 1997). Sveiby (1994) terms it as
customer capital and defines it as the relationship built up with the customers and
image, customer’s loyalty and satisfaction (Mayo, 2000) and market information used
to capture and retain customers (Stewart, 1997). Edvinson & Malone (1997) term
relational capital as a market component which is the relationship between organization
and outsiders, Brooking (1997) terms it as market assets which includes brands,
customers, customers loyalty and distribution channels. Relational capital encompasses
the knowledge embedded in all the relationships an organization develops whether it be
from customers, from the competition, from suppliers, from trade associations or from
government (Bontis, 1999, Allee, 2000) and Allee (2000) expand it even to include the
environmental health.
Contemporary classification schemes have divided intellectual capital into the
categories of external (customer-related) capital, internal (structural) capital and human
capital (e.g. Sveiby, 1997; Roos et al., 1997, Stewart, 1997; Edvinson and Mallone,
1997; Petty and Guthrie, 2000). An expanded definition proposes by Allee (2000) still
falls within this framework. The proposal of social innovation capital by McElroy
(2002) is actually another way of looking at human capital. In conclusion, it appears
that most of the definitions of intellectual capital listed above include human capital,
structural capital and relational/customer capital.
26
2.4
The Need for a Redefinition of Intellectual Capital
In the race to show a strong financial performance for their companies, there are
business leaders who utilise their intellectual capital by manipulating figures and
reports to portray that their companies are in good health, to the shareholders,
authorities and to the public. In the United States, a few cases of accounting
irregularities of Fortune 500 companies, which happened in the year 2002, such as
Enron, WorldCom, Anderson and a few other corporate companies, resulted in the fall
of the stock market and the decline of investors’ confidence (Chatzkel, 2003). More
than that, these incidences also affect the credibility of the industry, the present
financial system and the organizations that practise knowledge management. In
Malaysia most of the cases reported involved the unethical use of political power by the
government especially in the giving of projects and licenses related to the government
projects or government related companies such as North-South Highway, Bakun Dam,
Malaysian Airlines System, and Celcom Sdn.Bhd (Gomez & Jomo, 1999).
Table 2.2a and Table 2.2b show the top 20 list of year 2001, 2002, 2003 and
2004 of “Global Most Admired Knowledge Enterprises (MAKE)” yearly study that
seeks to identify organizations that are creating, sharing and using knowledge to
become leaders in the new e-business economy (Teleos, 2001, 2002, 2003, 2004).
Table 2.2a : Top 20 “Global Most Admired Knowledge Enterprise” yearly report
1999 2000 2001 rank
rank rank
11
2
1 General
Electric
8
3
2 Hewlett –
Packard
4
1
3 Buckman
Laboratories
10
4 World Bank
1
6
5
Microsoft
2
16
6
13
17
7
British
Petroleum
Siemens
2002 list
2003 list
2004 list
Accenture
Accenture
Accenture
British
Petroleum
Buckman
Laboratories
Clarica Life
Insurance
Ernst &
Young
General
Electric
Hewlett –
Packard
Amazon.
com
British
Petroleum
Buckman
Laboratories
Canon
Amazon.
com
British
Petroleum
Buckman
Laboratories
Dell Computer
Ernst &
Young
General
Electric
Ernst &
Young
General
Electric
27
Table 2.2b : Top 20 “Global Most Admired Knowledge Enterprise” yearly report
(continue)
18
11
8
Skandia
-
-
9
-
5
14
4
5
7
-
-
12 Ernst &
Young
13 KPMG
3
8
14 Xerox
12
13
6
-
14
-
10
19
-
-
15 International
Business
Machines
16 Accenture
17 Clarica Life
Insurance
18 Royal
Dutch/Shell
19 Sony
20 Schlumberger
McKinsey &
Company
10 Cisco
Systems
11 Anderson
InternatioHewlett –
nal Business Packard
Machines
KPMG
Infosys
Technologies
McKinsey
IBM
& Company
Microsoft
McKinsey &
Company
Nokia
Microsoft
Royal
Dutch/Shell
Siemens
Nokia
Hewlett –
Packard
IBM
Infosys
Technologies
Intel
McKinsey &
Company
Microsfot
Pricewaterhouse
Coopers
Royal
Dutch/Shell
Pricewaterhouse Coopers
Toyota
Unilever
Siemens
3M
Samsung
Siemens
US
Government
World Bank
Xerox
Toyota Motor Toyota Motor
Skandia
World Bank
Xerox
Royal
Dutch/Shell
World Bank
Xerox
In the year 2002 Global MAKE Report, there is a section named ‘The Enron
Factor’ which reported on the Anderson’s collapse as a result of Enron’s bankruptcy.
Until the 2002 global MAKE study, Anderson had been a Global MAKE Winner four
years in a row and in year 2002 Anderson did not receive a single vote from the 2002
Global MAKE expert panel. This had wide and far-reaching effects and repercussions
to the entire professional and consulting services companies i.e. the knowledgeintensive companies. In fact Cap Gemini Ernst & Young, Ernst & Young, KPMG and
Pricewaterhouse Coopers all receive fewer nominations as the MAKE finalists in year
2002, compared to previous years. As a group they were marked down in the ‘success
in maximising the value of the enterprise’s intellectual capital’ knowledge performance
dimension (Teleos, 2002).
28
It is very likely that investors and shareholders will begin to question the
veracity of the annual financial reports prepared by the professional accounting firms.
Can they be trusted? After all they have been manipulating and misrepresenting
financial figures for years by covering up and hiding the truth, and doing so deliberately
and consciously at that! What assurance have we got that these professional accounting
firms are not another Arthur Anderson, and their clients another Enron in the making?
Why is this happening? Who are the people doing this? Are they not the very
best and brightest produced by the very best and the most hallowed institutions – NorthWestern University, Harvard Business School, University of Chicago, just to name a
few. McElroy (2002) explains that bad practice is nothing more than bad knowledge in
use and that when this happens in an organization, it is because the knowledgeprocessing capability in those organizations is profoundly broken or at least
dysfunctional. Most of the time misbehaviour and mismanagement happen not because
the leaders of these organizations do not have the knowledge, but because they fail to
practise the knowledge they have. They know what is right and what is wrong, what is
good and what is bad, what is sound and what is unsound but choose to practise,
deliberately and consciously, those that are wrong, bad and unsound. It appears that it is
perfectly acceptable, that to know well is enough, even if one does not practice that
goodness. Worse still perhaps, is the notion that it is still acceptable to practice what are
contrary to those good and sound principles, as long as you do not get caught.
Chatzkel (2003) in his interview with Hubert Saint-Onge on critical issues
raised by the phenomena of the Enron collapse quoted Hubert Saint-Onge who
comments that, since in the intangible world there are no guardrails, the importance of
core values, moral fabric and behavioural elements increases. Strong and sound
governorship and stewardship need to be exercised to guarantee that a meaningful
checks and balanced process exists in the management system.
The above examples of incidences involving Arthur Anderson, Enron,
WorldCom and Global Crossing (Chatzkel, 2003) show that intellectual capital is not
only made up of intellectual assets but a mixture of both intellectual assets and
intellectual liabilities (Caddy, 2000). Knowledge and intellectual capital, on its own and
by itself, is not inherently bad, even if it is knowledge and intellectual capital about evil.
29
Therefore it appears that the issue this study has to grapple with is how to minimize
intellectual liabilities and maximize intellectual assets, i.e. how to make sure that
individuals and organizations possessing the appropriate intellectual capital leverage
this capital for the benefits of the individuals, the organizations, the shareholders, the
investors and the general public. Not the other way around!
2.5
Deficiency of Contemporary Definition of Intellectual Capital
In the above definitions of intellectual capital, Bontis (1996) includes ‘trust’ and
‘culture’ only as drivers. Trust and culture are not part of intellectual capital. McElroy
(2002) quotes, that in the theory of social capital trust, reciprocity, shared values and
norms are all the things that add value in a firm or between firms. Andriessen (2001)
discusses the weightless wealth of companies as consisting of intangible asset – the
products of the right side of the brain and in the hearts of people. These include among
others, the corporate culture and the charisma of leaders. Andriessen, however does not
label these as “intellectual’ assets. Mayo (2000) in his discussion on the contribution of
human capital contribution to the value or wealth of organizations includes individual
capability, individual motivation, leadership, the organizational climate or culture and
workgroup effectiveness as factors that produce a climate that leads to the growth of
people in the organization.
To include values, culture, trust and motivation taken together only as a driver,
as a value-add, collectively as a factor, as an influence or as an underpinning element to
the intangible assets still does not represent the actual truth, the holism and whole ‘big
picture’ of intellectual capital belonging to an individual or an organization. How about
the products of the right side of the brain and in the hearts of people such as an act of
honor, sincerity, trustworthiness, self esteem, courage, benevolence, love, team spirit
and others? Are they not the product of intangible assets? The values, culture and ethic
– do these items not fall within the definition of intangible asset? These are the
deficiencies of the contemporary definitions of intellectual capital since the dimensions
mentioned above absolutely fall within the definition of the intangible asset discussed
above and they are likely to yield future benefits to the individuals and organizations.
30
This thinking is in line with a few authors such as Brooking (1996) who
maintains that corporate culture is an asset when the culture of an organization
reinforces the achievement of the overall goals. Hall (1998) says that cultural capital is
one way for the values to be understood in a cultural context, within an organization,
specifically the internal organization environment that includes communication issues
with individuals and groups, values and vision. Andriessen & Tissen (2000) also lists
collective values and norms, the corporate culture of an organization as one of the
intangible assets and Marr et al. (2002, 2003) who in their case studies, carried out at
three e-business companies find out that the culture in the organization is a key asset.
Cultural assets embrace categories such as mission, corporate culture, entrepreneurial
spirit, organizational values and management philosophies.
To address the above issues, that is, to manage the issue of intellectual liability
(Candy, 2000), manipulation of financial reports and other activities that destroy values
and more importantly to understand the sustainability of a few successful companies,
the understanding of intellectual capital should be broadened to include the whole range
of intangible assets. It is timely to look at the intellectual capital as a more practical,
operational and long-term sustainable business concept, which has been accepted and
practised by a few good and successful companies. Details of these companies will be
discussed later. In this study, a “bigger picture” and a holistic understanding of
intellectual capital is suggested by proposing a new definition of intellectual capital – to
include “Spiritual Capital” (SpC) as the fourth component or capital of the intellectual
capital. The role of spiritual capital in intellectual capital and its influence on the
performance of organization will also be discussed to justify the inclusion of spiritual
capital in the new definition of intellectual capital.
2.6 Spiritual Capital in Practice
The presence of spiritual capital within organization which are practiced by some
world-class organizations can be seen, and they have contributed for their better
sustainable performance. Zohar and Marshal (2004) quoted the examples of companies
who possess spiritual capital such as Clark’s Shoes, Rowntree’s Chocolates, Coca-Cola,
Amul from Gujarat, India, Van City credit Union from Vancouver, British Petroleum
31
and Starbuck. Gillett (2002) gives examples of Nortel, JetBlue Airways, Tom’s of
Maine as successful companies who adhere to the spiritual capital principle. In this
discussion, this study would like to highlight a few examples of successful companies
who possess and practise spiritual capital in their businesses such as:
i.
Gillett (2002) told the story of AT & T Canada Long Distance
Services, a Canadian telecommunication company which had
suffered a loss in revenue, low products and service qualities, lowest
level of employee morale in 500 North American companies and
high turn over of higher managers. With the actions taken by
Catucci, the CEO who is sent by AT & T United States in building
up the intellectual capital, restoring financial capital and creating
spiritual dimensions – the power of purpose, serving the whole,
guided by values, collaboration and unity and inspiration by higher
management to the whole organization had turnaround the company
to become a successful company in three years in every aspect of
performance indicators – financial, products and services, customer
satisfaction and employee’s satisfaction. The achievement is further
accelerated by the CEO leadership who practice the spiritual
dimensions – motivation, beliefs, values, expectation, energy and
connection and responsibility to make things happen, in managing
the whole organization.
ii.
Velasquez (1998) told the story of Merck & Company, a global
research-driven pharmaceutical company when it deals with the issue
of ‘river blindness’ which afflicts 16 million people living along the
banks of rivers in the tropical regions of Africa and Latin America.
Merck & Company decided to provide fund to develop the drug –
Ivermeetin, although they knew they could not recover the $100
million of the development cost. The company was morally obliged
to proceed in spite of adverse financial benefits. After seven years of
successful development of the drug and nobody responded to buy the
new pill, Merck & Company decided to give the drug away free to
millions of potential victims. Asked why the company had invested
so
much
money
and
effort
into
researching,
developing,
manufacturing and distributing a drug that makes no money, Dr. Roy
Vagelos replied that once the company suspected that they have the
32
solution to the disease, the only ethical choice was to develop it.
Moreover, people in the third world “will remember” that Merck
helped them, he commented, and “would respond favourably to the
company in the future”
iii.
Lucas (1999) explains the “ten clues to the presence of passion”
shown by John Chamber and other Cisco employees which include –
willingness to confront reality, ability to discern the truth about who
we are, what we want and need, alignment between personal and
organizational aspirations, desire to make a difference, love for labor,
indignation over conditions and being young at heart. Harris and
Brannick (1999) say that Cisco is an excellent example of a company
that excels at finding and keeping superior workers through a core
culture of innovation, customer service, operational excellence and
spirit where excellence is achieved by unleashing people’s limitless
energy, creativity and enthusiasm.
iv.
Shell report for Royal Dutch/ Shell Group of Companies for year
2001, titled People, Planet & Profit explains the companies’
objectives to meet their economic, environmental and social
responsibilities and describe how they are striving to create value for
the future generation. Shell’s chairman, Philip Watts explains that
while Shell continues to focus on delivering robust profitability, they
are also striving to fulfil their commitment to society based on their
business principles. It includes using the principles of sustainable
development in all Shell’s operations – taking into account of their
social and environmental consequences as well as the economic
dimensions. Shell believes that the long-term competitive success
depends on being trusted to meet societies’ expectations. Respect for
people is one of Shell’s key values – underpinning how shell’s
people treat each other inside their worldwide family, meet the need
of Shell’s customers and respond to those touched by Shell’s
activities. In fact we are not leaving this planet or handing over this
planet to the future generation. We are actually borrowing this planet
from the generation that is yet unborn. It seems, through it activities,
Shell lives and practices these highly noble values.
33
v.
Bethune, Continental Airline’s CEO (1998) tells a complete story in
on how his team has engineered one of the most dramatic comebacks
in the history of business where a company which was on the verge
of filing for bankruptcy for the third time in a decade, in the end
becomes one of the best airlines in the world. Bethune highlights the
importance of company’s leaders and management team in providing
direction, culture, team work, management sincerity, belief, truth and
trustworthiness, spirit of honesty, willingness to face facts and doing
things as honourable as possible. By doing that, they have a group of
employees who are extremely trustworthy, more responsible, have a
strong faith in their leaders, honest to themselves, honest to their
teams and willing to change. In the process Continental unleashes a
tremendous talent and creative force in the company and Continental
becomes a place where people are happy to come to work. Bethune
also requires that his employees link their arms and sang ‘kumbayah’
before every shift and remember each other in their prayers every
night. In conclusion as CEO, Bethune’s goal is to get the sense of
value into every aspect of their operation, every customer feels
valued in every transaction and every employee feels valued
everyday.
vi.
Gestner, Jr. IBM’s CEO (2002) describes how IBM in 1990 had its
most profitable year ever but in 1993 IBM was losing $16 billion and
became a company listed in the watch list for extinction. He tells the
story of IBM’s competitive and cultural transformation, how it
rebuilds the leadership team and gives the workforce a renewed
sense of purpose. IBM is a classic example of a giant in its industry
that has reached the pinnacle then falls to near collapse and rises
again to capture its lost position and set new agenda for growth. With
decentralization, empowerment, the advent of self-managed work
teams, authority to make decision and take action is being pushed
further downwards towards those in direct contact with customers
and those involved in actual operations and away from management.
Workers are expected to regulate themselves and exercise selfcontrol or self-management. In fact the performance appraisal system
is fast moving in this direction.
34
vii.
Collin & Porras (1994) also describe how visionary companies, the
best of the best in their industries for decades such as Walt Disney,
3M, HP, Boeing and Ford have experienced almost similar life
histories as IBM. They have bounced back with the set goals of not
only improving their financial performance through maximizing
profits but with other goals to become the role models for exemplary
corporate management practices around the world.
viii.
Despain (2003) describes the story of a lifetime experience and
lesson he has learned that has enabled him to become a true leader of
people in Caterpillar Inc. He describes the process of the
transformation of a man and the transformation of a business, which
results in the success of Caterpillar Inc. In 1990’s Caterpillar was at a
crossroad, the economy was slow, markets were mature and
competitors were improving their quality while lowering their prices.
After much effort such as reorganization, forced right – sizing,
process reengineering, plant modernization and total quality
management, Caterpillar was still suffering heavy losses. But after
Despain and his management team started with a ‘values-based’
approach – putting people first, trusting them, empowering and
caring for them – after years of effort and determination, thousands
of people start exhibiting trust, mutual respect, sense of urgency, risk
taking,
empowerment,
teamwork,
commitment,
continuous
improvement and customer satisfaction, Caterpillar then consistently
achieved their goals and drove outstanding company results as a $ 20
– billion corporation.
2.7
Knowledge Management and Intellectual Capital.
Knowledge is the meaningfully structured accumulation of information which
may be categorized as explicit or tacit (Hubert & Stuart, 1984). Explicit knowledge can
be formally articulated, more easily transferred or shared but is abstract and removed
from direct experience. Tacit knowledge is developed from direct experience and action
often referred to as knowledge-in-practice. It is highly pragmatic, situation-specific,
subconsciously understood and applied, difficult to articulate and usually shared
35
through highly interactive conversation, story-telling and shared experience
(Zack,1993). Knowledge must be internalized and made tacit to be truly understood and
applied to practice, it is best exchanged, distributed, or combined among communities
of practice by being made explicit. Once shared, explicit knowledge can be internalized
and made tacit again by reapplying it to practice. This constant cycle of tacit creation
leading to explicit combination and exchange enlarges the total knowledge base of the
organization (Nonaka,1995)
In Islam, the importance of knowledge can be understood through the
conversation between Ali, the fourth caliph of Islam after the Holy Prophet (peace be
upon him) with the Khawarij tribe (Salam, 1981). The holy prophet says, “I am like a
city of knowledge and Ali is the gateway to that city.” The Khawarij tribe chooses ten
of their most educated and taught men, to test the truth of the prophet’s statement, by
asking Ali, “which is more important and valued, knowledge or property?”
Ali answers,
(i)
“Knowledge takes care of you, while you have to take care of
properties.
(ii)
Knowledge, because with a lot of properties you tend to have a lot of
enemies, but with a lot of knowledge you tend to have a lot of friends.
(iii)
When you give away your properties, they become less, while the
more you give away your knowledge the more it grows.
(iv)
Those with a lot of properties are called ‘stingy’, while those who are
knowledgeable are considered learned are called by honorable and
respectable names.
(v)
Those with properties are assessed in the Day of Judgment, while
those with knowledge are duly rewarded on that they.
(vi)
There are a lot of thieves after your properties, there is none after
your knowledge.
(vii)
Knowledge is the properties of all prophets, because knowledge
causes those who possess it to have hearts that are soft and crystal
clear, while those with properties have hearts that are hard.
(viii)
Properties grow less with time, while knowledge will not become less
although it may not increase.”(Salam, 1981).
36
In another occasion with a man named Kumail, Caliph Ali Abdul Mutalib the
fourth caliph of Islam, said:
“ Oh Kumail,
Knowledge is better than material wealth. Knowledge takes care of
you, whereas you have to take care of material wealth. Knowledge is
the judge, whereas material wealth has to be judged. Material wealth
becomes less, when you spent it; knowledge on the other hand grows
when you spent it.”
Caliph Ali adds that, “a person who is knowledgeable and practices
what he knows is far better than those who fast, practice qiyamullail
(i.e. performs night prayers) and performs the “jihad”. When a
knowledgeable Muslim dies, Islam will be that much poorer and
adversely affected, which cannot be put right by any other person”
(Al-Ghazali, 1975).
Intellectual capital and knowledge have a very strong relationship. The
definitions of intellectual capital by many authors clearly include the element of
“knowledge” such as – intellectual capital is, intellectual material-knowledge,
information, experience, intellectual property that can be put to create wealth (Stewart,
1999; Chatzkel, 2002), the ‘stock’ of knowledge that exists in an organization at a
particular point of time (Bontis et al., 2001). At the same time the critical role of
“knowledge” in intellectual capital is highlighted by other authors such as – an
organization increases its intellectual capital by creating, sharing and leveraging
knowledge (Allee, 2003) and managing and integrating knowledge to develop
intellectual capital (MacDougal & Hust, 2002). Intellectual capital can be seen as the
framework for intangible resources in an organization as well as a way to understand
the stock of those resources. Knowledge management leverages intellectual capital
through an integrated approach to create, share, and apply knowledge for desired
outcomes and both intellectual capital and knowledge management are two branches of
the same tree (Chatzkel, 2002).
Stewart (2001) identifies three pillars for knowledge economy to stand. The first
is that knowledge has become what we buy, sell and do. The second pillar is a mate, a
corollary to the first: knowledge assets – that is, intellectual capital – have become more
important to companies than financial and physical assets. The third pillar is the need of
37
new vocabularies, new management techniques, new technologies and new strategies to
exploit these newly vital assets.
Knowledge is a resource of value creation with a major attribute of appreciating
value with continuing use and sharing of knowledge instead of depreciating value of
tangible resources (Arthur, 1996). Sveiby (2001) identifies nine basic knowledge
transfers in organization which create value for the organization:
(i)
between individuals.
(ii)
from individuals to relational capital.
(iii)
from relational capital to individuals.
(iv)
from individual competence into structural capital.
(v)
from structural capital to individual competence.
(vi)
within the relational capital.
(vii)
from relational capital to structural capital.
(viii)
from structural capital to relational capital
(ix)
within structural capital.
The nine knowledge transfers exist in most organization but they tend not to be
coordinated in a coherent strategy due lack of accurate understanding of what a
knowledge-based theory may give them and most organizations also have the legacy
and cultures that block the leverage (Sveiby, 2001). The successful of knowledge
transfer processes need to be supported by the whole management system of the
organization including the information system, career development, reward and
recognition and performance management system.
Knowledge management involves gathering, structuring, storing, and accessing
information to build knowledge. It also involves creating a culture that encourages and
facilitates the creation and sharing of knowledge within an organization (Boyett &
Boyett, 2001). Organizations which manage knowledge effectively exhibit the
following characteristics (Zack, 1993):
(i)
Applying maximum effort and commitment to creating, sharing and
applying their knowledge.
(ii)
Applying an appropriate level and mix of skill, knowledge and expertise
to problems and opportunities.
(iii)
Employing an organizational and technical knowledge processing
strategy appropriate to the situation.
38
(iv)
Engaging in effective communication as evident by the reliable,
accurate, timely and meaningful exchange of information and
knowledge.
In this theoretical study, the relationship between intellectual capital and
knowledge is best described in the metaphor of the tree as discussed before. In the
above metaphor, the tree is the intellectual capital, the knowledge is the environment –
the dews, and rains from the sky, the light from the sun, the nutrients and minerals from
earth, and the fruits and emission of oxygen as the wealth created. Intellectual capital
can only be developed and it grows to produce the desired wealth in an organization
through the availability of healthy and the appropriate use of knowledge, which is
flowing and used throughout the organization. The life cycle of the tree follows a set of
inscrutable laws and principles in its close relationships with earth, rain, sun, other
trees, other living things as well as within its internal system, amongst its roots, trunks,
branches, leaves and fruits. This metaphor will be used as a foundation in developing
the holistic theory of intellectual capital with the inclusion of spiritual capital as one of
the important components of intellectual capital and the importance of knowledge in
relation to the intellectual capital that will be leveraged together to improve the overall
performance of the organization.
Summary
Through many research, efforts and studies, intellectual capital has been
identified as a key resource and driver of organizational performance. From the studies
of the fifteen current definitions, intellectual capital can be summarized as consisting
of:
i)
Human capital – the ‘tangible’ tacit knowledge embedded in the minds of
individuals
which
include
competence,
know-how,
education,
innovativeness, capabilities, work related knowledge and changeability.
ii)
Structural capital – the organizational capabilities and routines in performing
business which include organizational structure,
operating manual and
procedures, databases, documents, information systems, networking,
research and development capabilities, patents, copyright, trade marks,
system and technologies.
39
iii)
Relational capital – the relationship between the organization and the outside
environment, which includes alliances, relationship with customers,
partners, suppliers, investors, franchisers, distribution networks, government
bodies, image and brand, communities, public and environment.
In this study a ‘bigger picture’ and a holistic understanding of intellectual
capital is suggested by proposing to include ‘Spiritual Capital’ as an additional
component of intellectual capital. With this proposal, deficiencies in the current
definitions where the absent of another aspect of intangible assets such as vision,
culture, values, trust, honor, motivation, benevolence, relationship, team spirit and
others will significantly improve the definitions of intellectual capital. This new
definition will comprehensively cover all components of intangible assets. This
thinking is in line with many other studies before related to corporate culture,
organizational values and the achievement of a better organization’s sustainable
performance shown by many world-class organizations who adhere and practiced
the spiritual capital principle. The importance of the linkage between intellectual
capital and knowledge management also been studied, in developing the proposed
definition.
CHAPTER 3
THE DEVELOPMENT OF A NEW MODEL OF INTELLECTUAL CAPITAL
BY INCLUDING THE SPIRITUAL CAPITAL
Spiritual capital is the least defined of the intellectual capital components and
usually reserved for defining elements that we do not know how to otherwise identify
with one of the other elements. It discusses the essence of a high-performing, high level
communicating culture. The idea is to capture the essence or positive spirit of the
organization and harness this essence in developing intellectual capital (Hall, 1998).
The development of a new model of intellectual capital by including the spiritual capital
is timely and valid due to the deficiencies of the contemporary definitions of intellectual
capital – human capital, structural capital and relational capital as discussed in Chapter
2. With the inclusion of the spiritual capital dimensions in the definition, it will result in
a comprehensive and holistic meaning of intellectual capital.
3.1
Metaphor Of Spiritual Capital
This study would enhance the metaphor used by Edvinson and Malone (1998)
and Grafstrom and Edvinson (1999) in Figure 2.1 to explain the meaning of intellectual
capital, by arguing that the existence of the tree has actually broader meaning and
purpose, more than just to produce the ripe fruits. The tree will grow and flourish
healthily to produce the ripe fruits and to attain its purpose of existence only if it
receives and absorbs enough rainfall from the sky and light from the sun in a healthy
natural environment. The tree lives in the environment with rules, disciplines and
universal laws predetermined by the Creator of the world and receives blessings from
above in the form of rain and sunlight to live and prosper. The sun and rain will
naturally help the leaves, branches, trunk and roots to receive enough light, nutrients
and the necessary minerals for the tree’s output which are carried out by the root, trunk
41
and leaves systems. The tree naturally consumes all the resources it is provided with, to
produce the maximum output it can produce for the benefits of all forms of life. Man
and animals can benefit from the fruits, parts of the tree and the emission in the form of
oxygen that benefits all. Above and over all these, the growth of the tree, its inner and
external functions follow a set of inscrutable laws and principles. It applies to every
tree, everywhere. All these bring to the true broader meaning and purpose of the
existence of the tree.
3.2
What is Spiritual Capital?
Human beings are made up of the physical self and non-physical or intangible
self, such as emotion and mind, which are always referred to as the spirit. The interplay
between our spiritual yearning, our emotions, psychological capacity and our capability
to learn are all deeply interwoven (Howard, 2002). Man’s inherent design or inner
nature seems not only to rest on his anatomy and physiology, but also lies in his most
basic needs and the yearning and psychological capacity. This inner nature is not
obvious and cannot be seen, but is rather hidden (Maslow, 1987).
Spirit comes from the word ‘spiritus’ which means breath of life. Spirit is the
unseen force that breaths life into us, enlivens us and gives energy to us. Spirit helps to
define the true, it’s real and unique self that is “we” and confirms our individuality
(Moxley, 2000). In fact, one could say that it is the ‘spirit’ that provides meanings to
our existence.
Pokora (1997) defines spirituality as “faith in action” or “that, which links faith
and action”. As mentioned above, for Gardner (1999) spirituality reflects a desire to
know about experiences and cosmic entities that are not readily apprehended in a
material sense but that nonetheless, seems important to human being. Again in
Gardner’s opinion spiritual refers to everything - mind, body, self, nature, and the
supernatural and sometimes, even to nothing.
Sass (2000) in his case study on the subject of “characterizing organizational
spirituality”, concludes that the “alignment between the values of management and
42
members is vital to organizational spirituality”. Dehler and Welsh (1994) write of an
‘alignment’ that “reflects an individual’s emotional investment in an organization’s
purpose” and that this occurs when “individuals have internalised the organization’s
values and beliefs” (Dehler & Welsh, 1994; Lee, 1991).
Covey (1989) reports that almost all the literature in the first 150 years of the
success literature in the United States since 1776 focussed on what could be called the
‘character ethic’ as the foundation of success, such things like integrity, humility,
fidelity, temperance, courage, justice and patience. The character ethic teaches that
there are basic principles of effective living, and that people can only experience true
success and enduring happiness as they learn and integrate these principles into their
basic character and live in harmony with them. Principles such as fairness, integrity,
honesty, trust and human dignity are not practices or values but principles that are
guidelines for human conduct that are proven to have enduring, permanent value. They
are fundamental and essentially unarguable because they are self-evident (Covey, 1989,
1992).
Sun Tzu the great Chinese warrior and military genius during the Warring States
Period more than 2,300 ago in China said (Chung, 1991):
“ There are five things to consider in the study of warfare. There are
the moral cause, nature, situation, leadership and discipline. Moral
cause enables the people and government to share a common belief.
People can then work with the government through thick and thin,
even at the expense of their lives”
Krishnakumar and Neck (2002) report that some evidence exists that suggests a
link between workplace spirituality and enhanced creativity. Workplace spirituality is
also said, in a sense to enhance the personal fulfillment of employees (Burack, 1999), to
increase the level of honesty and trust within the organization (Wagner-Marsh and
Conely, 1999), and to increase commitment to organizational goals (Delbec, 1999;
Leigh, 1997)
43
3.2.1 Spiritual and Intelligence
Gardner (1999) defines intelligence as a “bio psychological potential to process
information that can be activated in a cultural setting to solve problems or create
products that are of value in a culture”. Gardner further explains that intelligences are
not things that can be seen or counted. Instead, they are potentially, presumably, neural
ones that will or will not be activated, depending upon the values of a particular culture,
the opportunities available in that culture and the personal decisions made by
individuals and/or their families, schoolteachers, and others. Gardner further discusses a
few more new intelligences such as naturalist intelligence, spiritual intelligence,
existential intelligence and moral intelligence. Spirituality reflects a desire to know
about experiences and cosmic entities that are not readily apprehended in a material
sense but that nonetheless, seems important to human beings.
In Gardner’s opinion spiritual refers to everything – mind, body, self, nature,
and the supernatural and sometimes, even to nothing. Existential intelligence is the
capacity to locate oneself with respect to the furthest reaches of the cosmos - the infinite
and the infinitesimal - and the related capacity to locate oneself with respect to such
existential features of the human condition as the significance of life, the meaning of
death, the ultimate fate of the physical and the psychological worlds, and such profound
experiences as love of another person or total immersion in a work of art. Moral domain
is a concern with those rules, behaviours and attitudes that govern the sanctity of life, in
particular the sanctity of human life and in many cases the sanctity of any other living
creatures and the world they inhabit. A moral sense entails the capacity to recognize
and make judgments about such issues. A key to this concern is a delineation of what is
proper or improper, right or wrong or just or unjust with respect to the sanctity of
human life or to all forms of life.
In conclusion, Gardner is of the opinion that by narrowly defining spiritual
intelligence as “existential” intelligence may be admissible, while the more broadly
defined “spiritual intelligence” to include those elements this study is now suggesting,
is not. Morality is in itself is also not an intelligence but is a statement about
personality, individuality, will, character, and in the happiest cases about the highest
realisation of the human nature. This is understandable because Gardner is interested
44
mainly in the cognitive domain, not what goes on when one intensely feels something –
those that happen in the affective domain.
Buzan (2001) refers spiritual to ‘non-physical’, life energy including emotions,
character, enthusiasm, courage and determination. The spiritual intelligence concerns
with how the growing, development and protection of nature, these qualities and the
soul-moral and emotional identity and the intensity if it’s emotional and intellectual
energy. Buzan is of the opinion that, the self-actualisation – the ultimate stage of human
development, referred to by Abraham Maslow in his ‘hierarchy of needs’ – is actually
what we now call a spiritual intelligence.
Tischler, Biberman and McKeage (2002) discuss the positive impacts of
emotional intelligence and spirituality to workplace effectiveness and performance.
They propose further investigation on the amount of linkages between emotional
intelligence and spirituality for the purpose of people development and enhanced
success in life, with people and society.
Emmons (2000), Zohar and Marshall (2001) postulate the notion that spirituality
could be intelligence. Emmons (2000) argues that spirituality meets Gardner’s (1993)
criteria for intelligence and Zohar and Marshall (2001) propose that “spiritual
intelligence” is the highest form of intelligence, among all the intelligences identified.
Zohar (2004) defines spiritual intelligence as the intelligence with which we access our
deepest meanings, values, purposes and highest motivations. It is our spiritual
intelligence, which gives us our innate ability to distinguish right from wrong and for us
to exercise our goodness, truthfulness and compassion in our lives. What conclusion
can we draw from the above lengthy discussion?
(i)
Spiritual intelligence is actually spiritual capital. How? It falls within the
definition of a capital because it is a ‘resource’ that is controllable by an
enterprise as a result of past events – the result of recruitment, the result
of solutions produced by individuals and teams, or innovations or
inventions produced by individual and teams – which can bring inflow
of cash or other assets, like patents in the future.
(ii)
Further, Gardner himself defines intelligence as the capacity ‘to solve
problems or create products that are of value to a culture’. Since
45
‘spiritual intelligence’ reflects a desire to know about experience and
cosmic entities that…seems important to human beings, then by
extension, it can be logically concluded that spiritual intelligence is
spiritual capital. It adds meanings and purpose. It focuses on
relationship and interrelatedness. It causes individuals with this
awareness to be more calm and balanced in life.
Zohar (2004) is of the opinion that spiritual intelligence and spiritual capital are
crucially linked. Spiritual intelligence’s sense of meaning, values and purpose generates
spiritual capital. Gillett (2002) defines spiritual capital as the energy of the human spirit
– a spirit that sees and acts from an appreciation that individually we each has a purpose
in life beyond just the accumulation of material wealth and collectively our lives are
intricately intertwined with others. It is the juice whose power and flow make all the
other ingredients come together and work effectively. Zohar (2004) defines spiritual
capital as a wealth that we can live by which enriches the deeper aspect of our lives. It
is a wealth we gain by drawing upon our deepest meanings, deepest values, most
fundamental purposes and highest motivations. It helps to make the future of humanity
sustainable, nourishes and sustains the human spirits. It is reflected in what a
community or organization exists for, what it aspires to and what it takes responsibility
for.
3.2.2
Spiritual, Culture and Religion
Religion is an explanation of the ultimate meaning of life, and how to live
accordingly, based on some notion of the transcendent (Swidler, 1999). MerriamWebster Dictionary defines religion as “a cause, principle or system of beliefs held with
ardour and faith” or “a personal set of institutionalized system of religious attitudes,
beliefs and practices”. Spiritual is defined as “of relating to sacred matters or concern
with religious values or relating to supernatural beings”. Bruce (1996) defines religion
as “religion consists of beliefs, actions and institutions which assume the existence of
supernatural entities with powers of action, or impersonal powers or processes
possessed of moral purpose”. According to John’s Gospel, the Spirit of God, like the
wind, “blows where it pleases, you can hear its sound but you cannot tell where it
46
comes from or where it is going” (John 3:8). Towards the beginning of the Hebrew
scripture we read that “God shaped man from the soil of the ground and blew the breath
of life into his nostril, and man became a living being” (Genesis 2:7) (Wright, 2000).
Christian spirituality is the quest for a fulfilled and authentic life, that involves taking
the belief and values of Christianity, and weaving them into the spirit of our lives so
that they ‘animate’ – provide the ‘breath’ and ‘spirit’ and ‘fire’ for our lives (McGrath,
1999). Jesus lives his values of love of God and love of his neighbors all the way across
– “Love the lord your God with all your heart and with all your soul. And with your
entire mind. This is the first and greatest commandment. And the second is like it: Love
your neighbor as yourself. All the law and the prophets hang on these two
commandments.” (Matthew 22:37 – 40) (Blancard and Hodges, 2003)
With the precepts of the ‘People of the Book’ – Christian, Muslim and Jews, an
‘Interfaith Declaration, a Code of Ethics on International Business’ is built to become
an international declaration (Swidler, 1999) with four key concepts of the faiths and
they form the basis of any human interaction:
(i)
The first principle is justice, which can be defined as just conduct,
fairness, and exercise of authority in maintenance of right. All three
faiths agree that God created the world and that justice must
characterise the relationship amongst its inhabitants.
(ii)
The second principle is mutual respect for love and consideration for
others is also inherent in the moral teaching of each religion. Love is
here rendered as mutual respect or reciprocal regard “love thy
neighbour as thyself” that exists between two individuals.
(iii)
A third principle shared by all three faiths is that of stewardship
(trusteeship) of God’s creation, the universe and all that is in it. Man
is set over it all with delegated responsibility as a steward charged with
its care and proper use for which he will have to give account.
(iv)
The fourth principle inherent to the value system of each of the three
faiths is honesty. It incorporates the concept of truthfulness and
reliability and covers all aspects of relationships in human life,
thought, word and action.
The United Nation also has adopted the resolution on A ‘Declaration and
Programme of Action on a Culture and Peace’ in the 53rd session, agenda 31 of the
47
United Nations (United Nations, 1999) which proclaims the period 2000 as the
‘International Year for the Culture of Peace’. Governments, international organization
and civil societies may be guided in their activities to promote and strengthen a culture
of peace in the new millennium, Article 1 in the declaration which says that a culture of
peace is a set of values, attitudes, traditions and modes of behaviour and ways of life
based on:
(i)
Respect for life, ending of violence and promotion and practice of nonviolence through education, dialogue and cooperation;
(ii)
Full respect for the principles of sovereignty, territorial integrity and
political independence of states and non-intervention in matters which are
essentially within the domestic jurisdiction of any state, in accordance
with the Charter of the United Nations and international law;
(iii)
Full respect for the promotion of all human rights and fundamental
freedoms;
(iv)
Commitment to peaceful settlement of conflicts;
(v)
Efforts to meet the developmental and environmental needs of present and
future generations;
(vi)
Respect for and promotion of the right to development;
(vii)
Respect for and promotion of equal rights and opportunities for women
and men;
(viii)
Respect for and promotion of the right of everyone to freedom of
expression, opinion and information;
(ix)
Adherence to the principles of freedom, justice, democracy, tolerance,
solidarity, cooperation, pluralism, cultural diversity, dialogue, and
understanding at all level of society and among nations; and fostered by
an enabling national and international environment conducive to peace.
Before the ‘Declaration on a Culture and Peace’ by the United Nation in 1999, a
‘Universal Declaration of a Global Ethic’ of the ‘Parliament of the World’s Religions’
(Hans Kung, 1996) has been organized within a statement of consensus, arrived at in
dialogues on the basic principle of ethics by the religions of the world. It declares:
(i)
We are interdependent. Each of us depends on the well being of the
whole. We have respect for the community of living beings, for people,
animals, and plants and for the preservation of earth, the air, water and
soil.
48
(ii)
We take individual responsibility for all we do. All our decisions, actions,
and failures to act have consequences.
(iii)
We must treat others as we wish others to treat us. We make a
commitment to respect life and dignity, individuality and diversity, so
that every person is treated humanely, without exception. Opening our
hearts to one another, we must sink our narrow differences for the
cause of the world community by practicing a culture of solidarity and
relatedness.
(iv)
We consider humankind our family. We must strive to be kind and
generous. We must not live for ourselves alone but should serve
others. We must put behind us all form of domination or abuse.
(v)
We commit ourselves to a culture of non-violence, respect, justice, and
peace.
(vi)
We must strive for a just social and economic order, in which
everyone has an equal chance to reach full potential as a human being.
We must speak and act truthfully and with compassion, dealing fairly
with all and avoiding prejudice and hatred. We must move from the
dominance of greed for power, prestige, money and consumption to
make a just and peaceful world.
Without denying the importance of spirituality in other religions such as
Christian, Jewish, Buddhist, Confucius, Taoist and Hindu, this study will generally
more focus on Islam and take most principles and concept of spirituality from Islamic
teachings. In principle, Islam is not only a form of worship or religion per se. It is all
pervasive. It is a complete way of life for those who acknowledge the Oneness of Allah
and the dignity of Muhammad (peace be upon him) as His final greatest messenger
(Nor, 1999). In order to be a true ‘Muslim’ three things are necessary (Islamic
Foundation, 1992) for a Muslim:
(i)
Faith, which is described in the Qur’an, the Holy Book of Islam, as
‘iman’ which consists of believing that Allah (God) alone is worthy of
worship and that Muhammad (peace be upon him) is the Messenger
of Allah. This implies that man and the entire creation exist only
because Allah wills them to exist hence the entire creation is the
manifestation of Allah’s power and glory and hence of His attributes.
Man is Allah’s servant and believes Muhammad (peace be upon him) is
49
the messenger of Allah who thus completes the process of
revelation. To believe that Qur’an contains all the revelations sent to
mankind through the Prophet, which provides guidance to us and
prescriptions for us by the Prophet in accordance with his saying and
practice, is an important component of faith.
(ii)
Action or ‘’amal’ in Arabic, is the manifestation in actually how far
we are the true servants of God. As action needs rules and regulations
according to which we organise our individual and social behaviour, the
revelations
and
the
actual
physical
embodiment
of
these
revelations in the actions of the Prophet provide both basis and the
structure of the law, the rules and guidelines of human conduct, known as
“shari’ah” in Arabic. This striving in the path of Allah with
faith as the guiding light and the scheme of action as the system and
structure has the implications such as – man is accountable to Allah
for all that he does, man’s life does not end with his death in this
world, he has life after death. Allah will judge him on the Last Day of
Judgement and sent him either to heaven or to hell.
(iii)
Realisation of man’s relation to Allah is the spiritual aspect known as
‘ihsan’ in Arabic, which the Prophet explains in the following way:
“You should worship Allah as if you are seeing him, for He sees you
though you do not see Him”. It means that all actions should be
performed with Allah in the vision. If that is not possible, always one
must realise that Allah is seeing him. This realisation is regarded as
the basis of true devotion and the basis of piety. This piety is the
source of righteousness, which is regarded as the core of just action.
When the above three – faith, action and realisation – are in perfect harmony,
man manifests the fact that he is the vicegerent of God on earth. Though man derives
everything from Allah, he is the most complete manifestation of the attributes of Allah
and as such he is Allah’s representative on earth.
The Islamic values system emanates from its worldview, which is underlined by
three fundamental principles of unity, vicegerency and justice. The belief system not
only affects the behaviour but also the character of the individuals. Character is the state
of the soul, which produces consistent and spontaneous physical actions either good or
50
evil to reflect the true state of that soul. Islamic values to illustrate their universality and
applicability in all system and societies are:
(i)
Every act should be accompanied by intention.
(ii)
Conscientiousness and knowledgeable in all endeavour.
(iii)
Proficiency and efficiency.
(iv)
Sincerity.
(v)
Passion for excellence
(vi)
Continuous self-evaluation.
(vii)
Forever mindful of the Almighty.
(viii)
Justice.
(ix)
Truthfulness
(x)
Patience
(xi)
Moderation
(xii)
Promise keeping.
The manifestation and implementation of the value system, principles,
behaviour and character of the Muslim man who is the representative of Allah in this
world will depend very much on his ‘heart’ as affirm by the Prophet who says:
“…Remember! Within the human self there is blot of blood. If that
blot is good, then the whole human self is good. If it is bad, then the
whole human self is bad. Remember! That is the heart”. (Narrated by
Bukhari & Muslim)(Al-Ghazali, 1992).
3.2.3
Spiritual and Servant – Leadership Concept
Greenleaf who propagates the ‘Servant –Leadership’ concept (Spears, 1995)
writes, “It begins with the natural feeling that one wants to serve, to serve first. Then
conscious choice brings one to aspire to lead. The difference manifests itself in the care
taken by the servant-first to make sure that other people’s highest priority needs are
being served”. The best test is – do those served grow as persons, do they, while being
served, become healthier, wiser, freer, more autonomous, more likely themselves to
become servants. Spears (1995) identify ten critical characteristic of the servant leader –
listening intently, empathy, healing, awareness, persuasion, conceptualisation, foresight,
stewardship, and commitment to the growth of people and building community. DePree
51
(1993) further proposes additional characteristics such as – integrity, courage in
relationship, sense of humour, intellectual energy and curiosity, comfort with ambiguity
and presence. Cashman (2003) suggests what he says as “six seeds of growth” for the
excellent leadership from the soul, based on values and belief - the seed of authenticity,
the seed of purpose, the seed of essence, the seed of relationship, the seed of value
creation and the seed of coaching.
3.2.4 Spiritual and the New Science Theory.
Capra (1996) and Wheatley (1999) discuss the new scientific understanding of
life of living and non-living systems including organism, social system and eco system,
which is very much related to intellectual capital, we have discussed before. In the
fundamental new understanding of “Deep Ecology” (Devall & Session, 1986) theory,
the world is seen as an integrated whole and interdependency between natures – all
living beings, individuals and societies are the essence of this new understanding. Each
of them is one part of the whole web of life. In “System Thinking” (Kim, 1999) theory,
living systems are considered properties of the whole which none of the parts have. The
whole is more than the sum of the parts. The properties and characteristics of the whole
cannot be understood from the properties and characteristics of the individual parts. The
whole systems will damage if the parts are isolated and not connected. The whole big
mirror will not be understood, if its breaks into smaller pieces and putting them together
again to become the original big piece. Correlation, connectedness and relationships
amongst the parts are essential in the integrated system. Similar principles are explained
in the ‘Gestalt psychology’ and ‘Quantum Physic’ theories (Capra, 1996), Lovelock
(2000) in his ‘Gaia’ theory sees the earth as a whole self-organising system.
The impact of vision, values and culture occupies a great deal of organizational
attention. Their effect is seen on organizational vitality, even if why such potent forces
exist can’t be defined. Many scientists now work with the concept of fields – the
invincible forces that occupy space and influence behaviour. Organization vision and
values act like fields, unseen but real forces that influence people (Wheatley, 1999).
52
The interdependency and connectedness amongst living in the world is clearly
expressed in a metaphor by Chief Seattle (1854).
“All things are connected
like the blood
which unites one family.
All things are connected
whatever befalls the earth,
befalls the sons of the earth.
Man did not weave the web of life;
he is merely a strand in it.
Whatever he does to the web,
he does it to himself”.
Entire living and non living systems and their entire environment are linked,
connected, in a network of interdependence coupled together to form a self-regulating
entity that makes life possible as shown in the example of natural food cycle system and
earth temperature self-regulating systems (Lovelock, 2000). The new science of nature
clearly shows that, in a universe, relationship and interconnectedness in the whole web
of life are the primary requirements and nothing will exist without the
interconnectedness and interdependency of this vast relationship. As an example, the
flowers of the tree can only exist on the existence of its own system – the stalk, leaves,
twigs, branches and roots – and the still larger system – the earth, heat, sun, sea, rain
and wind, of which the plant system is a part of it. And below the earth, the expansive
interconnection of roots, without boundaries of trees in the forest, forms a dense
underground network between trees and earth (Capra, 1996).
The real issue is that humans try to develop and understand human
organizations, using “Newtonian” principles, developed by Newton and Descartes,
which view the world through the mechanistic lens (Capra, 1999). This means that the
whole world is a collection of parts, which can be disconnected and reconnected again.
Many organizations are organised according to functions, objectives, expertise and
responsibilities. They create independent silos. Everything is viewed, as a material
object – it must be visible, tangible and measurable. The basic human dynamic and
needs such as values, trust, relationships and interdependencies and context are
neglected.
53
From the above discussion, this study offers a definition of spiritual capital,
which forms the fourth dimension, the component of intellectual capital. “Spiritual
capital is the position/principle held based on sound and correct understanding at the
cognitive level, lived and practised at the affective level, and reflected at the
behavioural
level,
the
concepts
of
interrelationship,
interconnectedness
and
interdependency for sustainable development and final prosperity and happiness for
all”.
3.3
Organization’s Intellectual Capital Central-Triangle Model.
The largest intangible asset in any organization is its people and their collective
intelligence. It means intellectual capital is largely driven by and derived from the
human side of the enterprise (Hall, 1998). Human capital is derived from the
knowledge, skill and intelligence of individuals, the thinking processes and actions
taken by individuals result in the establishment of structural and relational capitals of
the organization. It is similar for spiritual capital – organization can only benefit from
the individuals’ spiritual capitals by collectively leveraging their peoples’ spiritual
capitals to become their organization’s spiritual capital.
The ‘Intellectual Capital Central-Triangle model’ shown in the Figure 3.1
below describes the new proposed definition of intellectual capital for the organization:
HC
SpC
SC
RC
Fig 3.1: The proposed “Intellectual Capital Central-Triangle” model
54
The model is based on the following hyphothesis:
(i)
Spiritual Capital is not just another addition… it does not just add to
the total sum.
(ii)
The relationships amongst capitals especially amongst spiritual capital
and the other capitals are significant and critical.
(iii)
It controls, oversees, decides and determines how those three other
capitals should be used to satisfy higher level goals, even when losses are
incurred in the short, or even perhaps in the long-run, in favor of far better
returns through other more ethically better alternatives.
(iv)
These higher-level goals are meaningful to the organization and that
members of the organization truly believe and subscribe to these
goals.
(v)
It guides and determines how the other three forms of capital should
be used as parts of a system to achieve the needs of interrelationship,
interconnectedness and interdependency – the central features of
human life on earth.
(vi)
The end results are sustainable development and final prosperity and
happiness for all. “Spiritual capital nourishes and sustains the human
spirit and is the necessary future if we are to have a future at all”
(Zohar, 2004)
From the lengthy discussions on the meaning, contents and implications of
spiritual capital, the study can conclusively state that human beings are made up of the
physical body, human capital and spiritual capital. The earlier definitions of human
capital also support this view and that there exists another form of capital, what this
study calls a spiritual capital. For example, those definitions easily identify two groups
of capital – the ‘tangibles’, and the ‘intangibles’ which includes competence,
experience, skills, education and know-how. The presence of this intangible capital is
reflected in the values, principles, feelings, emotion and behaviours that the individuals
have. Like the gravity whose presence cannot be physically located but the effect of its
presence can be felt nevertheless regardless! Spiritual capital is the rudder of a ship that
determines not just what is right or wrong, good or bad but provides the will to do what
is always right and good, even when expediency tells you otherwise.
55
From this theoretical studies, spiritual capital seems to be the most paramount
and fundamental component of the intellectual capital of any individual or organization.
It is the principle or the compass that governs and determines what is right and wrong,
what is good or bad. This principle cannot be violated without paying the price for it.
When a strong spiritual capital is inculcated and becomes ‘a way of life’ of the
individual and organization, eventually it will determine the nature, behaviour, attitudes
and character of the individual and organization.
These will ensure that the individual on organization will be endowed with
honesty,
sincerity,
trustworthiness,
fairness,
responsibility,
philanthropy
and
gratefulness – among others. It will determine the correct and most sound decision,
actions and reactions. At the same time spiritual capital will also generate emotion,
power, motivation, courage, strength, commitment, a sense of personal fulfilment, self
policing, and inner consciousness to the owner of the spiritual capital to adhere to the
values, principles, beliefs and faith as discussed earlier. The existence of a set of
principles or ‘Laws of Nature’, as some choose to call them, transcends culture, space
and time. And since man is part of nature, he too is governed by these laws – it does not
matter whether he likes it or not, or accepts it or not. Like gravity or the true north, its
effects will be felt. They will continue to influence life’s activities, whatever that
individual may choose to believe or say about it.
For intellectual capital to work as explained in the metaphor of the tree,
relationships and interconnectedness, forms the basis of all the interactions of all the
capitals within the larger definition of intellectual capital this study is now proposing. It
is critical and significant to remember that no one capital can produce the required
results on it’s own without the existence and interdependencies from the other capitals
from outside its immediate environment. No other kind of capital really works without
an underlying base of spiritual capital (Zohar, 2004). Spiritual capital plays the vital
role in the making of an effective establishment through the correct and effective
relationships amongst all the capitals. Spiritual capital becomes the driver, guider,
controller and referee on how the other capitals should be used in operating and
managing the relationships to produce the required or desired outcomes. Spiritual
capital is the critical element that makes everyone understand, appreciates and accepts
that there must be relationship, connectedness and interdependency within an
organization and outside the organization.
56
This is the message conveyed to us by nature – in fact this is what it teaches us!
This understanding and belief must be followed by practice – in human organizations
and within the larger life in general. For the tree mentioned in the above metaphor, the
ability to adhere to these laws and principles has been predetermined for it. For us
humans and our organizations, it appears that only the spiritual capital – when available
or present and appropriately installed and nurtured can ensure such compliance.
As quoted before, most of the time misbehavior and mismanagement of leaders
of organization happen not because of the lack of knowledge but because these leaders
fail to practice the principles they know and accept to be correct and to be loyal only to
the truth. Unlike the tree, man has freedom to choose – but they choose wrongly after
knowing full well that the choice is wrong. Therefore it follows that another
competence, capability or awareness, this study call this the spiritual capital, is
necessary to guide how one chooses to use his or her intellectual capital.
3.4
The Potential Relation of Spiritual Capital to Other Forms of Capital
Besides the definition of capitals given above, further comparisons amongst
other capitals and spiritual capital, this study offers below additional convincing
justifications that spiritual capital is also another form of capital:
(i)
Unlike structural capital which is “what is left after the people have
gone home” (Mayo, 2000), human capital and spiritual capital on an
individual level is the result of a combination of these factors – education,
experience and attitude about life and business (Hudson, 1993) and
socialised values and culture. Similar to human capital, spiritual capital of
an organization is the organization’s capability to extract, nurture and
leverage the individual spiritual capital accordingly. People’s departure
can result in the loss of ‘the most important’ asset and will weaken the
organization.
(ii)
Physical capital is created by changes in materials to form tools that
facilitate production. Human capital is created by changes in persons
that bring about skills and capabilities (Adler & Kwon, 1999).
57
Spiritual capital is created by changes in persons that bring about the
values, culture, emotional energy, heart and will power (Gillett, 2002)
that makes them able to facilitate and act in the ways needed for
productive activities.
(iii)
Spiritual capital, like other forms of capital, can be learned, nurtured
and improved (Zohar, 2004). It is a resource into which other resources
can be invested with expectation of future benefits or returns (Adler &
Kwon, 1999). Through investment in training, spiritual development,
consultation and guidance, the spiritual capital components – emotional
energy, heart power and will power (Gillett, 2002) – can be learned and
relearned, nurtured and improved.
(iv)
Like physical capital, human capital, structural capital and relational
capital, spiritual capital needs maintenance so that the energy and
power of spiritual capital is flourished and improved with time – else
it will deteriorate and lose efficacy.
(v)
Like human capital and some forms of public goods such as
knowledge (Adler & Kwon, 1999), spiritual capital normally grows
and develops with use. Values, principles, and integrity and trust
demonstrated today will be reciprocated and amplified tomorrow.
3.5
Ten Clues to the Presence of Spiritual Capital Within Individual or
Organization.
The presence of spiritual capital within individual or within organization can be
seen or felt as the individual think, behave and act in daily activities – interaction and
communication others and how the organization plans, organizes, operates, acts and
performs in it’s daily business operations. Zohar and Marshall (2004) list ten qualities
they believe are possessed by a company, which is high in spiritual capital:
(i)
Placing its goals and strategies in a wider context of meaning and
value.
(ii)
Self-aware company, which knows what it believes in, what and
whom it affects and what it wants to achieve.
58
(iii)
Has deep human values and a deep vision, which is invisible but inspires
everything it, does.
(iv)
Has a high sense of holism or connectivity.
(v)
Compassionate with all those it affects or could affect.
(vi)
Being true to its own values and vision and dares to be different.
(vii)
Always ready to be spontaneous and willing to change its paradigm
if necessary.
(viii) Seeks a positive response to adversity.
(ix)
Maintains a sense of deep humility.
(x)
Has a sense of vocation – feel called-upon to share it’s wealth in
meeting the wider needs of community, humanity and life itself.
Gillett (2002) also lists the work of spiritual capital, which will create companies with:
(i)
Higher and broader purpose
(ii)
Living values.
(iii)
Vibrant, collaborative organization
(iv)
Powerful customer relationship
(v)
Superior business performance.
In this study of the definition and understanding of spiritual capital, the
individuals or organizations whose spiritual capital is present in them will have the
following characteristic:
(i)
Belief in the existence of a set of principles or laws of nature authored
by the “Creator”.
(ii)
A strong, clear set of principles, beliefs, direction and goals in the
heart and mind, in accordance
with universal principles, guidance
and references. The principles and beliefs are propagated and practised
in every aspect of life.
(iii)
Interrelationship, interconnectedness and dependency are primary
and critical and they are always under consideration for all actions and
activities taken.
(iv)
Clear values and culture, which are adhered to in the mind, heart and
soul. Every behaviour and action taken is in accordance to these
adhered values and culture.
59
(v)
Behave and act with honour, ethics, integrity, honesty, sincerity and
trustworthiness and exercise self control in all actions.
(vi)
Goodness, truthfulness, righteousness, fairness and justice are the
prime anchors and references that govern every decision and action.
(vii)
Comprehensive consideration for the present and future of every
aspect of life and nature including social, economic and environment
in every plan and action.
(viii)
Courage,
strength,
dedication,
determination,
commitment,
self
esteem, enthusiasm, optimism, motivation, being responsible, being
accountable, bravery and sacrifice are the manifest behaviours to the
presence of spiritual capital in that person.
(ix)
Gratefulness, thankfulness, benevolence, love, respect and care for
others including Mother Nature.
(x)
Demonstrating a high degree of team spirit and cohesiveness, respect
and tolerance with companions and others in pursuing a common
mission.
3.6
Analysis and Comments
From the examples of the successful world-class companies who possess and
practised spiritual capital in their businesses as discussed in Chapter 2 before, a
summary on the ‘extra’ features that indicate the presence of spiritual capital beside
their human capital, structural capital and relational capital is shown in Table 3.1:
60
Table 3.1: Features and characteristic of Recovery or Rebound
Organization
Salient features of
recovery or rebound
AT&T Canada Human capital
(Gillett, 2002) Structural capital
Relational capital
Merck &
Company
(Velasquez,
1998)
Human capital
Structural capital
Relational capital
CISCO
(Lucas, 1999)
Human capital
Structural capital
Relational capital
Shell
Human capital
(Shell Report, Structural capital
Relational capital
2001)
Continental
Airlines
(Bethune,
1998)
Human capital
Structural capital
Relational capital
IBM
(Gestner,
2002)
Caterpillar
Inc.(Despain,
2003)
Human capital
Structural capital
Relational capital
Human capital
Structural capital
Relational capital
The ‘extra’ features that indicate the
presence of spiritual capital
The power of purpose, serving the whole,
guided by values, collaboration, unity,
inspiration, motivation, beliefs, values,
expectation, energy, connection and
responsibility.
Ethic, moral, love and care for others,
philanthropic and benevolence, optimistic
of future value.
Corporate culture, direction, goals, bravery,
truthfulness, common aspiration, desire,
love, courage, enthusiasm, strength,
dedication.
Principle, direction, beliefs, values,
responsibilities, love, consideration,
benevolence, respect and care, trust,
commitment.
Direction, corporate culture, team spirit and
cohesiveness, sincerity, truth,
trustworthiness, spirit of honesty, honour,
bravery, responsibility, courage, love,
respect and care.
Direction, corporate culture, trust,
responsibility and accountability, courage,
determination, strength, self control.
Vision, core values, trust, mutual respect,
team work, risk taking, commitment, caring
determination, shared belief, integrity,
struggle.
From Table 3.1, it is obvious that the common features or characteristics found
in these organizations are:
(i)
All the organizations have all the three components of intellectual capital
– human capital, structural capital and relational capital.
(ii)
Plus one other presence such as direction, principles, belief, corporate
culture, values, team spirit, spirit and commitment, honesty etc. as
discussed and listed in the “Ten Clues to the presence of spiritual
capital within individual or organization” above.
61
Shell’s ‘sustainable development’ and ‘responding to those touched by Shell’s
activities, Catucci’s approach to brings the breathing life back into AT & T Canada,
Bethune’s effort at Continental Airlines, values-based approach by Despain at
Caterpillar Inc and the rest clearly show features owned and practised by these
organizations, that the management teams in these organizations not only understand
what they have to do at the cognitive level, but also believe in those things that they
understand at the affective level – they live those values right to the level of their bone
marrow. In the case of Shell, by values and commitment Shell seems to mean issues
like sustainable development and responding appropriately to those touched by Shell’s
activities. These cannot be effectively handled only by the three components of IC
identified. They require an awareness and acceptance of higher level goals, ideals if you
like, that can only be understood and accepted by those who have the features of
spiritual capital within themselves or ‘within their organization.
3.7
New Definition of Intellectual Capital
Rules, regulations, sanctions, codes of ethics are factors that are imposed from
the outside to gain conformance and compliance. In all the cases of the successful
companies we have mentioned – IBM, Shell, Continental airlines, Cisco, Caterpillar
Inc. – none of these was the motivation factor or deciding factor. In each and every
case, it was the principles and values of the management team that were the most telling
factor. The team was imbued with principles and values not captured and included in all
the current definitions of intellectual capital. In conclusion, the new definition of
intellectual capital this study proposes means: ‘The intangible assets’, which can be
leveraged or converted into value or profit by the spiritual capital, which includes:
(i)
Human capital – the ‘tangible’ tacit knowledge embedded in the minds of
individuals which include skills, knowledge, know-how, experience,
competence, capability and abilities.
(ii)
Structural capital – the organizational capabilities and routines in
performing business which include organizational structures, operating
manual and procedures, databases, research & development capabilities,
patents, copyright and trade marks, system and technologies.
62
(iii)
Relational capital – relationship between the organization and the outside
environment which includes alliances and relationship with customers,
partners,
suppliers,
investors,
franchiser,
distribution
networks,
government bodies and agencies, image and brand, communities, the
public and environment.
(iv)
Spiritual capital – the ‘intangible’ knowledge, faith and emotion
embedded in the minds of individuals and in the heart of the organization
which includes vision, direction, guidance, principles, values and culture.
The individual and organization behave and act with honor, integrity,
sincerity, honesty, truth, justice, trust, love, moral and ethical. It also
includes motivation, self-esteem, courage, strength, commitment,
determination, desire, enthusiasm and team spirit. It focuses on
interrelationships,
interconnectedness
and
interdependency
for
sustainable development with the view to achieve final prosperity and
happiness for all. It governs how the other three capitals should be used!
Spiritual capital plays a critical role in the establishment of connectedness and
interrelationships, purpose and meanings, amongst the various types of capitals within
the organization to produce the desired outcomes. The flow cycle – with its emphasis
on interrelationship and interconnectedness – can only take place if it is guided and led
by the spiritual capital, to the benefits of the organization which can at the same time
leverage its other forms of capitals. There is no other kind of capital that really works
without an underlying base of spiritual capital (Zohar et al., 2004).
From this theoretical study, spiritual capital is the most paramount and
fundamental component or ingredient to intellectual capital of any individual or
organization. It acts as the driver and the compass that governs and provides the “true
north” to the correct application of the other three components of intellectual capital –
human capital, structural capital and relational capital. These are the four components
of intellectual capital, which this study is now proposing. With spiritual capital,
intellectual capital can be managed and leveraged for the benefits of the individual and
organization while at the same time resulting in the benefits for people, organization,
government, the environment and the whole world.
63
This study intent to show that with the inclusion of those factors found in the
cases involving IBM, Continental Airlines, Cisco, Caterpillar Inc. discussed above,
intellectual capital needs a new definition. Not only will this bring about a strong
positive relationship between intellectual capital and business but also a high
performance standard will be maintained, and the relationship will be enhanced. This
study intends to show that these new dimensions should be included in a new definition
of intellectual capital and that they rightly belong to the realm of intellectual capital. In
this case study, the new definition of intellectual capital – the proposed CentralTriangle Model of Intellectual Capital will be examined – on the affect on the
performance of Telekom Malaysia through a mixed method research methodology
which will be discussed in Chapter 4.
Summary
The development of spiritual capital as a component of intellectual capital
involves the theoretical studies from the past studies in the aspect of human being –
physical, non-physical, thinking and feeling, character, intelligence, religions, culture,
universal declarations and management philosophies such as ‘Servant – Leadership’,
the ‘ New Science Theory’ and the ‘Law of Nature’. From these studies and the
understanding of current definitions of intellectual capital which lack of the spiritual
capital dimensions, an organization’s ‘Intellectual Capital – Central Triangle’ model is
proposed in this study. The model is based on the hypothesis that:
i)
Spiritual capital does not just add to total sum.
ii)
The relationship amongst capitals is significant.
iii)
Spiritual capital controls, oversees and determines how those other
capitals should be used to satisfy higher level goals – those meaningful,
truly believed and subscribed to by the organization.
iv)
Spiritual capital guides and determines how the other capitals should be
used as parts of a system to achieve the need of interrelationship,
interconnectedness and interdependency.
v)
The end results are sustainable development and prosperity and
happiness for all.
64
Many world-class corporations have shown the affect of spiritual capital
dimensions on their organizational performance where their sustainable
performance is not only due to the existence of their human capital, structural
capital and relational capital but more importantly the ‘extra’ features due to the
presence of spiritual capital in their organizations.
Hence, the proposed new definition of intellectual capital is ‘The intangible
asset, which can be leveraged or converted into value or profit by the spiritual
capital, which includes – human capital, structural capital, relational capital and
spiritual capital. The spiritual capital is defined as ‘the intangible knowledge, faith
and emotion embedded in the minds of individuals and in the heart of the
organization which includes vision, direction, guidance, principles, values and
culture. The individual and organization behave and act with honor, integrity,
sincerity, honesty, truth, justice, trust, love, moral and ethics. It also includes
motivation, self-esteem, courage, strength, commitment, determination, desire,
enthusiasm and team spirit. It focuses on interrelationships, interconnectedness and
interdependency for sustainable development with the view to achieve final
prosperity and happiness for all. It governs how the other three capitals should be
used!
In this study the new definition of intellectual capital will be examined on the
affect on the Telekom Malaysia’s performance through a mixed method research
methodology.
CHAPTER 4.
RESEARCH DESIGN AND METHODOLOGY
This chapter explains the design and methodology of this study. It covers the
research framework, data collection, sampling and the instrumentation used. Since this
research is an exploratory research, no hypothesis has been developed to be empirically
tested. A hypothesis will only be developed at the end of this research.
4.1
Research Framework.
Creswell (2003) proposes a research framework in designing the research
proposal as shown in Figure 4.1 below:
Elements of Inquiry
Alternative Knowledge Claims
Approach to Research
Strategies of Inquiry
Qualitative
Design Processes
Quantitative
Mixed Method of Research
Questions
Conceptualised
By the researcher
Methods
Translated
Theoretical lens
Into practice
Data analysis
Write-up
Validation
Figure 4.1: Knowledge claims, strategies of inquiry, and methods
leading to approaches and the design process
66
Creswell’s (2003) model, addresses three questions central to the design of
research:
(i)
What knowledge claims the researcher is making?
(ii)
What strategies of inquiry will inform the procedures?
(iii)
What methods of data collection and analysis will be used?
Stating knowledge claims means that researchers start a project with certain
assumptions about how they will learn and what they will learn during their inquiry.
Creswell (2003) discusses four knowledge claims - post positivism, constructivism,
advocacy/participatory and pragmatism. Strategies of inquiry provide specific direction
for procedures in research design such as quantitative, qualitative and mixed methods
strategy. It is useful to consider the full range of possibilities for data collection and
their degree of predetermined nature and their focus for numeric versus non-numeric
data analysis (Creswell, 2003)
This research is a case study of Telekom Malaysia. Case study research is a
research strategy (Eisenhardt, 1989; Denscombe, 1998) which is an in-depth study
which focuses on the particular instances with a “holistic’ view of the relationships and
processes of the case with multiple sources of data such as archives, interviews,
questionnaires and observations (Eisenhardt, 1989; Merriam, 1997; Denscombe, 1998;
Creswell, 2003). This research method is chosen because researchers interested in
insight, discovery and interpretation rather than hypothesis testing (Merriam, 1997) and
this approach has considerable ability to generate answers to the question ‘why?’ as
well as ‘what?’ and ‘how?’(Robson, 1992).
Case study research can involve qualitative data only, quantitative only or both
(Yin, 1994) but the combination of data types or the “triangulation” through multiple
data, provides a comprehensive perspective of the matters, enhances the reliability and
validity of the data, improves the quality of the research and provides a stronger
substantiation of constructs and hypothesis (Eisenhardt, 1989; Denscombe, 1998;
Taylor & Bogdan, 1998; Hussey & Hussey, 1997; Merriam, 1997). Various aims can
be accomplished through case study such as to provide description, test theory or
generate theory (Eisenhardt, 1989).The aim of this case study research is to arrive at a
more comprehensive understanding through investigation of the insight and discovery
of the subject under study.
67
In this research, a mixed method research approach is used with a pragmatic
knowledge claim (e.g., consequence-oriented, problem-centred and pluralistic)
(Cresswell, 2003) with strategies of inquiry that involve sequential quantitative and
qualitative data collection - questionnaires survey, document analysis and interviews.
With broad theoretical perspective guides, data collection is done sequentially in
phases, beginning with a questionnaires survey to collect the generalised results of the
population, followed by secondary data or document analyses to identify the
relationship and corroboration between them and finally the interviews to conclude the
overall “holistic” understanding (Mathinson, 1988; Denscombe, 1998) of the subject
under study.
As quoted by Merriam (1998), rarely, however are all three methods of data
collection used equally. One or two methods of data collection predominate – the
other(s) play a supporting role in gaining an in-depth understanding of the case. In this
study, questionnaire survey predominate the method of data collection.
4.2
Research Model
Theoretical research model for this research is shown below in Figure 4.2. The
whole study was based on this theoretical model:
Independent variable
Human
Capital
Knowledge Flow
K
N
O
W
L
E
D
G
E
Dependent variable
Managing
Spiritual
Capital
Leveraging
Relational
Capital
Knowledge
Flow
Figure 4.2: Research model
Structural
Capital
P
E
R
F
O
R
M
A
N
C
E
68
The aim of this study is to investigate the influence of intellectual capital on the
performance of Telekom Malaysia and to provide a new definition of intellectual
capital that includes spiritual capital into the existing model. This study also wants to
establish whether this new inclusion-the spiritual capital, can indeed leverage the use
and application of the other original capital – human capital, structural capital and
relational capital. It is also necessary to identify the present level of intellectual capital
and which component of intellectual capital has a more critical influence on the
performance. Apart from attempting to arrive at a more comprehensive understanding
of the subject, this study also wants to find out the importance of knowledge
management and the importance of managing and leveraging of intellectual capital to
achieve Telekom Malaysia’s business competitiveness.
Through literature review this study has identified six important independent
variables that contribute to the performance of Telekom Malaysia. Independent
variables are variables that (probably) cause, influence or affect outcomes (Creswell,
2003). The independent variables are; human capital, structural capital, relational
capital, spiritual capital, knowledge management and managing and leveraging of
intellectual capital. The dependent variables are variables that depend on the
independent variables; they are the outcomes or result of the influence of the
independent variables (Creswell, 2003). In this research, the dependent variable is the
performance improvement of Telekom Malaysia which includes the organizational
leadership, business leadership, operational efficiency and business performances.
All of the independent variables and dependent variables - human capital,
relational capital, structural capital, knowledge and performance improvement were
identified and derived from studies by past researchers like Youndt (1998), Bontis
(1999), Walker (2001), Hayton (2002) and Shook (2003). Spiritual capital is the new
component of intellectual capital, and managing and leveraging of intellectual capital is
the independent variable proposed by this study.
69
As shown in the research model, there are six independent variables. The first
four independent variables refer to assets that individuals and organizations actually do
have:
(i)
Human capital
(ii)
Structural capital
(iii)
Relational capital
(iv)
Spiritual capital – the new proposal that together form the intellectual
capital.
The other independent variables refer to what do individuals and organizations do with
those assets – what is done with the accumulated knowledge they have and the extent to
which the first four independents are managed and leveraged.
The first variable is human capital. Human capital examines the extent of
knowledge of an individual, which includes competence, know how, education,
innovativeness, capabilities and abilities to the overall performance of Telekom
Malaysia. Human capital has a positive influence on organization performance
(Youndt, 1998; Bontis, 1998; Bontis et al., 2000; Walker, 2001)
The second independent variable is structural capital. Structural capital is the
sum of organizational capabilities and routines in performing business activities, which
include organizational structure, operating manual and procedures, databases,
documents, information and networking system. Research & development capabilities,
patents, copyright and trademark are not studied in this research because of Telekom
Malaysia’s nature of business as a service industry. Structural capital has a positive
influence to organization performance (Bontis, 1998; Bontis et al., 2000)
The third independent variable is relational capital. Relational capital
determines the extent of the relationship between Telekom Malaysia and the outside
environment which includes alliances, customers, partners, suppliers, investors,
distribution networks, government bodies and agencies, image and brand, communities
and the public to the overall performance of Telekom Malaysia. Relational capital has a
positive influence on an organization’s performance (Bontis, 1998; Bontis et al., 2000).
Market orientation – one of the manifestations of leveraging relational capital – has an
70
important and positive relationship on business performance (Narver & Slater, 1990;
Jaworski & Kohli, 1993)
The fourth independent variable is spiritual capital. Spiritual capital is an
additional capital proposed by this study. Spiritual capital determines the extent of the
most paramount and fundamental influence on intellectual capital, that is, the
‘intangible’ knowledge, faith, belief and emotion embedded in the minds and hearts of
individuals within Telekom Malaysia to the overall performance of Telekom Malaysia.
There are many successful companies such as Cisco, Continental Airlines, IBM, GEC,
Microsoft, and Caterpillar that have shown from their experiences that the spiritual
capital-as defined above such as vision, core values and corporate culture, has played a
significant and important role to the sustainable and successful performance of their
companies (Lucas,1999; Stauffer, 2000; Bethune,1998; Gestner, 2002; Thielen,1999;
Despain, 2003)
The fifth independent variable is the knowledge management. Knowledge
management determines the extent of knowledge identification, acquisition,
application, sharing, development, creation and preservation of knowledge to the
overall performance of Telekom Malaysia. Organizations with higher knowledge stocks
relatively have higher business performance (Bontis, 1999).
The final independent variable is to determine the extent of leveraging and
managing of intellectual capital to the overall performance of Telekom Malaysia. These
aspects are important to ensure the intellectual capital that exists in the minds and
hearts of the employees of Telekom Malaysia, is managed and leveraged, to achieve
sustained and improved business performance.
The dependent variable is the perceived performance of Telekom Malaysia
which covers the aspect of operating efficiencies, business performances,
organizational leadership and business leadership. The perceived performance of
Telekom Malaysia is based from the understanding of the respondents on Telekom
Malaysia performance as stated in the Telekom Malaysia’s 2002 annual report and any
other official literature or documents on Telekom Malaysia which had been read by the
respondents. These performance indicators are relevant and important in measuring the
71
stage of Telekom Malaysia performance as a telecommunication industry leader in
Malaysia and to achieve the vision of Telekom Malaysia – to be the communications
company of choice, focused on delivering exceptional value to customers and other
stakeholders.
4.3
Questionnaire
The questionnaires are designed based on the variables indicated in the research
framework shown in Figure 4.2. There are 93 items altogether including the questions
in the demographic section. The questionnaires are divided into five parts. Part I to III
measure the six independent variables - human capital, structural capital, relational
capital, spiritual capital, knowledge management and managing and leveraging of
intellectual capital. Part IV measures the dependent variable - the perceived
performance of Telekom Malaysia. Part V measures the demographic background of
the respondents. The five-point Likert-type scales was used which tap into individual’s
perceptions, ranging from 1 (strongly disagree) to 5 (strongly agree) throughout the
questionnaire.
The previous researchers used the Likert-type scale predominantly. Youndt
(1998) used the five-point Likert-type scale to measure the human management system,
intellectual capital and organizational performance. Shook (2002) used the same
methodology in analysing investment broker attitudes of intellectual capital value.
Bontis (1998) used the seven-points Likert-scale to measure knowledge stocks and flow
and business performance and Bontis et al. (1999) to measure intellectual capital and
business performance. Items in the questionnaire were either developed by the author
or adapted from the works of researchers. The details of the items used for each
variable are described below:
Part 1: Intellectual Capital
Intellectual Capital is defined as an identifiable non-monetary asset without
physical existence held for use in the production or supply of products or services, for
rental to others or for administrative purposes.
72
Previously there are three components of Intellectual Capital:
Intellectual Capital = Human Capital + Structural Capital + Relational Capital
The fourth component of intellectual capital proposed by the author in this survey, as
an additional capital is, spiritual capital. Hence, in this survey there are four proposed
components of intellectual capital:
Intellectual Capital = Human Capital + Structural Capital
+ Relational Capital + Spiritual Capital
The sample items and their sources are as follows:
A. Human Capital
Human capital is the tacit knowledge of an individual, which includes employee
competence, know-how, education, innovativeness, capabilities, abilities, and work
related knowledge and changeability. The sample items and their sources is shown
in Table 4.1
Table 4.1: Human capital
Items
A1
A2
A3
A4
A5
A6
A7
A8
TM has a highly competent management team (MCM)
Source
Modified from Bontis
(1998)
My employees can quickly adopt to changes made by Developed by Author
TM's management without any difficulty
My employees are experts in their jobs
Modified from Bontis
(1998) and Youndt
(1998)
My employees are brilliant, innovative and creative
Modified from Bontis
(1998) And Youndt
(1998)
My employees are the most competent in the Modified from Bontis
telecommunication industry
(1998)
My employees cooperate, have trust and show respect Modified from Bontis
when working in teams
(1998)
My employees have the capabilities to operate the Developed by Author
information system required for them to perform their
jobs
Our management provides conducive working Modified from Bontis
environment for me and my employees to share ideas and (1998)
practice creativity
73
B. Structural Capital
Structural capital is the organizational capabilities and routines in
performing business which include organizational structures, operating manual and
procedures, databases, documents, information system, networking system, research
& development capabilities, patents, copyright and trade marks, system and
technologies. The sample items and their sources is shown in Table 4.2
Table 4.2: Structural capital
No.
Items
Source
B1
Policies, procedures and work instructions in my
department are contained in manuals and databases
Knowledge and information in my department are
embedded in our structure, systems and procedures
Although key people left my department, vital
knowledge and information has always remained with
the organization
My employees have accessibility to information system
required for them to perform their jobs
Modified from Youndt
(1998)
Modified from Youndt
(1998)
Modified from Bontis
(1998) and Youndt
(1998)
Modified from Bontis
(1998)
B2
B3
B4
B5
Our information system is integrated with vendor's Modified from Youndt
system.
(1998)
B6
We use extensive and advanced integrated management
systems in our business operations to better serve our
customers
My division synergies our strength and information with
other divisions to deliver the best to customers
B7
B8
Modified from Youndt
(1998)
Modified from Youndt
(1998) and Bontis
(1998)
Process improvement and innovation of its products, Modified from Bontis
services and systems are done actively to improve my (1998)
department’s performance as well as to reduce cost
C. Relational Capital
Relational capital is the relationship between the organization and the
outside environment, which includes alliances, and relationship with customers,
partners, suppliers, investors, franchiser, distribution networks, government bodies
and agencies, image and brand, communities and public and environment. The
sample items and their sources is shown in Table 4.3
74
Table 4.3: Relational capital
No.
Items
Source
C1
Our vendors have performed extremely well in
supporting my department to achieve our business targets
My department uses customer feedbacks effectively in
our effort to provide quality services to our customers
My department uses feedback and recommendations
from vendors to produce better products and services to
our customers
Government agencies provide good support to us in our
effort to serve the people better
Modified from Youndt
(1998)
Modified from Bontis
(1998)
Developed by Author
C2
C3
C4
C5
C6
C7
C8
Developed by Author
TM's distribution channel (e.g.: Kedai Telekom) has been Developed by Author
performing excellently to serve customers
TM's brand name is well-known in Malaysian Developed by Author
telecommunication services
TM’s business collaboration with other international Developed by Author
telecommunication operators enhances TM's competitive
edge and performance
My department can serve our important customers Modified from Bontis
excellently because we have a ‘customers profile’ (1998)
including their requirements and level of services
expectation.
D. Spiritual Capital
Spiritual capital is the ‘intangible’ knowledge, faith, belief and emotion
embedded in the minds and heart of the organization, reflected in the mind and
heart of its employees. This includes vision and direction, principles, values and
culture, integrity, sincerity, honesty, truth, trust, love, moral and ethic. It also
includes motivation, self-esteem, courage, strength, commitment, teamwork,
determination, desire and enthusiasm. It is the most paramount and fundamental to
intellectual capital of any individual or organization. It acts as the driver, the
compass that governs, and it provide the “true north” to intellectual capital – human
capital, structural capital and relational capital. The sample items and their sources
is shown in Table 4.4
75
Table 4.4: Spiritual capital
No.
Items
D1
I have strong faith in the present TM's higher
management team in performing their duties to achieve
TM’s vision and mission statements in the near future.
TM will be more profitable and prosper through
financial and non-financial contributions to religious
and philanthropic (love of mankind) activities.
My department always considers environmental health
and public social benefits in any planning, development
and implementation of our projects
TM will reap future business advantages by providing
services in non profit making areas
I am thankful and loyal to TM. I will never leave TM
although other competitor is offering better salary and
incentives to me.
My department shares a “common belief” with other
departments in performing our duties to achieve TM’s
goals and mission.
TM’s key values; Total commitment to customers,
uncompromising integrity and respect & care for others
are understood, believed and internalized by my
employees
TM is strictly following the rules of corporate
governance required by the government
My department practices good business ethics in our
daily business operation
My employees are sincere, honest and truthful in
performing their duties
My employees are motivated, courageous and
committed in performing their jobs
I will be committed to my work as usual-although I’m
not been promoted like my colleagues, even juniors
I work at the best of my capabilities because I believe
and practice “working is part of my acts of devotion to
God”.
The Machiavellian principle- “the ends justify the
means” is an unaccepted practice in my department.
Trust, shared knowledge, mutual respect and
reciprocity are the culture of TM, which result to
continuous innovation for TM
D2
D3
D4
D5
D6
D7
D8
D9
D10
D11
D12
D13
D14
D15
Source
Modified from Bontis
(1999)
Developed by Author
Developed by Author
Developed by Authors
Modified from Youndt
(1998) and Bontis
(1999)
Modified from Bontis
(1999)
Modified from Bontis
(1999)
Developed by Author
Developed by Author
Modified from Bontis
(1999)
Modified from Bontis
(1999)
Developed by Author
Developed by Author
Developed by Author
Modified from Youndt
(1998) and Bontis
(1999)
76
Part II. Knowledge management.
The sample items and their sources are shown in Table 4.5a and Table 4.5b:
Table 4.5a: Knowledge management
No.
E1
Items
My employees understand what is the required
knowledge they must have to be a competent
employee.
E2 My employees know exactly the level of competence
and knowledge they currently possess compared to
what they should possess.
E3 My employees actively and intensively seek their
required competencies from TM’s suppliers, customers
and also through other efforts.
E4 The process of learning, nurturing and applying the
knowledge and skills acquired by my employees are
actively done to develop "industry’s best practices".
E5 Knowledge sharing among individuals, teams and
departments is highly promoted and actively
encouraged in my department.
E6 Knowledge sharing, skills and competences are
appreciated, appropriately recognized and rewarded in
my department
E7 My department has a comprehensive development plan
in concept ional, behavioral and technical abilities for
our employees to develop their distinctive
competencies.
E8 The knowledge creation between tacit knowledge
(personal knowledge possessed by employees) and
explicit knowledge (codified knowledge stored by the
organization) is systematically managed in my
department to nurture further innovation
E9 Knowledge and competences within employees,
databases and documented manuals are captured,
stored and updated in my department ‘information
system’ and can be efficiently retrieved for constant
usage.
E10 To enable my department to produce innovation and
sustain its performance, we continuously assess and
evaluate the knowledge and competency level of our
employees and our department
E11 The physical architecture and facilities of offices and
their environment in my department, promote intensive
knowledge development and sharing
E12 Individual department teams and cross-functional
teams are actively functioning in my department to
address changing and complex problems by leveraging
Source
Developed by Author
Modified from Bontis
(1999)
Modified from Youndt
(1998)
Modified from Youndt
(1998) and Bontis
(1999)
Modified from Youndt
(1998) and Bontis
(1999)
Modified from Youndt
(1998) and Bontis
(1999)
Modified from Youndt
(1998) and Bontis
(1999)
Modified from Bontis
(1999)
Modified from Youndt
(1998) and Bontis
(1999)
Developed by Author
Modified from Youndt
(1998) and Bontis
(1999)
Modified from Youndt
(1998) and Bontis
(1999)
77
their rich and diverse knowledge capabilities
Table 4.5b: Knowledge management (continue)
No.
Items
E13 My leaders are actively leading, coaching and
developing their employees to become self-driven
knowledge professionals
E14 My department is able to successfully improve our
operational effectiveness and efficiency through
‘learning history’ i.e. learning from past experiences,
success stories and mistakes.
E15 Production of new knowledge through enhancing our
capacity to learn and innovate is actively promoted in
my department.
Source
Modified from Bontis
(1999)
Modified from Youndt
(1998)
Modified from Youndt
(1998) and Bontis
(1999)
Part III. Managing and leveraging of Intellectual Capital
The sample items and their sources are shown in Table 4.6a and Table 4.6b:
Table 4.6a: Managing and leveraging of intellectual capital
No.
Items
F1
My employees understand the goals and strategies used
by TM to achieve the vision and mission statement.
Modified from Bontis
(1999)
F2
My department gives a balanced importance to:
(i). Financial perspective.(ii) Customer perspective (iii)
Internal business processes perspective (iv) Innovation
and Learning perspective.
As an important management approach in our daily
operation.
Presently in my department, achieving short term
performance and financial results are more important
than long term value creation
In my department, achieving performance targets of
key activities are more important than performing
duties according to the established documented
procedures
Research and development activities for products,
services, systems and human resources is important in
my department
The decision making process in my department is
based on sufficiently accurate and reliable data,
balanced with experience and intuition
The present TM organizational structure is a traditional
hierarchical structure which hinders operational
effectiveness and efficiency
The present performance management system (MAPS)
leads to the optimum leveraging of human capital in
Modified from Youndt
(1998) and Bontis
(1999)
F3
F4
F5
F6
F7
F8
Source
Developed by Author
Developed by Author
Modified from Youndt
(1998) and Bontis
(1999)
Developed by Author
Modified from Youndt
(1998)
Modified from Youndt
(1998)
78
TM
Table 4.6b: Managing and leveraging of intellectual capital (continue)
No.
Items
F9
Sufficient empowerment and participation are given to
line managers in my department to perform their duties
to satisfy customers
High degree of ‘office politics’ in my department
hinders the creation and development of innovative
teams
Units with ISO 9000 certification or score high in
TMBEA consistently show significant performance
improvements
In my opinion, TM’s sponsorship of the activities of
government agencies generate business, growth and
future values to TM
Our employees can express their opinions openly and a
healthy and positive challenging culture exists in our
working environment.
My contribution is appreciated and TM is taking care
of my future carrier development
F10
F11
F12
F13
F14
F15
TM’s New Vision; “The Communication Company of
choice-focused on delivering Exceptional Value to our
customers & other shareholders” will mobilize,
motivate and improve our employees performance
Source
Modified from Youndt
(1998)
Developed by Author
Developed by Author
Modified from Youndt
(1998)
Modified from Bontis
(1999)
Modified from Youndt
(1998) and Bontis
(1999)
Developed by Author
Part IV. Perceived Performance Improvement
The sample items and their sources are shown in Table 4.7a and Table 4.7b:
Table 4.7a: Perceived Performance improvement
No.
G1
G2
Items
TM is able to compete globally
TM is a Malaysian telecommunication
industry leader
TM is a forward -looking organization
Source
Developed by Author
Modified from Youndt (1998) and
Bontis (1998,1999)
G3
Modified from Youndt (1998) and
Bontis (1998,1999)
G4 TM's 'Leadership Index' is high
Developed by Author
G5 TM's 'Employee Satisfaction Index' is high
Modified from Bontis (1999)
G6 TM is quickly responsive to local and Modified from Youndt (1998)
international market needs
G7 TM's revenue growth is improving
Modified from Bontis (1998)
G8 TM's market share is improving
Developed by Author
G9 TM's profit growth is improving
Modified from Bontis (1998) and
Youndt (1998)
G10 TM is improving operating efficiency
Modified from Youndt (1998)
G11 TM is always able to achieve and sustained Modified from Bontis (1999)
79
superior performance
Table 4.7a: Perceived Performance improvement (continue)
No.
Items
G12 TM 'Customer Satisfaction Index' is
improving
G13 TM practices 'On Time Delivery' of its
Products and services to customers
G14 TM achieves a high success rate in new
product/service launched
G15 TM is able to continuously produce
competitive products and services
Source
Modified from Youndt (1998) and
Bontis (1999)
Modified from Youndt (1998) and
Bontis (1999)
Modified from Youndt (1998)
Modified from Youndt (1998)
Part V: Demographic Section.
The items in this section are adapted from Gurnani (1999) and the items include
important respondents’ profiles such as the age, gender, race, academic qualification,
marital status, job-grade, and place of work and length of service.
4.3.1 Questionnaire Pilot-Test
The draft questionnaires were then sent to twelve experts in management
including those with some knowledge of intellectual capital and knowledge
management from Telekom Malaysia and some knowledge of research methodologies
for comments. They are my research academic supervisors and two other research
consultants. To guarantee a high level of questionnaires validity, a few management
experts from Telekom Malaysia are chosen from a team of Telekom Malaysia’s “Senior
Management Development Program” personnel. These are MBA graduates with the
following characteristics:
(i)
Length of service of more than twenty years
(ii)
Those with excellent performance throughout their years of service.
(iii)
They have consistently produced excellent results in places where they
have worked.
80
(iv)
He or she is a well known senior management personnel who is
knowledgeable, experienced and has high degree of personal
credibility.
Only seven of the Telekom Malaysia’s management experts and research
consultants responded out of ten contacted. All their comments were taken into
consideration in modifying the questionnaires. The questionnaires were pre-tested
among thirty respondents. The overall result of the pre-test survey was satisfactory. All
the research variables registered good Cronbach’s alpha reliability coefficients of above
0.8 (Sakaran, 1992, Hair et al., 1998) except for one variable-management and
leveraging of intellectual capital, which has Cronbach’s alpha value of 0.57. As a
result, two items were re-worded and two more items were added. These are:
1) Three re-worded items:
(i)
F2-My department gives a balanced important to:
(i). Financial perspective.
(ii) Customer perspective.
(iii) Internal business process perspective.
(iv) Innovation and learning perspective.
as an important management approach and this practice is pervasive.
(ii)
F7-The
present
TM
organizational
structure
is
a
traditional
hierarchical structure, which hinders operational effectiveness and
efficiency.
2) Two additional items included:
(i)
F12- In my opinion, TM’s sponsorship of the activities of
government
agencies generates business, growth and future value to TM.
(ii)
F15- TM’s new vision – “The communication company of choice-focused
on delivering exceptional value to customers and other shareholders” will
mobilize, motivate and improve our employee performance.
4.3.2
Sample
At the time this study was undertaken Telekom Malaysia (Telco) had a total of
2758
executives – 165 (or 5.9%) of job grade assistant general manager, 829 (or
30.0%) of job grade manager and 1694 (or 61.4%) of job grade executive. A sample of
81
400 respondents or 14.5% of the total executive population were selected for this study.
The selection was based on the disproportionate stratified random sampling (Sakaran,
1992) and the strata comprised of the executives whose job grade is at the executive
level and executives whose job grade is manager and assistant general manager level
who worked in state’s business areas and supporting departments at Telekom Malaysia
(Telco)’s headquarters level. Since the number of job grade of assistant general
manager and manager is smaller compared to the job grade executives, a slightly larger
sample of assistant general manager and manager was taken to ensure a better
representative of their groups. The responded surveyed represented 17% of the total
assistant general managers, 16% of the total managers and 14% of the total executives
of Telekom Malaysia (Telco).
There were 52 respondents who failed to return the questionnaires and 4
respondents failed to give their answers to all of the questions asked. These unanswered
questions were treated as missing values to be discarded to avoid the data having any
missing value. As a result only 344 respondents were included in the final sample or
86% of the total sampling. From the sample of 344 respondents, 200 respondents (or
58.15%) were job grade executives and 117 respondents (or 34.0 %) were job grade
managers and 27 respondents (or 7.85%) were job grade assistant general managers.
The sampling number was more than sufficient because the minimum requirement for a
population of 2758 is 338 samples (Sakaran, 1992).
4.3.3
Data Collection
The author administered the data collection process personally with the
assistance of a few managers chosen by the author, together with the support from the
state general managers and the functional general managers’ unit. The survey covered
all major business sections in Telekom Malaysia (Telco) at the state’s and
headquarters’ levels -such as Customer Network Operations, Marketing, Network
Services, Network Development, Support Services, Payphone, Quality Improvement,
Human Resource, Finance, Training and Credit Management Unit. These units were
selected, because they are the ones that are actually involved in the actual performance,
day-to-day operations, in servicing of the actual paying customers-those that bring the
revenues to Telekom Malaysia (Telco).
82
This study conducted a special session with the managers. In these special
sessions, the managers were trained on how to conduct the session with executives in
their own divisions. In each session, the respondents were brief on the purpose of the
survey and any doubt about the questionnaire clarified. Sufficient times were given to
the respondent to carefully go through and answer the questionnaires. On average each
respondent took about thirty to forty minutes to answer the questionnaire and returned
the questionnaire to the researcher or the appointed representatives.
Since the
respondents were from different states and divisions, the sessions were conducted
according to the available date and time given by the state’s general managers and
functional general manager’s office. With the assistance of these able and well-trained
managers, this study managed to complete the entire data collection process within two
months.
4.4
Secondary Data
Data that have been collected for some other purposes are known as secondary
data (Saunders et al., 1997; Hakim, 1987) and can be treated as a source of data in their
own right (Denscombe, 1998). It may include both quantitative and qualitative data;
documentary, which includes written documents such as committee’s report; surveybased materials which include data collected by questionnaires which have been
analysed for their original purpose, and multiple-source secondary data which based on
documentary or on survey or mixture of the two (Saunders et al., 1977). Secondary data
has the advantages of providing a comparative and contextual data, unobtrusive
measures and may result to unforeseen discoveries (Saunders et al., 1997; Robson,
2002). Good and suitable secondary data has the following criteria (Saunders et al.,
1997; Denscombe, 1998):
(i)
Authentic and genuine documents
(ii)
It has credibility and accuracy
(iii)
It is sufficiently representative and complete
(iv)
It has clear meanings and completely unambiguous
83
Secondary data from various departments in Telekom Malaysia (Telco)
headquarters which have scopes of responsibilities close to the subject studied were
requested by official letter to the department’s general manager with the guarantee of
secrecy of the documents by this study. The departments were; Change Management
Office, Quality Improvement and Business Excellence, Human Resource Development
and Telecom Training College. Secondary data in the forms of books and documents
were chosen and examined according to the secondary data evaluation checklist
suggested by Denscombe (1998).
Table 4.8a: Evaluation checklist of secondary data
Document Title
Cultural
Assessment for
Telekom Malaysia
Retention
Assessment for
Telekom Malaysia
Employee Opinion
Survey Result
Telekom
Malaysia’s
CHANGE Plan
Promotion and
Upgrading Criteria
for Executive
Managing 21st
Century
Workforce and
Expatriates
Change
Management
Strategy
Document
Type of
Document
Consultant
Report
Author
Hagberg Consulting
Group(2001)
Human
Resource Dev.
Restricted
Yes
Taken account
of possible bias
Yes
Consultant
Report
Hagberg Consulting Group
(2001)
Human
Resource Dev.
Restricted
Yes
Yes
Consultant
Report
Management
Committee
Report
Management
Committee
Report
Hewitt Associates (2001)
Human
Resource Dev.
Change Mgmt.
Office
Restricted
Yes
Yes
Confidential
Yes
Yes
SVP Human Resource
Management
(2002)
Human
Confidential
Resource Mgmt.
Yes
Yes
Management
Committee
Report
SVP Human Resource
Management
(2002)
Human
Confidential
Resource Mgmt.
Yes
Yes
Consultant
Report
Cap Gemini Ernst & Young
(2002)
Change Mgmt.
Office
Yes
Yes
Senior Vice President CMO
(2001)
Sponsorship
Accessibility
Restricted
Genuinely
84
Table 4.8b: Evaluation checklist of secondary data (continue)
Document Title
Change Initiative
Survey
Telekom Malaysia
Business
Excellence
Assessment 2002
Telekom Malaysia
Composite
ReportLeadership
Practices
Leadership/Impact
Survey
Analysis of
Behaviour,
Attributes, Skills
Set of TM
Executives
Corporate Culture
Transformation
Project for TM
QIBE Presentation
to new CEO
Type of
Document
Official Survey
Report
Official Report
Author
Sponsorship
Accessibility
Genuinely
SVP Change Management
Office (2002)
General Manager QIBE
(2002)
Change Mgmt.
Restricted
Office
Quality Mgmt. Restricted
&
Business
Excellence
Yes
Taken account
of possible bias
Yes
Yes
Yes
Consultant
Report
Clark Wilson Group (2002)
SVP Human
Resource
Mgmt.
Confidential
Yes
Yes
Consultant
Report
Consultant
Report
Human Synergistic
International (2002)
Management Leadership
Institute
(2002)
SVP Change
Mgmt. Office
CEO Telekom
Training
College
Restricted
Yes
Yes
Restricted
Yes
Yes
Consultant
Report
Hewitt Associates (2003)
Confidential
Yes
Yes
Official
Report
Vice President QIBE (2004)
Quality Mgmt
& Business
Excellence
QIBE
Restricted
Yes
Yes
85
86
The above secondary data in Table 4.8 were studied, the relationships and
corroboration amongst items in the survey data were identified and finally the
questions and observations to be administered during the interview sessions were
formulated.
4.5
Interview
The interview session is the final data collection method in this research.
Interview is one of the effective methods in providing a more in-depth insight into the
research topic, drawing on information provided by selected informants and one of the
means to validate findings from questionnaire and secondary data. Through interview,
information with this characteristic can be obtained (Denscombe, 1998; Hussey et al.,
1997; Merriam, 1997):
(i)
Information, which is based on emotions, opinion, experiences and
belief.
(ii)
Information which is based on sensitive issues and highly confidential
(iii)
Those where the step-by-step logic of a situation is not clear
(iv)
Information which is based on the past events that impossible to
replicate
(v)
Information which is based on privileged information
Through interviews, exploratory discussions to reveal and understand not only
the ‘what’ and ‘how’, but also to place more emphasis on exploring the ‘why’
(Saunders et al., 1997) can be achieved. A semi-structured interview method is used in
this research where the researcher will have a list of themes, issues to be addressed and
questions to be answered. The questions are developed from the findings of the
questionnaires and secondary data analyses. Additional questions follow up and
probing questions and the order of questions are varied depending on the dynamic of
the interview sessions. The open-ended questions may vary from interview to
interview depending on who the interviewee is, and to let the interviewee develop
ideas and elaborate the points of interest (Saunders et al., 1997; Denscombe, 1998).
87
With the advice from the research’s industrial supervisor, the informants are
selected on the basis of their potential to contribute to the development of insights and
understandings of the research subject and because of the positions they hold
(Merriam, 1997; Denscombe, 1998). To ensure a high degree of reliability and validity
of the information gathered, all matters which affected the reliability and validity such
as the interviewer bias, credibility of the interviewer and the trust of the interviewee
(Saunders et al., 1997) are overcome through:
(i)
The informants are made to understand the criticality and purpose of
this research - a case study of Telekom Malaysia and the study is fully
sponsored by Telekom Malaysia.
(ii)
The informants know the interviewer (the researcher) very well
through official contacts and rapport even before the research begins,
hence a holistic, sincere and true details will be shared by the informants
with the interviewer including the sensitive issues without fear or favour
because of the trust and sincerity between informants and interviewer.
(iii)
The informants are chosen with the following criteria:
.
Length of service of more than twenty five years
.
A well-known higher management officer, who is
knowledgeable, experienced and has high degree of personal
credibility.
.
Has been consistently producing excellent performance throughout
his tenure.
.
(iv)
Holds an important and critical position in Telekom Malaysia.
The points suggested by Saunders et al. (1997) to overcome
interviewer and interviewee bias are considered in conducting the
interview by interviewer:
.
Preparation and readiness for the interview.
.
The level of information supplied to the interviewee.
.
The appropriateness of interviewer appearance at the
interview.
.
Behavior during the course of interview and approach to
questioning.
88
.
Ability to demonstrate attentive listening skills.
.
Scope to test understanding.
.
Approach to recording information
The informants for the interview are chosen from the management and senior
management level (general manager, vice-president, senior vice-president and CEO)
not from the lower and middle management (executives, managers and assistant
general managers) who participate in the questionnaire survey because lower and
middle management are more closer to customers, to the other non-executives
employee and greatly involve in business operating processes compare to management
and higher management who is closer in the making and implementing of policies,
changes in the company and the overall aspect of managing the whole company. With
this approach, information are collected from all parties involve in business operation
of TM hence the process of triangulation of information can be done more accurately
to answer the questions of ‘what’, ‘why’ and ‘how’ of the phenomena happen as part
of the processes of this study. This approach had been used intensively by Hewitt
Associates, Hagberg Consulting, Clark Wilson Group and Human Synergistic
International in their various studies in TM (Telekom Malaysia, 2001, 2002).
The one-to-one interviews, which take between 1 hour to 2 hours duration, is
recorded through making notes during the interview by the interviewer and recorded
on tape. To guarantee the trustworthiness of the data, the write up of the full set of
notes is done soon after the event (Saunders et al., 1997). Verbatim transcription of the
recorded interview is to done to provide the best and accurate data analysis (Merriam,
1997).
Summary
In this case study research, a mixed method research approach is used with a
pragmatic knowledge claim with strategies of inquiry that involve sequential
quantitative and qualitative data collection – questionnaire survey, document analyses
and interviews. The aim of this study is to investigate the influence of intellectual
capital on the performance of Telekom Malaysia and to provide a new definition of
89
intellectual capital that includes spiritual capital into the existing model. This study
also wants to establish whether this new inclusion – the spiritual capital – can indeed
leverage the use and application of the other capitals – human capital, structural capital
and relational capital. It is also necessary to identify the present level of intellectual
capital and which component of the intellectual capital has a more critical influence on
the performance. This study also wants to find out the importance of knowledge
management and the importance of managing and leveraging the intellectual capital to
achieve Telekom Malaysia’s business competitiveness.
Six important independent variables have been identified – human capital,
structural capital, relational capital, spiritual capital, knowledge management and
managing and leveraging of intellectual capital and the dependent variable is the
perceived performance improvement of Telekom Malaysia which includes the
organizational leadership, business leadership, operational efficiency and business
performance.
For the purpose of data collection, a Likert-type scale questionnaire with 93
items has been designed, pilot-tested, re-designed and distributed to 400 executives at
various departments and states as respondents, based on disproportionate stratified
random sampling method. 344 respondents responded, 14 restricted and confidential
documents from various departments were collected as secondary data to be studied
and finally a 1-hour to 2-hour one-to-one, semi-structured interview sessions were held
with the selected 15 interviewees from the level of general manager to CEO of
Telekom Malaysia. The interview sessions are recorded through notes and recorded on
tapes for further verbatim transcription, to provide the best and accurate data analysis.
CHAPTER 5
DATA ANALYSIS AND DISCUSSION
This chapter presents the analyses of the collected quantitative and
qualitative data - questionnaire survey data, secondary data and interview data.
This mixed method sequential study will begin with quantitative data analysis
followed by qualitative data analysis and in the interpretation phase, qualitative
findings helped to elaborate or extend the quantitative results (Creswell, 2003). The
analysis is to provide a descriptive analysis of the data, to determine the correlation
between the variables identified in this study and performing relevant statistical
tests by using the statistical techniques to understand the generalised results of the
analyses. Finally from the secondary data and interview data the relationship and
corroboration between them will be identified and than a conclusion will be made,
based on the overall holistic understanding of the phenomena under study.
5.1
Questionnaire Survey Data.
The five-point Likert-type scales was used which tap into individual’s
perceptions, ranging from 1 (strongly disagree) to 5 (strongly agree) throughout the
questionnaire as used by previous researchers such as Youndt (1998), Bontis
(1998), Bontis et al.(1999), Shook (2002) and Choo (2003). The Likert-type scales
is an interval scale of data which use a parametric statistical techniques such as
mean and standard deviation, correlation, regression, analysis of variance and
factor analysis in performing the data analysis (Linton,1975). The parametric
statistical techniques had been used by Youndt (1998), Bontis (1998), Bontis et
al.(1999), Shook (2002) and Choo (2003) in their studies.
91
In this study the analysis begins by reporting on the reliability of measures
themselves, followed by other statistical techniques such as descriptive statistic of
variables, regression and correlation analysis, path analysis, factor analysis, t-test
analysis and Analysis of Variance (ANOVA).
5.1.1
Reliability of Measures
The inter-item consistency reliability or the Cronbach’s alpha reliability
coefficients of the independent and dependent variables are obtained as shown in
Table 5.1. Both the pilot and the actual results are displayed for comparison
purposes. The actual results show that all Cronbach’s alpha for the variables is
above 0.8 except for three variables i.e. Human capital, relational capital and
managing and leveraging of intellectual capital which are above 0.7 and nearer to
0.8. Therefore the internal consistency reliability of the measures used in this study
is acceptably good (Sakaran, 1992).
Table 5.1: Cronbach’s Alpha Coefficient of instrument for pilot and actual studies.
Instrument
Human capital
Structural capital
Relational capital
Spiritual capital
Knowledge management
Management and leveraging of intellectual
capital
Telekom Malaysia’s performance
improvement
5.1.2
No. of
item
8
8
8
15
15
15
Pilot
Actual
0.8511
0.8099
0.8137
0.8461
0.8743
0.5675
0.7981
0.8410
0.7880
0.8420
0.9145
0.7554
15
0.9333
0.9347
Respondent’s Characteristic
The demographic data of the respondent are as shown in Table 5.2a and
Table 5.2b. The proportion of the male respondents (69.80 %) is higher than that of
the female (30.20 %). The majority of the respondents are mature employees
92
whose age is above 40 years (58.14 %), 33.72 % lies between 30 to 39 years old
8.14 % consists of young executives (between 20 to 29 years). The breakdown of
races is 87.80 % Malay, 4.90
% Chinese and 4.10 % Indian. Most of them are
degree holders who represent 75.90
% of which 7.60 % have a post graduate
degrees - Master Degree. The executives whose job grade are 23 and below
represent 58.15 %, those job grades falls between 24 and 25 represent 34.00 %,
those falling to job grades 26 to 27 represent 7.85 %.
In term of working experience most of those who have had more than 15
years represent 52.31 %, those with between 6 to 15 years represent 38.66 % and
those with less than 5 years, considered juniors in the company, represented only
9.03 %. The majority of the respondents are married - 91.60 %. The singles
represent 6.40 %. The respondents represent all the state business areas with a
higher percentage for critical business areas such as Selangor (8.44 %), Johor (8.14
%), Kuala Lumpur (7.85 %), Pulau Pinang (7.56 %) and Perak (7.85 %).
Respondents from headquarters (11.34 %) represent the functional units in
headquarters, such as Major Business Sales, Consumer Business Sales, Customer
Network Operation, Training and Quality Improvement & Business Excellence and
Procurement units. The respondents also representing all the critical units
established in the state business areas especially Marketing (18.31 %), Customer
Network Operation (14.83 %), Network Development (13.08 %) and Network
Services (12.50 %). “Others Department” (14.24 %) represent respondents from
Training, Quality Improvement & Business Excellence and Procurement units at
the headquarters level.
Table 5.2a : Demographic data of the respondents
Demographic type
Description
Number
Percentage
Age
Race
Gender
20 – 29
30 – 39
40 – 49
50 and above
Malay
Chinese
Indian
Others
Male
Female
28
116
169
31
302
17
14
11
240
104
8.14
33.72
49.13
9.01
87.80
4.90
4.10
3.20
69.80
30.20
93
Table 5.2b: Demographic data of the respondents (continue)
Demographic type
Description
Number
Percentage
Marital status
Qualification
Job Grade
Department
Place of work
Working tenure in
Telekom Malaysia
Married
Single
Divorced or separated
MCE/SPM
HSC/STP
Certificate
Diploma
Bachelor’s Degree
Master’s Degree
PhD
Others
Grade 23 and below
Grade 23 – 25
Grade 26 – 27
Grade 28
Grade 29 and above
Non executives
Marketing
CNO
Network Services
Network Development
Support Services
Payphone
Human
Resource/Finance
Others
Kedah/Perlis
Pulau Pinang
Perak
Selangor
Kuala Lumpur
MSC
Pahang
Trengganu
Negeri Sembilan
Melaka
Johor
Sabah
Sarawak
Headquarters
Kelantan
Others
Less than 2 years
2 – 5 years
6– 10 years
11 – 15 years
16 – 20 years
Above 20 years
315
22
7
7
10
0
66
235
26
0
0
200
117
27
0
0
0
63
51
43
45
28
27
38
49
91.60
6.40
2.00
2.00
2.90
0.00
19.20
68.30
7.60
0.00
0.00
58.15
34.00
7.85
0.00
0.00
0.00
18.31
14.83
12.50
13.08
8.14
7.85
11.05
14.24
22
26
27
29
27
18
19
17
20
21
28
16
19
39
16
0
8
23
50
83
43
137
6.39
7.56
7.85
8.44
7.85
5.23
5.52
4.94
5.81
6.11
8.14
4.65
5.52
11.34
4.65
0.00
2.33
6.70
14.53
24.13
12.50
39.81
94
5.1.3 Accounting for Bias
The use of survey methodology in this research raises the issue of nonresponse bias, which may affect the integrity of the data. Response bias is the effect
of non-responses on survey estimates, which would substantially change the overall
results if the non-responded had responded (Creswell, 2003). In this study the
percentage of response is considered high - 86% which minimize the effect of
response bias. From 400 respondents, 52 did not respond and 4 respondents were
treated as missing values because they failed to provide answers to all of the
questions asked. Those who do not respond come from all states as shown in Table
5.3.
Table 5.3 : Non-responded questionnaires
Place of
Work
Kedah/
Perlis
Pulau Pinang
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
Trengganu
Negeri
Sembilan
Melaka
Johor
Sabah
Sarawak
Headquarters
Kelantan
Total
No. of
questionnaire
22
Nonresponded
questionnaire
0
%
Missing
Values
%
0
0
0
30
30
30
30
4
3
1
3
13.33
10.00
3.33
10.00
0
0
0
0
0
0
0
0
22
22
22
22
4
3
4
2
18.18
13.63
18.18
9.09
0
0
1
0
0
0
4.54
0
22
30
22
24
50
22
400
1
2
5
5
9
6
52
4.54
6.67
22.73
20.83
18.00
27.27
13.00
0
0
1
0
2
0
4
0
0
4.54
0
4.00
0
1.00
From the feedback given by the managers who assisted in the process of
data collection, it appears that those who did not respond requested for extra time
to complete the questionnaires, mostly for personal reasons, such as feeling not
very well – fever and headache, need to prepare for immediate presentation, cannot
95
concentrate to the questionnaires because of work problems and need to prepare for
outstation jobs.
Subsequently, follow up calls were made to those who failed to response.
Promises were made to complete and submit the completed questionnaires, but
these were finally not done. This study made another follow-up call to those who
work in Pulau Pinang, MSC, Pahang, Trengganu, Sabah, Sarawak, Kelantan and
Headquarters to find out why they did not respond. Two main reasons were given –
one was that they were involved in outstation work of long duration, and the other
was they had to attend courses of long duration Telecom Training College, Kuala
Lumpur.
Through telephone calls, this study performed a respondent – nonrespondent check for response bias (Creswell, 2003) to 17 of those who did not
respond. The purpose was to determine if their responses differ substantially from
those who had responded. From the responses obtained, 80% showed they had
almost similar perceptions with those who had responded. With this finding, the
response bias has been reduced to an acceptable minimum and as such, the
integrity of this survey is highly maintained.
5.1.4
Descriptive Statistic of Variables
All the variables indicated in the Table 5.4 below are measured on a fivepoint Likert-type scale. From the results it can be seen that the mean for all except
for spiritual capital (3.63) of the variables such as human capital (3.36), structural
capital (3.38), relational capital (3.35), knowledge management (3.35), managing
and leveraging of intellectual capital (3.32) and Telekom Malaysia’s performance
improvement (3.01), indicate that the general awareness and interest is on these
issues has always been there. For various reasons, which this study will discuss
later, this awareness and interest has not been encouraged to develop into a strong
agreement, let alone commitment. It seems Telekom Malaysia has a strong interest
towards a high level of spiritual capital.
96
Table 5.4 : Descriptive statistic: Central tendencies
Variables
Human
Capital
Structural
Capital
Relational
Capital
Spiritual
Capital
Knowledge
Management
Managing and
leveraging of
Intellectual
Capital
Performance
improvement
N
Minimum Maximum
Score
Score
344
1.88
4.50
344
1.25
344
Mean
Variance
3.3608
Standard
Deviation
0.4687
4.63
3.3866
0.5477
0.3000
1.63
4.63
3.3565
0.5086
0.2587
344
2.07
4.80
3.6386
0.4525
0.2072
344
1.00
4.73
3.3550
0.5448
0.2964
344
2.20
4.60
3.3279
0.4075
0.1660
344
1.40
4.67
3.0110
0.60992
0.37201
0.2197
5.1.5 Survey Results.
The responses from 344 respondents are tabulated accordingly to each
variable and the results as analyzed are as follows. The following tables present the
results that show interests towards intellectual capital, knowledge management and
Telekom Malaysia’s performance improvement. The results are separated
accordingly namely human capital (Table 5.5), structural capital (Table 5.6),
relational capital (Table 5.7) and spiritual capital (Table 5.8). The other tables show
knowledge management (Table 5.9), managing and leveraging of intellectual
capital (Table 5.10) and Telekom Malaysia’s performance improvement (Table
5.11). The results present the means and the percentage of respondents answering
the items under each variable. The variables are measured on a five point Likerttyped scale ranging from 1 = Strongly disagree to 5 = Strongly agree.
5.1.5.1 Human Capital
The results in Table 5.5 with an overall mean of 3.36 shows that the majority
of the respondents seem to indicate that they are quite undecided when expressing
97
their opinion in the presence of the level of human capital in Telekom Malaysia.
The overall rating shows that the mean for ‘employees cooperate, have trust and
show respect when working in teams’ is the highest (3.66) and the mean for
‘employees can quickly adopt to changes made by TM's management without any
difficulty’ is the lowest (2.84). Evidence seems to suggest that employees have the
expertise, capabilities and are cooperative in performing their jobs but they are less
creative and innovative and find difficulty to quickly adopt changes made by the
management. This may be due to the lack of supporting working environment for
employees to share ideas and practice creativity provided by the management. It
appears that the respondents are quite undecided when expressing their opinion in
the competence of Telekom Malaysia’s management team.
Table 5.5 : The mean and percentage of respondents on human capital
Total Mean = 3.36
Median = 3.50
SD = 0.468
Human Capital
Survey Items
TM has a highly competent management team (MCM)
Employees can quickly adopt to changes made by TM's
management without any difficulty
Employees are experts in their jobs
Employees are brilliant, innovative and creative
Employees are the most competent in the telecommunication
industry
Employees cooperate, have trust and show respect when working
in teams
Employees have the capabilities to operate the information system
required for them the perform their jobs
Management provides conducive working environment for
employees to share ideas and practice creativity
Mean
3.30
2.84
3.57
3.18
3.24
3.66
3.54
3.45
5.1.5.2 Structural Capital
The results in Table 5.6 with the overall mean of 3.38 show that the
majority of the respondents seem to indicate that they are quite undecided when
expressing their opinion in the availability of the level of structural capital in
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Telekom Malaysia. The overall rating shows that the mean for ‘policies, procedures
and work are contained in manuals and databases’ is the highest (3.72) and
‘information system is integrated with vendor's system’ is the lowest (2.84). It
appears that policies, procedures and knowledge are contained in the structure and
system and the employees have accessibility to information system required for
them to perform their task although the information system is not integrated with
vendor’s system. Evidence seems to suggest that the respondents are quite
undecided in expressing their opinion in term of ‘activities for process
improvement and innovation of products, services and systems, synergy of
information between division and the usage of advanced integrated management
system in business operation’.
Table 5.6: The mean and percentage of respondents on structural capital
Total Mean = 3.38
Median = 3.37
SD = 0.547
Structural Capital
Survey Items
Policies, procedures and work instruction are contained in manuals
and databases
Knowledge and are embedded in our structure, systems and
procedures
Although key people left, vital knowledge and information has
always remained with the organization
Employees have accessibility to information system required for
them to perform their jobs
Information system is integrated with vendor's system
Use of extensive and advanced integrated management system in
business operation to better serve customers
Division synergies strength and information with other divisions to
deliver the best to customers
Process improvement and innovation of its products, services and
systems are done actively to improve department’s performance as
well to reduce cost
Mean
3.72
3.57
3.47
3.63
2.84
3.16
3.42
3.28
5.1.5.3 Relational Capital
The results in Table 5.7 with the overall mean of 3.35 show that the
majority of the respondents seem to indicate that they are quite undecided when
99
expressing their opinion in the level of relational capital present in Telekom
Malaysia. The overall rating shows that the mean for ‘Telekom Malaysia's brand
name is well-known in Malaysian telecommunication’ is the highest (3.72) and
‘Telekom Malaysia's distribution channel (e.g.: Kedai Telekom) has been
performing excellently’ is the lowest (2.84). Besides the Telekom Malaysia's brand
name is well- known in Malaysian telecommunication and the business
collaboration with other international telecommunication operators enhances
Telekom Malaysia's competitive edge and performance, it appears that the
respondents are quite undecided in the usage of feedback from vendors and
customers to provide quality services to customers and the performance of
Telekom Malaysia’s distribution channel. They are expressing similar decision for
the usage of customers’ profiles to serve customers and the support of vendors and
government agencies to Telekom Malaysia.
Table 5.7 : The mean and percentage of respondents on relational capital
Total Mean = 3.35
Median = 3.37
SD = 0.508
Relational Capital
Survey Items
Vendors have performed extremely well in supporting
department to achieve business targets
Use of customer feedbacks effectively in our effort to provide
quality services to customers
Use of feedbacks and recommendations from vendors to produce
better products and services to customers
Government agencies provide good support to us in our effort to
serve the people better
TM's distribution channel (e.g.: Kedai Telekom) has been
performing excellently to serve customers
TM's brand name is well- known in Malaysian
telecommunication services
TM’s business collaboration with other international
telecommunication operators enhances TM's competitive edge
and performance
Important customers can be serve excellently because we have a
customers profile including their requirements and level of
services expectation
Mean
3.12
3.49
3.26
3.18
3.01
3.97
3.55
3.30
100
5.1.5.4 Spiritual Capital
The results in Table 5.8a with the overall mean of 3.62 indicate that the
majority of the respondents agree that Telekom Malaysia has a high level of
spiritual capital. The overall rating shows that the mean for ‘work at the best of
capabilities because working is part of my acts of devotion to God’ is the highest
(4.34) and ‘TM will reap future business advantages by providing services in a non
profit making areas’ is the lowest (3.10). Evidence seems to suggest that the
employees have a moderately high level of spirituality, because they are sharing a
common belief and believe that working is part of their acts of devotion to God
which results in their thankfulness, commitment, loyalty, sincerity, honesty, and
that they are ethical and truthful in performing their duties.
Although it seems that the respondents agree that Telekom Malaysia is
following the principles and tenets of good corporate governance and will be more
profitable and prosper by contributing financial and non-financial aids to religious
and philanthropic activities, they are quite undecided when expressing their opinion
as to whether Telekom Malaysia provides services in a non-profit making areas and
whether considers the environment, health and social benefits when planning and
implementation projects. Similarly, they seems quite undecided when expressing
their opinion in their faith to the present Telekom Malaysia’s management in
performing their duties, the practice of “Machiavellian’s principle”, the belief and
internalized core values held by the employees, and the culture of trust, shared
knowledge, mutual respect and reciprocity practiced in the company.
101
Table 5.8: The mean and percentage of respondents on spiritual capital
Total Mean = 3.62
Median = 3.60
SD = 0.544
Spiritual Capital
Survey Items
Have a strong faith in the present TM's higher management team in
performing their duties to achieve TM’s vision and mission
statements
TM will be more profitable and prosper through financial and nonfinancial contribution to religious and philanthropic (love of
mankind) activities.
Always considers environmental health and public social benefits in
any planning, development and implementation of projects
TM will reap future business advantages by providing services in a
non profit making areas
Thankful and loyal to TM and will never leave TM although other
competitor is offering better salary and incentives.
Department shares a “common belief” with other departments in
performing our duties to achieve TM’s goals and mission
TM’s core values; Total commitment to customers, uncompromising
integrity, respect & care are understood, believed and internalized by
employees
TM is strictly following the rules of corporate governance required
by the government
Practice of good business ethics in daily business operation
Employees are sincere, honest and truthful in performing their duties
Employees are motivated, courageous and committed in performing
their jobs
Will committed to work as usual, although I’m not been promoted
like other colleagues, even juniors
Work at the best of my capabilities because I believed and practice
‘working is part of my acts of devotion to God’
The Machiavellian principle; “the ends justify the means” is an
unaccepted practice in my department.
Trust, shared knowledge, mutual respect and reciprocity are the
culture of TM which result to continuous innovation to TM
Mean
3.30
3.57
3.46
3.10
3.87
3.79
3.48
3.78
3.77
3.69
3.55
3.78
4.34
3.40
3.55
5.1.5.5 Knowledge Management
The results in Table 5.9a and Table 5.9b with the overall mean of 3.35 show
that the majority of the respondents seem to indicate that they are quite undecided
when expressing their opinion in the practice of knowledge management in
102
Telekom Malaysia. The overall rating shows that the mean for ‘knowledge sharing
among individuals, teams and departments is highly promoted and actively
encouraged’ is the highest (3.73) and the ‘knowledge creation between tacit
knowledge and explicit knowledge is systematically managed’ is the lowest (3.01).
Evidence seems to suggest that employees understand what the required
knowledge they must have is and what is the level of competence and knowledge
they currently possess. The process of seeking, learning, nurturing and applying the
knowledge and skills acquired by employees are actively done and knowledge
sharing among individuals, teams and departments is actively encouraged. The
process of ‘learning history’ has been able to successfully improve their operational
effectiveness and efficiency. Respondents seem to indicate that they are quite
undecided in the process of knowledge development, knowledge creation,
knowledge preservation, knowledge measurement, knowledge application and
knowledge appreciation. They also express similar quite undecided opinion in their
leaders are leading, coaching and developing their employees to become
knowledgeable professionals, and the physical architecture and facilities of offices
and their environment promote intensive knowledge development and sharing
between them.
Table 5.9a: The mean and percentage of respondents on knowledge management
Total Mean = 3.35
Median = 3.46
SD = 0.544
Knowledge Management
Survey Items
Employees understand what is the required knowledge they must have
to be a competent employee
Employees know exactly the level of competence and knowledge they
currently possess to what they should possess
Employees actively and intensively seek their required competencies
from TM’s suppliers, customers and also through other efforts.
The process of learning, nurturing and applying the knowledge and
skills acquired by employees are actively done to develop ‘industries
best practices’
Knowledge sharing among individuals, teams and departments is
highly promoted and actively encouraged
Mean
3.71
3.51
3.34
3.51
3.73
103
Table 5.9b: The mean and percentage of respondents on knowledge management
(continue)
Total Mean = 3.35
Median = 3.46
SD = 0.544
Knowledge Management
Survey Items
Knowledge sharing, skills and competences are appreciated,
appropriately recognized and rewarded
My department has a comprehensive development plan in concept
ional, behavioral and technical abilities for our employees to develop
their distinctive competencies
The knowledge creation between tacit knowledge and explicit
knowledge is systematically managed to nurture further innovation
Knowledge and competences within employees, databases,
documented manuals, customers and suppliers are captured, stored,
updated in ‘information system’ and can be efficiently retrieved for
constant usage.
To enable to produce innovation and sustain its performance
continuous assess and evaluate the knowledge and competency level of
our employees and our department
The physical architecture and facilities of offices and work stations and
their environment promote intensive knowledge development and
sharing
Individual department teams and cross-functional teams are actively
functioning to address the changing and complex problems by
leveraging their rich and diverse knowledge capabilities
Leaders are actively leading, coaching and developing their employees
to become a self-driven professionals
Department is able to successfully improve operational effectiveness
and efficiency through ‘learning history’ i.e. learning from past
experiences, success stories and mistakes
Production of new knowledge through enhancing our capacity to learn
and innovate is actively promoted.
Mean
3.32
3.17
3.01
3.17
3.30
3.28
3.28
3.35
3.60
3.39
5.1.5.6 Managing and Leveraging of Intellectual Capital
The results in Table 5.10a and Table 5.10b with the overall mean of 3.32
show that the majority of the respondents seem to indicate that they are quite
undecided when expressing their opinion in the management and leveraging of
intellectual capital management in Telekom Malaysia. The overall rating shows
that the mean for ‘achieving performance targets of key activities are more
important than performing duties according to the established documented
104
procedures’ is the highest (3.63) and ‘the present performance management system
(MAPS) leads to the optimum leveraging of human capital in TM’ is the lowest
(2.86). Evidence seems to suggest that employees understand moderately high, the
strategies and goals and of Telekom Malaysia and achieving the short-term
performance results of key activities including financial are more important than
performing duties according to the documented procedures and long-term value
creation. Although Telekom Malaysia’s organizational structure is a traditional
hierarchical structure, which hinders operational effectiveness and efficiency,
departments give a balanced importance to financial, customer, internal business
processes and innovation learning perspective as an important management
approach.
It appears that respondents are quite undecided when expressing their
opinion on the decision-making process, which is based on sufficiently accurate
and reliable data and information analyses balanced with experience and intuition.
Similar opinion is expressed in the issues of empowerment and their participation
in decision-making, their chance to openly express their opinion and the
appreciation of their contributions. They also show similar opinion when assessing
the affect of new Telekom Malaysia’s vision to mobilize and motivate the
employees, the benefits of the high score of TMBEA and ISO 9000 certification on
the performance improvement of the department, research and development
activities, the sponsorship to the government activities and the reduction in practice
of ‘office politic’. Evidence seems to suggest that the present performance
management system (MAPS) does not lead to the optimum leveraging of human
capital in Telekom Malaysia.
105
Table 5.10 : The mean and percentage of respondents on managing and
leveraging of intellectual capital
Total Mean = 3.32
Median = 3.26
SD = 0.407
Managing and Leveraging of IC
Survey Items
Employees understand the goals and strategies used by TM to achieve the
vision and mission statement
Department gives balanced important to financial, customer, internal
business process and innovation learning perspective as an important
management approach in daily operation
Achieving short term performance and financial results are more
important than long-term value creation
Achieving performance targets of key activities are more important than
performing duties according to the established documented procedures
Research and development activities for products, services, systems and
human resources is important
The decision making process is based on sufficiently accurate and reliable
data and information analyses balanced with experience and intuition
Present TM organizational structure is a traditional hierarchical structure
which hinders operational effectiveness and efficiency
The present performance management system (MAPS) leads to the
optimum leveraging of human capital in TM
Sufficient empowerment and participation are given to line managers to
perform their duties to satisfy customers
High degree of ‘office politics’ hinders the creation and development of
innovative teams
Units with ISO 9000 certification or score high in TMBEA consistently
show significant performance improvements
TM’s sponsorship of government’s activities generate business, growth
and future values to TM
Employees can express their opinions openly and a healthy, positive
challenging culture exists in our working environment
My contribution is appreciated and TM is taking care of my future carrier
development
TM’s new vision will mobilize, motivate and improve employees
performance
Mean
3.62
3.55
3.52
3.63
3.17
3.47
3.50
2.86
3.33
3.28
3.22
3.15
3.19
3.05
3.46
5.1.5.7 Performance Improvement
It appears that the results in Table 5.11 with the overall mean of 3.01 show
that the majority of the respondents seem to indicate that they are undecided, when
expressing their opinion on the performance improvement of Telekom Malaysia.
The overall rating shows that the mean for ‘Telekom Malaysia is a Malaysian
106
telecommunication industry leader’ is the highest (3.74) and ‘Telekom Malaysia’s
market share is improving’ is the lowest (2.48). Evidence seems to suggest that
Telekom Malaysia’s performance is leaning toward non-improvement performance
in the aspects of forward looking organization, leadership index, employee
satisfaction index, revenue growth, market share, profit growth, operating
efficiency, to achieve and sustain superior performance, customer satisfaction
index, on time delivery of products and services and success rates in new products
and services launches. An improvement in performance seems to exist only in the
area of Telekom Malaysia as a Malaysian telecommunication industry leader and
Telekom Malaysia ability to compete globally.
Table 5.11 : The mean and percentage of respondents on TM’s performance
improvement
Total Mean = 3.011
Median = 3.00
SD = 0.609
TM’s Perceived Performance
Survey Items
Mean
TM is able to compete globally
TM is a Malaysian telecommunication industry leader
TM is a forward -looking organization
TM's 'Leadership Index' is high
TM's 'Employee Satisfaction Index' is high
TM is quickly responsive to local and international market needs
TM's revenue growth is improving
TM's market share is improving
TM's profit growth is improving
TM is improving operating efficiency
TM is always able to achieve and sustained superior performance
TM 'Customer Satisfaction Index' is improving
TM practices 'On Time Delivery' of its products and services to customers
TM achieves a high success rate in new product/service launched
TM is able to continuously produce competitive products and services
3.53
3.74
2.97
2.84
2.83
3.02
2.59
2.48
2.55
2.94
2.97
2.91
2.89
2.74
3.15
5.1.5.8 Factor Analysis for Intellectual Capital
Factor analysis for the variables of intellectual capital (human capital, structural
capital, relational capital and spiritual capital) summarize the variables into a
107
smaller number of scales than the original individual variables (Hair et.al, 1998) as
shown in Table 5.12a, Table 5.12b, table 5.12c, Table 5.12d and Table 5.12e with
specific factor loadings and Eigenvalues. Cronbach’s alpha is calculated to measure
the internal consistency of the scales .
Table 5.12a : Factor Analysis of Intellectual capital (human capital, structural capital, relational capital and spiritual capital)
Knowledge and information in my
department are embedded in our
structure, systems and procedures.
Although key people left my
department, vital knowledge and
information has always remained in the
organization.
Policies, procedures and work
instructions in my department are
contained in manuals and databases.
My employees have accessibility to
information system required for them to
perform their jobs.
Our management provides conducive
working environment for me and my
employees to share ideas and practice
creativity.
We use extensive and advanced
integrated management systems in our
business operation to better serve our
customers.
I am thankful and loyal to TM. I will
never leave TM although other
competitor is offering better salary and
incentives to me.
1
2
3
4
5
6
7
8
9
0.78
0.04
0.01
0.14
0.09
-0.01
-0.04
0.24
0.01
0.72
0.25
0.04
0.09
0.05
-0.05
0.04
0.19
0.18
0.69
-0.08
0.05
0.19
0.12
0.10
-0.05
0.13
0.03
0.63
0.05
0.07
0.13
0.39
0.10
0.01
-0.13
-0.09
0.45
0.25
0.19
0.02
0.04
0.14
0.13
-0.14
0.34
0.44
0.20
0.22
0.36
-0.14
0.20
0.36
-0.06
-0.01
0.05
0.74
0.11
0.03
0.01
0.23
0.24
-0.03
-0.27
108
Table 5.12b : Factor Analysis of Intellectual capital (human capital, structural capital, relational capital and spiritual capital)(continue)
2
3
4
5
6
7
8
9
0.07
0.70
-0.01
0.16
0.08
0.11
-0.01
0.17
-0.01
0.01
0.65
-0.08
0.05
0.17
-0.08
-0.02
-0.06
0.22
0.22
0.56
0.06
0.12
0.30
0.01
0.11
-0.14
0.00
0.23
0.45
0.16
0.18
0.34
0.17
0.18
0.20
0.07
0.25
0.42
0.09
0.01
0.14
-0.01
0.19
0.36
0.02
0.01
0.05
0.81
0.08
0.15
0.29
0.28
0.30
-0.11
0.07
0.06
0.09
0.00
0.73
0.68
0.14
0.03
0.06
0.09
0.05
0.08
0.01
-0.17
0.03
0.15
-0.01
0.13
109
I will committed to my work as usual
although I’m not been promoted like
my colleagues, even juniors.
I work at the best of my capabilities
because I believe and practice
“working is part of my acts of
devotion to God”.
My department shares a ‘common
belief’ with other departments in
performing our duties to achieve
TM’s goals and mission.
TM key Values-Total commitment to
customers, uncompromising integrity
and respect & care for others are
understood, believed and internalized
by my employees.
Trust, shared knowledge, mutual
respect and reciprocity are the culture
of TM, which result to continuous
innovation for TM.
My employees are brilliant,
innovative and creative.
My employees are expert in their job
My employees are the most
competent in the telecommunication
industry.
1
Table 5.12c : Factor Analysis of Intellectual capital (human capital, structural capital, relational capital and spiritual capital)(continue)
1
3
4
5
6
7
8
9
0.25
0.06
0.42
0.10
0.18
0.16
0.21
0.14
-0.16
0.16
0.11
-0.04
0.70
0.09
0.15
0.26
-0.11
0.30
0.08
0.05
0.18
0.65
-0.02
0.24
0.11
0.01
0.17
0.13
0.17
0.06
0.64
0.29
0.03
0.09
0.32
-0.01
0.40
-0.02
0.18
0.52
0.18
0.28
0.04
0.02
-0.03
0.37
0.25
0.14
0.45
0.14
0.08
0.16
-0.01
-0.27
0.38
0.30
0.15
0.44
0.22
0.22
0.19
0.03
-0.21
0.06
0.16
0.25
0.09
0.70
0.12
0.28
0.03
-0.13
110
My employees can quickly adopt to
changes made by TM’s management
without any difficulty.
My department uses feedback and
recommendations from vendors to
produce better products and services to
our customers
Our vendors have performed extremely
well in supporting my department to
achieve our business targets
My department uses customer
feedbacks effectively in our effort to
provide quality services to our
customers
Our information system is integrated
with vendor’s system
Process improvement and innovation of
its products, services and systems are
done actively to improve my
department’s performance as well as to
reduce cost
My division synergies our strength and
information with other divisions to
deliver the best to customers
My employees are sincere, honest and
truthful in performing their duties
2
Table 5.12d : Factor Analysis of Intellectual capital (human capital, structural capital, relational capital and spiritual capital)(continue)
1
My department practices good business
ethics in our daily business operation
My employees are motivated,
courageous and committed in
performing their jobs
My employees cooperate, have trust
and show respect when working in
teams
TM is strictly following the rules of
corporate governance required by the
Government
TM’s brand name is well-known in
Malaysian telecommunication services
TM’s business collaboration with other
international telecommunication
operators enhances TM’s competitive
edge and performance
My department can serve our important
customers excellently because we have
a ‘customers profile’ including their
requirements and level of services
expectation
Government agencies provide good
support to us in our effort to serve the
people better
2
3
4
5
6
7
8
9
0.19
0.21
0.08
0.01
0.63
0.10
0.08
0.09
0.01
0.12
0.28
0.27
0.12
0.56
0.23
0.26
-0.03
0.04
0.19
-0.09
0.40
0.05
0.47
0.02
-0.06
0.40
0.12
0.31
0.20
0.01
-0.01
0.45
0.03
0.12
0.05
0.25
0.11
0.14
0.10
0.03
0.06
0.71
-0.02
0.05
0.02
-0.07 0.04
0.07
0.31
0.13
0.65
0.03
0.08
0.02
0.20
0.01
0.16
0.18
0.29
0.56
0.18
0.14
-0.04
0.04
-0.15
0.09
0.26
-0.01
0.14
0.27
0.22
0.55
111
Table 5.12e : Factor Analysis of Intellectual capital (human capital, structural capital, relational capital and spiritual capital)(continue)
2
3
4
5
-0.06
0.10
0.02
0.04
0.09
0.03
0.07
0.08
0.17
0.36
0.09
-0.04
-0.06
0.36
0.13
-0.07
0.08
0.30
0.16
0.17
0.02
8
9
0.72
0.05
0.01
-0.13
0.64
0.14
0.01
-0.02
-0.04
0.60
0.18
0.21
0.21
0.12
0.27
0.13
0.62
0.01
0.32
-0.01
-0.02
0.33
0.30
0.50
-0.06
0.31
0.13
0.09
0.09
0.34
0.38
0.50
-0.05
0.20
0.07
-0.04
0.01
0.09
0.08
0.01
0.69
1.31
3.35%
1.29
1.22
1.05
3.32% 3.14% 2.70%
10.19
2.32
2.24
26.13% 5.96% 5.74%
2.05
1.43
5.27% 3.65%
6
7
0.13
112
TM will be more profitable and prosper
though financial and non-financial
contribution to religious and
philanthropic activities
My department always considers
environmental health and public social
benefits in any planning, development
and implementation of our projects
TM will reap future business
advantages by providing services in a
non-profit making areas
TM’s distribution channel (e.g.-Kedai
Telekom) has been performing
excellently to serve customers
TM has a highly competent
management team (MCM)
I have a strong faith in the present
TM’s higher management team in
performing their duties to achieve TM’s
vision and mission statements in the
near future
The Machiavellian principle-‘The ends
justify the means’ is an unaccepted
practice in my department
Eigenvalues
% of variance
1
113
From the factor analysis shown in Table 5.12a, Table 5.12b, Table 5.12c, Table 5.12d
and Table 5.12e the original variables for intellectual capital are grouped into 7 scales
as shown in Table 5.13.
Table 5.13 : New scales of intellectual capital variables
No
1
Scales
Eigenvalues % of
Cronbach’s
variance alpha
Vital knowledge and information is
embedded in our system and
documented processes and procedures
10.19
26.13%
0.79
which can be access by my employees
to perform their jobs
2
I believed and internalized TM’s core
values which result to my thankfulness,
2.324
5.96%
0.77
loyalty, sincerity and commitment in
performing my duties
3
My employees are expert, competent,
brilliant, innovative, capable in
2.240
5.74%
0.74
performing their jobs and can quickly
adopt changes without any difficulty
4
We use the feedback and information
from vendors and customers to
2.054
5.27%
0.77
improve our performance through
process improvement and innovation
our products and services
5
My employees are sincere, honest,
motivated, courageous, ethical,
cooperate, have trust, good teamwork
1.425
3.65%
0.72
and following the corporate
governance in performing their duties
6
TM’s brand name with the support
from government and international
1.305
3.35%
0.69
partner will result to an excellence
performance and services to customers
7
I have a strong belief that present TM’s
higher management team is competent
1.223
3.14%
0.73
in performing their duties
Note: Factor number 7 and number 9 in the analysis were dropped because their
internal consistency were much less than 0.7
114
5.1.5.8 Factor Analysis for Knowledge Management
Factor analysis for the variable of knowledge management is shown in Table
5.14a and Table 5.14b with specific factor loadings and Eigenvalues. Cronbach’s alpha
is calculated to measure the internal consistency of the scales.
Table 5.14a : Factor analysis for knowledge management.
My department has a comprehensive development plan in concept
ional, behavioral and technical abilities for our employees to develop
their distinctive competencies
Knowledge sharing, skills and competences are appreciated,
appropriately recognized and rewarded in my department
To enable my department to produce innovation and sustain its
performance, we continuously assess and evaluate the knowledge and
competency level of our employees and our department
The knowledge creation between tacit knowledge (personal knowledge
possessed by employees) and explicit knowledge (codified knowledge
stored by the organization) is systematically managed in my
department to nurture further innovation
Knowledge and competences within employees, databases and
documented manuals are captured, stored and updated in my
department ‘information system’ and can be efficiently retrieved for
constant usage.
My leaders are actively leading, coaching and developing their
employees to become self-driven knowledge professionals
Production of new knowledge through enhancing our capacity to learn
and innovate is actively promoted in my department.
The physical architecture and facilities of offices and their
environment in my department, promote intensive knowledge
development and sharing
Individual department teams and cross-functional teams are actively
functioning in my department to address changing and complex
problems by leveraging their rich and diverse knowledge capabilities
Knowledge sharing among individuals, teams and departments is
highly promoted and actively encouraged in my department.
My department is able to successfully improve our operational
effectiveness and efficiency through ‘learning history’ i.e. learning
from past experiences, success stories and mistakes.
My employees understand what is the required knowledge they must
have to be a competent employee.
My employees know exactly the level of competence and knowledge
they currently possess compared to what they should possess.
My employees actively and intensively seek their required
competencies from TM’s suppliers, customers and also through other
efforts.
1
2
0.77
0.19
0.74
0.18
0.74
0.24
0.72
0.23
0.70
0.21
0.69
0.13
0.68
0.23
0.67
0.21
0.64
0.29
0.54
0.40
0.53
0.41
0.15
0.84
0.11
0.84
0.32
0.67
115
Table 5.14b : Factor analysis for knowledge management(continue)
The process of learning, nurturing and applying the knowledge and
skills acquired by my employees are actively done to develop
"industry’s best practices".
Eigenvalues
% of variance
1
2
0.45
0.65
6.97
46.45%
1.45
9.70%
From the factor analysis shown in Table 5.14a ad Table 5.14b, the original
variables for knowledge management are grouped into two scales as shown in Table
5.15.
Table 5.15 : New scales for knowledge management variables
No
1
2
Scales
Knowledge sharing,
development, creation,
preservation and measurement
processes are actively done,
appreciated and rewarded in my
department with the coaching
from my leaders
The process of knowledge
identification, acquisition and
application is actively done in
my department
Eigenvalues % of
Cronbach’s
variance alpha
6.97
46.45%
0.90
1.45
9.70%
0.81
5.1.5.10 Factor Analysis for Managing and Leveraging of Intellectual Capital
Factor analysis for the variables of leveraging of intellectual capital is shown in
Table 5.16a and Table 6.16b with specific factor loadings and Eigenvalues. Cronbach’s
alpha is calculated to measure the internal consistency of the scales.
116
Table 5.16a : Factor analysis for managing and leveraging of
intellectual capital.
My department gives a balanced important to:
(i). Financial perspective.(ii) Customer perspective
(iii) Internal business processes perspective (iv)
Innovation and Learning perspective.
as an important management approach in our daily
operation.
My employees understand the goals and strategies
used by TM to achieve the vision and mission
statement.
The decision making process in my department is
based on sufficiently accurate and reliable data,
balanced with experience and intuition
Sufficient empowerment and participation are given to
line managers in my department to perform their
duties to satisfy customers
The present performance management system (MAPS)
leads to the optimum leveraging of human capital in
TM
My contribution is appreciated and TM is taking care
of my future carrier development
In my opinion, TM’s sponsorship of the activities of
government agencies generate business, growth and
future values to TM
TM’s New Vision; “The Communication Company of
choice-focused on delivering Exceptional Value to our
customers & other shareholders” will mobilize,
motivate and improve our employees performance
Research and development activities for products,
services, systems and human resources is important in
my department
Our employees can express their opinions openly and
a healthy and positive challenging culture exists in our
working environment.
Units with ISO 9000 certification or score high in
TMBEA consistently show significant performance
improvement
Presently in my department, achieving short term
performance and financial results are more important
than long term value creation
In my department, achieving performance targets of
key activities are more important than performing
duties according to the established documented
procedures
1
2
3
4
0.75
-0.02
0.19
-0.04
0.70
0.16
-0.01
-0.02
0.68
0.22
0.03
-0.07
0.60
0.26
-0.07
-0.24
0.57
0.45
-0.06
0.05
0.28
0.71
0.09
-0.26
-0.04
0.68
0.06
0.06
0.34
0.67
0.09
0.04
0.30
0.47
-0.10
0.08
0.32
0.45
0.17
-0.38
0.35
0.40
-0.10
0.06
-0.05
-0.01
0.78
0.08
0.06
0.10
0.76
0.01
117
Table 5.16b : Factor analysis for managing and leveraging of intellectual capital
(continue)
The present TM organizational structure is a
traditional hierarchical structure which hinders
operational effectiveness and efficiency
Eigenvalues
% of variance
1
2
3
4
0.16
-0.08
0.31
0.61
4.23
1.49
1.27
1.06
28.21% 1.49% 8.17% 7.06%
From the factor analysis shown in Table 5.16a and Table 5.16b, the original
variables for managing and leveraging of intellectual capital are grouped into two
scales as shown in Table 5.17.
Table 5.17 : New scales for managing and leveraging of intellectual capital
variables.
No
Scales
Eigenvalues % of
Cronbach’s
variance alpha
1
My department uses a Balance
Scorecard management approach with
a good performance management
system (MAPS). The employees
4.23
28.21%
0.76
understand the TM’s goals and
strategies and they are empowered to
perform their duties
2
The new vision, quality, research and
development activities, good
relationship with government and the
motivated employees who feel
1.49
9.96%
0.72
appreciated and can express their
opinion openly, will improve TM’s
performance.
Note: Factor 3 and factor 4 in the analysis were dropped because their internal
consistencies were less than 0.7.
5.1.5.11 Factor Analysis for Performance Improvement
Factor analysis for the variables of performance improvement is shown in Table
5.18 with specific factor loadings and Eigenvalues. Cronbach’s alpha is calculated to
measure the internal consistency of the scales.
118
Table 5.18 : Factor analysis for performance improvement
TM's profit growth is improving
TM's market share is improving
TM's revenue growth is improving TM is a forward -looking
organization
TM is improving operating efficiency
TM is always able to achieve and sustained superior performance
TM 'Customer Satisfaction Index' is improving
TM achieves a high success rate in new product/service launched
TM's 'Leadership Index' is high TM is able to compete globally
TM is a forward -looking organization
TM is a Malaysian telecommunication industry leader
TM is able to compete globally
TM is quickly responsive to local and international market needs
TM practices 'On Time Delivery' of its products and services to
customers
TM's 'Employee Satisfaction Index' is high
TM is able to continuously produce competitive products and services
Eigenvalues
% of variance
1
0.90
0.86
0.85
2
0.23
0.20
0.28
0.67
0.60
0.59
0.53
0.32
0.21
0.19
0.14
0.43
0.39
0.39
0.53
0.48
0.45
0.74
0.71
0.71
0.70
0.63
0.61
0.33
0.44
7.88
52.56
0.59
0.56
1.23
8.20
From the factor analysis shown in Table 5.18, the original variables for managing and
leveraging of intellectual capital are grouped into two scales as shown in Table 5.19.
Table 5.19: New scale for performance improvement
No
1
2
Scales
TM’s profit, market share, revenue,
operating efficiency, customer
satisfaction index and new products
/services launch is improving
TM’s leadership index and employee’s
satisfaction indexes are high result to a
responsive, a forward-looking, able to
compete globally and a Malaysian
telecommunication industry leader.
Eigenvalues
% of
Cronbach’s
variance alpha
7.88
52.56
0.912
1.23
8.20
0.877
119
5.5.1.12 Test Analysis
A T-Test analysis to compare the mean difference between genders of the
respondents was performed and the results are shown in Table 5.20.
Table 5.20 : T-Test results for independent variables against genders
Variables
Mean
Gender
Male
3.41
3.38
Female
3.26
3.39
Human Capital
Structural
Capital
Relational
3.37
3.33
Capital
Spiritual Capital
3.65
3.55
Knowledge
3.39
3.28
Management
Leveraging of
3.35
3.29
Intellectual
Capital
Performance
3.05
2.93
improvement
* Significant at 0.05 level (2-tailed)
T-test for equality of means
T-value df
Sig(2Mean
Std
tailed)
Difference Error
Diff
2.595
-0.116
342
342
0.010*
0.908
0.1416
-0.0075
0.0546
0.0644
0.766
342
0.444
0.0458
0.0598
2.023
1.705
342
342
0.044*
0.089
0.1076
0.1087
0.0532
0.0637
1.240
342
0.216
0.0593
0.0478
1.624
342
0.105
0.1160
0.0714
The results in Table 5.20 show that there are significant difference in the means
for human capital and spiritual capital. The means of these variables are higher for
males than females. Thus, it shows comparatively the male employees perceive a
higher level of presence of human capital and spiritual capital in Telekom Malaysia
than female employees. The other variables do not indicate any significant mean
difference.
5.1.5.13 One Way ANOVA Test for Independent Variables Against Age.
A one-Way ANOVA test result for independent and dependent variables against
age (20 - 29 years, 30 -39 years, 40 - 49 years and 50 years and above) is shown in
Table 5.21.
120
Table 5.21 : One Way ANOVA test results for independent and dependent
variables against age.
Variable
Human
Capital
Between
Groups
Within
Groups
Total
Structural
Between
Capital
Groups
Within
Groups
Total
Relational
Between
Capital
Groups
Within
Groups
Total
Spiritual
Between
Capital
Groups
Within
Groups
Total
Knowledge
Between
Management Groups
Within
Groups
Total
Leveraging
Between
of
Groups
Intellectual
Within
Capital
Groups
Total
Performance Between
improvement Groups
Within
Groups
Total
Sum of
Square
1.659
df
3
Mean
Square
0.553
73.694
340
0.217
75.353
1.002
343
3
0.334
101.921
340
0.300
102.922
1.116
343
3
0.372
87.625
340
0.258
88.741
1.470
343
3
0.490
69.605
340
0.205
71.075
0.965
343
3
0.322
100.719
340
0.296
101.684
0.474
343
3
0.158
56.493
340
0.166
56.968
1.196
343
3
0.399
126.402
340
0.372
127.598
343
F
Sig
2.551
0.056
1.114
0.344
1.444
0.230
2.394
0.068
1.086
0.355
0.951
0.416
1.072
0.361
The results in Table 5.21 show that there are no significant differences in the
mean for all the variables against age of respondents. Thus, it shows that the employees
of Telekom Malaysia at all level of ages have a similar perception of the level of
presence of human capital in Telekom Malaysia.
121
5.1.5.14 One Way ANOVA Test for Independent Variables Against Qualification
Table 5.22a, Table 5.22b, Table 5.23, Table 5.24a, Table 5.24b, Table 5.25,
Table 5.26 and Table 5.27 show a One Way ANOVA test for the independent
variables – human capital, structural capital, relational capital, spiritual capital,
knowledge management, managing and leveraging of intellectual capital. Table
5.26, shows the dependent variable – performance improvement against
qualification of respondents - MCE/SPM, HSC/STP, Certificates, Diploma,
Bachelor’s Degree and Master’s Degree. For the variable, which has a significant
mean difference, further Post-Hoc test (Tukey) is done to identify the multiple
comparisons for observed means.
Table 5.22a: One Way ANOVA test results for human capital against qualification
ANOVA
Human Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between
3.698
4
.924
4.374 .002
Groups
Within Groups
71.655
339
.211
Total
75.353
343
Multiple Comparisons
Dependent Variable: Human Capital
Tukey HSD
Mean
95% Confidence
Difference Std.
(I) H5
(J) H5
Error Sig.
Interval
(I-J)
Lower Upper
Bound Bound
MCE/SPM
HSC/STPM
.3679
.2265 .483 -.2535
.9892
Diploma
.1239
.1827 .961 -.3773
.6251
Bachelor
.3067
.1763 .411 -.1769
.7903
Degree
Master
.5034
.1957 .078 -.0335 1.0403
Degree
HSC/STPM MCE/SPM
-.3679
.2265 .483 -.9892
.2535
Diploma
-.2439
.1560 .522 -.6718
.1839
Bachelor
-.0612
.1484 .994 -.4683
.3459
Degree
Master
.1356
.1710 .933 -.3336 .6048
Degree
*The mean difference is significant at the .05 levels.
122
Table 5.22b: One Way ANOVA test results for human capital against
qualification (continue)
Multiple Comparisons
Dependent Variable: Human Capital
Tukey HSD
Mean
Difference
(I) H5
(J) H5
(I-J)
Std.
Error
Sig.
-.1239
.2439
.1827
.1560
.961
.522
.1828*
.0640
.037
.0071
.3584
.3795*
.1064
.004
.0876
.6715
-.3067
.1763
.411
-.7903
.1769
.0612
-.1828*
.1484
.0640
.994
.037
-.3459
-.3584
.4683
-.0071
.1967
.0950
.235
-.0639
.4573
-.5034
.1957
.078
-1.0403
.0335
HSC/STP
-.1356
.1710 .933
Diploma
-.3795*
.1064 .004
Bachelor
-.1967
.0950 .235
Degree
* The mean difference is significant at the .05 levels.
-.6048
-.6715
.3336
-.0876
-.4573
.0639
Diploma
Bachelor
Degree
Master
Degree
MCE/SPM
HSC/STPM
Bachelor
Degree
Master
Degree
MCE/SPM
HSC.STP
Diploma
Master
Degree
MCE/SPM
95% Confidence
Interval
Lower Upper
Bound Bound
-.6251
.3773
-.1839
.6718
The results in Table 5.22a and Table 5.22b show that there is a significant
different in the mean of human capital against qualification, F (4, 339) = 4.374; p <
0.05. From the Tukey test analysis, the results show a significant difference in the mean
for the pair of Diploma and Bachelor Degree and the pair of Diploma and Master
Degree. The other pairs do not indicate any significant mean difference. Thus, it shows
that the employees of Telekom Malaysia with a qualification of Diploma perceive
Telekom Malaysia has a higher level of presence of human capital than those with
degrees and masters.
123
Table 5.23: One Way ANOVA test results for structural capital against qualification
ANOVA
Structural Capital
Between Groups
Within Groups
Total
Sum of
Squares
5.845
97.077
102.922
Mean
df
F
Square
4
1.461
5.103
339
.286
343
Multiple Comparisons
Dependent Variable: Structural Capital
Tukey HSD
Mean
Difference
(I) H5
(J) H5
(I-J)
Sig.
.001
Std.
Error
Sig.
-.1214
-.0373
.2637
.2127
.991
1.000
95% Confidence
Interval
Lower Upper
Bound Bound
-.8447 .6018
-.6207 .5460
.2147
.2052
.834
-.3482
.7776
.4093
.1214
.0841
.2278
.2637
.1815
.377
.991
.991
-.2156
-.6018
-.4139
1.0343
.8447
.5821
.3362
.1727
.295
-.1377
.8100
.5308
.0373
-.0841
.1991
.2127
.1815
.061
1.000
.991
-.0153
-.5460
-.5821
1.0769
.6207
.4139
.2521*
.0745
.007
.0476
.4565
.4467*
.1239
.003
.1069
.7865
-.2147
.2052
.834
-.7776
.3482
-.3362
-.2521*
.1946
.1727
.0745
.1106
.295
.007
.399
-.8100
-.4565
-.1087
.1377
-.0476
.4979
-.4093
.2278
.377
-1.034
.2156
HSC/STP
-.5308
.1991
.061
Diploma
-.4467*
.1239
.003
Bachelor
-.1946
.1106
.399
Degree
*The mean difference is significant at the .05 levels
-1.077
-.7865
.0153
-.1069
-.4979
.1087
SPM/MCE
HSC/STP
Diploma
Bachelor
Degree
Master
Degree
HSC/STPM
Diploma
Bachelor
Degree
Master Degree
MCE/SPM
Diploma
Bachelor
Degree
Master Degree
MCE/SPM
HSC/STPM
Bachelor
Degree
Master Degree
MCE/SPM
HSC.STP
Diploma
Master Degree
MCE/SPM
124
The results in Table 5.23 show that there is a significant difference in the mean
of structural capital against qualification, F (4, 339) = 5.103; p < 0.05. From the Tukey
test analysis, the results show a significant difference in the mean for the pair of
Diploma and Bachelor Degree and the pair of Diploma and Master Degree. The other
results do not indicate any significant mean difference. Thus, it shows that the
employees of Telekom Malaysia with a diploma qualification perceive that Telekom
Malaysia has a higher level of presence of structural capital than the employees with a
basic degree and post-graduate degree.
Table 5.24a : One Way ANOVA test results for relational capital against
qualifications
ANOVA
Relational Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
4.759
4
1.190
4.803
.001
Within Groups
83.982
339
.248
Total
88.741
343
Multiple Comparisons
Dependent Variable: Relational Capital
Tukey HSD
Mean
95%
Std.
Difference
Confidence
(I) H5
(J) H5
Error
Sig.
(I-J)
Interval
Lower Upper
Bound Bound
SPM/MCE
HSC/STPM
-.0411
.2452 1.000 -.7138 .6316
Diploma
-.1293
.1978
.966 -.6719 .4133
Bachelor
.1411
.1909
.947 -.3825 .6647
Degree
Master
.2589
.2119
.739 -.3223 .8402
Degree
HSC/STPM MCE/SPM
.0411
.2452 1.000 -.6316 .7138
Diploma
-.0883
.1689
.985 -.5515 .3750
Bachelor
.1822
.1607
.789 -.2586 .6229
Degree
Master
.3000
.1852
.486 -.2079 .8079
Degree
Diploma
MCE/SPM
.1293
.1978
.966 -.4133 .6719
HSC/STPM
.0883
.1689
.985 -.3750 .5515
Bachelor
.2704*
.0693
.0803 .4606
.001
Degree
Master
.3883*
.1152
.0722 .7043
.007
Degree
125
Table 5.24b : One Way ANOVA test results for relational capital against
qualifications (continue)
Multiple Comparisons
Dependent Variable: Relational Capital
Tukey HSD
Mean
Std.
Difference
(I) H5
(J) H5
Error
(I-J)
Bachelor
Degree
MCE/SPM
Sig.
95%
Confidence
Interval
Lower Upper
Bound Bound
-.1411
.1909
.947
-.6647
.3825
-.1822
-.2704*
.1607
.0693
.789
.001
-.6229
-.4606
.2586
-.0803
.1178
.1028
.782
-.1643
.3999
-.2589
.2119
.739
-.8402
.3223
HSC/STP
-.3000
.1852
.486
Diploma
-.3883*
.1152
.007
* The mean difference is significant at the .05 levels.
-.8079
-.7043
.2079
-.0722
Master
Degree
HSC.STP
Diploma
Master
Degree
MCE/SPM
The results in Table 5.24a and Table 5.24b show that there is a significant
difference in the mean of relational capital against qualifications, F (4, 339) = 4.803; p
< 0.05. From the Tukey test analysis, the results show a significant difference in the
mean for the pair of Diploma and Bachelor Degree and the pair of Diploma and Master
Degree. The other results do not indicate any significant mean difference. Thus, it
shows that the employees of Telekom Malaysia with a qualification of Diploma
perceive that Telekom Malaysia has a higher level of presence of relational capital than
the employees with a qualification of basic degree and post-graduate degree.
126
Table 5.25 : One Way ANOVA test results for spiritual capital against qualifications
ANOVA
Spiritual Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
3.819
4
.955
4.812
.001
Within Groups
67.257
339
.198
Total
71.075
343
Multiple Comparisons
Dependent Variable: Spiritual Capital
Tukey HSD
Mean
Difference
(I) H5
(J) H5
(I-J)
MCE/SPM
HSC/STPM
Diploma
Bachelor
Degree
Master
Degree
HSC/STPM
Diploma
Bachelor
Degree
Master
Degree
MCE/SPM
Diploma
Bachelor
Degree
Master
Degree
MCE/SPM
HSC/STPM
Bachelor
Degree
Master
Degree
MCE/SPM
HSC.STP
Diploma
Master
Degree
MCE/SPM
Std.
Error
Sig.
.0686
.0255
.21950
.17705
.998
1.000
95% Confidence
Interval
Lower Upper
Bound Bound
-.5334 .6706
-.4600 .5111
.2516
.17084
.581
-.2170
.7201
.3696
.18967
.294
-.1506
.8898
-.0686
-.0430
.21950
.15115
.998
.999
-.6706
-.4576
.5334
.3715
.1830
.14382
.708
-.2114
.5774
.3010
.16574
.366
-.1535
.7556
-.0255
.0430
.17705
.15115
1.000
.999
-.5111
-.3715
.4600
.4576
.2260*
.06205
.003
.0558
.3962
.3441*
.10313
.008
.0612
.6269
-.2516
.17084
.581
-.7201
.2170
-.1830
-.2260*
.14382
.06205
.708
.003
-.5774
-.3962
.2114
-.0558
.1180
.09206
.702
-.1344
.3705
-.3696
.18967
.294
-.8898
.1506
.366
.008
-.7556
-.6269
.1535
-.0612
.702
-.3705
.1344
HSC/STP
-.3010
.16574
Diploma
-.3441*
.10313
Bachelor
-.1180
.09206
Degree
* The mean difference is significant at the .05 levels.
127
The results in Table 5.25 show that there are significant difference in the
means of spiritual capital against qualifications, F (4, 339) = 4.812; p < 0.05. From the
Tukey test analysis, the results show a significant difference in the means for the pair of
Diploma and Bachelor Degree and the pair of Diploma and Master Degree. The other
results do not show any significant mean difference. Thus, it shows that the employees
of Telekom Malaysia with a qualification of Diploma perceive that Telekom Malaysia
has a higher level of presence of spiritual capital than the employees with a basic
degree and post-graduate degree.
Table 5.26a : One Way ANOVA test results for knowledge management against
qualifications
ANOVA
Knowledge Management
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
5.793
4
1.448
5.120
.001
Within Groups
95.890
339
.283
Total
101.684
343
Multiple Comparisons
Dependent Variable: Knowledge Management
Tukey HSD
Mean
Std.
Difference
(I) H5
(J) H5
Error
(I-J)
MCE/SPM
HSC/STPM
Diploma
HSC/STPM
Diploma
Bachelor
Degree
Master
Degree
MCE/SPM
Diploma
Bachelor
Degree
Master
Degree
MCE/SPM
HSC/STPM
Bachelor
Degree
Master
Degree
.2419
.1154
.26210
.2114
.888
.982
95%
Confidence
Interval
Lower Upper
Bound Bound
-.4769 .9607
-.4644 .6952
.2870
.2039
.624
-.2724
.8465
.6440*
.2264
.038
.0229
1.2651
-.2419
-.1265
.2621
.1804
.888
.956
-.9607
-.6214
.4769
.3685
.0451
.1717
.999
-.4259
.5161
.4021
.1979
.253
-.1407
.9448
-.1154
.1265
.2114
.1804
.982
.956
-.6952
-.3685
.4644
.6214
.1716
.0740
.142
-.0316
.3748
.5285*
.1231
.000
.1908
.8662
Sig.
128
Table 5.26b : One Way ANOVA test results for knowledge management against
qualifications (continue)
Multiple Comparisons
Dependent Variable: Knowledge Management
Tukey HSD
Mean
Std.
Difference
(I) H5
(J) H5
Error
(I-J)
Bachelor
Degree
Master
Degree
MCE/SPM
HSC.STP
Diploma
Master
Degree
MCE/SPM
Sig.
95%
Confidence
Interval
Lower Upper
Bound Bound
-.2870
.2039
.624
-.8465
.2724
-.0451
-.1716
.1717
.0740
.999
.142
-.5161
-.3748
.4259
.0316
.3569*
.1099
.011
.0555
.6584
-.6440*
.2264
.038
HSC/STP
-.4021
.1979
.253
Diploma
-.5285*
.1231
.000
Bachelor
-.3569*
.1099
.011
Degree
* The mean difference is significant at the .05 levels.
1.265
1
-.9448
-.8662
-.6584
-.0229
.1407
-.1908
-.0555
The results in Table 5.26a and Table 5.26b show that there is a significant
difference in the mean of knowledge management against qualification, F (4, 339) =
5.120; p < 0.05. From the Tukey test analysis, the results show a significant difference
in the means for the pair of SPM/MCE and Master Degree, the pair of Diploma and
Master Degree and the pair of Bachelor Degree and Master Degree. The other pairs do
not indicate any significant mean difference. Thus, it shows that the employees of
Telekom Malaysia with a qualification of MCE/SPM, Diploma and Bachelor Degree
perceive that Telekom Malaysia has a higher level of knowledge management practice
than the employees with a qualification of Master Degree.
129
Table 5.27 : One Way ANOVA test results for managing and leveraging of
intellectual capital against qualification.
ANOVA
Managing and leveraging of intellectual capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
3.422
4
.855
5.416
.000
Within Groups
53.546
339
.158
Total
56.968
343
Multiple Comparisons
Dependent Variable: Managing and leveraging of intellectual capital
Tukey HSD
Mean
Std.
95% Confidence
Difference
(I) H5
(J) H5
Error Sig.
Interval
(I-J)
Lower Upper
Bound Bound
MCE/
HSC/STPM
.3152
.1958 .492 -.2219
.8524
SPM
Diploma
.2498
.1579 .511 -.1835
.6830
Bachelor
.3874
.1524 .084 -.0306
.8055
Degree
Master Degree
.6029*
.1692 .004
.1388 1.0671
HSC/
MCE/SPM
-.3152
.1958 .492 -.8524
.2219
STPM
Diploma
-.0655
.1348 .989 -.4353
.3044
Bachelor
.0722
.1283 .980 -.2797
.4241
Degree
Master Degree
.2877
.1478 .295 -.1179
.6933
Diploma MCE/SPM
-.2498
.1579 .511 -.6830
.1835
HSC/STPM
.0655
.1348 .989 -.3044
.4353
Bachelor
.1377
.0553 .096 -.0142
.2895
Degree
Master Degree
.3531*
.0920 .001
.1008
.6055
Bachelor MCE/SPM
-.3874
.1524 .084 -.8055
.0306
Degree
HSC.STP
-.0722
.1283 .980 -.4241
.2797
Diploma
-.1377
.0553 .096 -.2895
.0142
Master Degree
.2155
.0821 .068 -.0098
.4408
Master
MCE/SPM
-.6029*
.1692 .004 -1.0671 -.1388
Degree
HSC/STP
-.2877
.1478 .295 -.6933
.1179
Diploma
-.3531*
.0920 .001 -.6055 -.1008
Bachelor
-.2155
.0821 .068 -.4408
.0098
Degree
* The mean difference is significant at the .05 levels
130
The results in Table 5.27 show that there is a significant difference in the mean
of managing and leveraging of intellectual capital management capital against
qualification, F (4, 339) = 5.416; p < 0.01. From the Tukey test analysis, the results
show a significant difference in the means for the pair of SPM/MCE and Master Degree
and the pair of Diploma and Master Degree. The other pairs do not indicate any
significant mean difference. Thus, it shows that the employees of Telekom Malaysia
with a qualification of MCE/SPM and Diploma perceive that Telekom Malaysia has a
higher level of presence of managing and leveraging of intellectual capital than the
employees with a qualification of Master Degree.
Table 5.28a : One Way ANOVA test results for performance improvement against
qualifications.
ANOVA
Performance improvement
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
14.016
4
3.504
10.458
.000
Within Groups
113.582
339
.335
Total
127.598
343
Multiple Comparisons
Dependent Variable: Performance improvement
Tukey HSD
Mean
Std.
95% Confidence
Difference
(I) H5
(J) H5
Error
Sig.
Interval
(I-J)
Lower
Upper
Bound
Bound
MCE/
HSC/STPM
.0771
.2852
.999
-.7052
.8595
SPM
Diploma
-.1297
.2300
.980
-.7607
.5013
Bachelor
.3343
.2220
.559
-.2746
.9432
Degree
Master
Degree
HSC/
STPM
MCE/SPM
Diploma
Bachelor
Degree
Master
Degree
.5341
.2464
.195
-.1419
1.2100
-.0771
.2852
.999
-.8595
.7052
-.2069
.1964
.830
-.7456
.3318
.2572
.1869
.644
-.2554
.7697
.2153
.213
-.1338
1.0476
.4569
131
Table 5.28b : One Way ANOVA test results for performance improvement against
qualifications.(continue)
(I) H5
(J) H5
Diploma
Mean
Difference
(I-J)
Std.
Error
Sig.
MCE/SPM
.1297
.2300
.980
HSC/STPM
.2069
.1964
.830
Bachelor
.4640*
.0806
.000
Degree
Master
.6638*
.1340
.000
Degree
Bachelor MCE/SPM
-.3343
.2220
.559
Degree
HSC/
-.2572
.1869
.644
STPM
Diploma
-.4640*
.0806
.000
Master
.1998
.1196
.454
Degree
Master
MCE/SPM
-.5341
.2464
.195
Degree
HSC/STPM
-.4569
.2153
.213
Diploma
-.6638*
.1340
.000
Bachelor
-.1998
.1196
.454
Degree
* The mean difference is significant at the .05 levels.
95% Confidence
Interval
Lower
Upper
Bound
Bound
-.5013
.7607
-.3318
.7456
.2429
.6852
.2962
1.0314
-.9432
.2746
-.7697
.2554
-.6852
-.2429
-.1283
.5279
-1.2100
.1419
-1.0476
-1.0314
.1338
-.2962
-.5279
.1283
The results in Table 5.28a and Table 5.28b show that there is a significant
difference in the mean of performance against qualification, F (4, 339) = 10.458; p <
0.01. From the Tukey test analysis, the results show a significant difference in the
means for the pair of Diploma and Bachelor Degree and the pair of Diploma and
Master Degree. The other pairs do not indicate any significant mean difference. Thus,
it shows that the employees of Telekom Malaysia with a qualification of Diploma
perceive that Telekom Malaysia has a better performance improvement than the
employees with a qualification of Bachelor Degree and Master Degree.
132
5.1.5.15 One Way ANOVA Test for Independent Variables Against Job-Grades
Table 5.29, Table 5.30, Table 5.31, Table 5.32, Table 5.33 and Table 5.34 show
a One Way ANOVA test results for the independent variables – human capital,
structural capital, relational capital, spiritual capital, knowledge management,
managing and leveraging of intellectual capital and Table 5.35 shows the dependent
variable – performance improvement against job-grades of respondents - Executive,
Manager and Assistant General Manager (AGM). For the variable, which has a
significant mean difference, further Post-Hoc test (Tukey) is done to identify the
multiple comparisons for observed means.
Table 5.29 : One Way ANOVA test results for human capital against job-grades.
ANOVA
Human Capital
Between Groups
Within Group
Total
Sum of
Squares
2.140
73.213
75.353
df
2
341
343
Mean
Square
1.070
0.215
F
Sig.
4.983
0.007
Multiple Comparisons
Mean
Difference
(I-J)
Std.
Error
(I) Job-Grade (J) Job-Grade
Tukey Executive Manager
0.1658*
0.0537
HSD
AGM
0.12227
0.0951
Manager Executive
-0.1658*
0.0537
AGM
-0.0431
0.0987
AGM
Executive
-0.1227
0.0951
Manager
0.0431
0.0987
* The mean difference is significant at the 0.05 levels
Sig
0.006
0.401
0.006
0.900
0.401
0.900
95% Confidence
Interval
Lower
Upper
Bound
Bound
0.0395
0.2921
-0.1011
0.3466
-0.2921 -0.0395
-0.2754
0.1893
-0.3466
0.1011
-0.1893
0.2754
The results in Table 5.29 show that there is a significant difference in the mean
of human capital against job-grades, F (2, 341) = 4.983; p < 0.01. From the Tukey test
analysis, the results show a significant difference in the means for the pair of Executive
and Manager. The other pairs do not indicate any significant mean difference. Thus, it
shows that the employees of Telekom Malaysia at the executives’ level perceive that
Telekom Malaysia has a higher level of presence of human capital than the employees
at the manager level.
133
Table 5.30 : One Way ANOVA test results for structural capital against job-grades
ANOVA
Structural Capital
Between Groups
Within Group
Total
Sum of
Squares
4.855
98.067
102.922
df
2
341
343
Mean
Square
2.428
0.288
F
Sig.
8.442
0.000
Post Hoc Tests
Multiple Comparisons
Mean
Difference
(I-J)
Std.
Error
(I) Job-Grade (J) Job-Grade
Tukey Executive Manager
0.2234*
0.0621
HSD
AGM
0.2981*
0.1101
Manager Executive
-0.2234*
0.0621
AGM
0.0748
0.1142
AGM
Executive
-0.2981*
0.1101
Manager
-0.0748
0.1142
* The mean difference is significant at the 0.05 levels
Sig
0.001
0.019
0.001
0.790
0.019
0.790
95% Confidence
Interval
Lower
Upper
Bound
Bound
0.0772
0.3695
0.0391
0.5572
-0.3695 -0.0772
-0.1941 0.3437
-0.5572 -0.0391
-0.3437 0.1941
The results in Table 5.30 show that there is a significant difference in the mean
of structural capital against job-grades, F (2, 341) = 8.442; p < 0.01. From the Tukey
test analysis, the results show a significant difference in the means for the pair of
Executive and Manager and the pair of Executive and Assistant General Manager. The
other pairs do not indicate any significant mean difference. Thus, it shows that the
employees of Telekom Malaysia at the executives’ level perceive that Telekom
Malaysia has a higher level of presence of structural capital than the employees at the
manager and the assistant general manager level.
134
Table 5.31 : One Way ANOVA test results for relational capital against job-grades
ANOVA
Relational Capital
Sum of
Squares
Between Groups
5.365
Within Group
83.376
Total
88.741
df
2
341
343
Mean
Square
2.682
0.245
F
Sig.
10.971
0.000
Post Hoc Tests
Multiple Comparisons
Mean
Std. Error
Difference
(I-J)
(I) Job-Grade (J) Job-Grade
Tukey Executive Manager
0.1989*
0.0573
HSD
AGM
0.3868*
0.1015
Manager Executive
-0.1989*
0.0573
AGM
0.1878
0.1053
AGM
Executive
-0.3868*
0.1015
Manager
-0.1878
0.1053
* The mean difference is significant at the 0.05 levels
Sig
0.002
0.000
0.002
0.177
0.000
0.177
95% Confidence
Interval
Lower
Upper
Bound Bound
0.0641 0.3337
0.11479 0.6256
-0.3337 -0.0641
-0.0601 0.4358
-0.6256 -0.1479
-0.4358 0.0601
The results in Table 5.31 show that there is a significant difference in the mean
of relational capital against job-grades, F (2, 341) = 10.971; p < 0.01. From the Tukey
test analysis, the results show a significant difference in the means for the pair of
Executive and Manager and the pair of Executive and Assistant General Manager. The
other pairs do not indicate any significant mean difference. Thus, it shows that the
employees of Telekom Malaysia at the executive’s level perceive that Telekom
Malaysia has a higher level of presence of relational capital than the employees at the
manager and the assistant general manager level.
Table 5.32 : One Way ANOVA test results for spiritual capital against job-grades
ANOVA
Spiritual Capital
Between Groups
Within Group
Total
Sum of
Squares
1.165
69.910
71.075
df
2
341
343
Mean
Square
0.582
0.205
F
Sig.
2.841
0.060
135
The results in Table 5.32 show that there is no significant difference in the mean
of spiritual capital against job-grades.
Table 5.33: One Way ANOVA test results for knowledge management against jobGrades
ANOVA
Knowledge Management
Sum of
Squares
Between Groups
2.539
Within Group
99.144
Total
101.684
df
2
341
343
Mean
Square
1.270
0.291
F
Sig.
4.367
0.013
Post Hoc Tests
Multiple Comparisons
Mean
Std. Error Sig
Difference
(I-J)
(I) Job-Grade (J) Job-Grade
Tukey Executive Manager
0.1181
0.0624
HSD
AGM
0.2902*
0.1106
Manager Executive
-0.1181
0.0624
AGM
0.1722
0.1148
AGM
Executive
-0.2902*
0.1106
Manager
-0.1722
0.1148
* the mean difference is significant at the 0.05 levels
0.143
0.025
0.143
0.293
0.025
0.293
95% Confidence
Interval
Lower
Upper
Bound
Bound
-0.0289 0.2650
0.0297
0.5507
-0.2650 0.0289
-0.0982 0.4425
-0.5507 -0.0297
-0.4425 0.0982
The results in Table 5.33 show that there is a significant difference in the mean
of knowledge management against job-grades, F (2, 341) = 4.367; p < 0.05. From the
Tukey test analysis, the results show a significant difference in the mean for the pair of
Executive and Assistant General Manager. The other pairs do not indicate any
significant mean difference. Thus, it shows that the employees of Telekom Malaysia at
the executives’ level perceive that Telekom Malaysia has a higher level of knowledge
management practice than the employees at the assistant general manager level
136
Table 5.34 : One Way ANOVA test results for the managing and leveraging of
intellectual capital against job-grades.
ANOVA
Managing and leveraging of intellectual capital
Sum of
df
Mean
F
Sig.
Squares
Square
Between Groups 1.788
2
0.894
5.525
0.004
Within Group
55.179
341
0.162
Total
56.968
343
Post Hoc Tests
Multiple Comparisons
Mean
Std. Error Sig
95% Confidence
Difference
Interval
(I-J)
Lower Upper
(I) Job-Grade (J) Job-Grade
Bound Bound
Tukey Executive Manager
0.1241*
0.0466
0.0145 0.2338
0.022
HSD
AGM
0.2072*
0.0825
0.0129 0.4016
0.033
Manager Executive
-0.1241*
0.0466
-0.2338 -0.0145
0.022
AGM
0.0831
0.0857
0.597
-0.1186 0.2848
AGM
Executive
-0.2072*
0.0826
-0.4016 -0.129
0.033
Manager
-0.0831
0.0857
0.597
-0.2848 0.1186
* The mean difference is significant at the 0.05 level
The results in Table 5.34 show that there is a significant difference in the mean
of managing and leveraging of intellectual capital against job-grades, F (2, 341) =
5.525; p < 0.01. From the Tukey test analysis, the results show a significant difference
in the means for the pair of Executive and Manager and Executive and Assistant
General Manager. The other pairs do not indicate any significant mean difference.
Thus, it shows that the employees of Telekom Malaysia at the executive’s level
perceive that Telekom Malaysia has a higher level of presence of managing and
leveraging of intellectual capital than the employees at the manager and the assistant
general manager level.
137
Table 5.35 : One Way ANOVA test results for performance improvement against
job- grades
ANOVA
Performance improvement
Sum of
df
Mean
F
Sig.
Squares
Square
Between Groups
13.455
2
6.727
20.098
0.000
Within Group
114.143
341
0.335
Total
127.598
343
Post Hoc Tests
Multiple Comparisons
Mean
Difference
(I-J)
Std. Error
(I) Job-Grade (J) Job-Grade
Tukey Executive Manager
0.3542*
0.0670
HSD
AGM
0.5400*
0.1187
Manager Executive
-0.3542*
0.0670
AGM
0.1857
0.1232
AGM
Executive
-0.5400*
0.1187
Manager
-0.1857
0.1232
* The mean difference is significant at the l0.05 level
Sig
0.000
0.000
0.000
0.289
0.000
0.289
95% Confidence
Interval
Lower Upper
Bound Bound
0.1965 0.5119
0.2605 0.8194
-0.5119 -0.1965
-0.1044 0.4758
-0.8194 -0.2605
-0.4758 0.1044
The results in Table 5.35 show that there is a significant difference in the mean
of performance improvement against job-grades, F (2, 341) = 20.098; p < 0.01. From
the Tukey test analysis, the results show a significant difference in the means for the
pair of Executive and Manager and Executive and Assistant General Manager. The
other pairs do not indicate any significant mean difference. Thus, it shows that the
employees of Telekom Malaysia at the executives’ level perceive that Telekom
Malaysia has a better performance improvement than the employees at the manager and
the assistant general manager level.
5.1.5.16 One Way ANOVA Test for the Independent Variables Against
Departments
Table 5.36, Table 5.37, Table 5.38, show a One Way ANOVA test results for
the independent variables – human capital, structural capital, relational capital,
138
spiritual capital, knowledge management, managing and leveraging of intellectual
capital and dependent variable – performance improvement against department of
respondents – Marketing, Customer Network Operation (CNO), Network Services,
Network Development, Support Services, Payphone, Finance/ Human Resource and
others. For the variable, which has a significant mean difference, further Post-Hoc test
(Tukey) is done to identify the multiple comparisons for observed means.
Table 5.36 : One Way ANOVA test results for relational capital, spiritual capital,
knowledge management, managing and leveraging of intellectual capital
and performance against departments.
Variable
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Square
2.441
86.300
88.741
1.777
69.298
71.075
7
336
343
7
336
343
Knowledge
Management
Between Groups
Within Groups
Total
3.276
98.408
101.684
Managing and
Leveraging of
Intellectual
Capital
Performance
improvement
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Relational
Capital
Spiritual
Capital
df
Mean
Square
0.349
0.257
F
Sig
1.358
0.222
0.254
0.206
1.231
0.285
7
336
343
0.468
0.293
1.598
0.135
0.874
56.094
56.968
7
336
343
0.125
0.167
0.748
0.632
5.300
122.298
127.598
7
0.757
0.364
2.080
0.055
336
343
The results in Table 5.36 show that there is no significant difference in the
means of relational capital, spiritual capital, knowledge management and performance
against departments of the respondents. Thus, it shows that the employees of Telekom
Malaysia from all the departments perceive that Telekom Malaysia has a similar level
of presence of relational capital, spiritual capital, managing and leveraging of
intellectual capital, knowledge management practice and performance improvement
level.
139
Table 5.37 : One Way ANOVA test results for the human capital against departments
ANOVA
Human Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
4.472
7
.639
3.029
.004
Within Groups
70.881
336
.211
Total
75.353
343
Dependent Variable: Human capital
(I) H7
Tukey Marketing
HSD
CNO
Finance/
HR
(J) H7
CNO
Network
Services
Network
Dev.
Support
Services
Payphone
Finance/HR
Others
Marketing
Network
Services
Network
Dev.
Support
Services
Payphone
Finance/HR
Others
Marketing
Mean
Difference
(I-J)
Std.
Error
Sig.
-.2613*
.0848
.046
-.5201
-.0025
-.1946
.0869
.333
-.4599
.0708
-.2093
.0823
.182
-.4605
.0419
-.1236
.1070
.944
-.4502
.2030
.1260
-.2793*
-.1432
.2613*
.1317
.0902
.0812
.0848
.980
.044
.646
.046
-.2759
-.5547
-.3909
.0025
.5279
-.0039
.1046
.5201
.0667
.1008
.998
-.2410
.3745
.0520
.0969
.999
-.2437
.3476
.1376
.1186
.942
-.2243
.4995
.3873
-.0180
.1181
.1413
.1037
.0959
.114
1.000
.922
-.0438
-.3345
-.1746
.8183
.2985
.4109
.2793*
.0902
.044
.0039
.5547
.1037
1.000
-.2985
.3345
.1055
.993
-.2371
.4066
.1017
.997
-.2403
.3802
.1226
.909
-.2183
.5296
.1446
.1008
.098
.879
-.0360
-.1714
.8465
.4436
CNO
.0180
Network
.0847
Services
Network
.0700
Dev.
Support
.1556
Services
Payphone
.4053
Others
.1361
* The mean difference is significant at the .05 level.
95% Confidence
Interval
Lower Upper
Bound Bound
140
The results in Table 5.37 show that there is a significant difference in the mean
of human capital against departments, F (7, 336) = 3.029; p < 0.01. From the Tukey test
analysis, the results show a significant difference in the means for the pairs of CNO and
Marketing and Finance/HR and Marketing. The other pairs do not indicate any
significant mean difference. Thus, it shows that the employees of Telekom Malaysia,
from the department of CNO and Finance/HR perceive that Telekom Malaysia has a
higher level of presence of human capital than the employees from the Marketing
department.
Table 5.38a: One Way ANOVA test results for structural capital against departments
ANOVA
Structural Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
6.593
7
.942
3.285
.002
Within Groups
96.329
336
.287
Total
102.922
343
Multiple Comparisons
Dependent Variable: Structural Capital
Mean
Difference
(I-J)
Std.
Error
Sig.
-.2262
.0989
.304
-.5279
.0755
-.3958*
.1014
.003
-.7051
-.0865
-.2590
.0960
.127
-.5518
.0338
-.2391
.1248
.541
-.6199
.1416
-.1382
.1536
.986
-.6067
.3303
-.3545*
.1052
.019
-.6755
-.0334
-.1203
.0946
.909
-.4092
.1685
.3958*
.1014
.003
.0865
.7051
CNO
.1695
.1176
Network
.1368
.1151
Dev.
* The mean difference is significant at the .05 level.
.837
-.1892
.5283
.935
-.2146
.4881
(I) H7
Tukey Marketing
HSD
Network
Services
(J) H7
CNO
Network
Services
Network
Dev.
Support
Services
Payphone
Finance/
HR
Others
Marketing
95% Confidence
Interval
Lower Upper
Bound Bound
141
Table 5.38b: One Way ANOVA test results for structural capital against departments
(continue)
(I) H7
(J) H7
Mean
Difference
(I-J)
Support
.1567
Services
Payphone
.2576
Finance/
.0413
HR
Others
.2754
Finance/HR Marketing
.3545*
CNO
.1282
Network
-.0413
Services
Network
.0954
Dev.
Support
.1153
Services
Payphone
.2163
Others
.2341
* The mean difference is significant at the .05 level.
Std.
Error
Sig.
95% Confidence
Interval
Lower Upper
Bound Bound
.1401
.953
-.2707
.5840
.1662
.780
-.2496
.7647
.1230
1.000
-.3339
.4165
.1141
.1052
.1209
.238
.019
.964
-.0726
.0334
-.2407
.6235
.6755
.4972
.1230
1.000
-.4165
.3339
.1185
.993
-.2663
.4572
.1429
.993
-.3206
.5513
.1686
.1175
.905
.489
-.2981
-.1244
.7307
.5926
The results in Table 5.38 show that there is a significant difference in the mean
of structural capital against departments, F (7, 336) = 3.285; p < 0.01. From the Tukey
test analysis, the results show a significant difference in the means for the pairs of
Network Services and Marketing and Finance/HR and Marketing. The other pairs do
not indicate any significant mean difference. Thus, it shows that the employees of
Telekom Malaysia from the department of Network Services and Finance/HR perceive
that Telekom Malaysia has a higher level of presence of structural capital than the
employees from the Marketing department.
142
5.1.5.17 One Way ANOVA Test for the Independent Variables Against Place
of Work
Table 5.39, Table 5.40, Table 5.41, and Table 5.42 show a One Way ANOVA
test for the independent variables – human capital, structural capital, relational capital,
spiritual capital, knowledge management, managing and leveraging of intellectual
capital and the dependent variable – performance improvement against place of works
of respondents – Kedah/Perlis, Pulau Pinang, Perak, Selangor, Kuala Lumpur, MSC,
Pahang, Trengganu, Negeri Sembilan, Melaka, Johor, Sabah, Sarawak, Headquarters
and Kelantan. For those variables, which have a significant, mean difference, further
Post-Hoc test (Tukey) is done to identify the multiple comparisons for observed means.
Table 5.39: One Way ANOVA test results for human capital, relational capital,
managing and leveraging of intellectual capital and performance
improvement against place of work
Variable
Human Capital
Relational
Capital
Managing and
Leveraging of
Intellectual
Capital
Performance
improvement
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Square
4.504
70.849
75.353
3.945
84.796
88.741
3.382
53.586
56.968
df
14
329
343
14
329
343
14
329
343
Between Groups
Within Groups
Total
8.295
119.303
127.598
14
329
343
Mean
Square
0.322
0.215
F
Sig
1.494
0.111
0.282
0.258
1.093
0.362
0.242
0.163
1.483
0.115
0.593
0.363
1.634
0.069
The results in Table 5.39 show that there is no significant difference in the mean
of human capital, relational capital, spiritual capital, managing and leveraging of
intellectual capital and performance against places of works of the respondents. Thus, it
shows that the employees of Telekom Malaysia from all the places of works perceive
that Telekom Malaysia has a similar level of presence of human capital, relational
capital, managing and leveraging of intellectual capital and performance improvement
level.
143
Table 5.40a: One Way ANOVA test results for structural capital against place of
works
ANOVA
Structural Capital
Between Groups
Within Groups
Total
Sum of
Mean
Squares
df
Square
10.588
14
.756
92.334
329
.281
102.922
343
Multiple Comparisons
F
2.695
Sig.
.001
Dependent Variable: Structural Capital
Tukey HSD
Mean
(I-J)
Std.
Error
Sig.
-.1786
.0237
.0464
.1392
.1379
.1356
.994
1.000
1.000
95% Confidence
Interval
Lower Upper
Bound Bound
-.6543
.2972
-.4478
.4952
-.4173
.5100
.0599
.1233
1.000
-.3615
.4813
.3482
-.2542
.1458
.2223
.1675
.1675
.965
.973
1.000
-.4117
-.8267
-.4267
1.1081
.3183
.7183
.0250
.1529
1.000
-.4976
.5476
-.0951
.0893
.0852
-.0875
.4844*
.0625
.1786
.2023
.2249
.1468
.1392
.1867
.1675
.1346
.1809
.1392
.1403
.1381
1.000
1.000
1.000
1.000
.028
1.000
.994
.983
.951
-.5969
-.3864
-.5529
-.6600
.0243
-.5559
-.2972
-.2774
-.2471
.4067
.5650
.7234
.4850
.9445
.6809
.6543
.6819
.6970
.2385
.1259
.855
-.1920
.6690
.5268
-.0756
.3244
.2238
.1695
.1695
.552
1.000
.845
-.2383
-.6549
-.2549
1.2918
.5037
.9037
.2036
.1551
.993
-.3265
.7336
Difference
(I) H8
(J) H8
Kedah/Perlis
Pulau Pinang
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
Trengganu
Negeri
Sembilan
Melaka
Johor
Sabah
Sarawak
Headquarters
Kelantan
Kedah/Perlis
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
Trengganu
Negeri
Sembilan
Pulau Pinang
144
Table 5.40b: One Way ANOVA test results for structural capital against place of
works (continue)
Mean
(I-J)
Std.
Error
Sig.
Melaka
Johor
Sabah
Sarawak
Headquarters
Kelantan
Kedah/Perlis
.0835
.2679
.2638
.0911
.6629*
.2411
.1490
.1415
.1885
.1695
.1370
.1827
1.000
.856
.987
1.000
.000
.993
95% Confidence
Interval
Lower Upper
Bound Bound
-.4260
.5929
-.2160
.7517
-.3804
.9080
-.4882
.6704
.1945
1.1314
-.3836
.8657
-.0599
.1233
1.000
-.4813
.3615
Pulau Pinang
Perak
Selangor
MSC
Pahang
Trengganu
Negeri
Sembilan
Melaka
Johor
Sabah
Sarawak
Headquarters
Kelantan
Kedah/Perlis
Pulau Pinang
Perak
Selangor
Kuala
Lumpur
MSC
Trengganu
Negeri
Sembilan
Melaka
Johor
Sabah
Sarawak
Headquarter
Kelantan
Kedah/Perlis
Pulau Pinang
-.2385
-.0362
-.0135
.2883
-.3141
.0859
.1259
.1246
.1220
.2143
.1567
.1567
.855
1.000
1.000
.991
.795
1.000
-.6690
-.4620
-.4307
-.4442
-.8496
-.4496
.1920
.3896
.4036
1.0208
.2215
.6215
-.0349
.1409
1.000
-.5167
.4469
-.1550
.0294
.0253
-.1474
.4245*
.0026
.2542
.0756
.2779
.3005
.1343
.1259
.1770
.1567
.1209
.1709
.1675
.1695
.1684
.1666
.998
1.000
1.000
1.000
.037
1.000
.973
1.000
.946
.895
-.6141
-.4011
-.5799
-.6829
.0113
-.5817
-.3183
-.5037
-.2979
-.2689
.3041
.4599
.6305
.3881
.8377
.5869
.8267
.6549
.8537
.8700
.3141
.1567
.795
-.2215
.8496
.6024
.4000
.2424
.1934
.455
.755
-.2263
-.2611
1.4311
1.0611
.2792
.1809
.969
-.3392
.8975
.1591
.3435
.3394
.1667
.7385*
.3167
.0951
-.0835
.1758
.1695
.2102
.1934
.1657
.2051
.1468
.1490
1.000
.781
.955
1.000
.001
.969
1.000
1.000
-.4418
-.2358
-.3793
-.4944
.1720
-.3845
-.4067
-.5929
.7599
.9227
1.0581
.8277
1.3051
1.0178
.5969
.4260
Difference
(I) H8
Kuala
Lumpur
Pahang
Melaka
(J) H8
145
Table 5.40c: One Way ANOVA test results for structural capital against place of
works (continue)
Mean
(J) H8
(I-J)
Std.
Error
Sig.
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
Trengganu
Negeri
Sembilan
Johor
Sabah
Sarawak
Headquarter
Kelantan
Kedah/Perlis
Pulau Pinang
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
Trengganu
Negeri
Sembilan
Melaka
Johor
Sabah
Headquarter
Kelantan
Kedah/Perlis
Pulau Pinang
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
.1188
.1415
.1479
.1457
1.000
1.000
95% Confidence
Interval
Lower Upper
Bound Bound
-.3867
.6243
-.3568
.6397
.1550
.1343
.998
-.3041
.6141
.4433
-.1591
.2409
.2286
.1758
.1758
.832
1.000
.989
-.3382
-.7599
-.3599
1.2248
.4418
.8418
.1201
.1619
1.000
-.4334
.6736
.1844
.1803
.0076
.5795*
.1576
.0875
-.0911
.1112
.1339
.1490
.1942
.1758
.1448
.1886
.1675
.1695
.1684
.1666
.996
1.000
1.000
.007
1.000
1.000
1.000
1.000
1.000
-.3251
-.4833
-.5932
.0846
-.4871
-.4850
-.6704
-.4646
-.4356
.6939
.8440
.6085
1.0744
.8023
.6600
.4882
.6870
.7033
.1474
.1567
1.000
-.3881
.6829
.4357
-.1667
.2333
.2424
.1934
.1934
.898
1.000
.997
-.3930
-.8277
-.4277
1.2644
.4944
.8944
.1125
.1809
1.000
-.5059
.7309
-.0076
.1768
.1727
.5719*
.1500
-.4844*
-.6629*
-.4607
-.4380
.1758
.1695
.2102
.1657
.2051
.1346
.1370
.1358
.1335
1.000
.999
1.000
.045
1.000
.028
.000
.054
.075
-.6085
-.4025
-.5459
.0054
-.5512
-.9445
-1.1314
-.9248
-.8942
.5932
.7561
.8914
1.1384
.8512
-.0243
-.1945
.0035
.0182
-.4245*
.1209
.037
-.8377
-.0113
-.1362
-.7385*
.2210
.1657
1.000
.001
-.8916
-1.3051
.6193
-.1720
.1657
.771
-.9051
.2280
Difference
(I) H8
Sarawak
Headquarter
Trengganu
-.3385
146
Table 5.40d: One Way ANOVA test results for structural capital against place of
works (continue)
Mean
Difference
(I) H8
(J) H8
(I-J)
Std.
Error
Negeri
-.4594
.1510
Sembilan
Melaka
-.5795*
.1448
Johor
-.3951
.1370
Sabah
-.3991
.1851
Sarawak
-.5719*
.1657
Kelantan
-.4219
.1793
* The mean difference is significant at the .05 level.
Sig.
95% Confidence
Interval
Lower Upper
Bound Bound
.143
-.9754
.0567
.007
.210
.696
.045
.552
-1.0744
-.8636
-1.0319
-1.1384
-1.0347
-.0846
.0734
.2336
-.0054
.1910
The results in Table 5.40a, Table 5.40b, Table 5.40c and Table 5.40d show that
there is a significant difference in the mean of structural capital against places of works,
F (14,329) = 2.695; p < 0.01. From the Tukey test analysis, the results show a
significant different in the means for the pairs of – Kedah/Perlis and Headquarters,
Pulau Pinang and Headquarters, Kuala Lumpur and Headquarters, Pahang and
Headquarters, Melaka and Headquarters and Sarawak and Headquarters. The other
pairs do not indicate any significant mean difference. Thus, it shows that the employees
of Telekom Malaysia from places of works of Kedah/Perlis, Pulau Pinang, Kuala
Lumpur, Pahang, Melaka and Sarawak perceive that Telekom Malaysia has a higher
level of presence of structural capital than the employees from the Headquarters level.
147
Table 5.41a: One Way ANOVA test results for spiritual capital against places of
works
ANOVA
Spiritual Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
6.449
14
.461
2.345
.004
Within Groups
64.626
329
.196
Total
71.075
343
Multiple Comparisons
Dependent Variable: Spiritual Capital
Tukey HSD
Mean
Std.
95% Confidence
Difference
(I) H8
(J) H8
Error Sig.
Interval
(I-J)
Lower Upper
Bound Bound
Kedah/Perlis Pulau Pinang
-.0151
.1164 1.000 -.4131 .3829
Perak
.0640
.1154 1.000 -.3304 .4584
Selangor
-.0362
.1135 1.000 -.4241 .3517
Kuala
.1944
.1031 .859
-.1581 .5470
Lumpur
MSC
.2492
.1860 .991
-.3866 .8850
Pahang
.0022
.1401 1.000 -.4767 .4812
Trengganu
.2067
.1401 .979
-.2723 .6856
Negeri
.0411
.1279 1.000 -.3961 .4783
Sembilan
Melaka
.1271
.1228 .999
-.2927 .5468
Johor
.1325
.1164 .998
-.2655 .5305
Sabah
.1990
.1562 .995
-.3349 .7329
Sarawak
.0156
.1401 1.000 -.4634 .4945
Headquarters
.4257*
.1126 .015
.0408 .8106
Kelantan
.3444
.1513 .610
-.1729 .8618
Pulau
Kedah/Perlis
.0151
.1164 1.000 -.3829 .4131
Pinang
Perak
.0791
.1174 1.000 -.3222 .4804
Selangor
-.0211
.1155 1.000 -.4160 .3738
Kuala
.2095
.1053 .804
-.1507 .5697
Lumpur
MSC
.2643
.1872 .986
-.3758 .9043
Pahang
.0173
.1418 1.000 -.4673 .5019
Trengganu
.2217
.1418 .965
-.2629 .7064
Negeri
.0562
.1297 1.000 -.3872 .4996
Sembilan
Melaka
.1421
.1247 .998
-.2841 .5684
Johor
.1476
.1184 .996
-.2572 .5524
Sabah
.2141
.1577 .990
-.3249 .7530
148
Table 5.41b: One Way ANOVA test results for spiritual capital against places of
works(continue)
Mean
Difference
(I) H8
(J) H8
(I-J)
Std.
Error
Sarawak
.0306
.1418
Headquarters
.4408*
.1146
Kelantan
.3595
.1529
Selangor
Kedah/Perlis
.0362
.1135
Pulau Pinang
.0211
.1155
Perak
.1002
.1145
Kuala
.2306
.1021
Lumpur
MSC
.2854
.1854
Pahang
.0384
.1394
Trengganu
.2429
.1394
Negeri
.0773
.1271
Sembilan
Melaka
.1633
.1219
Johor
.1687
.1155
Sabah
.2352
.1555
Sarawak
.0518
.1394
Headquarters
.4619*
.1116
Kelantan
.3806
.1506
Headquarter Kedah/Perlis
-.4257*
.1126
Pulau Pinang
-.4408*
.1146
Perak
-.3617
.1136
Selangor
-.4619*
.1116
Kuala
-.2312
.1011
Lumpur
MSC
-.1765 .1849
Pahang
-.4235
.1386
Trengganu
-.2190
.1386
Negeri
-.3846
.1263
Sembilan
Melaka
-.2986
.1211
Johor
-.2932
.1146
Sabah
-.2267
.1549
Sarawak
-.4101
.1386
Kelantan
-.0812
.1500
* The mean difference is significant at the .05 levels.
Sig.
1.000
.012
.553
1.000
1.000
1.000
95% Confidence
Interval
Lower Upper
Bound Bound
-.4540 .5153
.0488 .8327
-.1631 .8821
-.3517 .4241
-.3738 .4160
-.2911 .4915
.622
-.1183
.5796
.970
1.000
.918
-.3484
-.4380
-.2335
.9192
.5148
.7193
1.000
-.3571
.5117
.991
.981
.974
1.000
.004
.425
.015
.012
.099
.004
-.2536
-.2261
-.2964
-.4246
.0802
-.1343
-.8106
-.8327
-.7500
-.8436
.5801
.5636
.7668
.5281
.8436
.8956
-.0408
-.0488
.0266
-.0802
.601
-.5769
.1144
1.000
.139
.962
-.8085
-.8974
-.6930
.4555
.0505
.2549
.142
-.8163
.0472
.469
.404
.980
.176
1.000
-.7127
-.6851
-.7561
-.8841
-.5940
.1154
.0988
.3027
.0638
.4315
149
The results in Table 5.41a, Table 5.41b and 5.41c show that there is a
significant difference in the mean of spiritual capital against places of works, F
(14,329) = 2.345; p < 0.01. From the Tukey test analysis, the results show a significant
difference in the means for the pairs of – Kedah/Perlis and Headquarters, Pulau Pinang
and Headquarters and Selangor and Headquarters. The other pairs do not indicate any
significant mean difference. Thus, it shows that the employees of Telekom Malaysia
from places of works of Kedah/Perlis, Pulau Pinang, and Selangor perceive that
Telekom Malaysia has a higher level of presence of spiritual capital than the employees
from the Headquarters level.
Table 5.42a: One Way ANOVA test results for knowledge management and place of
works
ANOVA
Knowledge Management
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
9.761
14
.697
2.496
.002
Within Groups
91.922
329
.279
Total
101.684
343
Multiple Comparisons
Dependent Variable: Knowledge Management
Tukey HSD
Mean
Std.
Difference
(I) H8
(J) H8
Error
Sig.
(I-J)
Kedah/Perlis Pulau
Pinang
Perak
Selangor
Kuala
Lumpur
MSC
Pahang
Trengganu
Negeri
Sembilan
Melaka
Johor
Sabah
Sarawak
95% Confidence
Interval
Lower Upper
Bound Bound
.0983
.1389
1.000
-.3764
.5729
.2624
.1675
.1376
.1353
.849
.996
-.2080
-.2952
.7328
.6301
.2633
.1230
.707
-.1571
.6837
.4673
.0444
.1778
.2218
.1671
.1671
.730
1.000
.999
-.2909
-.5268
-.3935
1.2255
.6157
.7490
.2078
.1525
.990
-.3137
.7292
.1071
.3125
.2760
.1333
.1465
.1389
.1863
.1671
1.000
.628
.978
1.000
-.3936
-.1621
-.3608
-.4379
.6077
.7872
.9127
.7046
150
Table 5.42b: One Way ANOVA test results for knowledge management and place of
Works(continue)
Mean
(I-J)
Std.
Error
Sig.
.5953(*)
.5911
.1343
.1805
.001
.077
95% Confidence
Interval
Lower Upper
Bound Bound
.1362
1.0543
-.0259 1.2081
-.0983
.1389
1.000
-.5729
.3764
.998
1.000
-.3145
-.4018
.6427
.5402
.993
-.2645
.5946
.945
1.000
1.000
-.3943
-.6318
-.4985
1.1324
.5242
.6575
1.000
-.4193
.6384
1.000
.973
1.000
1.000
.025
.308
.001
-.4995
-.2685
-.4651
-.5429
.0296
-.1304
-1.0543
.5171
.6971
.8205
.6131
.9645
1.1161
-.1362
.025
-.9645
-.0296
Difference
(I) H8
Pulau
Pinang
(J) H8
Headquarter
Kelantan
Kedah/Perlis
Perak
.1641
.1400
Selangor
.0692
.1378
Kuala
.1651
.1257
Lumpur
MSC
.3690
.2233
Pahang
-.0538
.1691
Trengganu
.0795
.1691
Negeri
.1095
.1547
Sembilan
Melaka
.0088
.1487
Johor
.2143
.1412
Sabah
.1777
.1880
Sarawak
.0351
.1691
Headquarter .4970(*) .1367
Kelantan
.4929
.1823
Headquarter Kedah/Perlis -.5953(*) .1343
Pulau
-.4970(*) .1367
Pinang
Perak
-.3329
.1355
Selangor
-.4278
.1332
Kuala
-.3319
.1206
Lumpur
MSC
-.1280
.2205
Pahang
-.5508
.1654
Trengganu
-.4175
.1654
Negeri
-.3875
.1506
Sembilan
Melaka
-.4882
.1445
Johor
-.2827
.1367
Sabah
-.3193
.1847
Sarawak
-.4619
.1654
Kelantan0
-.0042
.1789
* The mean difference is significant at the .05 level
.475
.091
-.7960
-.8830
.1302
.0274
.279
-.7442
.0803
1.000
.065
.426
-.8817
-1.1161
-.9827
.6258
.0144
.1477
.393
-.9024
.1274
.056
.756
.923
.256
1.000
-.9820
-.7502
-.9507
-1.0272
-.6156
.0056
.1847
.3120
.1033
.6073
151
The results in Table 5.42a and 5.42b show that there is a significant difference in
the mean of structural capital against places of works, F (14,329) = 2.496; p < 0.01.
From the Tukey test analysis, the results show a significant difference in the means for
the pairs of – Kedah/Perlis and Headquarters and Pulau Pinang and Headquarters. The
other pairs do not indicate any significant mean difference. Thus, it shows that the
employees of Telekom Malaysia from places of works of Kedah/Perlis and Pulau
Pinang perceive that Telekom Malaysia has a higher level of knowledge management
practice than the employees from Headquarters level.
5.1.5.18 One Way ANOVA Test for the Independent Variables Against Length of
Service
Table 5.43, Table 5.44, Table 5.45, and Table 5.46 show a One Way ANOVA
test for the independent variables – human capital, structural capital, relational capital,
spiritual capital, knowledge management, managing and leveraging of intellectual
capital and table 4.47, the dependent variable – performance improvement against
length of service of respondents – (< 2 years), (2 – 5 years), (6 – 10 years), (11 – 15
years), (16 – 20 years) and (> 20 years) length of service. For the variable, which has a
significant mean difference, further Post-Hoc test (Tukey) is done to identify the
multiple comparisons for observed means.
Table 5.43: One Way ANOVA test results for human capital, relational capital and
managing and leveraging of intellectual capital against length of service
Variable
Human Capital
Relational
Capital
Managing and
Leveraging of
Intellectual
Capital
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Sum of
Square
2.169
73.184
75.353
2.689
86.053
88.741
1.377
55.571
56.968
df
5
338
343
5
338
343
5
338
343
Mean
Square
0.434
0.217
F
Sig
2.003
0.078
0.538
0.255
2.112
0.064
0.275
0.164
1.674
0.140
152
The results in Table 5.43 show that there is no significant difference in the mean
of human capital, relational capital and managing and leveraging of intellectual capital
against length of service. Thus, it shows that the employees of Telekom Malaysia from
length of service duration perceive that Telekom Malaysia has a similar level of
presence of human capital, relational capital and managing and leveraging of
intellectual capital level.
Table 5.44a: One Way ANOVA test results for structural capital against length of
service
ANOVA
Structural Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
3.612
5
.722
2.458
.033
Within Groups
99.311
338
.294
Total
102.922
343
Multiple Comparisons
Dependent Variable: Structural Capital
Mean
Std.
Differen
(I) H9
(J) H9
Error
Sig.
ce (I-J)
Tukey <2
HSD
years
2–5
years
6 – 10
years
11 –15
years
2 – 5 years
95% Confidence
Interval
Lower
Upper
Bound
Bound
.4586
.2224
.310
.4256
.4079
.2351
.2414
.2064
.2006
.2087
.1971
.310
.326
.870
.825
-.1660
-.1672
-.3631
-.3236
1.0172
.9831
.8333
.8065
-.4586
.2224
.310
-1.0962
.1791
6 – 10 years
11 – 15 years
16 – 20 years
> 20 years
<2 years
-.0329
-.0506
-.2235
-.2171
.1365
.1277
.1400
.1221
1.000
.999
.602
.482
-.4244
-.4167
-.6248
-.5672
.3585
.3155
.1779
.1330
-.4256
.2064
.310
-1.0172
.1660
2 – 5 years
11 – 15 years
16 – 20 years
> 20 years
<2 years
.0329
-.0177
-.1905
-.1842*
.1365
.0970
.1127
.0895
1.000
1.000
.539
.041
-.3585
-.2958
-.5136
-.4409
.4244
.2604
.1326
.0725
-.4079
.2006
.326
-.9831
.1672
6 – 10 years
11 – 15 years
16 – 20 years
> 20 years
<2 years
-.1791
1.0962
153
Table 5.44b: One Way ANOVA test results for structural capital against length of
service (continue)
Mean
Differen
ce (I-J)
Std.
Error
Sig.
2 – 5 years
6 – 10 years
16 – 20 years
> 20 years
<2 years
.0506
.0177
-.1728
-.1665
.1277
.0970
.1018
.0754
.999
1.000
.535
.237
95% Confidence
Interval
Lower
Upper
Bound
Bound
-.3155
.4167
-.2604
.2958
-.4648
.1191
-.3826
.0496
-.2351
.2087
.870
-.8333
.3631
2 – 5 years
6 – 10 years
11 – 15 years
> 20 years
<2 years
.2235
.1905
.1728
.0063
.1400
.1127
.1018
.0947
.602
.539
.535
1.000
-.1779
-.1326
-.1191
-.2652
.6248
.5136
.4648
.2779
-.2414
.1971
.825
-.8065
.3236
2 – 5 years
.2171
.1221
6 – 10 years
.1842*
.0895
11 – 15 years
.1665
.0754
16 - 20 years
-.0063
.0947
* The mean difference is significant at the .05 level
.482
.041
.237
1.000
-.1330
-.0725
-.0496
-.2779
.5672
.4409
.3826
.2652
(I) H9
16 –20
years
> 20
years
(J) H9
The results in Table 5.44a and Table 5.44b show that there is a significant
difference in the mean of structural capital against length of service, F (5,338) = 2.458;
p < 0.05. From the Tukey test analysis, the results show a significant difference in the
mean for the pairs of (> 20 years) and (6 – 10 years) length of service. The other pairs
do not indicate any significant mean difference. Thus, it shows that the employees of
Telekom Malaysia with more than 20 years of service (> 20 years) perceive that
Telekom Malaysia has a higher level of presence of structural capital than the
employees whose length of service is between 6 to 10 years.
154
Table 5.45 : One Way ANOVA test results for spiritual capital against length of
service
ANOVA
Spiritual Capital
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
3.820
5
.764
3.839
.002
Within Groups
67.255
338
.199
Total
71.075
343
Multiple Comparisons
Dependent Variable: Spiritual Capital
Mean
Std.
95% Confidence
Difference
(I) H9
(J) H9
Error
Sig.
Interval
(I-J)
Lower Upper
Bound Bound
Tukey < 2 years 2 – 5 years
.0054
.1830
1.000 -.5193
.5302
HSD
6 – 10 years
.0883
.1698
.995
-.3985
.5752
11 – 15 years
-.0166
.1651
1.000 -.4899
.4567
16 – 20 years
-.0909
.1717
.995
-.5832
.4014
> 20 years
-.1960
.1622
.833
-.6611
.2690
2 –5 years <2 years
-.0054
.1830
1.000 -.5302
.5193
6 – 10 years
.0829
.1123
.977
-.2392
.4050
11 – 15 years
-.0220
.1051
1.000 -.3233
.2793
16 – 20 years
-.0963
.1152
.961
-.4266
.2339
> 20 years
-.2015
.1005
.342
-.4896
.0866
6–10 yrs
<2 years
-.0883
.1698
.995
-.5752
.3985
2 – 5 years
-.0829
.1123
.977
-.4050
.2392
11 – 15 years
-.1049
.0798
.777
-.3338
.1240
16 – 20 years
-.1792
.0927
.385
-.4451
.0867
> 20 years
-.2844*
.0737
-.4956
-.0731
.002
11 –15 yrs <2 years
.0166
.1651
1.000 -.4567
.4899
2 – 5 years
.0220
.1051
1.000 -.2793
.3233
6 – 10 years
.1049
.0798
.777
-.1240
.3338
16 – 20 years
-.0743
.0838
.950
-.3145
.1659
> 20 years
-.1795*
.0620
-.3573
-.0016
.046
16 –20 yrs <2 years
.0909
.1717
.995
-.4014
.5832
2 – 5 years
.0963
.1152
.961
-.2339
.4266
6 – 10 years
.1792
.0927
.385
-.0867
.4451
11 – 15 years
.0743
.0838
.950
-.1659
.3145
> 20 years
-.1052
.0779
.758
-.3286
.1183
> 20 years <2 years
.1960
.1622
.833
-.2690
.6611
2 – 5 years
.2015
.1005
.342
-.0866
.4896
6 – 10 years
.2844*
.0737
.0731
.4956
.002
11 – 15 years
.1795*
.0620
.0016
.3573
.046
16 - 20 years
.1052
.0779
.758
-.1183
.3286
* The mean difference is significant at the .05 level
155
The results in Table 5.45 show that there is a significant difference in the mean
of structural capital against length of service, F (5,338) = 3.839; p < 0.01. From the
Tukey test analysis, the results show a significant difference in the means for the pairs
of (> 20 years) and (6 – 10 years) and (> 20 years) and (11 – 15 years) length of
service. The other pairs do not indicate any significant mean different. Thus, it shows
that the employees of Telekom Malaysia who have been with Telekom Malaysia for
more than 20 years (> 20 years) perceive that Telekom Malaysia has a higher level of
presence of structural capital than the employees who have been with Telekom
Malaysia between 11 to 15 years and 6 to 10 years.
Table 5.46a: One Way ANOVA test results for knowledge management against
length of service.
ANOVA
Knowledge Management
Sum of
Mean
df
F
Sig.
Squares
Square
Between Groups
3.750
5
.750
2.589
.026
Within Groups
97.933
338
.290
Total
101.684
343
Multiple Comparisons
Dependent Variable: Knowledge Management
Mean
Differ
Std.
95% Confidence
ence
(I) H9
(J) H9
Error
Sig.
Interval
(I-J)
Lower
Upper
Bound
Bound
Tukey < 2 years 2 – 5 years
.3442
.2209
.627
-.2890
.9775
HSD
6 – 10 years
.3513
.2049
.523
-.2361
.9388
11 – 15 years .2641
.1992
.771
-.3071
.8352
16 – 20 years .1267
.2072
.990
-.4673
.7208
> 20 years
.1047
.1957
.995
-.4564
.6659
2–5
<2 years
-.3442
.2209
.627
-.9775
.2890
years
6 – 10 years
.0071
.1356
1.000
-.3816
.3958
11 – 15 years -.0801
.1268
.989
-.4437
.2834
16 – 20 years -.2175
.1390
.623
-.6160
.1811
> 20 years
-.2395
.1212
.359
-.5871
.1082
6 – 10
<2 years
-.3513
.2049
.523
-.9388
.2361
years
2 – 5 years
-.0071
.1356
1.000
-.3958
.3816
11 – 15 years -.0873
.0963
.945
-.3635
.1889
156
Table 5.46b: One Way ANOVA test results for knowledge management against
length of service (continue)
(I) H9
Std.
Error
Sig.
-.2246
.2466
*
.1119
.341
95% Confidence
Interval
Lower
Upper
Bound
Bound
-.5455
.0963
.0889
.046
-.5015
.0083
-.2641
.1992
.771
-.8352
.3071
2 – 5 years
6 – 10 years
16 – 20 years
> 20 years
<2 years
.0801
.0873
-.1373
-.1593
.1268
.0963
.1011
.0748
.989
.945
.752
.275
-.2834
-.1889
-.4272
-.3739
.4437
.3635
.1526
.0553
-.1267
.2072
.990
-.7208
.4673
2 – 5 years
6 – 10 years
11 – 15 years
> 20 years
<2 years
.2175
.2246
.1373
-.0220
.1390
.1119
.1011
.0940
.623
.341
.752
1.000
-.1811
-.0963
-.1526
-.2917
.6160
.5455
.4272
.2477
-.1047
.1957
.995
-.6659
.4564
.359
-.1082
.5871
.046
-.0083
.5015
.275
1.000
-.0553
-.2477
.3739
.2917
(J) H9
16 – 20 years
> 20 years
11 - 15
years
16 - 20
years
> 20
years
Mean
Differ
ence
(I-J)
<2 years
2 – 5 years
6 – 10 years
.2395
.1212
.2466
.0889
*
11 – 15 years .1593
.0748
16 - 20 years
.0220
.0940
*The mean difference is significant at the .05 level.
The results in Table 5.46a and Table 5.46b show that there is a significant
difference in the mean of knowledge management against length of service, F (5,338) =
2.589; p < 0.05. From the Tukey test analysis, the results show a significant difference
in the mean for the pairs of (> 20 years) and (6 – 10 years) length of service. The other
pairs do not indicate any significant mean different. Thus, it shows that those who have
been with the company for more than 20 years (> 20 years) perceive that Telekom
Malaysia has a higher level of knowledge management practice than those who have
been with the company between 6 to 10 years.
157
Table 5.47a: One Way ANOVA test results for performance improvement against
length of service
ANOVA
Performance improvement
Sum of
Squares
Between Groups
5.299
Within Groups
122.299
Total
127.598
F
5
2.929
338
343
Multiple Comparisons
Dependent Variable: Performance improvement
Mean
Difference Std.
(I) H9
(J) H9
Error
Sig.
(I-J)
6 – 10
years
11 – 15
years
16 – 20
years
Sig.
.013
.3091
.2469
.811
.4810
.2290
.290
.3559
.3304
.1578
.2226
.2316
.2187
.600
.711
.979
95% Confidence
Interval
Lower Upper
Bound Bound
1.016
-.3986
7
1.137
-.1755
5
-.2823 .9942
-.3334 .9943
-.4692 .7849
-.3091
.2469
.811
-1.0167
.3986
6 – 10 years
11 – 15 years
16 – 20 years
> 20 years
<2 years
.1719
.0469
.0214
-.1512
.1515
.1417
.1553
.1355
.867
.999
1.000
.875
-.2624
-.3594
-.4240
-.5397
.6063
.4531
.4667
.2373
-.4810
.2290
.290
-1.1375
.1755
2 – 5 years
11 – 15 years
16 – 20 years
> 20 years
<2 years
-.1719
-.1251
-.1506
-.3232*
.1515
.1076
.1251
.0993
.867
.855
.835
.016
-.6063
-.4337
-.5091
-.6080
.2624
.1836
.2080
-.0383
-.3559
.2226
.600
-.9942
.2823
2 – 5 years
6 – 10 years
16 – 20 years
> 20 years
<2 years
-.0469
.1251
-.0255
-.1981
.1417
.1076
.1130
.0836
.999
.855
1.000
.171
-.4531
-.1836
-.3494
-.4379
.3594
.4337
.2984
.0417
-.3304
.2316
.711
-.9943
.3334
2 – 5 years
6 – 10 years
11 – 15 years
> 20 years
-.0214
.1506
.0255
-.1726
.1553
.1251
.1130
.1051
1.000
.835
1.000
.572
-.4667
-.2080
-.2984
-.4739
.4240
.5091
.3494
.1288
Tukey < 2 years 2 – 5 years
HSD
6 – 10 years
2–5
years
df
Mean
Square
1.060
.362
11 – 15 years
16 – 20 years
> 20 years
<2 years
158
Table 5.47b: One Way ANOVA test results for performance improvement against
length of service (continue)
(I) H9
Tukey > 20
HSD
years
(J) H9
<2 years
Mean
Difference Std.
Error
(I-J)
-.1578
Sig.
95% Confidence
Interval
Lower Upper
Bound Bound
.2187
.979
-.7849
.4692
2 – 5 years
.1512
.1355
6 – 10 years
.3232*
.0993
11 – 15 years
.1981
.0836
16 - 20 years
.1726
.1051
* The mean difference is significant at the .05 level.
.875
.016
.171
.572
-.2373
.0383
-.0417
-.1288
.5397
.6080
.4379
.4739
The results in Table 5.47a and Table 5.47b show that there is a significant
difference in the mean of performance against length of service, F (5,338) = 2.929; p <
0.05. From the Tukey test analysis, the results show a significant different in the means
for the pairs of (> 20 years) and (6 – 10 years) length of service. The other pairs do not
indicate any significant mean different. Thus, it shows that the employees of Telekom
Malaysia who have been with the company for more than 20 years (> 20 years)
perceive that Telekom Malaysia has a better performance improvement than those who
have been with the company between 6 to 10 years.
5.1.5.19 Summary of the Tests.
Table 5.48a, Table 5.48b and Table 5.48c show the summary of all the tests
done for the intellectual capital, knowledge management and managing and leveraging
of intellectual capital against all the demographics items in their significant difference
in the mean.
Table 5.48a: Summary of the variables tests against demographic items.
Demographic
item
Age
Gender
Qualification
Significant
difference
between
No
significant
difference
Human
Capital
Structural
Capital
Relational
Capital
√
√
√
Significant
difference
between
No
significant
difference
Male and
female
Significant
difference
between
Diploma
&
degree,
diploma
& master
Spiritual
Capital
√
Knowledge
Management
Managing and
Leveraging of
IC
Performance
Improvement
√
√
√
√
√
√
MCE/SPM &
master,
diploma &
master, degree
& master
MCE/SPM &
master, diploma
& master
Male and
female
√
√
Diploma &
degree,
diploma &
master
Diploma &
degree,
diploma &
master
Diploma &
degree,
diploma &
master
Diploma &
degree,
diploma &
master
No
significant
difference
159
Table 5.48b: Summary of the variables tests against demographic items (continue)
Demographic
item
Job-grades
Significant
difference
between
Human
Capital
Structural
Capital
Relational
Capital
Executiv
es &
manager
Executives
&
manager,
executives
& AGM
Executives
&
manager,
executives
& AGM
No
significant
difference
Department
Significant
difference
between
No
significant
difference
Spiritual
Capital
Knowledge
Management
Executives &
AGM
Managing and
Leveraging of
IC
Executives &
manager,
executives &
AGM
Performance
Improvement
Executives &
manager,
executives &
AGM
√
Marketin
g&
CNO,
Marketin
g&
Finance/
HR
Network
services &
Marketing,
Finance/H
R&
Marketing
√
√
√
√
√
160
Table 5.48c: Summary of the variables tests against demographic items (continue)
Demographic
item
Place of work
Length of
Human
Capital
Significant
difference
between
No
significant
difference
Significant
difference
between
Structural
Capital
Relational
Capital
Kedah/Perl
is & HQ,
P.Pinang
& HQ,
K.Lumpur
& HQ,
Pahang &
HQ,
Melaka &
HQ,
Sarawak &
HQ
√
√
20 years &
6 to 10
years
√
Knowledge
Management
Managing and
Leveraging of
IC
Performance
Improvement
Kedah/Perl Kedah/Perlis
is & HQ,
& HQ, Pulau
Pulau
Pinang & HQ
Pinang &
HQ,
Selangor
& HQ
√
> 20 years
& 6 to 10
years,
> 20 years
& 11 to 15
years
service
No
significant
difference
Spiritual
Capital
√
> 20 years & 6
to 10 years
√
20 years &
6 to 10 years
√
161
162
Evidence seems to suggest that from the means of all the measured variables,
all the employees are quite undecided when expressing their opinion on the presence
of the intellectual capital level, managing and leveraging of intellectual capital and
knowledge management practice in Telekom Malaysia. The employees with a diploma
level of education perceive that Telekom Malaysia has a higher level of presence of intellectual capital, managing and leveraging of intellectual capital, knowledge
management practice and performance improvement compared to employees with a
basic or post-graduate level of universities education. This could be due to their
education, knowledge and level of expectation they have towards Telekom Malaysia.
Employees with a higher degree qualification with their level of education and
knowledge may expect Telekom Malaysia to have a higher level of intellectual capital,
in managing and leveraging it and in the knowledge management practice in order to
be a world-class company. The similar phenomena can also be seen between job-grade
executives and manager, and executives and AGM. Almost all diploma holders are at
the executive level and higher degree holders are executives, managers and at the
AGM levels.
The difference between the employee’s knowledge, exposure, responsibilities
and expectation results in the difference in their perception. Employees who have been
with the company for more than 20 years seem to perceive Telekom Malaysia has a
higher level of presence of spiritual capital, structural capital, knowledge management
practice and performance improvement compared to employees who have served
between 6 to 10 years. As matured employees who generally have a higher level of
wisdom, a higher level of loyalty to the company and have enjoyed more benefits due
to the many changes that the company has undergone during these – especially from a
government department to a corporate company – their perceptions, principles and
values in life are different than the employees with a shorter period of service in the
company. The elder employees generally are more appreciative of what the company
had given them and their families for all these years – literally more than the bread and
butter on their breakfast table. As a result they are more willing to share their
experience and knowledge with others. Chances are, they are more willing to stay and
retire in Telekom Malaysia, compared to the younger ones with shorter lengths of
163
service with Telekom Malaysia. They are more likely to leave for better and greener
pastures, so to speak.
There is a vast difference in perceptions between those employees who work in
the states especially in Kedah/Perlis, Pulau Pinang and units within the headquarters
on the perception of the level of presence of structural capital, spiritual capital and
knowledge management practice. This may due to the level of practice of Telekom
Malaysia’s Business Excellence Assessment (TMBEA), in the states especially in
Kedah/Perlis and Pulau Pinang. They are the states that are actively practicing the
assessment guidelines of TMBEA and they score high marks in the TMBEA yearly
assessment, compared to especially the units at headquarters level.
5.1.5.20 Relationship Amongst Variables.
Pearson correlation tests were performed to ascertain the nature of
relationships between the independent variables – human capital, structural capital,
relational capital, spiritual capital, knowledge management, managing and leveraging
of intellectual capital and performance improvement. The results are shown in Table
5.49.
164
Structural
Capital
Relational
Capital
Spiritual
Capital
Knowledge
Management
Managing and
Leveraging of
IC
Performance
Improvement
Human
Capital
Structural
Capital
Relational
Capital
Spiritual
Capital
Knowledge
Human Capital
Table 5.49: Pearson Correlation between variables
1.00
0.524*
0.510*
0.488*
0.486*
0.454*
0.520*
0.524*
1.00
0.555*
0.515*
0.554*
0.524*
0.501*
0.510*
0.555*
1.00
0.522*
0.604*
0.572*
0.641*
0.488*
0.515*
0.522*
1.00
0.703*
0.637*
0.563*
0.486*
0.554*
0.604*
0.703*
1.00
0.731*
0.552*
1.00
0.662*
0.662*
1.00
Management
0.454* 0.524* 0.572* 0.637* 0.731*
Managing
and
Leveraging
of IC
Performance 0.520* 0.501* 0.641* 0.563* 0.552*
* Correlation is significant at the level of 0.01 levels (2-tailed)
From the Table 5.49, it is clear that there are significant positive relationship
between Human Capital and Structural Capital (r = 0.524, p < 0.01), Human Capital
and Relational Capital (r = 0.510, p < 0.01), Human Capital and Spiritual Capital (r =
0.488, p < 0.01), Structural Capital and Relational Capital (r = 0.555, p < 0.01),
Structural Capital and Spiritual Capital (r = 0.515, p < 0.01) and Relational Capital
and Spiritual Capital (r = 0.522, p < 0.01).
There are a significant positive relationship between Knowledge Management
and Human Capital (r = 0.486, p < 0.01), Knowledge Management and Structural
Capital (r = 0.554, p < 0.01), Knowledge Management and Relational Capital (r =
0.604, p < 0.01), Knowledge Management and Spiritual Capital (r = 0.703, p < 0.01).
There are also significant positive relationship between Managing and
Leveraging of Intellectual Capital and Human Capital (r = 0.454, p < 0.01), Managing
and Leveraging of Intellectual Capital and Structural Capital (r = 0.524, p < 0.01),
165
Managing and Leveraging of Intellectual Capital and Relational Capital (r = 0.572,
p < 0.01) and Managing and Leveraging of Intellectual Capital and Spiritual Capital
(r = 0.637, p < 0.01). Managing and Leveraging of Intellectual Capital and Knowledge
Management also has a positive significant relationship (r = 0.731, p < 0.01)
All independent variables have a positive significant relationship with the
Telekom Malaysia’s performance – Human Capital and Performance (r = 0.520, p <
0.01), Structural Capital and Performance ( r = 0.501, p < 0.01), Relational Capital and
Performance (r = 0.641, p < 0.01), Spiritual Capital and Performance ( r = 0.563, p <
0.01), Knowledge Management and Performance (r = 0.552, p < 0.01) and Managing
and Leveraging of Intellectual Capital ( r = 0.662, p < 0.01).
From the relationships amongst independent variables and between
independent variables and dependent variables it is clear that the proposed
“Intellectual Capital Central- Triangle” model shown in Figure 3.1 and the “research
model” of this research shown in Figure 4.2 are substantiated.
5.1.5.21 Regression Analysis
Regression analysis using a stepwise-method was done to predict the values of
one (the dependent variable – performance) from those of another (the independent
variables – human capital, structural capital, relational capital, spiritual capital,
knowledge management and managing and leveraging of intellectual capital). A
regression equation then will be developing based from the results. The results are
shown in Table 5.50, Table 5.51, Table 5.52, Table 5.53, Table 5.54, Table 5.55,
Table 5.56, Table 5.57, Table 5.58, Table 5.59, Table 5.60, Table 5.61, Table 5.62 and
Table 5.63. Consequently by using the results from the regression analysis, a path
analysis was done to study the causal relationship between the variables.
166
Table 5.50: Regression analysis for human capital, structural capital and
relational capital to spiritual capital
Coefficient Table
Model
Constant
Unstandardized Coeff.
B
Std
error
1.388
.159
Standardized
Coeff.
Beta
Relational
.244
.048
.272
capital
Structural
.207
.045
.249
capital
Human
.213
.051
.219
capital
Dependent variable: Spiritual capital
t
Sig
Model
Summary
R
R2
8.72
.000
.614
5.03
.000
4.55
.000
4.14
.000
.377
ANOVA
Table
F
Sig
68.
658
.000
The ANOVA table shows that the F-value of 68.658 is significant at 0.000.
Relational capital has the highest Beta value of 0.272 significant at 0.000. Thus, it
indicates that relational capital (RC) is the most significant and it is positively
regressed to the spiritual capital (SpC), followed by structural capital (HC) with Beta
value of 0.249 significant at 0.000 and human capital (SC) with Beta value of 0.219
significant at 0.000. The relationship between the dependent and independent
variables derived by this model can thus be expressed as:
Spiritual capital = 0.272 (RC) + 0.249 (SC) + 0.219 (HC) + 1.388
Table 5.51: Regression analysis for structural capital and relational capital to human
capital
F
Sig
Model
UnstandarStandt
Sig
R
R2
dized Coeff.
ardized
Coeff.
B
Std
Beta
error
(Constant)
89.
1.373
.135
9.108 .000 .586
.344
.000
310
Structural
.298
.045
.348 6.607 .000
capital
Relational
.292
.049
.316 6.001 .000
capital
Dependent variable: Human capital
167
Table 5.52: Regression analysis for relational capital to structural capital
Model
Unstandardized Coeff.
B
(Constant)
1.382
Std
error
Standardized
Coeff.
Beta
.164
Relational
.597
.048
.555
capital
Dependent variable: Structural capital
t
Sig
8.399
.000
12.329
.000
R2
R
.5555
.308
F
151.
995
Sig
.000
Table 5.53 : Regression analysis for knowledge management and managing
and leveraging of intellectual capital to human capital
Model
Unstandardized Coeff.
B
(Constant)
1.593
Std
error
Standardized
Coeff.
Beta
.138
Knowledge
.284
.059
management
Managing
and
.245
.079
leveraging of
intellectual
capital
Dependent variable: Human capital
t
Sig
8.843
.000
.330
4.830
.000
.213
3.114
.002
R
.507
R2
F
.257
58.
975
Sig
.000
168
Table 5.54: Regression analysis for knowledge management and
managing and leveraging of intellectual capital to structural
capital
Model
Unstandardized Coeff.
B
(Constant)
1.005
Std
error
Standardized
Coeff.
Beta
.199
Knowledge
.369
.065
.367
management
Managing
and
.343
.087
.255
leveraging of
intellectual
capital
Dependent variable: Structural capital
t
Sig
R
5.056
.000
.580
5.685
.000
4.955
.000
R2
F
Sig
.337
86.
643
.000
Table 5.55: Regression analysis for knowledge management and managing and
leveraging of intellectual capital to relational capital
Model
Unstandardized Coeff.
B
(Constant)
.942
Std
error
Standardized
Coeff.
Beta
.137
Knowledge
.374
.057
.400
management
Managing
and
.348
.077
.279
leveraging of
intellectual
capital
Dependent variable: Relational capital
t
Sig
R
5.373
.000
.634
6.523
.000
4.551
.000
R2
.401
F
114.
336
Sig
.000
169
Table 5.56: Regression analysis for knowledge management and managing and
leveraging of intellectual capital to spiritual capital
Model
Unstandardized Coeff.
B
(Constant)
1.208
Std
error
Standar
-dized
Coeff.
Beta
.140
Knowledge
.425
.046
.508
management
Managing
and
.297
.061
.266
leveraging of
intellectual
capital
Dependent variable: Spiritual capital
t
Sig
R
R2
F
Sig
8.651
.000
.726
.527
1890
.752
.000
9.321
.000
4.873
.000
Table 5.57: Regression analysis for knowledge management to managing
and leveraging of intellectual capital
Model
Unstandardized Coeff.
B
(Constant)
Knowledge
management
Std
error
1.494
.094
.547
.028
Standar
-dized
Coeff.
Beta
.731
t
Sig
R
R2
F
15.901
.000
.731
.534
391.
375
19.783
.000
Sig
.000
170
Table 5.58 : Regression analysis for human capital, structural capital, relational
capital and spiritual capital to performance
Model
Unstandardized Coeff.
B
(Constant)
-.704
Std
error
Standar
-dized
Coeff.
Beta
.210
t
Sig
R
-3.356
.001
.711
Relational
.496
.057
.413 8.684
capital
Spiritual
.344
.063
.257 5.474
capital
Human
.239
.061
.184 3.956
capital
Dependent Variable: Performance improvement
R2
.505
F
Sig
115.
750
.000
.000
.000
.000
The R square value is 0.505, so the model is suitable to be used with the data.
The ANOVA table shows that the F-value of 115.750 is significant at 0.000.
Relational capital has the highest Beta value of 0.413 significant at 0.000. Thus, it
indicates that relational capital (RC) is the most significant and it is positively regress
to the performance, followed by spiritual capital (SpC) with Beta value of 0.257
significant at 0.000, human capital (HC) with Beta value of 0.184 significant at 0.000.
The relationship between the dependent and independent variables derived by this
model can thus be expressed as:
Performance = 0.496 (RC) + 0.344 (SpC) + 0.239 (HC) – 0.704
171
Table 5.59 : Regression analysis for human capital, structural capital, relational
capital and spiritual capital to performance improvement – Operating
efficiency and business performances (profit, market share, revenue,
CSI, products/services launch)
Model
Unstandardized Coeff.
B
Constant
-0.888
Std
error
.273
Standardized
Coeff.
Beta
t
-3.252
Sig
.001
R
.601
R2
.368
F
Sig
65.
988
.000
Relational
.497
.074
.360 6.691 .000
capital
Spiritual
.308
.082
.200 3.763 .000
capital
Human
.253
.079
.169 3.215 .001
capital
Dependent variable: Performance - operating efficiency and business performances
(OEBP)
The ANOVA table shows that the F-value of 65.988 is significant at 0.000.
Relational capital has the highest Beta value of 0.360 significant at 0.000. Thus, it
indicates that relational capital (RC) is the most significant and it is positively regress
to the performance – operating efficiency and business performance, followed by
spiritual capital (SpC) with Beta value of 0.200 significant at 0.000, human capital
(HC) with Beta value of 0.169 significant at 0.000. The relationship between the
dependent and independent variables derived by this model can thus be expressed as:
Performance (OEBP) = 0.360 (RC) + 0.200 (SpC) + 0.169 (HC) – 0.888
172
Table 5.60 : Regression analysis for human capital, structural capital, relational
capital and spiritual capital to performance improvement– organisational
leadership (leadership, employee’s satisfaction indexes) and business
leadership (responsive, forward-looking, global competition and industry
leader)
Model
Unstandardized Coeff.
B
Constant
-.627
Std
error
.222
Standardized
Coeff.
Beta
t
-2.819
Sig
.005
R
.703
R2
.494
F
Sig
82.
863
.000
Relational
.459
.063
.367 7.253 .000
capital
Spiritual
.368
.068
.263 5.382 .000
capital
Human
.161
.066
.118 2.418 .016
capital
Structural
.128
.059
.111 2.177 .030
capital
Dependent variable: Performance - organisational leadership and business leadership
(OBL)
The ANOVA table shows that the F-value of 82.863 is significant at 0.000.
Relational capital has the highest Beta value of 0.367 significant at 0.000. Thus, it
indicates that relational capital (RC) is the most significant and it is positively regress
to the performance – organisational leadership and business leadership, followed by
spiritual capital (SpC) with Beta value of 0.263 significant at 0.000, human capital
(HC) with Beta value of 0.118 significant at 0.000, and structural capital (SC) with
Beta value at 0.111 significant at 0.000. The relationship between the dependent and
independent variables derived by this model can thus be expressed as:
Performance (OBL) = 0.367 (RC) + 0.263 (SpC) + 0.118 (HC) + 0.111 (SC) – 0.627
173
Table 5.61 : Regression analysis for human capital, structural capital,
relational capital, spiritual capital, knowledge management,
management and leveraging of intellectual capital to performance
improvement
.
Model
Unstandar
Standart
Sig
R
R2
F
Sig
dized Coeff.
dized
Coeff.
B
Std
Beta
error
(Constant)
111.
-1.147
.206
-5.555 .000 .753
.568
.000
204
Managing
and
.523
.075
.349 6.984 .000
leveraging of
intellectual
capital
Relational
.371
.056
.309 6.586 .000
capital
Human
.199
.057
.153 3.500 .001
capital
Spiritual
.139
.066
.104 2.109 .036
capital
Dependent variable: Performance improvement
The R square value is 0.568, so the model is suitable to be used with the data.
The ANOVA table shows that the F-value of 111.204 is significant at 0.000.
Managing and leveraging of intellectual capital has the highest Beta value of 0.349
significant at 0.000. Thus, it indicates that managing and leveraging of intellectual
capital (MLIC) is the most significant and it is positively regress to the performance,
followed by relational capital (RC) with Beta value of 0.309 significant at 0.000,
human capital (HC) with Beta value of 0.153 significant at 0.01and spiritual capital
(SpC) with Beta value of 0.104 significant at 0.05. The relationship between the
dependent and independent variables derived by this model can thus be expressed as:
Performance improvement = 0.523 (MLIC) + 0.371 (RC) + 0.199 (HC)
+ 0.139 (SpC) – 1.147
174
Table 5.62 : Regression analysis for human capital, structural capital, relational
capital, spiritual capital, knowledge management, managing and
leveraging of intellectual capital to performance improvement– operating
efficiency and business performances (profit, market share, revenue,
CSI, products/services launch)
Model
Unstandar
dized Coeff.
B
Constant
-1.273
Std
error
.267
Standardized
Coeff.
Beta
t
-4.774
Sig
.000
R
.645
R2
.417
F
Sig
80.
951
.000
Managing
and
leveraging
.591
.089
.343 6.612 .000
of
intellectual
capital
Relational
.381
.074
.276 5.139 .000
capital
Human
.230
.074
.153 3.103 .002
capital
Dependent variable: Performance - operating efficiency and business performances
(OEBP)
The ANOVA table shows that the F-value of 80.951 is significant at 0.000.
Managing and leveraging of intellectual capital has the highest Beta value of 0.343
significant at 0.000. Thus, it indicates that managing and leveraging of intellectual
capital (MLIC) is the most significant and it is positively regress to the performance –
operating efficiency and business performances , followed by relational capital (RC)
with Beta value of 0.276 significant at 0.000 and human capital (HC) with Beta value
of 0.153 significant at 0.000. The relationship between the dependent and independent
variables derived by this model can thus be expressed as:
Performance (OEBP) = 0.343 (MLIC) + 0.276 (RC) + 0.153 (HC) –1.273
175
Table 5.63 : Regression analysis for human capital, structural capital, relational
capital, spiritual capital, knowledge management, management and
leveraging of intellectual capital to performance – organisational
leadership (leadership, employee’s satisfaction indexes) and business
leadership (responsive, forward-looking, global competition
and industry leader)
Model
Unstandar
dized Coeff.
B
Constant
-1.023
Std
error
.222
Standardized
Coeff.
Beta
t
-4.613
Sig
.000
R
.737
R2
F
.542
Sig
100.
148
.000
Managing
and
leveraging
.510
.080
.326 6.339 .000
of
intellectual
capital
Relational
.380
.061
.303 6.272 .000
capital
Spiritual
.204
.071
.146 2.882 .004
capital
Human
.160
.061
.118 2.612 .009
capital
Dependent variable: Performance - organisational leadership and business leadership
(OBL)
The ANOVA table shows that the F-value of 100.148 is significant at 0.000.
Managing and leveraging of intellectual capital has the highest Beta value of 0.326
significant at 0.000. Thus, it indicates that managing and leveraging of intellectual
capital (MLIC) is the most significant and it is positively regress to the performance –
organisational leadership and business leadership , followed by relational capital (RC)
with Beta value of 0.303 significant at 0.000, spiritual capital with Beta value of 0.146
and human capital (HC) with Beta value of 0.118 significant at 0.000. The relationship
between the dependent and independent variables derived by this model can thus be
expressed as:
Performance (OBL) = 0.326 (MLIC) + 0.303 (RC)
+ 0.146 (SpC) + 0.118 (HC) –1.023
176
5.1.5.22 Path Analysis
The path analysis is use (Youndt, 1998; Bontis, 1998; Bontis et al. 1999;
Choo, 2003) to show the causal relationship between human capital (HC), structural
capital (SC), relational capital (RC) spiritual capital (SpC), knowledge management
(KM), managing and leveraging of intellectual capital (MLIC) and performance
improvement (P). They are shown in Figure 5.1, Figure 5.2, Figure 5.3, Figure 5.4,
Figure 5.5, Figure 5.6 and Figure 5.7.
RC
HC
SC
0.219*
0.272*
SpC
0.249*
R2=37.7%
* Significant at 0.000
Figure 5.1:
Path analysis of HC, SC, RC and SpC
HC
0.184*
P
0.257*
R2=50.5%
SpC
0.413*
* Significant at 0.000
RC
Figure 5.2: Path analysis of HC, SC, RC, SpC and Performance (P)
177
HC
0.169**
OEBP
R2 = 36.8%%
SpC
0.200*
0.360*
RC
* Significant at 0.000
** Significant at 0.01
Figure 5.3 : Path analysis of HC, SC, RC, SpC and Performance-Operating
Efficiency and Business Performances (OEBP)
HC
0.118**
SpC
0.263*
OBL
R2 =49.4%
0.367*
RC
0.111**
SC
* Significant at 0.000
** Significant at 0.01
Figure 5.4 : Path analysis of HC, SC, RC, SpC and PerformanceOrganisational Leadership and Business Leadership(OBL)
178
HC
0.184**
OEBP
R2 = 41.7%
MLIC
0.257*
0.413*
RC
* Significant at 0.000
** Significant at 0.01
Figure 5.5 : Path analysis of HC, SC, RC, SpC, KM, MLIC and PerformanceOperating Efficiency and Business Performances (OEBP)
HC
0.118**
SpC
OBL
0.146**
R2=54.2%
RC
0.303*
0.326*
MLIC
* Significant at 0.000
** Significant at 0.01
Figure 5.6: Path analysis of HC, SC, RC, SpC, KM, MLIC and PerformanceOrganisational Leadership and Business Leadership(OBL)
179
HC
0.153**
SpC
0.104***
P
R2=56.8%
0.309*
RC
0.349*
MLIC
* Significant at 0.000
** Significant at 0.001
*** Significant at o.005
Figure 5.7 : Path analysis of HC, SC, RC, SpC, KM, MLIC and Performance
0.473*
0.731*
MLIC
0.255*
KM
0.330*
0.213*
HC
0.508*
0.367*
0.348*
0.40*
SC
R2=33.7%
0.555*
0.266*
R2 = 34.4%
0.219*
0.249*
0.349*
0.279*
0.153**
SpC
2
R =37.7%
0.104***
P
R2=56.8%
0.316*
RC
0.272*
0.309*
R2=40.1%
0.099*
* Significant at 0.000 ** Significant at 0.01 *** Significant at 0.05
Indirect effect
Figure 5.8: Overall Path analysis amongst HC, SC, RC, SpC, KM,MLIC,
and Performance(P)
180
5.2 Secondary Data
Secondary data consists of 14 reports as shown in Table 5.64 from various
departments at headquarters level, which has scope of responsibilities close to the
subject studied such as Change Management Office, Human Resource Development,
Quality Improvement and Business Excellence and Telekom Training College, is
collected and studied.
Table 5.64 : List of secondary data
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Document
Change Initiative Survey
Retention Assessment for Telekom Malaysia
Employee Opinion Survey Result
Telekom Malaysia’s Change Plan
Promotion and Upgrading Criteria for Executive
Managing 21st Century Workforce and Expatriates
Change Management Strategy Document
Change Initiative Survey
Telekom Malaysia’s Business Excellence Assessment
Telekom Malaysia’s Composite Report – Leadership Practice
Leadership / Impact Survey
Analysis of Behavior, Attributes, Skills Set of TM Executives
Corporate Culture Transformation Project for TM.
QIBE Presentation to New CEO
Abbreviation
CAS
RAS
EOS
CHP
PUC
MCW
CMS
CIS
BEA
LDP
LIS
BAS
CCR
QIB
Salient features refer to the topics being discussed, studied, highlighted and
reported in management reports or consultants’ reports and discussions are shown in
Table 5.65a and Table 5.65b. These salient features will be combined together with the
data from the interview sessions, and an in-depth discussion on them will be made.
These salient features are then matched against the theme currently studied –
human capital, structural capital, relational capital, spiritual capital, managing and
leveraging of intellectual capital and knowledge management. Full and relevant
remarks from these reports will be used to convey the findings from the secondary data
analyses.
181
CAS
RAS
EOS
CHP
PUC
MCW
CMS
CIS
BEA
LDP
LIS
BAS
CCR
QIB
Table 5.65a : Salient features of secondary data
Human Capital
Leadership
Strategic
Judgement
Creativity
Entrepreneur
Thinking
Problem solving
Innovation
Initiative
Structural Capital
Information
Performance
Employee
Procedures
Compensation
Financial
Job task
Relational Capital
Supplier
Business
Customer
Competitor
Collaboration
Communication
Spiritual Capital
Accountability
Commitment
Supportive
Inward looking
Sense of urgency
Perfectionist
Self focus
Trust
Openness
Transparency
Clarity
Transparency
Consistency
Integrity
Motivation
√ √ √ √ √ √ √ √ √ √ √ √ √ √
√ √ √ √ √
√ √
√ √
√
√
√
√
√
√ √ √
√
√
√ √
√
√ √
√
√
√
√
√
√
√ √ √ √
√ √
√
√ √ √
√ √
√ √ √ √ √ √ √ √ √ √ √
√ √
√ √ √ √ √ √ √ √
√ √ √ √
√ √
√
√
√ √
√
√
√ √
√
√
√
√
√
√
√
√
√
√
√
√ √ √ √ √ √ √ √ √ √ √ √
√ √
√ √ √
√ √ √ √
√
√
√
√ √
√ √
√ √ √
√
√ √
√
√
√ √ √
√ √ √
√
√ √
√ √ √
√ √
√
√
√ √
√
√
√ √
√
√
√ √
√
√
√
√ √
√
√
√
√
√
√
√ √
√
√
√
√
√
√
√
√
√
√
√
182
CAS
RAS
EOS
CHP
PUC
MCW
CMS
CIS
BEA
LDP
LIS
BAS
CCR
QIB
Table 5.65b : Salient features of secondary data (continue)
Drive
Risk taking
Credit sharing
Resilience
Loyalty
Relationship
Vision
Mission
Change
Culture
Values
Direction
Drive
Confidence
Achievement
Avoidance
Encouragement
Ethic
Defensive
Relationship
Teamwork
Leveraging of
Intellectual Capital
Career Development
Office Politic
Feedback
Empowerment
Reward & Recognition
Goal
Competitive Environment
Promotion
Top-Down
Quality
Knowledge
Management
Training
Competency
Job rotation
Learning
Knowledge
√
√ √
√
√
√
√
√
√
√ √ √
√
√ √
√ √ √
√
√
√
√
√ √ √
√
√
√
√
√ √
√
√
√
√ √
√
√ √
√
√ √
√
√
√ √
√
√
√
√
√ √
√ √
√
√ √
√
√
√
√
√
√ √ √
√ √
√
√ √ √ √
√
√
√
√
√
√ √
√
√
√
√
√
√ √ √ √
√ √ √ √
√ √
√ √
√ √ √
√ √ √
√ √ √ √
√ √
√ √
√
√
√ √
√
√ √ √
√
√
√
√ √ √
√ √ √
√
√ √ √
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√ √
√ √
√
√ √ √ √
√
√
√ √
√
√ √
√
√ √
√
√
√
√ √
√ √
√
√ √
√ √ √ √
√
√ √
√
√ √ √ √
√
√ √
√
√ √
√ √
√
√
√ √
√ √
183
5.3
Interview
Interviewees come from various levels, from the Chief Executive Officer to the
general manager from various departments who have been selected on the basis of their
potential to contribute to the development of insights and understanding of the subject
and their personal credibility. The List of these interviewees is shown in Table 5.66.
Table 5.66: List of interviewees
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Position and department
Chief Executive Officer of Telekom Malaysia
Ex -Senior Vice-President Human Resource Management
Vice-President Change Management Office
Vice-President Quality Improvement & Business Excellence
Chief Executive Officer of Telekom Training College
Vice-President of Network Operation
Senior General Manager Human Resource Development
Senior General Manager Major Business Sales
Senior general Manager Network Development
Senior General Manager Corporate Strategy
Senior General Manager Consumer & Business Sales
Senior General Manager State of Penang
General Manager Quality Improvement and Business
Excellence
General Manager Telco Strategy
General Manager State Network Operation
Abbreviation
CEO
SVP HRM
VP CMO
VP QIBE
CEO TTC
VP NWO
SGM HRD
SGM MBS
SGM NWD
SGM CTS
SGM C&B
SGM PGS
GM QIBE
GM TSY
GM SNO
The one-to-one interview conducted and managed by the author lasted for about
one hour to two hours for each participant. A series of questions relating to intellectual
capital, managing and leveraging of intellectual capital, knowledge management and
performance improvement (see Appendix B) are used as guides in the interview
sessions and the interviewees are allowed to explore various related issues as they saw
fit. All the interviews are recorded on tape and transcribed in verbatim reports.
5.3.1
Interview Data
The results from these interviews are analyzed by uncovering the salient
features that are directly related to the subject currently discussed. These salient
features from the interviews, refer to those unsolicited or unprovoked comments that
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are directly studied in this thesis. The salient features that emerged during these
interview sessions are shown in Table 5.67a, Table 5.67b and Table 5.67c. The salient
features are categorized according to the themes currently being studied – human
capital, structural capital, relational capital, spiritual capital, managing and leveraging
of intellectual capital and knowledge management. Some narrations will be used to
convey the findings of these analyses. These comments have been substantially edited
to make them more readable. Only the grammar has been changed NOT the substance.
Verbatim comments are available on tapes.
CEO
SVP HRM
VP CMO
VP QIBE
VP NWO
CEO TTC
SGM HRD
SGM MBS
SGM NWD
SGM CTS
SGM C&B
SGM PGS
GM QIBE
GM TSY
GM SNO
Table 5.67a: Salient features of comments from interviewees that are directly
related to subjects being studied.
Human Capital
Leadership
Broad picture
Brain power
Complacence
Direction
Judgement
Competency
Experience
Expert
Technical skill
Thinking
Soft skill
Innovative
Decision making
Maturity continuum
Structural Capital
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CEO
SVP
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VP QIBE
VP NWO
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Table 5.67b: Salient features of comments from interviewees that are directly
related to subjects being studied.(continue)
System
Technology
Bottom line/Finance
TMBEA
ISO 9000
Feudalism
Silo
Relational Capital
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Procurement
Customers
Partnering
Consultant
Government
Communication
Spiritual Capital
Culture
Spiritual
Clear Vision
Motivation
Individualistic
Integrity
Credibility
Accountability
Sincerity
Walk the talk
Change
Trust
Truth
Transparent
Openness
Values/Kristal
Value destroyer
Teamwork
Relationship
Transformation
Governance
Role-model
Bonding
Risk-taking
Loyalty
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Table 5.67c: Salient features of comments from interviewees that are directly
related to subjects being studied.(continue)
Managing and
Leveraging of
Intellectual Capital
Strategy
Deployment
Road-map
Develop people
Coaching
Framework
Clear target
Invest in people
Listen to people
Selection & placement
Encouraging
Driving
Leveraging
Evaluation
Performance
Long-term benefits
Reward & Recognition
Promotion
Consequence Mgmt
Growing
Power Play/Politic
Rock the boat
Authority
Internalizing
Modeling
Living
Receive feedback
Sustain
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Management
Structured training
Knowledge sharing
Practice knowledge
Learning
Success Stories
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5.4
Analysis and Discussion
Since this research is a case study of Telekom Malaysia, we will emphasise an
in-depth study to delve into more details, to focus on the relationship and processes that
are interconnected to each other and to explain why certain outcomes might happen,
more than just to find out what and how those outcomes are (Dencscombe, 1998). In
the analyses and discussions of the findings, the approach will begin with quantitative
data analyses followed by qualitative data analyses and in the interpretation phase,
qualitative findings have helped to elaborate the quantitative results for the intellectual
capital – human capital, structural capital, relational capital, spiritual capital, managing
and leveraging of intellectual capital and knowledge management. Major research
problems – to identify the level of availability and utilisation of intellectual capital, the
influence of intellectual capital, especially the spiritual capital, on the performance of
Telekom Malaysia and the importance of knowledge management and managing and
leveraging of intellectual capital, for Telekom Malaysia to achieve business
competitiveness will be discussed in great details.
5.4.1
Intellectual Capital
Intellectual capital is one of the important aspects of assets in Telekom
Malaysia and all levels of respondents from various states, departments and
demographic background agree on this point. This finding supports the previous
findings by most authors such as Edvinson (1997), Sveiby (1998) and Steward (1998).
Each of the intellectual capital components has a different level of importance and
degree of availability in Telekom Malaysia. Evidence from the means of the survey
show that the respondents are quite undecided when expressing their opinions further,
and it seems to suggest that the respondents, from executives to middle management
employees, hold the view that Telekom Malaysia has only an average amount of
intellectual capital.
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Similar opinion is also expressed by the interviewee from higher-level
management such as this comment from SGM HRD:
“In my perception the level of intellectual capital in Telekom Malaysia is
only about 60% of the required level of intellectual capital as a world –
class telecommunication company and only 1/3 of the intellectual capital
is leveraged. The reason we cannot leverage at the maximum level is
because of the way the organisation being managed. Telekom Malaysia,
because of this, has three weaknesses:
(i)
It has unclear levels of authority.
(ii)
No clear principles on good corporate governance.
(iii)
Too many decision makers – or too many can make too many
decisions".
The SGM MBS says,
“ My perception is that we only have at the most only within 20% of the
should be level of intellectual capital.”
When asked, the SVP HRM gives this comment “ In my opinion if we follow the QSR point system our intellectual
capital level not even 50% because if we want to be a world-class the
standard is at least 70%. Leveraging the intellectual capital of course is
much lower, the highest is 40% in all aspects including technical and
management. I think even for basic intellectual capital we are still very
far away.”
5.4.1.1 Human Capital
Evidence from the means of the survey shows that the respondents are quite
undecided when expressing their opinion on their employee’s expertise, competence,
brilliance, innovativeness, and capabilities in performing their duties. And it appears
that they tend to disagree that their employees can quickly adapt to changes made by
the management without any difficulty.
189
The SGM NWD gives the following comment:
“On the planning side, we have a strong competency for basic services
but we are not prepared for new services. For higher management it is
only at superficial level, not more than 30%. For middle management,
may up to 50% because they have gone through the required and
necessary trainings and seminars. For lower management, they are not
prepared. They need the training but we don’t have a well-structured
training program. For development side, the percentage is much lower
because they depend too much on the supplier to do for them. We only
manage the supplier not the project. Most of the time the suppliers are
dictating what to be done, it seems the suppliers know better than us.
Operation side may have a higher percentage because they have to be
involved. I believe most of the time we are looking at to perfect what we
already have than to look for innovations. This may not be good enough
in the current fast changing world”.
The CEO TTC gives the following comment:
“In my opinion for the subject matter, our executives may have about
50% to 60% of what are required from them. For the Lower staff, maybe
lower because of the new technologies that change very fast. A few elite
groups may have between 80% to 90% expertise, but it was not
homogenous”.
The GM SNO makes the following comments:
“Our staffs do not have the expertise to deal with suppliers. They don’t
have the required competency and they blame the technology. They let
the supplier tell us about the technology. We don’t have enough skills in
our own business areas and let the supplier to dictate us on our own
requirements”.
The GM TSY gives the following comment:
“I think we only have 30% to 40% of the required intellectual capital.
The balance 60% to 70% we have to get help from consultants and
others to make the plan implement able”.
The GM QIBE gives the following comments:
“Base on my personal effort and experience, now we only have 30% to
40% of the should be level of human capital. For the new technology, it
is reduced further to another 30%. On the soft skill part if we ask how
190
our executives at state level, how they manage their organisations, we
can only give them up to 60%”.
According to the SVP HRM:
“In our company we must have the experts. There are many products in
Telekom Malaysia that fail because we have failed to develop the experts
in telecommunication, like the doctors and surgeons in health industry.
When I visited British Telekom, their expert group really helps the
company. Telekom Malaysia doesn’t have that, we don’t have the
experts and we depend very much on the suppliers. Because our people
is not experts in their fields, we are like the Malay proverbs - “Pi mai, pi
mai, tang tu jugak” (we seem to make movement – towards all places –
but we end up at the same old place)”.
The CEO gives the following comment:
“I don’t think I have to quantify the percentage of human capital that we
have but I don’t think we have all the talents, skills and knowledge to be
a world-class organisation. There are good people here but there are
some gaps for example in IT, corporate communication, human resource
etc”.
Evidence from the means of the survey also shows that the respondents are
quite undecided when expressing their opinion on the competence of higher
management team members in performing their duties to achieve the vision and
mission statement.
Employee Opinion Survey 2001 reported; Employees are least satisfied (>20%
of the surveyed employees expressed disagreement) with the leadership – not effective
in addressing areas that need improvement, not very effective in setting business
direction and translating into business goals and not very effective at openly sharing
information and taking into account employees input prior to making decisions.
Change initiative survey 2002 reported; More than 20% of executives rated
poor on the leadership – management cooperation in making decision, receptivity to
ideas that are different from theirs, sensitivity to employees needs, opinions and
suggestions, demonstrate the values of Telekom Malaysia in their daily interaction with
191
employees, mutual respect for each other and high level of trust and respect between
management and employees.”
A paper on the proposal on promotion and upgrading mechanism for executives
says; “Assessment data has shown that not all of the executives promoted to
management positions do have the necessary competencies required to be in the
management position. Managers and middle managers generally are average in terms of
performance in all the managerial competencies being assessed. Executives in Telekom
are upgraded and promoted based on very simple eligibility criteria such as years in
grade and performance appraisal that does not reflect the competency acquired.
Overall, on the management appraisal using Egon Zehnder approach for 147 high
potential managers, senior managers and top managers, indicates an average
performance in terms of leadership and managerial capabilities with 76.2% are in the
above average, average and further analysis category”.
Leadership Practices Report 2002 on 274 general managers, managers and
senior managers reports the following; Personal attributes and management of skills in
term of entrepreneurial vision, leadership for change, gaining commitment, monitoring
personal impact, drive and recognising performance of all the respondents are at low
average (20% - 30%) score and average (40% - 50%) score.
A presentation from Management Leadership Institute TTC 2003 reports the
following; Finding from Potentia M test for executives level, for the competency in
problem analysis, creative thinking, judgement, drive, resilience, empathy, organising
and implementing show that from 286 tested executives, 98% of them is at the level
50% and below only 1 executive achieving the 75% score, which is the industry
average score. Finding from SMAC test for managers and assistant general managers
levels for the competency in problem solving and decision making, strategic thinking
and planning, organisation and client awareness, communication, leadership,
innovation, managing people, business sense and risk taking, 79% from the 268
managers and assistant general managers score average and below average competency
level and only 12% of them scoring above industry average score of 75%.
192
The Leadership Impact Reports 2003 of 23 top management executives and
136 of their staff (general managers, assistant general manager, managers and
executives) quotes the following; The defensive behaviours are dominant – strongly
evident in conventional and avoidance behaviours which result the outcomes of service
quality is below average, organisational trust is below average, quality of decisions is
sub-optimal and prime focus is self not team. There is a need to address improved
leadership behaviours through…
The GM HRD says:
“Our biggest problem is in the areas of leadership and communication.
Learning behaviour at the top is weak; they don’t have the long-term
strategic planning.”
The VP CMO says,
“From the Deming’s model, 80% of the problems are from the
management, 20% from the staff. Leadership in Telekom Malaysia is
poor, even when they do a psychometric test; leadership is not our
strongest point. Our top leaders must understand and be able to fully
grasp our vision. If they themselves fail to understand the direction of
Telekom Malaysia – where it wants to go – than our transformation will
fail.”
The VP NWO says,
“There is no significant improvement in terms of behaviour and style of
leadership for the past two years. I don’t think Telekom Malaysia leaders
have really showed an example of what good leadership is.”
The CEO TTC gives the following remarks on the role of TTC in improving the human
capital level of Telekom Malaysia:
“The behavioral and soft skill – 80% on the leadership, management of
human skill and managing people. This aspect we are very poor. While
we have a higher human capital in the industry knowledge, but when
comes to the emotional intelligence we are very far away. More than
50% of the general manager is not ‘fully cooked’ and they are not
following the maturity continuum.”
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The SVP HRM when explaining his understanding of Total Quality Management says:
“In any company leadership is the most important aspect. When the
leader doesn’t understand, the company will be in an unstable situation. I
feel very sad; our leaders don’t understand the concept of leadership.
Lower people cannot change unless the leaders change first because they
are supposed to make change happen. As Deming says – 80% of the
problems are due to management, if the leadership doesn’t realize that
they are the cause of the problems, then Telekom Malaysia will be in big
trouble.”
The VP CMO gives the following remarks:
“In our company if the leader is the type, who is listening to many
peoples, encourages people to give feedback than the tendency to form
gangs, tribes will be minimised but if he starts to become comfortable
with only certain individuals then everything will be spoilt. All of this
very much depends on his heart.”
The CEO says that currently Telekom Malaysia does not have enough human capital,
so he has to import higher management from outside Telekom Malaysia. He says,
“The general feeling is that we have a very techno centric knowledge,
but sometimes their thinking is not fast enough for the current business
environment when I import personnel from outside, actually I keep an
open mind on what is the current talent we have and what we don’t have.
If we want to change the organisation, we cannot depend on the existing
people only, we need to bring in from the outside new talents, new
perspectives – this is a process of rejuvenation.”
Steward (1998) and Bontis (1999) claim that human capital is important
because it is a source of innovation and strategic renewal. Walker (2001) is of the
opinion that human capital is perhaps the most important element of intellectual capital,
because people are primarily responsible for the firm’s structural and relational capital.
Sveiby (1998) has similar claims that people are the only true agents in business and all
assets are the result of human actions. Evidence seems to suggest that the level of
human capital existence in Telekom Malaysia is at a very average level compared to the
level that it should have as a world-class telecommunication company. As an
established telecommunication company in Malaysia, Telekom Malaysia should have
the required competence and expertise, in the technical aspect of the communication.
194
This is not so. So Telekom Malaysia has to depend on the services of consultants and
suppliers to provide the advanced services to customers. Telekom Malaysia may have a
strong competency and expertise in the basic technology and services but these
expertise and competency are inadequate in fulfilling the customers’ high expectation.
Above all, success in managing the intellectual capital depends on leadership.
There is no greater incentive than a boss who believes (Steward, 1998). Leaders in
successful knowledge organisation are high in both professional and organisational
competence. They must know where one wants to go and persuades others to go along
and have a strong communication ability, empathy and energy (Sveiby, 1998).
Tentatively the evidence seems to suggest that Telekom Malaysia has a crisis of
confidence in the leadership of higher management. It seems, Telekom Malaysia has a
high degree of feudalism where it is a very leaders-driven organisation. The leader has
the greatest influence to the overall management and performance of the organisation.
The leadership issue consists of two areas, the technical competency and the
competency in soft-skill, which refers to attribute of leadership, managerial,
relationship and task achievement. Although the same leadership issue had been
highlighted in all the surveys done by the external consultants since 2001, it appears
that the leadership qualities and abilities have not significantly improved in 2003 and
2004.
The crucial observation to note is that not only are the qualities and abilities
remaining at the same level, but also that they are affecting those in the lower and
middle management. People are beginning to emulate those in higher places. This may
due to the lack of effective leadership development training programs or that the
lessons learned and acquired have not been practised. The performance appraisals do
not contain these qualities and abilities. These same qualities and abilities are not the
ones they look for when wanting to promote employees and officers to higher positions.
Oftentimes, organisations invest in leadership development program, but the values and
culture do not change. The culture is the measurement yardstick to show whether these
new accepted values form part of the new culture. The current level and development
of human capital – leadership, expertise, competency, knowledge, creativity and
innovation development, has a strong relationship with the leadership and the overall
managing and leveraging of intellectual capital of Telekom Malaysia, which will be
discussed later.
195
5.4.1.2 Structural Capital
It appears that the respondents agree that Telekom Malaysia has a higher level
of structural capital compared to human capital in terms of vital knowledge and
information embedded in Telekom Malaysia’s system, policy, processes and
procedures which can be used and referred to by the employees in performing their
duties. Evidence seems to suggest they consider this is the most important element of
intellectual capital.
Employee Opinion Survey 2001 reports that employees are more satisfied (>
90% of surveyed employees agreed) in the way they believe that their work does make
a contribution to the achievement, that work is challenging and they are proud to work
with Telekom Malaysia.
Change Initiative Survey 2002, reports that more than 50% of the executives
rated good on Telekom Malaysia as a performance driven company and quality of work
life – they enjoy, are interested and proud to work with Telekom Malaysia.
Cultural Assessment Report 2002, reports that financial awareness, financial
focus, organisational identity, systems and procedure exist to ensure efficiency,
reliability and quality throughout organisation. It is one of the 15 items that scores the
most agreement with the 258 respondents.
A report from QIBE explains that the overall Telekom Malaysia Operational
Model with excellence as a culture, quality management system and operational
excellence as pillars to support the key performance indicators is the drivers to achieve
the strategic objectives and finally the mission and vision statement of Telekom
Malaysia. The quality management system consists of TMBEA, ISO 9000, ISO 14000,
ISO 17799 (ISMS), OHSAS 18000 and the Prime Minister quality Awards (PMQA).
Currently 20 divisions have been ISO 9001:2000 certified the process of certification is
still going on for other the relevant departments. Operational excellence consists of
processes and services – cost reduction, 6 Sigma, cycle time reduction, automation,
moment of truth, customer value and repositioning and complaint and feedback
management.
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TMBEA is a continuation of Quality System Review adopted from Motorola
Company started since 1993. A sample of TMBEA report 2003 from Perak shows
significant score for subsystem 4 – process management and improvement 60%;
subsystem 5 – information and data management 62%; and subsystem 6 – prevention
and problem solving management 58%. For Pahang the scores are for subsystem 4,
56%, subsystem 5, 60% and subsystem 6, 59%.
A paper on Promotion and Upgrading Criteria for Executive: A Proposal for
Structured Training and Development gives an overall policy, procedures and processes
for an executive development program in a structured training manner which integrates
the overall carrier path – promotion and upgrading for them start from executive level
up to the higher management level.
The SGM MBS gives the following comment on structural capital:
“We have all the structural capital, the structure, objectives, targets and
systems. If we want to compare with a car, we have all in Telekom
Malaysia.”
The GM QIBE quotes the following:
“From my observation, policy, procedures and processes are in place in
the technical department, they are committed in implementing TMBEA.
In non-technical department the implementation is still lacking. For ISO
9000 although the implementation is only 50% but the awareness and
consciousness is very high, the system is in place and will become a
culture later.”
The SGM C&B gives the following remarks on TMBEA:
“TMBEA cannot become the policy throughout the company because
most of the general manager feels TMBEA is not important until they
become the state general manager. Then they realize by using TMBEA
they have a systematic and documented guidelines in performing their
duties and at the same time they can ‘glue together’ all the divisions in
the state.”
197
The SGM HRD gives the following comment on the re-organization effective from July
1, 2004:
“Our new structure still very hierarchical, not lean yet and very
conventional structure. In my opinion the success only will be up to
30%.”
The CEO gives the following comment:
“I think we had taken a long thought before we implement the new
structure. We can have many option on how to run a business, I think
there should be no problem although initially there will be some
communication problems.”
According to Bontis (1998) if an organisation has poor structural capital such as
poor systems and procedures by which to track its actions, the overall intellectual
capital will not reach its fullest potentials. Roos et al. (1997) claims the importance of
structural capital because that remains in the company when all its employees have
gone home. Structural capital is the infrastructure that an organisation provides to its
human capital (Sullivan, 1998). It appears that Telekom Malaysia has a moderately
high level of structural capital in-term of organisation structures, systems, networking
and technology, databases, working manual, policy, processes and procedures.
Evidence seems to suggest in the aspect of performing the daily duties of the
employees, they have the necessary systems, information, targets, technical, financial,
non-technical guidelines and references in terms of guidelines, working manuals and
procedures. It appears that in the aspect of managing the overall companies especially
which is related to the development, career path, reward, recognition, promotion,
consequence management of employees, Telekom Malaysia has the necessary
established policies, procedures and processes. All these exist only on papers. No one,
it appears, are interested to make all these happen. TMBEA for example is an
established management system in Telekom Malaysia, which initially started as QSR of
Motorola in 1993. After undergoing some important changes and enhancement some 10
years later, TMBEA has allowed to fend for itself. With many changes at the higher
management level, the energy, the drive and motivation that once established and
maintained the system, are now, no longer there. Telekom Malaysia is now left with no
powerful management system to replace the reliable TMBEA.
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Recently on July 1, 2004 Telekom Malaysia underwent yet again, another major
restructuring exercise. It is predominantly hierarchical and maintaining silos not owners
of cross-functional key business processes. It created a lot of problems on the selection
and placement a lot of officers to maintain a silo-based hierarchical system, which
should have been discarded a long time ago. The effectiveness of the new structure is
yet to be seen.
The current level and development of structural capital has a relationship with
the leadership and overall managing and leveraging of intellectual capital and
knowledge management practice in Telekom Malaysia, which we will discuss later.
5.4.1.3 Relational Capital
Evidence from the means of the survey shows that the respondents are quite
undecided when expressing their opinion on the usage feedback and information from
vendors and customers to improve Telekom Malaysia’s performance through process
improvement and innovation of products and services. It appears that Telekom
Malaysia’s has a strong brand name with the support from the government and the
international partners. As such, it has a high level of “good will” which results in
excellent performance and services to its customers.
Change Initiative Survey 2002 reports that more than 20% of executives rated
poor on the owning customers – employees care about providing excellent service to
customers, employees try to follow-up on service by talking to customers and it is the
written responsibility of each employees for customer relations. They also rated poor
on the customer services – physical amenities for customers around company premises
and speed of service delivery.
A sample of TMBEA report 2003 from Perak state shows a significant score for
subsystem 3 – Supplier management; 64%, subsystem 9 – customer delight and loyalty,
56%. The state of Pahang has the following scores - subsystem 3, 48% and subsystem
9, 52%.
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The SGM HRD gives the following comment:
“I’m afraid to meet customers when they know I’m working in Telekom
Malaysia due to, for example, the problems in giving streamix service.
We simply pass the thing. We don’t want to learn. We simply hope from
others – customers give us feedback and suppliers giving us the
specifications and others give us everything because we don’t see it as a
learning opportunity. This phenomenon is throughout the organization –
it is like a disease.”
The VP NWO gives the following remarks:
“In my opinion, a partnership with vendor means – secure a long –term
contract and suppliers become fewer than before. At the moment most of
the contracts are short-term, in term of partnership - we are very far
away. We just practise, finish the current contract, open a new tender.
We are good only in monitoring the vendor’s performance.”
SGM PG gives the following comments on the relationship with the government:
“I don’t see because of we have a good relationship with the
government; it is giving a business advantage to us. Some of the
government departments give us the project because we are linked with
the government. Some despite they know we are a government’s
company still give to others because of personal relationship like in
Johor, their government departments prefer to give projects to MAXIS
because their CEO come himself to meet the officers. Even in Pahang
state although many Telekom Malaysia’s higher management got the
award of “Dato” from the state government because of their good
relationship but their business performance just like other states”.
The CEO gives the following comments:
“The relationship with the government comes in many ways. They are
the government, the shareholders and our customer. As a corporate
citizen we have a social responsibility to the country for example the
sponsorship in sports. We do get awareness, branding and the goodwill
in term of favourable policy by the government, which will generate
revenue for us. In terms of financial return, we cannot measure it in
short-term”.
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Relational capital represents the potentials an organisation has due to ex-firm
intangibles (Bontis, 1998), it is the life-blood of the companies and the companies also
acquire crucial development of services and competence from their customers (Sveiby,
1998). Allee (2000) claims that organisations are not only the fabric of a larger society,
they are in turn dependent on that larger social system for employees as well as direct
customers and a larger customer community.
Evidence seems to suggest Telekom Malaysia has a very average level of
relational capital especially the long-term partnership with the suppliers and the usage
of customer’s feedback for the future improvement of products and services. This
appears that due to the constant changes and the results of the ineffective development
of the expertise development process of the employees. All these together with the
availability of multiple and different technologies hinder the operational excellence of
the company. Finally it causes Telekom Malaysia to depend very heavily on the
supplier’s expertise for Telekom Malaysia’s current and future development. Also, it
appears that feedbacks and complaints from customers, in the areas of service delivery
or service quality, can resolve only simple and immediate problems, not for future
improvements in the areas of products and services.
Three factors at the moment seem to working in favour of Telekom Malaysia.
Firstly, Telekom Malaysia has the advantage of fixed network asset monopoly for the
current technology. Secondly, it has an established strong collaboration with
international telecommunication network and finally, the government is still the
majority shareholder in Telekom Malaysia. This last factor causes the government to
have a favourable policy towards Telekom Malaysia, when awarding favourable and
lucrative service contracts. These three factors result in Telekom Malaysia possessing
these two most valuable assets, the brand and image, which most successful companies
have (Andriessen & Tissen, 2000). In the future though things do not look so rosy for
Telekom Malaysia, with the competitive trade environment and highly advanced
technology, which is wire-less in nature.
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5.4.1.4 Spiritual Capital
It appears that the respondents agree that Telekom Malaysia has a high level of
spiritual capital. This is reflected in the employee’s belief and internalised core values
expressed as thankfulness, loyalty, honesty, sincerity, ethics, motivation, courage and
committed in performing their duties.
The Cultural Assessment 2001 for Telekom Malaysia reports; Items with the
most agreement are – I feel strong allegiance, sense of commitment and obligation to
remain in this organisation, in my workgroup, management trust us to figure out the
best way of getting the job done and people are expected to follow agreed-upon code of
ethics. Items with the least agreement are – This organisation is free of bad office
politics, peoples are accountable, employees are encouraged to challenge policies and
procedures, rewards and recognition based strictly on performance rather than
favouritism, compensation system promote teamwork and collaboration, employees are
supported for taking calculated risk and people treat each other as equal regardless of
position.
Employee Opinion Survey 2001 reports the following: Promotion opportunities
are the issue with highest negative perception – 53.8% of surveyed employees claim
Telekom Malaysia does not promote fairly and promotion is based on subjective rather
than objective criteria. Employees are somewhat satisfied (between 10 – 19% of
surveyed employees expressed disagreement) – relatively clear about vision, mission
and values, management does not consistently demonstrate values in daily interaction,
top-down decision approach, lack of empowerment.
Retention Assessment for Telekom Malaysia 2001 reports the following:
Highest rated items are – I’m loyal to this company, I’m excited about the vision and
prospect of this company, my manager is respected and effective in getting result,
employees are given freedom to do their work. Lowest rated items are – senior
management consistently models our core values, we trust senior management because
they do as they say, innovation, creativity and risk-taker are valued, encouraged and
supported and employee opinions are highly valued by senior management.
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Change Initiative 2002 reports the following; The respondent rated poorly on
the integrity of the company with regards to promotion, giving recognition and showing
interest in their welfare but they still look forward to come to work each day and
lifetime career with Telekom Malaysia which may be because although they are not
happy with the overall system, their local workplace provides the necessary support in
terms of getting support and encouragement from the local supervisors and co-workers.
They also give poor ratings on the management seeking employees’ views on proposed
changes in the company and that individuals do not have a say about changes in their
work area. Respondents from the executive category say that management does not
demonstrate the values of Telekom Malaysia in their daily interaction. There also
believe that there is a lack of trust and respect between management and employees,
and a lack of mutual trust and respect amongst each other.
Leadership Practices 2002 reports that general managers, senior managers and
managers rate the following items; vision, risk-taking, teaming and empowering a score
at average (40% - 50%); sharing of credit, perseverance, trustworthiness a score at low
average (20% - 30%) and average (40% - 50%).
SGM HRD gives the following comments:
“We are very far away from the characteristic of Kristal – we are not
sincere, we are not open enough to say it in a meeting, when decision
made we don’t honour it, the authority has a greater influence than the
polices and procedures that exist. In my opinion in terms of practising
spiritual capital is only at 10%. Within senior management themselves
does not practice Kristal in terms of their acts and decision- making
activities. Most of the times their practices are contradicting because all
of them have an interest. We must add the value of integrity in
recruitment and selecting for senior management. We have the basic
milestone and theoretical framework for change management but we are
moving too slow and don’t have enough energy to follow through”.
SGM MBS give the following comments:
“Kristal is already embedded with us for the past 2 years. This is the
governing factor, your own mindset. Sometimes the mindset is only
good on paper. Some practise Kristal, some are only beginning to start
practising it, and still many others don’t accept it. This is usually because
an individual interest over company’s interest and this has become a bad
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culture for us. The innovative culture also cannot be created because the
process, platform and the risk-taking aspects do not exist and they are
not actively inculcated into the individuals of Telekom Malaysia”.
SGM CTS says:
“The senior management leadership program is good for awareness but
the problem is they ‘never walk the talk’. We are destroying the values
by having a policy but you don’t follow that policy yourself. Culture
must be practised from above. It then should gracefully cascade to the
lower ranks. Although we are 95% Muslim in terms of population, we do
not show Muslim principles and values in our daily practices”.
VP CMO gives the following comments:
“As an experience member of higher management in training and human
resources development, I think technology is only an enabler. What we
are lacking now is the openness, motivation, sincerity and sharing. To
nurture these values at the moment we concentrate to the top 30 leaders
so that they become the role models by cascading them and by
internalising, modelling and living the Kristal. Bosses must keep their
promises, all efforts will fail if the top management does not ‘not walk
the talk’. The entire change activities success rate is about 50% only in
terms of awareness. Internalisation will take time. Higher management
needs to take action to improve the level. As a Muslim, spiritual is
definitely important to us, we must practise what we have learn”.
SGM C&B gives the following opinion on factors that destroy values in Telekom
Malaysia:
“I think there are many factors that destroy good values; organisational
politic is very strong in our company, ego of leaders who have a
tendency to feel that they know best. These people make decisions and
others follow them. Leaders live in a different world, keep their distance
and meet only those they choose to meet regularly, they divide the
offices, car parks and use different lifts. Selection and placement of
people in the recent re-structuring process by making silly mistakes on
the part of Human Resource by not following our policy, processes and
procedures. All these policies, processes and procedures are not being
followed by our higher management, thus destroying the values we have
created so far”.
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VP QIBE gives the following comments:
“Inside the book – ‘Leading Change’, leadership by example must exist.
You are talking about Kristal – respect and care, uncompromising
integrity but our leaders have not shown that, they themselves do not
practise it. We have the SMAC, 360 Degree test but they are not using
the results as a basis for the recent promotion exercise, they choose their
own people. Many people know that the higher management playing a
lot of ‘drama’, this is totally a big destroyer of values. We must follow
our own procedures, we must become accountable, and we must have
our own values. How do you want to develop a culture if you never walk
the talk? If we do not internalise the values, if we cannot create the role
models to emulate, people will not believe in the change program, we are
simply wasting their time”.
CEO TTC gives the following comment on change program:
“Kristal for me is an only a lip service. It fails because you never walk
the talk. When in daily life the staffs experience a different experience
from what we propagate, they give up. The lower staffs don’t see the
recognition, the self-belonging, and no congruence in values. If the
upstream is cloudy or dirty, you don’t expect to be clear at the
downstream. You have to go to many courses in order to be matured
selves but when the promotion takes place, the person who has never
gone to any courses get promoted. They introduce the rules and
regulations, but they themselves break those rules and regulations that
they have introduced earlier. Where is the credibility? The whole belief
and faiths collapse! When you have a religion but you don’t follow the
teachings of that religion, you are going to fail! Why bother to have that
religion in the first place!”
GM QIBE gives the following comments:
“Most of the times we have a clear policies, processes and procedures
but the implementation of these is very weak. Accountability is low and
not an issue in this company. If you follow you don’t get anything, if you
don’t follow you are not going to be penalised! In the recent promotion
exercise, the criteria for selection is not transparent enough, more tend to
very personal and usually promotion is done through personal contacts.
At the end of the day the element of ‘who knows who, who do you like’
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will decide everything. This is the main weakness in our human
resources practices. Kristal at the awareness level is good but in terms of
implementation it is not tie up to the business and customers. One way to
make Kristal happen is ‘walking the talk’. At the moment, the practice at
our senior management level is very low. We can be successful in
practicing Kristal if we ‘walk the talk’, make the principle clearly visible
in our behaviour, and put in place recognition and consequence
management for any destroyer of values and principles”.
GM SNO makes the following comments:
“We are world-class in procedures and processes but the implementation
is very poor throughout organisation, and the credibility is very poor.
This is because our culture of tolerance, and we look upon leaders. Our
well-being is determined by our leaders and the culture of maintaining
good relationship with boss is more important and very little emphasis is
placed on performance creates a lot of problems. This approach does not
support the organisation. The Kristal is good but how do you translate
these into behaviours of people? If people cannot see the physical
evidence, will they believe it? Leaders must ‘walk their talk’. If we are
indeed performance driven, then we must make sure that nobody can
escape from murder so to speak, consequence management must take
place”.
SGM NWD gives the following comments:
“Although the general manager should be the change agent, I don’t think
the platform, the support and the encouragement is there for us to
change. I see we are too weak in terms of management, maybe because
we are Malays; therefore we always want to be always obedient in
nature. We don’t want to rock the boat and we want to please others and
don’t want others to feel hurt although they are wrong and going to spoil
others. When we deal with suppliers, we always try to look good, we can
extent the time, we are polite and accommodating. If the cards are faulty,
then never mind, we want to look good. Actually I think as a Muslim we
must tell the truth to improve the whole situation. At the moment I don’t
see there is any systematic program for spiritual capital development to
nurture the Kristal. It all exists at a very individual level”.
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SGM CTS gives the following comments on the relationship, interconnectedness and
interdependency in Telekom Malaysia:
“In the past two years there are many works done through groups for
example the business plan. We work together but we cannot produce
good teams because some feels they are better than others and try to
show off and they push down others. I think there is a lot of interaction
between us but this interaction does not being translate effectively into
results”.
VP QIBE comments the following:
“Interdependency, relationship and teamwork in the current fast world
are very important. You cannot be good in all. An organisation will only
succeed through strong bonding and effective teamwork amongst it
members. I don’t see that happening in Telekom Malaysia. Maybe it’s
because I don’t have a proper system to see this. We are not processbased, we are still silo-based or compartment based. Promotion is based
on those who can talk not perform of produce real measurable results. In
order to have strong team, we must have trust. I don’t think we have
trust”.
SGM C&B gives the following comments:
“ There is high improvement on relationship compare to before because
the management stresses on it, but to achieve a world-class status in this,
we still have a long way to go. We have a lot of meetings and e-mail,
sometimes you get response and sometimes no response. I think our
level of relationship is very low”.
GM TSY gives the following comment:
“Spiritual bonding and trust is one of the most important elements. Our
organisation is big. Without personal touch and personal interaction
between one another you cannot get things done very fast because the
trust is not there. I don’t see the leadership forum organised by CMO for
the 30 leaders can achieve the objectives. We must have the
‘hablulminallah’ (our relationship with Allah) and the ‘hablulminannas’
(our relationship with human beings) because Allah gives the inspiration
to us, If Allah doesn’t give you, you will never have it. We must come
back to the Islamic understanding that we are from the physical, mental
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and spiritual sources, if these three are not synchronised nicely,
everything will be spoilt”.
Intellectual capital is largely driven by and derived from the human side of the
organisation and what allows any organisation to work and perform efficiently is its
culture (Hall, 1998), many companies enjoy success because their employees share
collective values and norms (Andriessen & Tissen, 2000). Values that is part of
company’s intellectual capital, is the most important foundation of the company,
everything they say and do is a reflection of their values (Chatzkel, 2002).
Evidence seems to suggest that there is a high level of spiritual capital within
the employees compared to the higher management of Telekom Malaysia. Employees
seem to believe and internalised the Kristal and the higher management generally may
believe but they don’t fully internalise the Kristal. It seems this phenomenon is
consistently evident from the reports from 2001 to 2004, which indicate that there is no
significant improvement in the level of spiritual capital of senior management. The
phenomena may strongly felt by the employees because most of the decisions made by
the higher management directly affect well being, benefits and future career
development of the employees. The perception of the employees maybe that worst
because of the inconsistency in practicing the policies, processes and procedures by the
higher management. This is clearly seen as impacting the employees. It appears that the
number of top management personnel that never ‘walk the talk’ and break the values
and rules they themselves have set up, is high, and this happens rampantly. All these
result in low credibility, integrity and trustworthiness of higher management.
Although the employees who have a higher level of spiritual capital, are more
open, more willing to give opinions, more innovative, are more willing to take risks,
but because the consequences for all these may have negative impacts on their own
career progressions, then the final decision they take is to remain silent and just follow
instructions from leaders. This again may be due to the dominant defensive behaviours
shown by the staff and primary focus is on self not teams, as shown when the study
discussed human capital before. The emphasis on relationship, interdependency and
teamwork is all there, and their present shows that Telekom Malaysia has made
significant improvement today, compare to years before. However, the improvement is
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still inadequate where the actual spiritual bonding and relationship, as a world-class
organisation is still not there yet.
To compare Telekom Malaysia with an organisation that has strong spiritual
capital, evidence seems to suggest the following features:
(i)
As an organisation with 95%
Muslim population and another 5%
belonging to other religions, Telekom Malaysia has a set of
characteristics, in belief in a set of natural laws
authored by the
Creator, which includes human right principles, environment rules and
regulations, and ethical practices. All these are abiding by Telekom
Malaysia.
(ii)
Telekom Malaysia has a clear mission, vision, goals, directions and
beliefs, but the understanding of all these accurately across all sections
of Telekom Malaysia, the internalisation of the values and principles,
and the living and practising of all these and are weak.
(iii)
Interrelationship, interconnectedness and interdependency seem to be
improving compared to the years before but the level is still below the
required level as a world-class company.
(iv)
In theory, Telekom Malaysia has clear values, but the internalisation
and living of these values amongst higher management is weak when it
comes to behaving with honour, integrity, honesty , sincerity and
trustworthiness.
(v)
Evidence seems suggest at the higher management behave with honour,
integrity, honesty, sincerity and trustworthiness.
(vi)
Evidence seems to suggest that the practice and behaviour of goodness,
truthfulness, righteousness, fairness and justice as a prime anchor and
reference that governs decision and action is very weak at the higher
management level.
(vii)
It appears that Telekom Malaysia does give due consideration to the
present and future, of every aspect of life and nature, in the planning
and implementation processes, and as determined by the rules and
regulations of the government.
(viii) Generally evidence seems to suggest that the employees are courage,
committed, motivated, responsible and accountable in performing their
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duties despite all the weaknesses in leadership and the shortcomings in
the implementation of policies, procedures and processes.
(ix)
Evidence seems to show that generally the employees are imbued with a
sense of gratefulness, thankfulness and love, maybe because the vast
majority are Muslims, so feelings of this nature are common and natural.
(x)
It appears that a high degree of team spirit and cohesiveness, respect and
tolerance behaviour in pursuing a common mission are weak at the higher
management level.
In conclusion, from the above evidences, generally one can say that Telekom
Malaysia is still below average when compared to the world-class organisations, in
terms of the presence of spiritual capital, as discussed in the chapters before this. The
current level and development of spiritual capital, has a strong relationship with the
leadership and overall managing and leveraging of intellectual capital and knowledge
management practices in Telekom Malaysia, which will be discuss later.
5.4.2
Knowledge management
Evidence from the means of the survey shows that the respondents are quite
undecided when expressing their opinion on the process of knowledge sharing,
development, creation, measurement, appreciation and reward to the employees and the
role of leaders in coaching the employees. It seems that the respondents agree that the
process of knowledge identification, acquisition and application is actively done in the
company.
Employees Opinion Survey 2001 proposes to conduct a training need analysis
to close identified gaps and to provide individuals with adequate learning opportunities
to acquire necessary competencies especially in communication, performance
management, transition management and customer service.
Cultural Assessment for Telekom Malaysia 2001 reports that the respondents
moderately disagree with the learning activities – learning from successes, failures and
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mistakes as a way to learn and improve performance. Teams and individuals leverage
their learning experiences by sharing them across the organisation.
Change Initiative 2002 reports that the respondents do not believe that
management provides the encouragement on information and knowledge sharing.
The Paper on ‘Proposal for structured training and development’ for executive
reports that the Management Leadership Development Program (MLDP) is the current
training program structure for the high performing executives in grade 22 and 23. Since
1997 to 2002 251 executives have attended the program. The Senior Management
Development Program (SMDP) is designed for managers and middle managers in
grades 26 and 27 through an intensive MBA program, which uses the ‘experiential
learning approach’. Both programs consist of knowledge, leadership, business skills
and action learning portions. The structured training and development are part of the
overall promotion and upgrading criteria for executives in the company.
SGM HRD makes the following comments:
“We may have a high level of tacit knowledge but low in explicit
knowledge. People are not willing to make the knowledge explicit. The
structured training is designed for learning purpose. HR has come out
with the policy, process, and procedures and prepares the facilities and
communicated to line managers but true deployment does not exist. The
problem starts when our management reach to top. Then they start
managing by pointing out, when something gets wrong, others must be
responsible. This is simply because they do not want to learn and do not
want to change. They know they don’t have the required knowledge and
competence, and then what do they do? They start to show-off the power
and authority that they have and used this in management, to get things
done. In my opinion, the level of knowledge management practice in
Telekom Malaysia is only 20%, for the rest we depend on staff, vendors,
and customers simply because we don’t want to learn”.
VP NWO gives the following comments:
“In my understanding, the structured training - the MLDP, SMDP, the
related tests, and the rest are strictly based on the policy to educate staff.
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The problem is when all the 200 executives obtain their certificates.
Then everything hangs. There is no consistency in implementation, what
we practise is very different from our policies. We for go all our earlier
intentions”.
VP CMO makes the following comments:
“In CMO actually we have the e-change as a platform to share the
knowledge but the problem is that nobody is interested to share anything
although the process to go in the e-change is easy. The spiritual capital is
not strong enough – motivation to give is not exist, if I give something I
want something in. Our infrastructure also does not promote incentive
for knowledge sharing, you don’t get anything for sharing the
knowledge”.
VP QIBE quotes the following:
“ We are not managing our knowledge well. Last time we have the MTI,
the working manual but now we don’t have it. We just do what ever we
want. Our staffs have the knowledge especially in technical aspect but
they park the knowledge somewhere else. We don’t have the information
where we must transform the knowledge. The process of knowledge
dissemination does not exist in our company. The late Professor Ibrahim
says that in order to acquire new knowledge, you must be able unlearn
what you have learned. In Islam, the principle is that knowledge grows
with the more you give it way, the more will come back to you. Of
course, Allah will also bless you. Our problem is that our system is not
accommodating, we reward wrongly, and we promote the wrong persons
for the wrong reasons. That is why knowledge cannot be properly share.
We have the structured training program but we don’t implement it. We
simply promote not according to the policies. The persons who sacrifice,
have spent their time to go through the structured training program, are
left behind. That is why the training process flops”.
SGM MBS gives the following comments:
“ I don’t think we have a central coordination group for learning purpose
that is responsible for the whole organisation. We are working in
isolation and duplication. We may have a lot of data within our own
division but we cannot convert it to information. If we don’t have a
database to capture what is the knowledge that we have, how can we
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leverage it? Human Resource says that we must have a job rotation
system but I don’t see it. In terms of the acquisition of knowledge and
demonstration of knowledge, we have the policy that states that everyone
must go through at least 40 hours of training per year. Is everyone
observing this? What do you get if you don’t fulfil this requirement?
Theoretically we may have the training plan, but is it not being
implemented as it should be”.
GM QIBE makes the following comments:
“ Audit reports show that the same mistakes are happening again and
again, all over the place, year after year. The QCC groups still present
duplicated projects for years. Until today, we still lack the mechanism
and even to share success stories and make them happen throughout
Telekom Malaysia. Knowledge sharing may happen at a very low level
in the forms of bulletin and newsletter. When I return from attending
seminars held overseas, they only request that I hand over the set of
notes of those seminars. They never ask me to disseminate the
information or knowledge I have required, although there is policy on it.
Nobody cares about it and I don’t think we have an inventory of
expertise that our employees have. In our company structured learning
does not exist and knowledge management still very far away”.
SGM PGS gives the following comments:
“ I think in terms of training we have the similarity like the ‘Quran’ and
we – many people don’t read it. The people who read, do not understand,
don’t practise it. Some go through training because they are asked to go.
They may acquire new knowledge and they may not. Only 10% apply
what they have acquired, at most. Even for the three batches of the
SMDP program, I have not seen any marked or significant improvement
in anyone of them. We are also lazy to learn and we always want to be
spoon-fed maybe because we are not visionaries, we don’t have
ambitions and we are poor at knowledge sharing”.
SVP HRM gives the following comments:
“ Structured training cannot exist by itself, it must be an on-going
process and others must support it, it cannot stand alone. If we have
training but there is no master plan, how about the pay scheme,
promotion, we must look from the total angle. For the leadership we
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must have a total picture- why we train our staff, how can we help them,
what is their future? I’m pushing for the structured training but it cannot
move further because the top is not convinced. It already has a clear
framework and we must put a try to it, because training must move with
time. I think we don’t have a clear vision”.
The intellectual capital of an organisation will be increased by creating, sharing
and leveraging knowledge (Allee, 2003) and can also be increased by managing and
integrating knowledge (MacDougal & Hust, 2002). Successful knowledge companies
create sustainable value through the creation of knowledge and know-how, which
becomes human capital and codified to forms the intellectual capital (Sullivan, 1998).
Managing the knowledge will not only enable the organisation to gain increased value
from the existing knowledge, but also to create new learning and knowledge in the
process. The speed at which explicit knowledge is transferred, internalised and
implicitly applied becomes an important factor in gaining the competitive advantage
(Gray, 1999).
Evidence seems to suggest that the overall knowledge management practice in
Telekom Malaysia is not adequate to meet the current business requirements. It seems
that there is no significant improvement although the issues were highlighted in the
Employee Opinion Survey 2001 and Change Initiative Survey 2002 reports. The most
observed issue is on the encouragement for the knowledge learning and knowledge
sharing. Although there are efforts from HRD, QIBE and TTC individually in
promoting the learning activities, to reduce the knowledge gaps and as a way of
employee development, but it seems that there is no integrated effort from higher
management to support the overall knowledge learning process. All these are not
closely linked to pay scheme, reward and recognition systems and promotion process.
As employees, the personal knowledge development must result in their
operational excellence for the company and their own career developments. Although
there are specific policies and procedures on promotion and upgrading, which relate to
the structured training for the executives, the whole employee development and
learning process collapse, when higher management does not follow them, when
selecting and promoting employees. As a consequence, the employees perceive that
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learning is only meant to achieve operational excellence of the company, not to achieve
their career developments. Hence knowledge becomes ‘power’ that everybody likes to
keep to himself. They are only willing to share only with their trusted people, because
only with this knowledge can they have a better deal in their career development,
unless they are in the path of the network of higher management.
It shows very clearly from the evidence that we have feedbacks from the
questionnaires and verbal articulations, that seeking knowledge is not a part of the
culture of Telekom Malaysia at the higher management level. Maybe this is so because
the absences of knowledge management platform to nurture and sustain the learning
process although some do not consider this as handicap. This is contrary to the claim
made by Amidon (2003) that at the heart of any transformation is the human being
within whom knowledge resides. In fact, the path to sustainable future is an ability to
innovate, to create knowledge, convert it into viable products and services, and apply it
for the profitable growth of an organisation.
5.4.3
Managing and Leveraging of Intellectual Capital.
Evidence from the means of the survey shows that the respondents are quite
undecided when expressing their opinion on the usage of ‘Balanced Scorecard’
approach, to understand Telekom Malaysia’s goals and strategies and the
empowerment to employees to perform their duties. Respondents also tend to disagree
that the present performance management system (MAPS) leads to the optimum
leveraging of human capital in Telekom Malaysia. They appear quite undecided when
asked to express their opinions on the new vision, quality, research and development
activities, relationship with the government and the motivation of the employees who
feel appreciated and can express their opinions openly, and that all these will improve
performance of Telekom Malaysia.
Employee Opinion Survey 2001 makes the following recommendations:
(i)
To design/ implement/ refine competency based staffing/ selection
process that allow the identification of right skills, knowledge, attitude
and experience that provide adequate support to Telekom Malaysia’s
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business strategies and results and the demonstration of the required
culture and values.
(ii)
To review the current performance management system to support a
performance-oriented culture and professional development and to
ensure objective, consistent and transparent management of staff’s
performance.
(iii)
To review/ design/ develop the reward and recognition system to
ensure a link between performance and rewards, the demonstration of
competencies
and
rewards
and
transparency/
consistency
of
performance evaluation process and rewards given.
(iv)
Use channels to reinforce the mission, vision, values, business direction
and strategies, to provide constant/ clear/ transparent / timely
information, to obtain feedback from staff, to promote exchange of
ideas and to disseminate the business information.
Retention Assessment for Telekom Malaysia 2001 reports the following; It
seems that the respondents moderately disagree that they are confident in the senior
management in managing this company successfully, by providing an entrepreneurial
approach in term of innovation, risk-taking, seeking and implementing of new ideas,
showing a long-term commitment in employee growth and development, appreciation
and reward and attractive career advancement opportunities. They also moderately
disagree that employees are respected and trusted, skills, talents, strength and opinion
are valued and that this company is a performance-driven company.
Telekom Malaysia’s ‘Change Plan’ paper lists out the reasons for the change to
take place. That are, the business strategy especially the erosion of fixed lines business
and increasing the financial challenges, the skills in technologies, network, sales and
marketing, shared values especially in customer responsiveness, performance and
accountability and operational excellence, business effective organisation structure,
system and processes which reinforce an effective corporate governance, strategic and
operational
challenges,
performance
management,
compensation, procurement and strategic planning.
talent
development
and
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Change Initiative Survey 2002 reveals the following analysis; Respondents rate
poorly on the integrity of the company with regards to promotion, giving recognition
and showing the interest in their welfare but the respondents are still motivated to come
to work each day. Executive respondents consider poor on the service work completion,
training in handling complaints and the attitude of employees in providing service.
Other respondents say that management is openly and actively supportive of the
company’s vision/ mission and values but executive respondents says that management
does not demonstrate the values, there is a lack of mutual trust and amongst employees.
The survey suggests follow-up actions to address the motivational factors that affect
employees’ productivity and commitment, customer service issues, to hasten and
enhance the communication process from headquarters to the front liners and to deploy
the core values practices to all, including the top management.
The paper ‘Managing 21st Century Workforce and Expatriates’ lays out the
human resource core strategies; In manpower planning - continue to recruit knowledgebased workforce at the executive level, renewal program to balance the age and skill
gaps and continue the voluntary separating scheme (VSS) program to reduce unskilled
staff. In performance and rewards, promote based on performance, develop innovative
compensation package to attract and retain high performers and customise
compensation components to address different business requirements. In human
resource development, build strategic competencies to meet the future requirements
through the nurturing and enhancement of existing workforce competencies and
strengths and ensure leadership continuity through career / succession plan.
The Leadership Impact Report suggests that there is a need to address the
improved behaviour of leaders through the development of personal action plan, hold
and live the principle that change only happens through people, discuss and agree on
your personal development goals with your peers or the CEO, and modify own
performance contracts and development plans to reflect the new directions. Cultural
change needs to be addressed by focussing on employee’s performance management,
reinforcing desired behaviours and sanctioning the inappropriate behaviours, jobs
design and accountabilities, improving lines of communication and improving
employee’s participation process.
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A paper on ‘Corporate Culture Transformation Project for Telekom Malaysia’
list out the Telekom Malaysia ‘desired culture’ which is innovativeness, teamwork,
owning customers and performance driven (ITOP) which is going to be supported by
the employees’ competency clusters of teamwork, customer focus, achievement
orientation, initiative, innovation, strategic thinking, building business knowledge and
inspiring others. The competency clusters and the desired culture then will support the
achievement of Telekom Malaysia’s values – Kristal, which means total commitment to
customers, uncompromising integrity and respect & care.
SGM HRD offers the following comments:
“ Performance management system is built on a strong governance and
strong business framework - clear governance, clear authority and
responsibility and fast decision- making. If it is not clear, too many
decision-makers, you are just given the accountability but no control on
authority than you cannot be a performance-based company. We always
take our performance management system very lightly and our reward
and punishment is not comprehensive and our consequence management
is weak. In terms of policy and procedures we follow religiously the
Manual Prosedur Perniagaan (MPP) because we are being audited.
Others like the TMBEA, we don’t have enough energy to follow
through. When we are trying to follow our policies, processes and
procedures the decision-makers want to make fast decisions and say that
we are not fast enough…in my opinion we only leverage what we have
not more than 30%”.
VP CMO gives the following comment:
“ There are components in TMBEA and ISO 9000 which directly
contribute to the Kristal we promote but we must not emphasise on
certificates but the contents. If we are certified to the ISO standard, that
means we have the necessary systems to deliver a better service. We
must internalise the intentions of the TMBEA and ISO, not just
emphasise on the certificate”.
VP QIBE gives the following comment:
“ I think until now we still produce a proper framework and roadmap for
our quality program and change management program. We ourselves
cannot portray the broad-picture so that the higher management know
where we are going. It looks like there is no proper succession plan of
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plan. When leaders changes there is no proper hand over jobs. The new
person starts all over again, not built or improves from what has been
done before. Who cares? Who bother?”.
SGM MBS gives the following comments:
“ Most of the time the ‘change’ cannot take place because of
complacency. At the moment everybody is happy, why must we ‘rock
the boat’? In the meetings they tell everything is in good situation. On
the 55th floor, everything in good conditions, the place, foods etc. We
create the environment that seems to suggest that we don’t have a crisis,
so why bother to bring up the problems? Our leaders most of the times
are trying to find others’ mistakes and then you are going to be blame,
quoted for months…so nobody is going to highlight any problem at all to
them”.
CEO TTC comments the following:
“ All the activities done by CMO, QIBE, HRD, TTC are good for the
company, but who marshal all these activities? Without an integrated
effort control by the central leader will never succeed. Most initiatives
fail because there is no congruence, structure and integration. We are
now like the Malay proverb – ‘ bagai enau dalam belukar…’(to each his
own….there is no teamwork). I think our structure also not in the correct
order, we have so many departments, so many people sitting at a higher
place – 65 general managers, so who wants to follow whom? Lastly
nobody wants ‘to rock the boat’ and let it be…”.
SGM NWD makes the following comments:
“ Most of the time, we implement what we already have and to perfect
what we have done. I hope we will be better than to perfect of what we
already have. I don’t see that we can do that anytime soon, we simply
don’t have the framework. We are busy correcting mistakes than seeking
opportunities. When we introduce the KPI (key performance indicators),
what happens if you achieve the KPI or not? Our culture doesn’t support
innovation, if you do anything creative, but never produce the required
results and found to be against the existing processes or procedures, you
have to answer for it. When we introduce consequence management, we
emphasise on correcting the mistakes that people makes, not on
encouragement, growth and development. At the moment all general
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managers have a contract, not because they appreciate us as general
managers but because there is mistrust that makes we feel miserable. I
signed because I have another two years and I have nothing to lose.
Maybe they want me to gain more knowledge and experience, but the
spirit behind the contract it is wrong”.
SGM C&B gives the following comments:
“When we talk about selection for promotion, it depends on people.
There are no clear-cut objective criteria, such as the use of critical
incidents
or
well-established
psychometric
tests.
Our
current
performance management system is not that way. Everything goes! High
scores and low scores actually mean nothing, nothing at all!”.
GM TSY gives the following comments:
“ Since 80% of the problems come from the management, our problems
come from our management. They don’t understand about quality. So
how can they deliver if they don’t understand? Quality must be top
management driven if you to make it happen. For change management, I
think we must have clear objectives, framework, programs and processes
else we will never achieve anything. Otherwise it will end up like the
“Internal Customer-Vendor Agreement”, it only happens at the ground
level, not at headquarters level. Now what happens? There is no
continuity and everyone is silent. Our CMO looks like it is following the
crowd. It must firmly decide what our actual programs to achieve our
cultural transformation are. Most of the time CMO only follow ad-hoc
programs and blindly follow whatever CEO says”.
SVP HRM makes the following comments:
“The development of people is manager’s job together with the
assistance of the Human Resource Division. Many general managers do
not want to develop their people and they are not good coaches. When
leaders understand their roles, eventually the product line, the marketing
functions and the rest will be good. There is no need to manipulate
anything. One of the reasons why we always fail is because we have
never been serious in everything we do. For the PMS, sometimes even
after three to four months, the standards have not been set. Any systems
that are correctly done are good for us. If we want to develop people,
develop teamwork, then the ways we recruit and evaluate people must be
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correct, we must discuss and provide correct advice on how to improve
staff performance. Otherwise else everything will be spoilt”.
VP NWO makes the following comments:
“In our company we have all the tools but it is a matter of using the
tools. Our weakness is that most of the time we thought our intuition is
better than the tools. That is why there are people who have not been
thorough the SMAC tests or who have not attended any structured
training, still gets promoted, because these people are in the ‘network’.
Individual relationship determines everything. Our promotion system is
very opaque, maybe our higher management sees what we don’t see but
most of the time our judgements and actions are not professional”.
CEO TM makes the following comments:
“ With respect to the Kristal that we have, what is important is the
internalisation of these values. There are people who practise it and there
are those who don’t. That is why I stress many times to CMO about this
practice and they had come up with the ‘Winning Practice’ to internalise
the Kristal. I think CMO, QIBE and TTC have their own frameworks but
at the moment their roles are very independent, they need integrate and
synchronise amongst them. I don’t believe in instilling values through
courses but it must be instilled as a part of the process of running your
business”.
Hall (1998) quotes Saint-Onge who discovers that the business success of a
corporate culture is the consequence of the harmony and right balance between human,
structural and relational capital. It is the people, their goodwill, motivation and
creativity with the support from structural capital that keeps the organisation alive and
it is the relational capital that keeps our lifeline to the future. To systematically manage
the intellectual capital, organisation needs to be a knowledge-focussed organisation that
stewards the creation and sharing of knowledge and orchestrates the flow of know-how
within, to and from the external firms. It needs to be woven together with the
organisation’s strategy, culture, capabilities, people, incentives, technology, processes
and other resources (Klein, 1998).
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Evidence seems to suggest that there is no significant improvement in the level
of managing and leveraging of intellectual capital in Telekom Malaysia. Evidence from
2001 to 2004 shows this fact. The existing intellectual capital cannot be effectively
leveraged at the maximum level because it appears that the overall management system
doesn’t support each other as suggested by ‘Balanced Scorecard’ approach. The aspect
of financial, customer, internal business processes, innovation and learning perspectives
do not support one another. The balanced scorecard is intended to link the short-term
operational control to the long-term vision and strategy of the business (Olve et al.,
1999) with the measures representing a balance between external measures for
shareholders and customers and internal measures (Kaplan & Norton, 1996). This is not
a surprise finding, because even after it’s establishment more than a decade earlier, the
TMBEA is no longer considered the standard quality management system practice in
Telekom Malaysia.
Leadership development programs such as MLDP, SMDP, technical and softskill courses organised by TTC, QIBE or CMO, advanced study at diploma, degree and
master’s levels by HRD actually are good efforts, being participated in, by individual
departments in improving the overall level of human capital in Telekom Malaysia. The
bigger issue is how to leverage the additional human capital acquired by the employees
themselves? Human capital needs to be supported by the compensation system, the
reward and recognition system and career advancement.
It appears that there are some planning activities in some theoretical areas to
done, but there is no such action taking place now in this areas. With the absent of such
supports the process of multiplying the existing human capital cannot take place
excellently hence full benefits cannot be enjoyed. Today’s knowledge leadership must
inspire passion for work. They must fundamentally understand the ‘whole’ and be able
to convey the context and meaning in ways that enable others to leverage their own
talents. They lead by examples and walk their talk and coach the employees, which
involves trust, support and shared values. The roots of leadership weakness are lack of
vision, lack of trust and inadequate communications, specifically regarding values,
mission, and critical success factors (Amidon, 2003).
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It appears that the existing human capital is only enough to cater for the current
operational requirements while the advanced technology knowledge and skill is
supported from the vendors. The process of developing, coaching and driving the
employees to the correct direction to acquire additional human capital seems lacking.
The effort done to create an expert group with an expert scheme seems to die off after a
few years of implementation. Currently it appears that no one department in Telekom
Malaysia can claim that their department has the most comprehensive documents on the
expertise and skills of Telekom Malaysia’s employees. The absence of such
comprehensive information results in the difficulties and inefficiency in leveraging that
human capital.
In the effort to reduce the overhead of Telekom Malaysia through voluntarily
separation scheme (VSS) and ordinary retirement by the executives and nonexecutives, it seems the human capital is naturally minimised due to the absence of no
serious effort to explicit the tacit knowledge and technical information. Currently it
seems that there is a strong trend that Telekom Malaysia is depending on the human
capital from the contractors even for the basic service delivery systems to customers. A
company that leases its most vital skills is a company that is in danger of losing its very
reason for being, but a company that holds on to those vital skills and outsource what it
can is able to leverage intellectual capital over a much bigger market (Steward, 1998).
Evidence from the analysis of behaviour, attributes and skills set of the future
leaders of Telekom Malaysia is very alarming and yet it seems that there is no evidence
of serious and concrete efforts and actions to improve the whole situation. With the
values destroyer practices done by the higher management in the selection and
promotion process, in the recent re-organisation, the newly promoted leaders may
inherit the similar behaviour and approach by the current higher management who
promoted them. Then the current damaging cycle may keep continuing, if serious
actions taken are not taken to arrest its continued harmful growth. Finally this lack of
able and competent leadership may become fatal to Telekom Malaysia in the future.
The import of new higher management personnel from outside on contract basis
by the new CEO with the intention to improve the level of human capital of the higher
management is yet to see the desired results, because that similar approach has been
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done by the previous CEOs before. It appears that from past observations, after a few
years of employment of the new imported higher management personnel, there is no
significant improvement in the business results and the level of human capital and the
overall intellectual capital in Telekom Malaysia. Those imported do not change
Telekom Malaysia but they become like the existing Telekom Malaysia personnel and
quite comfortably at that.
It appears that Telekom Malaysia has been able to manage and leverage the
structural capital – switching, transmission, access, information and technology
systems, networking, databases, specifications, working manual and guidelines to
generate business by providing the telecommunication services to customers hence
generating revenue to the company. But it appears that in the aspect of managing the
structural capital of the company in term of policies, processes and procedure which is
related to the employees, such as development, career path, reward, recognition,
promotion, consequence management and the proposal and finding from either
departments in the company or the consultants, the evidence seems to suggest Telekom
Malaysia is very weak in leveraging that structural capital. Evidence from the TMBEA,
structured training, performance management, reward and recognition, competency
tests and performance consequence management, employee’s opinion surveys,
leadership practice survey, change management proposal and cultural transformation,
all point to the same conclusion.
Evidence also suggests that the weakness in leveraging this structural capital is
due to the changes in the higher management, inconsistency in implementing the
policies and procedures and lack of energy of the department concerned, to leverage it
due to various reasons. It seems the phenomena happen because Telekom Malaysia
does not have a comprehensive framework which is agreed by the present leaders,
documented so that everybody can have a clear total picture on the way a head that new
comers can easily understand. This means management by policies, not personalities
and that the principles of consequence management will be put in place, without fear or
favours, if implementation goes astray.
The culture change program which aims to make sure that the employees
understand, internalise and live with the Telekom Malaysia’s values seems to work
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only at awareness level only. The practice of the values by the top management level is
questionable by the employees! In Saint-Onge terms, it is the core values of an
organisation that can bring minimal congruence between human, structural and
relational capitals. It gives meaning to people, drives and motivates them (Hall, 1998).
Evidence seems to suggest that Telekom Malaysia is unable to manage the spiritual
capital of higher management in the company hence unable to leverage the spiritual
capital that they have and those belongs to the employees although feedback on these
has been given since 2001.
A positive and conducive working environment, which result in a more sincere,
innovative and open communication between the employees and higher management
for both parties to share the information, feedbacks and feeling, seems absent. Hence
the leveraging of the spiritual capital of the employees for the benefit of the company
cannot be fully enjoyed. The practice of ‘rocking the boat’ by the employees to convey
extreme but valuable feedbacks to the higher management of course will not take place
within such working environment, unless the employees are willing to accept the
consequences. With the absent of such working environment, another important aspect
of spiritual capital fails to grow, that are the aspects of relationship, interdependency
and spiritual bonding amongst employees and higher management and even amongst
higher management themselves. In the final analysis, such phenomena adversely affect
the operational and business efficiency of the company.
As mentioned before, the inability to manage and leverage the spiritual capital
appears to be because of the negative leadership behaviours, lack of learning
opportunities for self and employees and lack of spiritual capital enhancement program.
Evidence seems to suggest that the feeling of complacency, the no crisis-working
environment and short-term financial targets rather than long- term values-creation
objectives in Telekom Malaysia, especially at the higher management level, has a
strong contribution to the overall phenomena mentioned earlier.
As an organisation with 95% of it’s population is Muslim, and 98% of its higher
management being Muslim, the above phenomena should not happen. According to
Nik Mustafa (2003) from Institute of Islamic Understanding Malaysia, Islam has all the
required principles, guidance, knowledge, teaching and practices of an excellent
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leadership imbued with universal perennial values. Those previous Islamic who adhere
to these principles and values have produced excellent results. The way it is now is
different. The SGM Penang says it aptly:
“Many Muslim do not read the Quran, those who read do not understand
it and those who understand, do not practice it”.
This again needs a stronger level of spiritual capital within the leaders at higher
management of Telekom Malaysia to leverage the Islamic knowledge, which they have,
for the benefit of Telekom Malaysia.
5.4.4
Causal Relationship
Evidence from the survey will be fully used in discussing the statistical
relationships between human capital, structural capital, relational capital, spiritual
capital, knowledge management, managing and leveraging of intellectual capital and
performance.
5.4.4.1 The Effect of Spiritual Capital
Evidence from the survey seems to suggest relational capital, human capital and
structural capital have a significant causal relationship with spiritual capital as shown in
Figure 5.1. The intellectual capital components – human capital, structural capital and
relational capital also have a significant relationships amongst them as shown in Figure
5.8, hence the proposed “Intellectual Capital Central-Triangle” model is again
substantiated. This means any activities done in improving the level of any intellectual
capital components will have a significant relationship and affect with the level of
spiritual capital, human capital, structural capital and relational capital in the company.
Managing and leveraging of intellectual capital and knowledge management
practice also have a significant causal relationships with spiritual capital with managing
and leveraging of intellectual capital has the stronger relationship to spiritual capital as
shown in Figure 5.8. This means that in managing and leveraging the intellectual
capital such as the implementation of change initiatives framework, quality
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improvement framework, performance management system, consequence management,
customers relationship management and all operational activities, the spiritual capital –
values, motivation, commitment, sincerity, interrelationship, teamwork and others has a
significant relationship and role to guarantee the effectiveness of those implementation.
Evidence seems to suggest that the level of knowledge management practices,
the level of implementing the policies, process and procedures, the quality management
systems and the level of skills, knowledge, experience and leadership capability have a
strong influence on the level of spiritual capital – integrity, sincerity, trustworthiness,
commitment, motivation and internalising the values by the employees. For example,
the improvement in leadership development program and quality improvement training,
an effective reward and recognition system, an improvement in the level of skills and
competency in performing duties will improve the level of loyalty and commitment of
the employees.
As shown in causal relationship in Figure 5.2, Figure 5.3, Figure 5.4, Figure 5.6
and Figure 5.7, spiritual capital has a significant relationship with performance in terms
of operating efficiency, business performances (profit, market share, revenue,
customers satisfaction index, new products/services launch), organizational leadership
(leadership, employees satisfaction indexes) and business leadership (responsive,
forward-looking, global competition and telecommunication industry leader).
Lev (2001) says that to advance knowledge in the area of intangibles,
theoretical principles should be subjected to empirical examination and observation.
The above empirical findings support the theory of spiritual capital and organisation
performance improvement as discussed before. The findings support the previous
studies in various elements of spiritual capital such as values, cultures and spirituality
and organization performance. Collin & Porras (1994) say that the most successful
organisations over the last 70 years have their cultural alignment is based on core
values. Marr et al. (2002) demonstrates how the positive impact of employee
satisfaction, organisational culture, environmental and social responsibility has on Shell
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International’s corporate strategy and financial performance. Thompson (2000) shows
that findings from research prove that the more spirited (honest, trustworthy,
committed, intuitive) companies outperformed the others by 400 –500%, in-terms of
net earning, ROI and shareholder values. Milliman et al. (1999) show that there is
positive relationship between value-based culture and the performance of Southwest
Airlines and the positive life experiences of successful companies such as IBM,
Caterpillar Inc. and others as quoted in the chapter before.
5.4.4.2 Human Capital, Structural Capital, Relational Capital and Managing and
Leveraging of Intellectual Capital
Human capital has a significant relationship with performance improvement
that is the operating efficiency, business performances, organisational leadership and
business leadership. This finding supports the previous findings by Hurwits et al.
(2002) that human capital and structural capital play a vital role in driving the stock
returns. Hayton (2002) shows human capital is associated with the entrepreneurial
orientation in high-tech new ventures industry, Bontis (1999) says that human capital
has a direct impact on performance, and Youndt (1998) shows that human capital has a
significant relationship with sales growth.
Human capital does have significant relationships with structural capital and
relational capital. This supports the previous findings by Youndt (1998), Bontis (1999),
Bontis et al. (2000) that human capital positively associates with relational capital and
structural capital. This means that an employee with a high level of technical
competency with the telecommunication networks and operating manual owned by
Telekom Malaysia with detailed customer segmentation information will deliver an
excellent service to customers, hence the revenues to Telekom Malaysia.
Human capital has a significant relationship with spiritual capital. This means
that a high level of internalising and practising the values, belief, culture, motivation,
commitment, team spirit and interconnectedness will result to a higher level of
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employees to enhance their knowledge, skill, experience, competency and leadership
capability for the benefit of the company.
Human capital has a significant relationship with knowledge management. This
finding supports the previous findings by Stewart (1999), Bontis et al. (2001), Chatzkel
(2002) and Allee (2003). This means that an employee with a high level of human
capital will have a high level of knowledge, experience and know-how. Human capital
also has a significant relationship with managing and leveraging of intellectual capital.
This means that employees who have a high level of knowledge, skills, competence and
capabilities will be able to effectively manage and leverage the existing intellectual
capital to deliver excellent performance of Telekom Malaysia.
Structural capital has a significant relationship with spiritual capital, human
capital and relational capital. These findings support Bontis et al. (2000) earlier finding
that structural capital is positively associated with relational capital and human capital.
Structural capital does have significant relationship with performance in the aspect of
organisational leadership and business leadership but do not have any relationship with
operating efficiency and business performances. This findings support earlier finding
by Youndt (1998) that structural capital was not significantly related to sales and was
not significantly related to reduce organisational cost. This finding does not support
Bontis (1999) and Bontis et al. (2000) findings that structural capital is positively
associated with overall business performance. In this study, it shows that the
telecommunication infrastructures, technical manual, operating manual and other
policies and procedures have a significant relationship with Telekom Malaysia’s
leadership and employee satisfaction and the quickly responsiveness of Telekom
Malaysia to local and international business needs. But those infrastructures, policies
and manual do not have significant relationship with operational efficiency, market and
financial performances.
Relational capital has a significant relationship with spiritual capital, human
capital and structural capital as discussed before and with managing and leveraging of
intellectual capital. Relational capital has a significant relationship with overall
performance improvement. This finding contradicts with the earlier findings by Youndt
(1998) but support the later finding by Bontis (1999) that relational capital is positively
229
associated with the performance. The finding means that the existing relationship with
customers and vendors, customers and vendors feedback, the customers’ relation
management and vendors’ management in Telekom Malaysia when managed and
leveraged efficiently will result in a significant operational efficiency, better business
and organisational leadership and overall performance improvement of the company.
Spiritual capital, human capital, relational capital, and structural capital have a
significant relationship with managing and leveraging of intellectual capital and
managing and leveraging of the intellectual capital has a significant relationship with
performance improvement. These findings support the previous findings by Crossan
and Hullard (2000) who suggest strong correlation between ‘leadership’ and
performance (note: ‘leadership’ items detail in Crossan and Hullard study have a
similar meaning to managing and leveraging of intellectual capital in this survey). This
means that Telekom Malaysia has the technical infrastructures, networks and systems
supported by working policies, manuals, experience, and competence, motivated,
committed, trusted and loyal employees. All these will result in a significant
improvement in all aspects of the company’s performance.
5.4.4.3 Knowledge Management.
Knowledge management has a significant relationship with structural capital,
spiritual capital and the performance improvement. These findings support the previous
findings by Coho (2003) that suggest that the motivational potential and systematic
method has a positive relationship with knowledge, and knowledge has a positive
relation with performance. Bontis (1999) express that knowledge stocks, flows and
creation are closely related to business performance and Marr et al. (2002) in their case
study of three e-business companies’ show that knowledge forms the foundation of a
company’s business performance.
Knowledge management has a significant relationship with human capital,
relational capital and managing and leveraging of intellectual capital. This means that
knowledge management practices in Telekom Malaysia such as identification and
acquisition of knowledge in quality improvement activities such as problem solving
230
techniques, cycle time reduction, Six Sigma and sharing of the knowledge by the
employees will enhance the experience, skills, know-how and competencies of the
employees. All these have a relationship with the understanding and implementing of
the overall quality management system such as TMBEA, the commitment, confidence
and courage of the employees to deliver an excellent service to customers. This will
result in an improvement in customer’s satisfaction level, which will in turn cause
Telekom Malaysia’s performance improvement.
5.4.5
Overall Finding
Evidence from the means of the survey show that the respondents moderately
disagree when expressing their opinion that the performance of Telekom Malaysia is
improving in term of profit, market share, revenue, operating efficiency, customer
satisfaction index and new products and services launched. They also moderately
disagree when expressing their opinion that Telekom Malaysia’s performance is
improving in the aspects of leadership index, employee satisfaction index,
responsiveness to market needs and that Telekom Malaysia is a forward-looking
organisation. The respondents seem to agree that Telekom Malaysia is a Malaysian
telecommunication industry leader and able to compete globally.
Tentatively evidence may suggest Telekom Malaysia is not improving in terms
of business performance, operational performance, customer satisfaction, leadership
and employee satisfaction indexes due to as explained before; moderately average level
of intellectual capital existence, moderately average level of knowledge management
practices and moderately average level of managing and leveraging of intellectual
capital in Telekom Malaysia. Evidence seems to suggest that all these have a strong
influence on the performance of the company.
Performance improvement of Telekom Malaysia needs to be supported by a
strong leadership especially at the higher management, competence and skills of the
employees in the areas of technical and the soft-skills. The employees also must have
strong values, a clear vision and understand the overall framework and direction of the
231
company. All these will strengthen their commitment, sincerity, loyalty and motivation
to perform their jobs.
A clear framework, documented quality management system, policies,
procedures and processes especially those that impact the employees need to be
established. The strength of the system, policies and procedures can only be leveraged
when they are implemented and practise as they should be and this can only be
achieved through competent leaders who have the ability to develop, coach and drive
the employees to the correct path. This can only by leaders who internalise, live, and
practice the agreed and accepted values. A high level of confidence to the integrity,
sincerity and trustworthiness of the leaders will positively promote the overall positive
behaviours, attitudes of employees, communication, relationship, spiritual bonding,
working environment and the culture of the company.
Telekom Malaysia cannot live alone in doing the business without the long-term
support from the vendors, consultants and contractors in terms of delivering the
required technology and providing the necessary advice and support. The relationship
with the government, regulatory bodies and customers are also very important in
getting the cooperation and feedback for Telekom Malaysia to deliver the best services
for the business.
Knowledge management practice is also critical in order to leverage, at the
maximum, the present intellectual capital and at the same time to allow the process of
intellectual capital to grow especially the values, skills, knowledge, attitude, behaviours
and practices of the employees.
Finally the managing of the whole intellectual capital in order for all the
components to be synchronised and synergies as they should be by visionary and
trusted leaders, so that the process of leveraging at the maximum level of the
intellectual capital can be done to produce the maximum performance improvement for
the company. From evidences discussed before, tentatively it may suggest that Telekom
Malaysia is lacking in all of the above-mentioned areas hence the performance
improvement.
232
Summary
The data analyses begin with quantitative data analysis, performing relevant
statistical tests to determine the correlation between variables and to understand the
generalised results, followed by qualitative data analysis, to identify the relationship
and corroboration between them for a holistic understanding of the phenomena
under study to make a conclusion. The Likert-type scale is an interval scale of data
which uses parametric statistical techniques such as mean and standard deviation,
correlation, regression, analysis of variance and factor analysis in performing the
data analysis
For the questionnaire survey, the internal consistency reliability of the
measures is acceptably good with all variables from Cronbach’s Alpha Coefficient
more than 0.7. A response bias check is done to the non-responded respondents and
the results show that the integrity of this survey is highly maintained. The overall
mean for human capital is at 3.36, structural capital is at 3.38, relational capital is at
3.35, spiritual capital is at 3.62, knowledge management is at 3.35, managing and
leveraging of intellectual capital is at 3.32 and finally the perceived performance
improvement is at 3.01. It seems that the majority of the respondents are inclined to
undecided when expressing their opinion on the variables asked in the
questionnaires. From the T-test analysis and ANOVA test against the demographic
items, the results show that generally there are no significant difference between
age, gender, department and place of works of respondents for all variables.
However, there are significant difference between qualification, job-grades and
length of service for all variables. This may be due to the respondent’s knowledge,
exposures, responsibilities and expectations in their daily works.
All independent variables have a positive significant relationship amongst
them and with the perceived performance of Telekom Malaysia. The regression
analysis and path analysis also show that all the variables have a significant positive
relationship amongst them hence the proposed “Intellectual Capital CentralTriangle Model’ is substantiated. Human capital, relational capital, spiritual capital,
managing and leveraging of intellectual capital have a significant positive causal
relationship with perceived performance whereas structural capital and knowledge
233
management have an indirect positive causal relationship with performance hence
the ‘Research Model’ of this study is again substantiated.
The salient features which refer to the topics being discussed, studied,
highlighted and reported in the secondary data and interview sessions are tabulated,
together with the results from the questionnaire survey, and in-depth study from the
data have been done with the following findings:
i)
Evidence from the means of the survey show that the respondents
moderately disagree when expressing their opinion that the performance
of Telekom Malaysia is improving in term of profit, market share,
revenue, operating efficiency, customer satisfaction index and new
products and services launched. They also moderately disagree when
expressing their opinion that Telekom Malaysia’s performance is
improving in the aspects of leadership index, employee satisfaction
index, responsiveness to market needs and that Telekom Malaysia is a
forward-looking organization. The respondents seem to agree that
Telekom Malaysia is a Malaysian telecommunication industry leader
and able to compete globally.
ii)
Tentatively evidence may suggest that Telekom Malaysia is not
improving in terms of business performance, operational performance,
customer satisfaction, leadership and employee satisfaction indexes due
to, as explained before, moderately average level of intellectual capital
existence, moderately average level of knowledge management practices
and moderately average level of managing and leveraging of intellectual
capital in Telekom Malaysia. Evidence seems to suggest that all these
have a strong influence on the performance of the company.
iii)
Performance improvement of Telekom Malaysia needs to be supported
by a strong leadership especially at the higher management, competence
and skills of the employees in the areas of technical and the soft-skills.
The employees also must have strong values, a clear vision and
understand the overall framework and direction of the company. All
these will strengthen their commitment, sincerity, loyalty and motivation
to perform their jobs.
234
iv)
A clear framework, documented quality management system, policies,
procedures and processes especially those that impact the employees
need to be established. The strength of the system, policies and
procedures can only be leveraged when they are implemented and
practice as they should be and this can only be achieved through
competent leaders who have the ability to develop, coach and drive the
employees to the correct path. This can only by leaders who internalize,
live, and practice the agreed and accepted values. A high level of
confidence to the integrity, sincerity and trustworthiness of the leaders
will positively promote the overall positive behaviours, attitudes of
employees, communication, relationship, spiritual bonding, working
environment and the culture of the company.
v)
Telekom Malaysia cannot live alone in doing the business without the
long-term support from the vendors, consultants and contractors in terms
of delivering the required technology and providing the necessary advice
and support. The relationship with the government, regulatory bodies
and customers are also very important in getting the cooperation and
feedback for Telekom Malaysia to deliver the best services for the
business.
vi)
Knowledge management practice is also critical in order to leverage, at
the maximum, the present intellectual capital and at the same time to
allow the process of intellectual capital to grow especially the values,
skills, knowledge, attitude, behaviours and practices of the employees.
vii)
Finally the managing of the whole intellectual capital in order for all the
components to be synchronized and synergies as they should be by
visionary and trusted leaders, so that the process of leveraging at the
maximum level of the intellectual capital can be done to produce the
maximum performance improvement for the company. From evidences
discussed before, tentatively it may suggest that Telekom Malaysia is
lacking in all of the above-mentioned areas hence the performance
improvement has not appeared – at least in the respondents’ perception.
CHAPTER 6
RECOMMENDATION AND CONCLUSION.
6.1
Benefit to Telekom Malaysia.
Telekom Malaysia has received numerous feedbacks and recommendations from
the external consultants and internal departments since year 2001 when the Change
Management Program took place. It is estimated that not less than RM 10 million has been
spent until 2003 by Telekom Malaysia for the Change Management Program, inclusive of
various consultancy fees, benchmarking exercises, study groups and others. This in-depth
study that is conducted from April 2003 to July 2004 giving a very beneficial benefits to
Telekom Malaysia in terms of timely important feedback and recommendations which are
done by Telekom Malaysia employee themselves to gauge the effectiveness of the efforts
done and RM 10 million returns on investment of the four years change management
program and other programs and activities related to it have been in place. By investigating
deep inside the company with resulting in internal confidential reports, consultants’ reports
and honest and sincere feedbacks from executives to higher management personnel
themselves, the integrated information gives a holistic view of the various processes and
relationships which answer not only the ‘what’ but ‘how’ and ‘why’ the phenomena
happen, which finally influence Telekom Malaysia’s overall performance. The
commitment from CEO, Dato’ Abdul Wahid Omar during the interview session on
September 29,2004 at his office to look into the findings and recommendations from these
study and act accordingly bring greater confidence that these in-depth studies are timely
and appropriate and will be beneficial to Telekom Malaysia.
236
Evidence seems to suggest, there is not much of significant improvement in the
level of intellectual capital and the level of managing and leveraging the intellectual capital
hence the performance of Telekom Malaysia since year 2000. The significant improvement
fails to materialise not because of the lack of knowledge, what and how to do, but there is
obviously the lack of strong will on the part of higher management to make it happen. The
top management lacks of courage and will to “manage and leverage the intellectual capital”
correctly, whole-heartedly and consistently together with other strategies, policies and
procedures to make what they themselves have decided happen. The commitment from
CEO, Dato’ Abdul Wahid Omar to look into these findings and recommendations and act
accordingly give some rays of hope that these studies and recommendation will not come
to waste.
Telekom Malaysia has great potentials for future performance improvement. It is
currently not that far behind from other world-class telecommunication companies. With
the increase level of the presence of its intellectual capital – the ultimate form of capital of
any organization, it can improve and attain better heights of performance in all areas.
6.2
Conclusion
The results have shown that there is a strong need, to investigate further, the
influence of intellectual capital on the performance of Telekom Malaysia, the level of
intellectual capital available, the affect and influence of spiritual capital on the
performance, and the importance of knowledge management and managing and leveraging
of the intellectual capital on the performance of Telekom Malaysia.
The studies indicate that there is a strong positive relationship amongst all the
intellectual capital components - human capital, structural capital, relational capital and
spiritual capital - on the overall performance of Telekom Malaysia. All component of
intellectual capital have a positive significant relationship with performance with the
structural capital in the aspect of organizational leadership and business leadership. The
“Intellectual Capital Central-Triangle” model and the research model of this research hence
strongly substantiate.
237
The study has also indicates that managing and leveraging of the intellectual capital
is critically important and has the greatest positive significant relationship to the
performance compared to the component of intellectual capital itself. Knowledge
management has an indirect positive significant relationship with the performance.
Knowledge management has a positive relationship with the managing and leveraging of
intellectual capital and all the components of intellectual capital.
By having a stronger spiritual capital within the higher management to manage and
leverage the present intellectual capital held, Telekom Malaysia will have a higher level of
intellectual capital and will achieve further performance improvement. Implementing the
suggested recommendations will further enhance the overall management and performance
of Telekom Malaysia in the future.
6.3 Limitation of the Study.
These studies, although conducted among the employees throughout all the 14
states of the country covering all levelling employment are actually confined to Telco - the
backbone of Telekom Malaysia, whose business focus is in the fixed network
telecommunication services. The other subsidiaries such as Celcom, Telekom Multimedia,
and other subsidiaries are not included in the survey. This is because they are continually
being re-organised internally, since they are in the early stages of establishing their
organizations.
Secondly, these studies involve intellectual capital - an intangible, which is
difficult to quantify using the present statistical measurement system. The parameters too
have not been categorically developed. The spiritual capital involves culture, values, faith,
beliefs, trust, commitment and other spiritual capital elements. These are then reflected in
the behaviours of those who hold them. Theoretically, they should be no dissonance
between what you hold and what you do. Also, due to lack of time, only the theoretical
recommendations based on general principles can be made. As such, actual contents of
leadership development program, actual dimensions of performance appraisals, actual
238
questions to ask, actual issues to further examine and explore, on how to implement and to
improve the levels of intellectual capital, to manage and leverage the intellectual capital
leading to performance improvement, are not included.
Further research can be done, probably in collaboration with some universities, to
explore how spiritual capital can add or enhance the Spiritual Capital-Based Performance
Management system, Leadership Transformational Program, Structured Learning
Experiences and Change Management Program that lead to performance improvement of
organizations. The research should be extended to include other organizations in the
service industry.
6.4
Recommendation
Based on the findings mentioned above, to effectively manage and leverage the
intellectual capital Telekom Malaysia has for further future performance improvement, the
study makes the following recommendations:
6.4.1
Spiritual Capital Enhancement.
Spiritual capital must be the driver and compass that governs the correct application
of the other component of intellectual capital – human capital, structural capital and
relational capital. The enhancement of spiritual capital can be accomplished in the
following ways:
(i)
Spiritual capital becomes the main aspect in the policy of recruitment,
performance management system, promotion, reward and recognition,
leadership development program, structured training and other related
human
programs.
resource
development
and
organizational
development
239
(ii)
The elements of spiritual capital must be integrated in the present
recruitment criteria, performance management criteria, and selection
criteria for promotion, reward and recognition, contents of Leadership
Development Programs (MLDP and SMDP) , and other related human
resource development and organizational development programs.
(iii)
Benchmarking of successful “Value-Based Management” companies to
adopt their approach, systems and elements of their success stories and
implementing elements of the spiritual capital that they have.
(iv)
Leadership Development Program for top management and CEO where
the focus of the contents is on the issue of spiritual capital enhancement
especially in developing and promoting trust, the emphasis on cooperation
not competition, on relationship, interdependency, interconnectedness and
context of any decision and action.
(v)
The integration of spiritual capital as additional sub-system in the
TMBEA and the implementation of ISI 2020 Quality Management
System besides the present ISO 9000 standard.
(vi)
Islamic
religious
programs
become
an
official
program
of
the
company in promoting the religious principles and values and at the
same time the benefits in terms of relationship and teamwork among
the employees.
6.4.2
Theoretical and Deployment Framework.
The Change Management Program, Quality Improvement Program, Leadership
Development Program, Structured Training Program, Quality Management System need
frameworks that are concrete and clear in theory, deployment and result to be obtained,
guarantee the determination and effectiveness throughout their deployment and
implementation processes. The above frameworks and programs from various divisions in
Telekom Malaysia must be synchronized, related and connected to each other and support
the overall mission and objectives of the company the systems and programs which
become the policy of the company must be implemented and monitored by the CEO with
240
the assistant from higher management of Telekom Malaysia. The company must be
managed by policies not individuals. Individuals come and go, but the policies must
remain, except when there are compelling reasons to change them. All the policies,
processes and procedures must be operationalized. They must be translated into observable
and measurable behaviors. Only then, can the customers benefit from these findings and
recommendations.
6.4.3 Consequence Management System
The current Consequence Management System must be seriously implemented. The
key performance indicators agreed upon must be truly meaningful and that these must truly
add values that are meaningful and measurable. Employees must be convinced that
whatever they are doing are meaningful. Consequence management includes the penalties
one has to pay for any form of misbehaviour – wrongful or misrepresentation of facts,
wrongful decisions, and violations of any policy or procedures and so on. This includes
everyone across the board – not just those in lower positions.
6.4.4 Employees Test Profiles
The use of all employees’ test profile such as Potentia-M, SMAC, 360 Degree
Feedback and Egon Zehnder that provide information on the competency and capability of
the staff for the purpose of their further development. The feedback becomes a strong basis
for the employees, his supervisor, Human Resource Development department and Telekom
Training Centre need to design the appropriate training programs for the individual
employees for further career development.
241
6.4.5. Long-Term Structured Training
A long-term structured training to develop the human capital - core competencies
and expertise must be developed and seriously implemented especially on the new and
future technologies beside the current technologies, marketing and the soft skill
competencies. Employees must know the strengths of current technologies. They also must
be aware of what else do we need them to perform that they cannot do. How will these new
requirements add value in order to make us even better in very specific measurable ways.
They can provide this gap in performance capability to research and development, and use
this knowledge to better negotiate with vendors. The long-term structured training cannot
exist as a stand-alone activity, it has to be supported by other actions. These include other
activities, such as career development, rewards and recognition program and others.
6.4.6
Knowledge Management
Knowledge management practices should immediately be the policy of Telekom
Malaysia. To guarantee the effectiveness and success of the knowledge management
practices, Telekom Malaysia should consider the establishment of the post of Chief
Knowledge Officer (CKO) as it is the practice in world-class companies. CKO, who is
responsible to the CEO, is responsible in designing, planning, implementing, monitoring
and reviewing the whole knowledge management practices in the company. Knowledge
management practices include knowledge identification, acquisition, application, sharing,
development, creation, preservation and measurement. The policy, reward and recognition
and career progression program must be seen to support it. With the knowledge
management practices lead by the CKO, the whole intellectual capital enhancement efforts
will be integrated and the knowledge and human capital information held by various
departments in Telekom Malaysia can be leveraged to maximize its value to the company.
If he is to be promoted from within then he must be a star performer from somewhere who
has what it takes to succeed in this position. Telekom Malaysia should use the services of a
professional head-hunter to recruit the candidates.
242
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APPENDIX B
THE INFLUENCE OF INTELLECTUAL CAPITAL
ON THE PERFORMANCE OF A TELCO- IT’S
PRODUCT AND SERVICES, PERFORMANCE AND
MANAGEMENT SYSTEM.
A CASE STUDY OF TELEKOM MALAYSIA
QUESTIONAIRE
BY :
HJ.MAZLAN ISMAIL
ASSISTANT GENERAL MANAGER
TELEKOM MALAYSIA.
ENGINEERING DOCTORATE CANDIDATE
BUSINESS & ADVANCED TECHNOLOGY CENTRE
UNIVERSITI TEKNOLOGI MALAYSIA
JALAN SEMARAK 54100
KUALA LUMPUR
Email: hmazlani@yahoo.com Tel: 013 – 3971624
SPONSORED BY
EDUCATION SPONSORSHIP UNIT,
HUMAN RESOURCE MANAGEMENT
TELEKOM MALAYSIA BERHAD
10TH FLOOR,MENARA TELEKOM
JALAN PANTAI BAHARU, 50672
KUALA LUMPUR
(TEL ; 03-22401580)
257
RESPID:
QUESTIONAIRE
The purpose of this survey is to investigate the influence of Intellectual Capital
on the performance of Telekom Malaysia- specifically on the quality of its product
and services, performance and management system. It also will study the importance
of knowledge management and leveraging of Intellectual Capital in Telekom Malaysia
to achieve business competitiveness, in the present and future business environment,
as well as to bring out relevant and significant performance improvement, in its
critical business issues.
I personally believed that you are partly or totally involved and related to the
managing and leveraging the Intellectual Capital in Telekom Malaysia for the success
of Telekom Malaysia’s business operations. Therefore, your SINCERE and HONEST
views and opinions about the statements presented in this questionnaire are very
essential and valuable for my study.
Please read each statement carefully and for each statement CIRCLES ONLY
THE NUMBER that matches your answer.
The data collected in this survey will be used only for research purposes and
will be kept strictly confidential. I sincerely thank you for your support and
cooperation in answering this questionnaire.
Part 1. General information
Intellectual Capital is defined as an identifiable non-monetary asset without
physical existence held for use in the production or supply of products or services, for
rental to others or for administrative purposes. There are 4 components of
Intellectual Capital:
Intellectual Capital = Human Capital + Structural Capital + Relational Capital
+ Spiritual Capital.
258
Human Capital
The tacit knowledge embedded in the mind of individual which include employee
competence, know how, education, innovativeness, capabilities, abilities, work related
knowledge, changeability.
Structural Capital
The organisational capabilities and routines in performing business which includes
organisational structures, operating manual and procedures, databases, documents,
information system, networking system, research & development capabilities, patents,
copyright and trade marks, system and technologies.
Relational Capital
Relationship between the organization and the outside environment which includes
alliances and relationship with customers, partners, suppliers, investors, franchiser,
distribution networks, government bodies and agencies, image and brand, communities and
public and environment.
Spiritual Capital
The ‘intangible’ knowledge, faith, belief and emotion embedded in the minds of
individual and in the heart of the organization which includes vision and direction,
principles, values and culture, integrity, sincerity, honesty, truth, trust, love, moral and
ethic. It also includes motivation, self-esteem, courage, strength, commitment, teamwork,
determination, desire and enthusiasm.
It is the most paramount and fundamental to intellectual capital of any individual or
organization it acts as the driver, the compass that governs, and providing the ‘true north to
intellectual capital – human capital, structural capital and relational capital.
259
Part 2. The Influence of Intellectual Capital
A1
1
2
3
4
5
A2
1
2
3
4
5
A3
1
2
3
4
5
A4
My employees are brilliant,
innovative and creative
My employees are the most
competent in the telecommunication
industry
My employees cooperate, have trust
and show respect when working in
teams
My employees have the capabilities
to operate the information system
required for them to perform their
jobs
Our management provides
conducive working environment for
me and my employees to share ideas
and practice creativity
1
2
3
4
5
A5
1
2
3
4
5
A6
1
2
3
4
5
A7
1
2
3
4
5
A8
1
2
3
4
5
Strongly
Agree
Disagree
TM has a highly competent
management team (MCM )
My employees can quickly adopt to
changes made by TM's management
without any difficulty
My employees are experts in their
jobs
STATEMENTS
Neither
Agree
Nor
Disagree
Agree
Strongly
disagree
A. Human Capital: This section of the survey is intended to assess Telekom
Malaysia's Human Capital. Please circle the number which best represents
your answer.
260
B1
B2
B3
B4
B5
B6
B7
B8
Policies, procedures and work
instructions in my department are
contained in manuals and databases
Knowledge and information in my
department are embedded in our
structure, systems and procedures
Although key people left my
department, vital knowledge and
information has always remained
with the organisation
My employees have accessibility to
information system required for
them to perform their jobs
Our information system is integrated
with vendor's system
We use extensive and advanced
integrated management systems in
our business operations to better
serve our customers
My division synergies our strength
and information with other divisions
to deliver the best to customers
Process improvement and
innovation of its products, services
and systems are done actively to
improve my department’s
performance as well as to reduce
cost
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Strongly
Agree
1
Neither
Agree
Nor
Disagree
Agree
Disagree
STATEMENTS
Strongly
disagree
B. STRUCTURAL CAPITAL: This section is intended to assess
Telekom Malaysia's structural capital. Please circle the number
which best represents your answer
261
C1
C2
C3
C4
C5
C6
C7
C8
Our vendors have performed
extremely well in supporting my
department to achieve our business
targets
My department uses customer
feedbacks effectively in our effort to
provide quality services to our
customers
My department uses feedback and
recommendations from vendors to
produce better products and
services to our customers
Government agencies provide good
support to us in our effort to serve
the people better
TM's distribution channel (e.g.:
Kedai Telekom) has been
performing excellently to serve
customers
TM's brand name is well- known in
Malaysian telecommunication
services
TM’s business collaboration with
other international
telecommunication operators
enhances TM's competitive edge
and performance
My department can serve our
important customers excellently
because we have a ‘customers
profile’ including their requirements
and level of services expectation.
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Strongly
Agree
1
Neither
Agree
Nor
Disagree
Agree
Disagree
STATEMENTS
Strongly
disagree
C: Relational Capital. This section is intended to assess
Telekom Malaysia's relational capital. Please circle the number
best represents your answer
262
D2
D3
D4
D5
D6
D7
D8
D9
I have strong faith in the present
TM's higher management team in
performing their duties to achieve
TM’s vision and mission statements
in the near future.
TM will be more profitable and
prosper through financial and non
financial contribution to religious
and philanthropic (love of mankind)
activities.
My department always considers
environmental health and public
social benefits in any planning,
development and implementation of
our projects
TM will reap future business
advantages by providing services in
a non profit making areas
I am thankful and loyal to TM. I
will never leave TM although other
competitor is offering better salary
and incentives to me.
My department shares a “common
belief” with other departments in
performing our duties to achieve
TM’s goals and mission.
TM’s key values; Total commitment
to customers, uncompromising
integrity and respect & care for
others are understood, believed and
internalized by my employees
TM is strictly following the rules of
corporate governance required by
the government
My department practices good
business ethics in our daily business
operation
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Strongly
Agree
1
Agree
Neither
Agree
Nor
Disagree
D1
Disagree
STATEMENTS
Strongly
disagree
D. Spiritual Capital: This section is intended to assess
Telekom Malaysia's spiritual capital. Please circle the number
best represents your answer.
263
D
10
D
11
D
12
D
13
D
14
D
15
My employees are sincere, honest
and truthful in performing their
duties
My employees are motivated,
courageous and committed in
performing their jobs
I will committed to my work as
usual-although I’m not been
promoted like my colleagues, even
juniors
I work at the best of my capabilities
because I believe and practice
“working is part of my acts of
devotion to God”.
The Machiavellian principle; “the
ends justify the means” is an
unaccepted practice in my
department.
Trust, shared knowledge, mutual
respect and reciprocity are the
culture of TM, which result to
continuous innovation for TM
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Part 3: Knowledge Management
E2
E3
E4
My employees understand what is
the required knowledge they must
have to be a competent employee.
My employees know exactly the
level of competence and knowledge
they currently possess compared to
what they should possess.
My employees actively and
intensively seek their required
competencies from TM’s suppliers,
customers and also through other
efforts.
The process of learning, nurturing
and applying the knowledge and
skills acquired by my employees are
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Strongly
Agree
1
Agree
Neither
Agree
Nor
Disagree
E1
Disagree
STATEMENTS
Strongly
Disagree
E. This section is intended to assess Knowledge
Management in Telekom Malaysia. Please circle the number
best represents your answer.
264
E5
E6
E7
E8
E9
E
10
E
11
E
12
actively done to develop "industry’s
best practices".
Knowledge sharing among
individuals, teams and departments
is highly promoted and actively
encouraged in my department.
Knowledge sharing, skills and
competences are appreciated,
appropriately recognized and
rewarded in my department
My department has a
comprehensive development plan in
concept ional, behavioural and
technical abilities for our employees
to develop their distinctive
competencies
The knowledge creation between
tacit knowledge (personal
knowledge possessed by
employees) and explicit knowledge
(codified knowledge stored by the
organization) is systematically
managed in my department to
nurture further innovation
Knowledge and competences within
employees, databases and
documented manuals are captured,
stored and updated in my
department ‘information system’
and can be efficiently retrieved for
constant usage.
To enable my department to
produce innovation and sustain its
performance, we continuously
assess and evaluate the knowledge
and competency level of our
employees and our department
The physical architecture and
facilities of offices and their
environment in my department,
promote intensive knowledge
development and sharing
Individual department teams and
cross-functional teams are actively
functioning in my department to
address changing and complex
problems by leveraging their rich
and diverse knowledge capabilities
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
265
E
13
E
14
E
15
My leaders are actively leading,
coaching and developing their
employees to become self-driven
knowledge professionals
My department is able to
successfully improve our
operational effectiveness and
efficiency through ‘learning history’
i.e. learning from past experiences,
success stories and mistakes.
Production of new knowledge
through enhancing our capacity to
learn and innovate is actively
promoted in my department.
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Part 4: Management and Leveraging of Intellectual Capital
F4
Strongly
Agree
F3
Agree
F2
My employees understand the
goals and strategies used by TM
to achieve the vision and mission
statement.
My department gives a balanced
important to :
(i). Financial perspective.(ii)
Customer perspective (iii)
Internal business processes
perspective (iv) Innovation and
Learning perspective.
as an important management
approach in our daily operation.
Presently in my department,
achieving short term performance
and financial results are more
important than long term value
creation
In my department, achieving
performance targets of key
activities are more important than
Neither
Agree
Nor
Disagree
F1
Disagree
STATEMENTS
Strongly
Disagree
F. This section is to assess the Management and Leveraging of Intellectual
Capital in Telekom Malaysia. Please circle the number best represents your
answer
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
266
F5
F6
F7
F8
F9
F
10
F
11
F
12
F
13
F
14
F
15
performing duties according to
the established documented
procedures
Research and development
activities for products, services,
systems and human resources is
important in my department
The decision making process in
my department is based on
sufficiently accurate and reliable
data, balanced with experience
and intuition
The present TM organizational
structure is a traditional
hierarchical structure which
hinders operational effectiveness
and efficiency
The present performance
management system (MAPS)
leads to the optimum leveraging
of human capital in TM
Sufficient empowerment and
participation are given to line
managers in my department to
perform their duties to satisfy
customers
High degree of ‘office politics’ in
my department hinders the
creation and development of
innovative teams
Units with ISO 9000 certification
or score high in TMBEA
consistently show significant
performance improvements
In my opinion, TM’s sponsorship
of the activities of government
agencies generate business,
growth and future values to TM
Our employees can express their
opinions openly and a healthy and
positive challenging culture exists
in our working environment.
My contribution is appreciated
and TM is taking care of my
future carrier development
TM’s New Vision ; “The
Communication Company of
choice-focused on delivering
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
267
Exceptional Value to our
customers & other shareholders”
will mobilise, motivate and
improve our employees
performance
G. Performance Improvement. This section is intended to
assess the overall performance of Telekom Malaysia's products
and services, performance and management system. The
information of the performance is based from the 2002
TM’s annual report and any other official literature on TM
that you have read. Please circle the number best represents
your answer.
TM is a Malaysian
telecommunication industry
leader
TM is a forward -looking
organization
G3
Strongly
Agree
G2
Agree
TM is able to compete globally
Neither
Agree
Nor
Disagree
G1
Disagree
STATEMENTS
Strongly
disagree
G. To what extend do you agree with the following statements describing
Telekom Malaysia's performance:
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
G4
TM's 'Leadership Index' is high
1
2
3
4
5
G5
TM's 'Employee Satisfaction
Index' is high
TM is quickly responsive to
local and international market
needs
TM's revenue growth is
improving
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
G8
TM's market share is improving
1
2
3
4
5
G9
TM's profit growth is improving
1
2
3
4
5
G
10
G
TM is improving operating
efficiency
TM is always able to achieve
1
2
3
4
5
1
2
3
4
5
G6
G7
268
11
G
12
G
13
G
14
G
15
and sustained superior
performance
TM 'Customer Satisfaction
Index' is improving
TM practices 'On Time
Delivery' of its
products and services to
customers
TM achieves a high success rate
in new product/service launched
TM is able to continuously
produce competitive products
and services
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
PART 5: DEMOGRAPHY
Please write your answer in the column provided
H1) Age (in years)
1 20-29
2 30-39
3
4
40-49
50 and above
H2) Race
1 Malay
2 Chinese
3
4
Indian
Others
H3) Gender
1 Male
2 Female
H4) Marital Status
1 Married
2
Single
4
5
Divorced or
separated
Others
H5) Highest Academic Qualifications
1 MCE/SPM
5
BACHELOR’S
DEGREE
2 HSC/STPM
6
MASTER’S
DEGREE
3 CERTIFICATE
7
DOCTORATE
/ PhD
4 DIPLOMA
8
OTHERS
269
H6) Job-Grade
1 Executive (Grade 23 and below)
2 Manager (Grade 23 – 25)
3 Assistant General Manager (Grade 26 - 27)
4 General Manager (Grade 28)
5 Senior Management (Grade 29 & above)
6 Non executive
H7) Department / Unit
1 Marketing
Services
2 CNO
3 Network Services
4 Network Development
H8) Place Of Work
1 Kedah/Perlis
Sembilan
2 Pulau Pinang
3 Perak
4 Selangor
5 Kuala Lumpur
6 MSC
7 Pahang
8 Trengganu
5
Support
6
7
8
Payphone
Finance / HR
Others
9
10
11
12
13
14
15
16
Negeri
Melaka
Johor
Sabah
Sarawak
Headquarters
Kelantan
Others
H9) Years Of Service In Telekom Malaysia
1
<2 years
4
11-15 years
2
2-5 years
5
16-20 years
3
6-10 years
6
> 20 years
END OF QUESTIONS
(I SINCERELY THANK YOU FOR YOUR COOPERATION)
FROM
HJ.MAZLAN B ISMAIL, 03/03
270
APPENDIX C
STRUCTURED INTERVIEW QUESTIONS
1. As an established company I’m sure we have plenty of Intellectual capital. Human
Capital, Structural Capital and Relational Capital.
(i)
How much Human Capital, Structural Capital and Relational Capital
do we have in-term of percentage of ‘Should Have” and “As Is” as a
leader in telecommunication industry in Malaysia?
(ii)
How much we have compare to our competitors?
(iii)
Do we had effective enough in leveraging the Intellectual Capital we
have to get the
necessary result?
(iv)
If we had leverage enough, what is the significant improvement to our
overall performance?
(v)
If we not leverage enough yet, why and what is the obstacles?
(vi)
At the moment, is there is necessary for TM to bring in Intellectual
Capital from outside the company to improve the overall business
operation.
2. Structural capital has a more influence on the performance of Telekom Malaysia
compare to Human Capital and Relational Capaital. Can you explain this phenomenon?
3. It seem that executive at job-grade executives level have a more positive perception
towards Human Capital, Structural Capital, Relational Capital, Knowledge Management
and Managing and leveraging of Intellectual Capaital compare to manager and AGM level,
can you explain this phenomena?
4. It seem that executive who served more than 20 years have a more positive perception
towards Spiritual Capital and Knowledge Management. Can you explain this phenomenon?
271
5. How far is the TMBEA and ISO 9000 contributes and supports the development of
Spiritual Capital in Telekom Malaysia?
6. In other world class company such as GEC, IBM, Cisco, Microsoft, Continental
Airlines, Caterpillar etc, Spiritual Capital is one of the most important factor of their
survival and success stories…What is the degree of importance of Spiritual Capital in
Telekom Malaysia?
(i)
If yes, very important, is the importance of SpC is understood and
recognised by all level of Telekom Malaysia: GM and above?
Executive? , Other staff?
(ii)
If no, which level? Why?
(iii)
Do you agree that Spiritual Capital must be the reference, guidance and
driver of the other Intellectual Capital? Why?
(iv)
Do you agree that Intellectual Capital alone and by themselves, do not
effectively and positively affect the performance?
(v)
Is all level of employee in Telekom Malaysia, works synergic ally
toward creating a true Spiritual Capital value in Telekom Malaysia?
What is the proof? If not why?
(vi)
What is the value destroyer if any in Telekom Malaysia? Whose and
what acts or behaviours result to the value destroyer?
(vii)
Please list all effort done in your department in strengthening the
Spiritual Capital in Telekom Malaysia. (Newsletter, Kristal snippet)
(viii)
What is the potential success of Spiritual Capital’s internalisation of
Telekom
Malaysia’s
employees-non-executive,
executive,
and
manager, GM, Top Management?
(ix)
Is SpC had become an important aspect of Intellectual Capital in Telekom
Malaysia in term of:
i. Business strategy? How?
ii. New recruitment? How?
iii. Performance Management systems? How? Why only to GM level
not to others.
iv. Reward? How?
272
v. Promotion criteria?
- SMAC, 360 Degree, Potentia M, Egon Zehnder, Fluid
Intelligence
vi. Training and staff development?
- Ordinary staff, executives, ELDP, MLDP, SMDP, Top Mgmt
Program.
vii. Quality Management System –TMBEA, ISO?
viii. Placement of executive, manager, GM etc.
(x)
Any other collective efforts by Telekom Malaysia’s management to
develop and improve Spiritual Capital?
(xi)
Other world-class companies had shown success stories of Spiritual
Capital after massive and long-term efforts, what is in Telekom Malaysia?
When? At what cost?
(xii)
Relationship, inter connectedness, inter-dependency, within departments and
employees are one of the critical factor in leveraging of Intellectual Capital
for generating the required result. What is the stage of those factors in
Telekom Malaysia? How? Why? Higher management?
7. According to questionnaire survey, Knowledge Management is one of a very important
factor in our effort to achieve Telekom Malaysia’s performance. What is the stage of
knowledge management implementation in Telekom Malaysia? How? Why?
8. According to report from consultant - Human Synergistic, Most of higher management
of Telekom Malaysia have a culture with a high score in Aggressive/Defensive styles and
low in constructive style. Another report from consultant – Leadership practice, in general
higher management have a low perseverance, low in trustworthiness and in sharing credit.
(i)
Does those culture and practice become a value destroyer to Telekom
Malaysia? Why? How?
(ii)
Presently, Is there is significant improvement of those aspect of culture and
practice among higher management? Why? How?
273
9. Deloitte Consulting Group proposed in year 1998 for Telekom Malaysia to practice
Value Based Management, to allocate capital based on Value creation & business potential,
to budget and execute at operational level.
(i)
What is the progress of that proposal? CMO? How successful is the effort?
Why? How?
(ii)
What is the cost we had spent? How much more we are going to spend to
attain the TM’s vision?
(iii)
Obstacles?
10.There are a many negative comments from Telekom Malaysia’s employee of the
Telekom Malaysia’s organisational structure effective on 1st of July 2004.
(i)
Does the overall structure showing the richness of Telekom Malaysia’s
Structural Capital and Human Capital?
(ii)
How we are going to improve the present organisational effectiveness and
rectify the consequence of the ‘value destroyers’?
11.What would you like to see Telekom Malaysia in term of Intellectual Capital,
Knowledge Management and Financial achievement.
(i)
What is the strategy to achieve this?
(ii)
What kind of Framework or Program can we have?
12. How in your opinion we can integrate the function of Kolej Latihan Telekom, Change
Management Office and Quality Improvement and Business Excellence Department?
(i)
Is there is any definite overall framework of strategy and program by
the departments concern in supporting Telekom Malaysia’s mission.
(ii)
Is there is any evaluation in term of Customer Satisfaction Index (CSI),
Employee Satisfaction Index (ESI) and Return On Investment (ROI) of all
the program effectiveness.
274