Organizational Learning and Collective Human Capital Relationship With Firm Performance Among MNEs in the Northern Region of Malaysia

Organizational Learning and Collective Human Capital Relationship With Firm Performance Among MNEs in the Northern Region of Malaysia

Phynthamilkumaran Siea Dass (Universiti Sains Malaysia, Malaysia) and Shankar Chelliah (Universiti Sains Malaysia, Malaysia)
Copyright: © 2019 |Pages: 22
DOI: 10.4018/978-1-5225-7426-2.ch008

Abstract

The main objective in this chapter is to understand the organizational learning challenges of multinational enterprises and their performance in Malaysia. At the same time, it also explores how organizational learning and collective human capital with competitive advantage as a mediating factor affect MNEs' performance in Malaysia through employee movement. This research concluded knowledge acquisition, knowledge distribution, and organizational memory is positively significant towards competitive advantage. Only knowledge acquisition and organizational memory are positively significant when competitive advantage mediates organizational learning towards firm performance. Collective human capital is positively significant towards competitive advantage as well as towards firm performance when competitive advantage mediates. Through this research it was found that MNEs in Malaysia are weak in knowledge interpretation and knowledge distribution due to employee movement in the northern region of Malaysia.
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Research Background

This study explores the determinants of Multinational Enterprises (MNE) performance in Malaysia. Therefore, the influence of organizational learning and collective human capital on establishing competitive advantage that improves firm performance has also been investigated.

Referring to Sampe (2012), most firms practice the sustaining and fundamentals of the economy model of having cost leadership, market or product differentiation and niche orientation to attain firm performance. The above three segments are widely used in domestic environments when referring to competitive advantage being analyzed in terms of business continuity with rapid changes, development in technology and market demands and requirements. Operational cost and product cost is one of the main contributing factors in order for MNEs to remain in the industry. Despite having a huge or limited product variant, it has to ensure meeting the end user’s demand. By having a huge variant of products MNEs have to ensure they meet their end user’s affordability so that the products can remain in the industry. All this has to be done without lowering the quality and safety standards of the product. One of the drawing factors for MNEs to venture into external resources is due to the knowledge and skills as well as the abilities that the labour force has to acquire. Furthermore with the establishment of the learning mechanisms or structure establishment in the organization in terms of sustainability as well as managing the crises and developing the new work force to demonstrate the firm performance (Nkundabanyanga, 2016), only an experienced work force has the ability to develop a new work force and repeat the organizational learning to ensure the self-sustainability is retained (Sampe, 2012).

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