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Human Resource Management for Innovative Capability Development in Malaysia’s New Economic Model

Copyright © 2013. 14 pages.
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DOI: 10.4018/978-1-4666-3655-2.ch008|
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MLA

Intan-Soraya, Rosdi and Kok-Wai Chew. "Human Resource Management for Innovative Capability Development in Malaysia’s New Economic Model." Intellectual Capital Strategy Management for Knowledge-Based Organizations. IGI Global, 2013. 142-155. Web. 24 Nov. 2014. doi:10.4018/978-1-4666-3655-2.ch008

APA

Intan-Soraya, R., & Chew, K. (2013). Human Resource Management for Innovative Capability Development in Malaysia’s New Economic Model. In P. Ordóñez de Pablos, R. Tennyson, & J. Zhao (Eds.) Intellectual Capital Strategy Management for Knowledge-Based Organizations (pp. 142-155). Hershey, PA: Business Science Reference. doi:10.4018/978-1-4666-3655-2.ch008

Chicago

Intan-Soraya, Rosdi and Kok-Wai Chew. "Human Resource Management for Innovative Capability Development in Malaysia’s New Economic Model." In Intellectual Capital Strategy Management for Knowledge-Based Organizations, ed. Patricia Ordóñez de Pablos, Robert D. Tennyson and Jingyuan Zhao, 142-155 (2013), accessed November 24, 2014. doi:10.4018/978-1-4666-3655-2.ch008

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Abstract

This chapter spotlights Malaysia’s New Economic Model (NEM), which aims to create a sustainable and robust economy through increased productivity and innovation. An innovation-driven business environment is to transform the Malaysian economy into one of high income and quality growth. Innovation is fueled by knowledge in organizations, and knowledge resides within individual employees. Thus, firms need to bring about knowledge exchange among employees to build on its innovative capability. Specific strategies can be utilized to encourage employees to acquire, share, and apply knowledge to create organizational value. The field of Human Resource Management (HRM) therefore becomes relevant in understanding organizational innovation in Malaysia. However, a comprehensive framework bridging HRM and organizational innovation has yet to be developed. This chapter fills in the gap by proposing a human resource management framework for innovative capability development in organizations for Malaysia’s New Economic Model.
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Introduction

The Malaysian government recognizes that the business environment in the knowledge economy is highly complex and driven by rapid technological advancements. Innovation is the main enabler for an organization’s sustainable competitive advantage, and it depends on an organization’s ability to manage its knowledge stocks or intellectual capital (Chen & Huang, 2009). Malaysia’s New Economic Model (NEM), which was announced in May 2010, is focused on ensuring a sustainable and robust economy, increasing innovativeness, and achieving high income levels (Government of Malaysia, 2010).

The NEM is based on three principles, which are high income, sustainability, and inclusiveness. The last two principles champion environmental stewardship and better quality of life for all Malaysians. The first principle, namely creating a high income nation, rests on the country’s ability to push for higher wages stemming from greater productivity through enhanced skills and innovation (Government of Malaysia, 2010). At the time of the announcement of the NEM, per capita annual income in Malaysia is at RM23,100, or approximately US$7,000. In 2020, that figure is targeted to more than double to RM49,500 or US$15,000 (“NEM will be led by three principles,” 2010). As outlined in the NEM, an innovation-driven business environment is to transform the Malaysian economy into one of high income and quality growth, thus realizing the country’s vision of becoming a fully developed nation by the year 2020.

The focus on innovation is further addressed in the launching of the country’s Tenth Malaysia Plan (10MP) in June 2010. The 10MP is a blueprint prepared by the Economic Planning Unit of the Prime Minister’s Department and the Finance Ministry of Malaysia, and approved by the Cabinet of Malaysia to apportion the national budget for the period of 2011 to 2015 to all sectors of the Malaysian economy (“Tenth Malaysia Plan,” 2010). The 10MP is to spark high economic growth with RM230bil having been allocated for development expenditure, and the target for real Gross Domestic Product (GDP) growth set at 6% per annum during the 10MP period. Through the 10MP, special programs and funding for businesses are geared towards encouraging higher research and development activities and innovation (“PM tables RM230bil 10th Malaysia Plan,” 2010).

Malaysia’s NEM and 10MP are embodiments of national strategies for the country’s survival in the knowledge economy. The Malaysian government is aiming for higher involvement of the country’s private sector firms in driving innovation and economic development (“PM tables RM230bil 10th Malaysia Plan,” 2010). Hence, there is a need for in-depth analysis on innovation issues in organizations in Malaysia.

Knowledge is crucial for firms to produce new products, services, and processes in meeting customer needs and create competitive advantages (Gloet & Terziovski, 2004). More importantly, knowledge resides within individuals in organizations, which means that firms need to facilitate communication and exchange among individuals in order to gain new insights and capabilities (de Pablos, 2004; Nonaka & Takeuchi, 1995). It is found that specific strategies can be deployed to encourage individual employees to acquire, share, and apply knowledge towards organizational value-creation (Lengnick-Hall, Lengnick-Hall, Andrade, & Drake, 2009). Reference to the field of Human Resource Management (HRM) is therefore necessary in understanding organizational innovation.

However, a comprehensive framework bridging Human Resource Management (HRM) and organizational innovation has yet to be developed. Existing literature has established the importance of HRM in innovation performance, but few have explained ‘how’ it manages to do so (Kang, Morris, & Snell, 2007). Therefore, this chapter aims to construct a human resource management framework for innovative capability development in organizations for Malaysia’s New Economic Model.

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Complete Chapter List

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Table of Contents
Foreword
Leif Edvinsson
Preface
Patricia Ordóñez de Pablos, Robert D. Tennyson, Jingyuan Zhao
Chapter 1
Jingyuan Zhao, Patricia Ordóñez de Pablos, Robert D. Tennyson
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Managing Informal Learning in Workplaces: The Practice of China
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Chapter 2
Shigeki Sugiyama
We are now in the age of various capitals like money, facility, real estate, movable property, structure, system, information, relations, human... Sample PDF
Intangible Capital Management Method as Dynamic Knowledge Wisdom
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Chapter 3
Romilda Mazzotta, Giovanni Bronzetti
This chapter discusses the Intellectual Capital (IC) and its management within the services-oriented firms. It argues that IC and its management are... Sample PDF
Intellectual Capital in a Services-Oriented Firm: The Case of Italian Public Utilities
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Chapter 4
Sharon E. Norris
Traditional strategic management focuses on securing organizational assets and maximizing resources through top-down leadership and the formation of... Sample PDF
A Complex Responsive Process Approach to Strategic Management: Employee Engagement, Knowledge Creation, and Organizational Learning
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Chapter 5
Carol Yeh-Yun Lin
From Resource-Based View (RBV), this chapter introduces intellectual capital as a valuable resource leading to competitive advantage at both... Sample PDF
Intellectual Capital Explains a Country’s Resilience to Financial Crisis: A Resource-Based View
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Chapter 6
Göran Roos
The Australian Manufacturing Environment has over a short time changed from being low or medium cost to becoming high cost. In the previous... Sample PDF
The Role of Intellectual Capital in Business Model Innovation: An Empirical Study
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Chapter 7
Marc Rabaey
This chapter introduces Complex Adaptive Systems Thinking (CAST) into the domain of Intellectual Capital (IC). CAST is based on the theories of... Sample PDF
Complex Adaptive Systems Thinking Approach for Intelligence Base in Support of Intellectual Capital Management
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Chapter 8
Rosdi Intan-Soraya, Kok-Wai Chew
This chapter spotlights Malaysia’s New Economic Model (NEM), which aims to create a sustainable and robust economy through increased productivity... Sample PDF
Human Resource Management for Innovative Capability Development in Malaysia’s New Economic Model
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Chapter 9
Camelia Iuliana Lungu, Chirata Caraiani, Cornelia Dascalu
This chapter introduces and defines the concept of sustainable intellectual capital and proposes an assessment model designed on the base of the key... Sample PDF
Sustainable Intellectual Capital: The Inference of Corporate Social Responsibility within Intellectual Capital
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Chapter 10
Eric Kong
Managing Nonprofit Organizations (NPOs) has become much more complex, particularly under the influence of New Public Management (NPM). Like their... Sample PDF
The Role of Human Resource Strategies and Practices in Developing Intellectual Capital for Innovation in Nonprofit Organizations
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Chapter 11
Giovanni Bronzetti, Romilda Mazzotta, Graziella Sicoli, Maria Assunta Baldini
The purpose of this chapter is to analyze the level and the quality of voluntary disclosures of Intellectual Capital (IC) in the sustainability... Sample PDF
Intellectual Capital Disclosure in Sustainability Reports
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Chapter 12
Anna Szopa
University spin-off companies are under many competitive pressures that necessitate ongoing innovation and new product development. Technological... Sample PDF
Intellectual Capital and Business Performance in University Spin-Off Companies
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Chapter 13
Rongbin W.B. Lee, Cherie C.Y. Lui, Jessica Y.T. Yip, Eric. Y.H. Tsui
Historically, Intellectual Capital (IC) has drawn the attention of researchers and practitioners as a new framework to assess the new... Sample PDF
Exploration in Intellectual Capital Practice: A Knowledge Management Perspective
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Chapter 14
Hasliza Abdul Halim, Noor Hazlina Ahmad, T. Ramayah
For the past decade, Malaysia has transformed considerably in its landscape, politics, outlook, economics, and social progress. It has developed... Sample PDF
Innovative Human Capital as a Core Strategy towards an Innovation-Led Economy: Malaysian Perspective
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