INTERNATIONAL SOCIAL SCIENCES ACADEMIC …

INTERNATIONAL SOCIAL

SCIENCES ACADEMIC CONFERENCE

(ISSAC)

Proceedings

14-15 NOVEMBER 2016

A'FAMOSA RESORT, MALACCA, MALAYSIA

PROCEEDINGS

International Social Sciences Academic Conference 2016

Published by MNNF Publisher

Copyright © 2016 by MNNF Publisher

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or

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Perpustakaan Negara Malaysia

Editor : Nur Fadhlina Zainal Abedin

TABLE OF CONTENTS

Relationship between Financial Literacy, Savings Motive and Level of Knowledge

towards Life Insurance Demand: A Case of Miri City, Sarawak

Erwin Laing, Jati Kasuma, Mohamad Firdaus Mohammad Zaid

1

Relationship Quality in Banking Industry

Mohd Zaidi Semawi, Agnes Kanyan, Jati Kasuma, Izzan Alfansu

6

A Study on the Promotion of Purchases Based on Analysing the Effect of the

Service by Combination between Customers Type and Service Providers Type

Using the Bayesian Network

Yuya Miyamoto*, Michiko Tsubaki

11

Tackling Obesity by Granting Financial Incentive through Lifestyle Modification

among Married Women in Malaysia

Wan Nor Fatihah Wan Hanafi*, Hasif Rafidee Hasbollah & Noorul Azwin Md.Nasir

18

Review Article: Tackling Obesity in Malaysia: Its Scenario and Strategies


23

Father Involvement and Self-Concept among Adolescents of Divorced Families:

Does Gender Matter?

Siti Nor Yaacob, Fam Jia Yuin

28

Quality of Life and Facilities of Nursing Home: A Systematic Review Article

Nik Muhammad Faris Bin Nik Nordin*, Hasif Rafidee bin Hasbollah, Mohd Hafzal Bin

Abdul Halim, Mohd Firdaus bin Mohd Nasir, Muhammad Aizat Bin Mat Ibrahim,

Muhammad Shafhuan Bin Yusran

33

The Association Physical Activity and Low Back Pain: Systematic Review

Muhamad Aizat bin Mat Ibrahim*, Hasif Rafidee bin Hasbollah, Nor Dalila bin

Marican, Muhd Hafzal bin Abdul Halim, Muhd Firdaus bin Mohd Nasir, Nik

Muhammad Faris bin Nik Nordin

38

Contrastive Pragmatics Analysis of Alerters in Malay and English Request Speech

Act

Nurul Syafawani Halim* & Marlyna Maros

44

The Relationship of Conflict Types, Supervisors’ Conflict Resolution Strategies

and Employees’ Positive Behaviors

Ooh Seow Ling*, Chua Bee Seok & Ismail Maakip

53

Tourist Satisfaction Indicators for Responsible Rural Tourism Framework: A Case

of Kinabalu National Park

Timothy Ajeng Merenga*, Hamimah Taliba & Jennifer Kim Lian Chanb

58

Corporate Philanthropy Disclosure in Malaysia: An Insight

Mohd Farid Asraf Md Hashim* & Mohd ‘Atef Md Yusof

63

Profit Maximization: Islamic Taught and Ethical Principles

Sri Wahyu Sakina Ahmad Sanusi, Nurauliani Jamlus Rafdi & Noor Aimi Mohd Puad

69

Impacts of Trade Institutions on Malaysia Trade Costs

Tan Jiunn Woei & Lee Chin*

75

Using Emotional Stroop Task as a Child Depression Screening Tool

Ker Sing Ling & Wan Yeng Chiah* 80

Awareness on Hibah Concept: Towards Cultivating Islamic Estate/Wealth

Management

Aini Hayati Musa

88

Efficiency Analysis in Conventional and Islamic Banks in Malaysia: An

Application of Data Envelopment Analysis

Nur Azlina Abd Aziz*, Nurfatin Zahid, Jamilah Mohd Mahyideen, Norfazira Abdullah &

Nur Farah Naila Suleima

92

Audit Committee Effectiveness and Financial Reporting Lag: Evidence from ACE

Market in Malaysia

Rohaida Ismail*, Norman Mohd-Saleh & Amariah Hanum Hussin

96

Towards Islamic Marketing – Consumer Behavior in Purchasing Halal Product

Aini Hayati Musa, Siti Hajar Md Jani, Nabilah Abd Shukur, Tengku Sharifeleani Ratul

Maknu, Rohasmizah Hashim, & Nur Nafhatun Md Shariff

102

Corporate Social Responsibility: SMEs Viewpoint

Salwa Muda, Amariah Hanum Hussin, Musliha Musmana & Jamil Mohamed Sapari

107

Users’ Satisfaction on Start-up Business Kits Website

Nur Fadhlina Zainal Abedin

112

Time Series Analysis on Monetary, Fiscal Policy and Growth in Malaysia

Maziah Mohamed Arif, Nur Fadhlina Zainal Abedin* & Habsah Kassim

117

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Proceedings: International Social Sciences Academic Conference (ISSAC 2016) 14-15 November 2016

Malacca, Malaysia

Abstract- Life insurance is one of an important thing in our life

but not all of people think insurance is important because they

think about the concept of insurance where it is just for waste

their money. Some people purchase the insurance policy for

many reasons not only for protection. Thus, this study would like

to identify the relationship of financial literacy, savings motives

and level of knowledge of life insurance demand. A self-

administered questionnaire was distributed at Miri city, Sarawak.

The results reveal that the most factor influence life insurance

demand is level of knowledge and followed by financial literacy

and saving motives. Ultimately, financial literacy and level of

knowledge have strong relationship with life insurance demand

and there are moderate relationship between saving motives and

life insurance demand.

Key Words: Financial literacy, level of knowledge, life

insurances, saving motives.

I. INTRODUCTION

ISK is defined as uncertainty the occurrence of a loss

(Judy et al., 2005). Risk is present anywhere and

whenever beings are unable to foreseen the future.

Risk is on demand of uncertainty as to whether an event

occurs or not. Losses can occur at any time anywhere. Risk

also can be defined as a potential of losing something

valuable or against the potential to gain some value. Pooja

Kungwani (2014), value can be defined as physical health,

social status and financial wealth that can be gained or loss

when taking risk resulting from a given action, activity and

or inaction, foreseen or unforeseen.

Insurance is a way to reduce potential financial loss or

hardship. It can be a mechanism to help cover the cost of

unexpected event for example theft, health problem, and

property damage. The legal definition of insurance is as an

*Corresponding author: [email protected]

agreement in which the insurance company (insurer) agree

to indemnify the insurance buyer (insured) losses or risk in

consideration insured will pay certain amount that called as

premium subject based on the term and conditions of the

insurance agreement. This means the insured make a risk

transfer in which insured will agreed to pay premium to the

insurer and will get a protection from the insurer.

Insurance can be defined as an agreement between the

insurers and insured. Insurance also defined as an

economic device whereby and individual substitutes an

uncertain monetary loss that provide by individual in a

small cost which known as a premium.

Life insurance plays an important role in an individual

personal financial plan. Then, life insurance allows

individual and families to allocate the risk of premature

death with many other and to manage the financial loss

from the premature death of the primary wage earner. It is

to ensure that family has cash and income after the death of

the breadwinner. Life insurance also can being an

instrument to manage income risk by providing coverage

against income loss form death and also can be as an

investment vehicle for long term saving. Thus the main

reason for the purchase of the life insurance is to provide

financial security for the family. Life insurance is an

important mechanism to finance the need of people against

premature deaths of the insured as well as long-term

savings for retirement. Life insurance designed to meet the

requirement of individual for themselves or for their

dependents. In addition life insurance can as the saving

plan for the future for example when retire at the future;

there will be a constant source of income (Ahmad Shukri

Yazid, 2012).

In Malaysia, there are many life insurance companies

that registered under the life insurance association of

Malaysia (LIAM). LIAM formed in 1974 which a trade

association registered under the society’s act 1966. LIAM

Relationship between Financial Literacy,

Savings Motive and Level of Knowledge

towards Life Insurance Demand: A Case of

Miri City, Sarawak

Erwin Laing, Jati Kasuma, Mohamad Firdaus Mohammad Zaid

Faculty of Business Management, Universiti Teknologi Mara Sarawak

Jalan Meranek, 94300, Kota Samarahan, Sarawak

R

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has a total 17 members, of which 15 are life insurance

companies and 2 life reinsurance companies. Section 22(1)

of the insurance act 1996 stated that, for all life insurance

companies and life reinsurance. LIAM’s objectives are to

promote a life insurance industry, to enhance public

understanding and appreciation for life insurance, and to

upgrade image and professionalism of the life insurance

industry and to support the regulatory authorities in

developing a strong industry (life insurance association of

Malaysia) (LIAM, 2013).

The studies of the factors influence individual to

purchase life insurance also have been conduct by other

researcher in the past for example by beck and Hwang and

Greenford (2005). This research will focus on the financial

literacy saving motives and level of knowledge as the

factor influencing life insurance demand.

II. RESEARCH PROBLEM AND RESEARCH OBJECTIVES

LIAM (2011) has reported the life insurance industry

growth of 11.9% (RM 8.42 billion) was reported in 2010

compared to 9% (RM 7.53 billion) in 2009. In fact, the

year after LIAM (2011) stating that only 42 percent of the

total Malaysia population are insured implying that the

remaining 58 percent of the population is still vulnerable to

life’s risk that may permanently strip away their future

earnings.

There is also awareness of the insurance as a protection

mechanism has increased over the years. It is means that,

people has knowledge on the important of insurance for

them. According to the research that had been conduct by

Loke and Goh, 2012 stated that the GDP for life insurance

in Malaysia is low at 2.9% compared to other Asian

countries such as Singapore (6.1%) and Japan (7.5%).

These statistics indicate that there is a large untapped life

insurance market in Malaysia. This means demand for life

insurance in Malaysia still low.

Therefore, this research is conducted to know the factor

influencing the demand of life insurance in Malaysia.

Nowadays life insurance can be categorized as an

important thing in our life but not all of people think

insurance is important because they think about the

concept of insurance where it is just for waste their money.

Some people purchase the insurance policy for many

reasons not only for protection. The issue of this research

to determine the factor influencing life insurance demand.

The objectives of this study are: (1) to rank which factor is

the most influential the life insurance demand and (2) to

examine the relationship between financial literacy, saving

motives and knowledge and life insurance demand.

III. LITERATURE REVIEW

A. Life Insurance Demand

In Yaari (1965) framework stated that, the demand for

life insurance is attributed to a person’s desire to bequeath

funds to dependents and provide income for retirement.

Protection of dependent member of family against

financial hardship in the ase of a wage earners premature

death is important motive of buying life insurance. In

addition life insurance is use to insure against lifetime

uncertainty resulting for the mortality risk of individuals

(Yaari, 1965). Thus, the demand of life insurance is a

function of wealth, expected income for individual and can

be as the future consumption. Life insurance purchasing

behaviour includes there part for example premium

expenditure, amount life insurance purchased and type of

life insurance that can be as the factor influence individual

to purchase life insurance. Hendon Redzuan (2011), stated

that the factor motivate an individual to purchase life

insurance have been focus by previous academic literatures

for example to examined the economic, demographic and

psychographic factors that determine life insurance

demand, while some were extended to explore political

and legal aspects.

Nowadays, the increasing of urbanization, mobility of

population and the economic relationships between

individuals, families and communities that lead individual

to purchase life insurance because life insurance is way for

individuals and families to manage financial risk. The new

innovations in life insurance that provide long term saving

and investment opportunities for individuals, as

endowment and investment-linked type of policies that

serve an accumulation purpose offered by insurance

companies (Nurul and Sarah, 2013).

B. Financial Literacy

Financial literacy is refer to the ability of individual to

manage their finance with effectively by utilizing saving to

accumulate wealth, it also can called as a careful

preservation of such wealth against value depreciation and

losses and finally, distribution of wealth at a later stage of

one’s life (Nurul Shahnaz Mahdzan and Sarah Margaret

Peter Victorian ,2013). According to Nurul and Sarah

(2013) stated that, research has found that individuals with

high financial literacy are more likely to engage in

financial planning, such as investing in unit trust and

purchase life insurance. The life insurance demand will

increase because household needs to plan their finance

well for their family. Lusardi, Mitchell and Curto (2010)

found that people with low financial security are less likely

to accumulate wealth and not manage their finance

properly for example not plan the finance for retirement.

The survey of adult financial literacy by the Australia and

New Zealand Banking Group Limited (ANZ) found that,

high level of financial literacy enable people to make

informed and confident on all aspect to managing their

financial. The increased financial will brings about higher

participation of individuals in financial planning activities

such as investment in shares, property and life insurance.

C. Saving Motives

Individual plan for their saving behaviour over long

term such as make a contractual saving over the individual

life cycle. The previous literature has been focus on the

four aspects of saving motives. One of it is precautionary

motive mean the way to undertaken by individual to reduce

the uncertainty in daily life. Warneryd (1999) stated that

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insurance is a remedy against the feeling of uncertainty to

prepare facing the consequences of the ill outcomes that

uncertainty may embody. Hence, precautionary motive can

be said as the factor influence demand of life insurance

because the life insurance function is to protect against

personal risks such as life and health.

The study have stated that individuals tend to smooth

out their consumption and save money to prepare for major

life cycle event such as wedding, to purchase a house, and

for education purposes. Liebenberg et al. (2010) also

stated that, purchasing a life insurance is a saving for the

life event for example marriage, the birth of a child,

purchasing a home, and termination of life insurance is

likely to follow other life event such as divorce, death of

spouse, unemployment and retirement. According to (Li,

2007) the demand of life insurance is influence by bequest

motive. Life insurance purchases also are based on how

well off a couple choose to leave the survivors if both

members had lived.

The last aspect of saving motive is wealth accumulation

motive. Warneryd (1999) suggested that individuals save

accumulate capital in order to make a profit from their

savings. Lusardi et al. (2010) found that, the people who

faced higher income risk also saved and accumulated more

wealth. Diacon and Mahdzan (2008) stated that the

changes in wealth accumulation in relation to changes in

risk and argued that households will want to conserve more

wealth when they facing with greater uncertainty and thus

will increasing the demand for life insurance. Research

conduct by Nurul Shahnaz Mahdzan and Sarah Margaret

Peter Victorian (2013) stated that saving motives have a

positive and significant relationship with life insurance.

D. Level of Knowledge

Knowledge is the awareness and understanding of

facts, truths or information gained in the form of

experience. The product depends on the consumers’

awareness or understanding. The consumers purchasing

decision was influenced by the degree of the knowledge on

the product. The consumer with lower product knowledge

did not have better memory recognition compare to the

consumers that higher product knowledge. The knowledge

can increase the awareness of consumers towards life

insurance.

The level of knowledge can be increase by the

education on the product. Based on the research done by

Truett and Truett (1990) stated that individual with higher

education increase the demand of life insurance because of

the awareness to protect themselves and their family.

Education can lead to greater awareness and understanding

towards life insurance. Min Li (2008) stated that previous

researchers also agreed there is a positive relationship

between education and demand of life.

According to Min Li (2008), households with greater

education have potentially higher incomes. The individual

have higher education will know how to manage their

income. Education level will increase the level of

knowledge toward the life insurance. The higher level of

education results the greater awareness of life’s

uncertainties, therefore leading to higher life insurance

coverage. People with education have a better knowledge

on the product. Consumers with higher education level are

more aware of risk and know how to manage the risk.

Wang (2010) indicates that knowledge of life insurance is

strongly related to owning life insurance.

IV. RESEARCH METHODOLOGY

Figure 1 clearly shows the theoretical framework that

linked several factors that could influence the life

insurance demand.

As in this study, the dependent variable is life insurance

demand. Financial literacy, saving motives and level of

knowledge will be the independent variables that will

shape up the dependent variable.

Fig 1: Conceptual Framework

As of the 2010 census, the population of Miri City was

358,020 the sample size of this study will be 384. But due

the time limitation, the number had been reduced to 150

respondents so the researcher will used the total of

population as the target population. In this study, we use

convenience sampling the most easily accessible members

are chosen as subjects. Uma Sekaran (2009) the rules of

thumb for determining sample size where sample size

larger than 30 and less than 500 are appropriate for most

research. So the researcher used 150 as the sample size for

this research and distributed. Unfortunately only 97

questionnaires are useable

V. FINDING OF STUDY

A. Demographic Profile

They are 44 male respondents and 53 female

respondents. The percentage for male respondents is

45.4% while the percentage of female respondents is

54.6%. Majority of the respondent is Malay with

percentage 33%, follow by Orang Ulu 30.9% and the third

is Chinese 13.4% and follow by Iban and others which is

9.3% and 7.2%. The least number of respondent’s race is

Bidayuh with percentage of 6.2%. In terms of age, the

highest of respondent age is 21 – 35 years old which is

59.8%. Then the second highest respondent age is 36-55

years old which is 33.0% and follow by below 20 years old

which is 4.1%. The least number of respondents age is

Financial literacy

Saving motives

Level of knowledge

Life insurance demand

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over 55 years old with percentage 3.1%. They are 46

single respondents and 51 married respondents. The

percentage for single respondents is 47.4% while the

percentage of married respondents is 52.6%. In terms of

respondent job position which show that clerical and below

is the highest with percentage 50.5% and follow by

executive which is 33.0% and the third highest percentage

is senior executive which is 10.3% and follow by manager

5.2%. The lowest is 1.0% which is for director and etc.

The higher percentage for income in this research is 47.4%

which is between RM 2000-RM 4000.Then, the second

highest percentage is less than RM 2000 which is 40.2%

and follow by RM 4001-RM 6000 which is 9..3%.

Meanwhile the lower percentage is 3.1% which is at the

income between RM 10001 and above.

Research Objective 1: To rank which factor is the most

influential the life insurance demand

Table 1 below shows the highest mean is level of

knowledge that is 3.9038. This shows that level of

knowledge is the most factor influences life insurance

demand. The lowest mean is saving motives which can be

seen from its mean 3.6323.

TABLE 1:

DESCRIPTIVE STATISTICS

This finding is similar to Truett and Truett (1990)

stated that individual with higher education increase the

demand of life insurance because of the awareness to

protect themselves and their family. In fact, education can

lead to greater awareness and understanding towards life

insurance. In relation to that, Min Li (2008) research

findings also found that there is a positive relationship

between education and demand of life.

Research Objective 2: To examine the relationship

between financial literacy, saving motives and knowledge

and life insurance demand.

A correlation analysis was aimed to study the

relationship between the dependent variable and

independents variables. Besides that it is also to helping

the researcher to determine the direction of the relationship

between variables themselves.

TABLE 1 :

PEARSON CORRELATION ANALYSIS

The finding in the table 2 shows that there is a positive

and strong relationship between financial literacy with life

insurance demand with Pearson Correlation analysis 0.755.

Where that household stated with higher financial literacy

will influence them to purchase life insurance. Besides

that, there is a positive and moderate relationship between

saving motives with life insurance demand. Pearson

Correlation shows 0.650 for saving motives. It is supported

by Nurul Shahnaz Mahdzan and Sarah Margaret Peter

Victorian (2013) stated that saving motives have a positive

and significant relationship with life insurance demand.

Other than that, the table also show that there is a positive

and strong relationship between levels of knowledge with

life insurance demand with Pearson Correlation 0.739. It is

supported by Huihui Wang (2010) stated that knowledge

of life insurance is strongly related to owning life

insurance. In addition Reza Ofoghi and Reza Hajipour

Farsargi (2013) stated that knowledge have significant and

positive relationship with insurance demand.

TABLE 3:

REGRESSION ANALYSIS

R’ is the square root of R-squared. It is the correlation

between the observed and predicted values of dependent

variables. R-squared is also called as the coefficient of

determination. The proportion of variance in the dependent

variable can be predicted from the independent variables.

As referring to table 16, R-square indicates that 65.3% of

life insurance demand can be predicted from financial

literacy, saving motives and level of knowledge. There are

still 34.7% of other factors that may influences life

insurance demand.

VI. CONCLUSION AND FUTURE RESEARCH

The finding of this research has answered all the

research objectives that have been developed earlier. Level

of knowledge is the most factor influence life insurance

demand. Based on the highest mean compare to others a

factor that is financial literacy and saving motives. There is

a positive and strong relationship between financial

literacy with life insurance demand with Pearson

Correlation analysis 0.755. The future research should be

test whether religious, awareness and motive is influential

factors on life insurance demand. The religious, awareness

and motive can be as the independent variable that will

affect the life insurance demand. In addition, insurance

company also need to take an initiative to give knowledge

about life insurance to the public. Life Insurance Company

can make a campaign about life insurance to promote and

advertise their life insurance product. Besides that, public

will know the important of insurance in our daily life. It is

important to public to have an insurance because will give

benefit such financial security if face with financial losses.

Model R R Square Adjusted R

Square

Std. Error of the

Estimate

1 .808a .653 .642 .47389

Financial

Literacy

Saving

Motives

Level of

Knowledge

Life

Insurance

Demand

Pearson

Correlation

.775**

.650**

.739**

Sig. (2

tailed)

.000

.000

.000

**. Correlation is significant at the 0.01 level (2-tailed).

Variables Rank Mean Std. Deviation

Financial literacy 2

3.7663 .74367

Saving motives 3 3.6323 .67097

Level of knowledge 1 3.9038 .70949

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Abstract – Nowadays, banks in competitive markets are

contending to pull as many as potential clients and attempt to hold

them. Therefore, to keep up and enhance the productivity from

long term relationship with their client, banking industry is

concerning relationship quality. Thus, understanding relationship

quality such as trust, commitment, communication and conflict

handling are crucial when understanding their existing customer

loyalty. Using self-administrative questionnaires, 377 respondents

are involved in this survey. The results reveal that all the

dimension of relationship quality has relationship with customer

loyalty. Ultimately, trust was at the first place in term of its

relationship with customer loyalty. From correlation of coefficient

analysis, trust was at highest relationship with customer loyalty

followed by commitment, communication and conflict handling.

The finding of research can be used as guidance for the banks in

order to survive in competitive market and to help them more

successfully in planning their relationship with customer.

Keywords – Relationship quality, Customer Loyalty, Banking

Industry, commitment

I. INTRODUCTION

N today's marketplace, banking industry and additionally

the other industry is developing in competitive

environment. Thus, they need to enhance their interior

vitality and potential quality that they have keeping in mind

to meet the difficulties in changing environment. Nowadays,

banks in this very competitive market are contending to pull

as many as potential clients and attempt to hold them.

Therefore, to keep up and enhance the productivity from

long term relationship with their client, banking industry are

concerning to relationship quality. In such a setting, quality

is drive from a few necessities. The first relies on customer

satisfaction and its outcomes on loyalty. The second is the

idea of quality and relationship quality management, and a

high attention on quality is further referred to as key

component inside client relationship management

(Christopher et al., 1991). Good relationship between the

bank and its customers has proven beneficial to both parties

(Jati Kasuma, T.S. Ung, Kanyan and Kamri (2016). As

indicated by Hansen and Bush (1999), further bolstering

attain good fortune through quality obliges an

understanding of the quality necessity from the clients'

viewpoints. Since 1999, banking industry experienced a

union practice in which 54 domestic banks consolidated to

structure 10 domestic anchor banks.

The reason for this activity is to meet the difficulties of

globalization and liberalization. While the domestic anchor

banks regroup from the huge merging, foreign banks seized

the chance to force themselves in the business. When the

market starts to saturate, client retention will be a key

variable in deciding the accomplishment of undertakings. In

short, under such extreme rivalry the bank that has the

biggest client base and most astounding client retention rate

will be a business pioneer in the industry. Tang and Zaire

(1998) have expressed that the nature of client

administration turns into a main thrust to decided business

survival in the banking industry.

This is not surprising that the banking industry has been

encountering focused action with flotation circumstance,

mergers with Different associations and in addition other

monetary establishments and new market participant

(Bellow and Andronikidis, 2008). Furthermore, Dibs and

Meadows (2001) stated that the immaterialness of the

offerings in the banking industry demonstrates the criticality

of customer connections, which has been connected, and

give and impact to customer loyalty and (Rubik and Smith

2000) added that it will lead to profitability. Loyal

customers feel it is an obligation or responsibility for them

to persevere in a personal relationship whether in good

times or vice versa (Reynolds & Arnold, 2000; Yusman

et.al 2016).Thus, Rubikk and Smith (2000) and Garland

(2002) found that solid, immediate relationship between

customer loyalty and customer profitability in the banking

industry. In this way, the objective of this research is to

analyze and determined the most imperative key dimension

of relationship quality see by customer in banking industry.

Relationship Quality in Banking Industry

Mohd Zaidi Semawi, Agnes Kanyan, Jati Kasuma, Izzan Alfansu

Faculty of Business Management

Universiti Teknologi Mara Sarawak

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II. RESEARCH PROBLEM AND RESEARCH OBJECTIVES

To confront the difficulties from changing market

environment today, banking industry is starting to

understand the importance of building a long term

association with their new customer. Furthermore, it is

extremely paramount the bank to perceive and comprehend

the dimension of relationship quality. It is a key for them to

build a long term relationship with a new customer and

when they enter to a new market. These dimensions are a

source toward customer perception on banks overall

services which it can lead to customer loyalty. Other than

that, the latest research has been conducted in this area was

in 2013. Among the few prior examination of relationship

quality are (Segarra-Moliner, Moliner-Tena, & Sańchez-

Garcia, 2012) and (Neg & Ketema, 2013).

However, these works are not without limitation. For

example, (Segarra-Moliner, Moliner-Tena, & Sańchez-

Garcia, 2012) find that the dimensions of relationship

quality are satisfaction, trust and commitment. While (Neg

& Ketema, 2013) find that key component of relationship

quality is trust, commitment, communication and conflict

handling and they put the satisfaction as a predictor of

relationship quality. The research objectives to be addressed

in this study are (1) To identify the relationship between the

dimension of relationship quality and customer loyalty and

(2) To examine the impact of the dimension of relationship

quality on customer loyalty.

III. LITERATURE REVIEW

A. Trust

Trust as a paramount underpinning of relationship

marketing is especially vital in building quality relationship

as people look for foreseeable and mandatory conduct from

their social accomplice such that a generally high level of

assurance is appended to future prizes (Millar and Rogers,

1987). Besides that, relationship quality is a higher request

build made of trust among other unique yet related

measurements (Crosby et al., 1990; Dwyer and Oh 1987).

Developing purchaser's trust is especially essential where

vulnerability and risk are innate and contracts and

guarantees are regularly truant (Schlenker et al., 1973) and

it can reach a state of perfection to upgraded relationship

quality. Trust results from keeping promise in addition to

different factors (Ndubisi and Chan, 2005). Calonius (1988)

underscored that a fundamental component of the

relationship marketing methodology is the promise concept.

As indicated by Calonius the obligations of marketing don't

just, or transcendently, incorporate giving promises and

along these lines influencing clients as detached partners on

the marketplace to act in a given manner, however in

keeping promises, which keeps up and upgrades advancing

relationship. Fulfilling promises that have been given fan

the fire of trust and thus improve relationship quality

(Ndubisi and Chan, 2005). According to Moorman et al.

(1993), trust as the readiness to depend on a trade

accomplice in whom one has confidence. A selling out of

this trust (by the supplier or service provider) could prompt

absconding. Gronroos (1990) attested that the assets of the

seller – personnel, technology and systems – must be

utilized within such a way, to the point that the client's trust

in the assets included and, in this manner, in the firm it is

kept up and fortified. Schurr and Ozanne (1985), defined

the term as the conviction that an accomplice's statement or

promise is solid and a gathering will fulfill his/her

commitments in the relationship.

B. Commitment

Commitment is one of the vital variables for

comprehension the quality of a marketing relationship, and

it is a helpful build for measuring the probability of client

loyalty and for foreseeing future purchase recurrence

(Gundlach et al., 1995; Morgan and Hunt, 1994; Dwyer et

al., 1987). Wilson (1995) contended that commitment is the

most widely recognized ward variable utilized as a part of

buyer-seller relationship studies. In sociology, the idea of

commitment is utilized to dissect both individual and

authoritative conduct (Becker, 1960). Sociologists use

commitment as an elucidating idea to check out types of

action characteristic for specific sorts of individuals or

groups (Wong and Sohal, 2002), while psychologists define

commitment in terms of choices or perceptions that fix or

tie a single person to a behavioral demeanor (Kiesler,

1971). In marketing concept, Moorman et al. (1992)

defined commitment as a continuing yearning to keep up an

esteemed relationship. This infers a larger amount of

commitment to make a relationship succeed and to make it

commonly satisfying and beneficial (Gundlach et al., 1995;

Morgan and Hunt, 1994). Since commitment is higher

among people who accept that they get more esteem from a

relationship, exceedingly dedicated clients ought to be eager

to respond exertion for a firm because of past benefits

gained (Mowday et al., 1982) and highly committed firms

will keep on getting a charge out of the benefits of such

correspondence. Since relationship quality from the client's

viewpoint is accomplished through the service provider's

capability to decrease vulnerability (Zeithaml, 1981). Banks

that are highly committed to service and client relationship

would be more effective in diminishing client questions and

instabilities and thus upgraded relationship quality.

C. Communication

Communication can be defined as the capacity to give

convenient and trustworthy information. Both content and

style in communication are essential in building quality

relationship with clients. Sheth (1975), noting the

distinction between content and style in communication

recommended that the later perceives the criticalness of

ritualistic behavior patterns in molding the outcomes of

purchaser/merchant interactions. Communication is likewise

about shared revelation or imparting of privileged insights.

Derlega et al. (1987) commented that among the behavior

frequently noted as paramount in making and keeping up

interpersonal relationship is mutual disclosure. The

observation that another party is taking part in disclosure

behavior to oneself that is not being responded regularly is

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perused as a shortcoming on the other party's part and may

prompt a less than great relationship. That is to say mutual

disclosure is a corresponding concept. Additionally, the

recurrence of communication (or contact force) is

imperative. Contact force reflects an exertion from the

salesperson (banking service provider) to keep the

communication channels open with the client and display a

commitment to the relationship (Williamson, 1983).

Deliberations to "stay in touch" with the client have been

identified as a key determinant of relationship upkeep in

wholesale banking (Greenwich Associates, 1987; Crosby et

al., 1990).

Anderson and Narus (1990) contended that there is

another perspective of communications as an intelligent

dialog between the organization and its clients that happens

throughout the preselling, selling, consuming and post-

consuming stages. Communications in relationship

marketing means providing information that might be

trusted; providing information on service; fulfilling their

promises; and providing information if delivery issue

happens (Ndubisi and Chan, 2005). It is the communicator's

undertaking to construct mindfulness, manufacture shopper

inclination by promoting quality, value, `èxecution and

other features, persuade intrigued purchasers, and urge them

to settle on the purchase decision. Communication

additionally keeps a dissatisfied client informed about what

the association is doing to amend the wellspring of

disappointment (Ndubisi and Chan, 2005). At the point

when there is successful communication between the bank

and its clients, clients are better informed about the bank's

drives and exercises, uncertainty will decrease and

relationship quality increase.

D. Conflict handling

Dwyer et al. (1987) defined conflict handling as the

supplier's capacity to minimize the negative outcomes of

manifest and potential conflicts. Conflicts handling reflects

the supplier's capacity to stay away from potential conflicts,

illuminate show conflicts before they make issues and the

capability to examine results unabashedly when issues

emerge. How conflicts are taken care of will guarantee

loyalty, exit or voice. Rusbult et al. (1988) inferred that the

probability that an individual will participate in these

behavior relies on upon the level of prior satisfaction with

the relationship, the greatness of the individual's investment

in the relationship and an assessment of the options one has.

Ndubisi (2006) reported significant relationship between

conflict handling and customer loyalty. Cooperative versus

competitive behavior has been interfaced to impression of

trust and satisfaction in negotiation context (Pruitt, 1981).

Crosby et al. (1990) contended that the degree to which

another party is relied upon to act cooperative to some

extent reflects the guidelines of issue/conflict determination.

As indicated by Evans and Beltramini (1987), in an

arrangement setting, agreeable versus aggressive plans have

been discovered to be interfaced to satisfactory issue

determination. As for saw relationship quality, satisfactory

determination of conflicts would leave in its wake clients

who have a positive view of the quality of their relationship

with bank.

IV. RESEARCH METHODOLOGY

The population of this study was retail bank customers

in Kota Samarahan, Sarawak. There were 4 retail banks in

Kota Samarahan area. In this study, the questionnaires were

distributed to these 4 retail bank in Kota Samarahan. The

questionnaire shall be distributed to 377 respondents.

Participation from respondents was strictly voluntary and

respondent give full commitment and cooperation toward

the questionnaire because the entire questionnaires are

useful. A systematic random sampling technique was used

to survey every customer that entered the bank. As a

probability technique, this approach is beneficial because of

the availability of analytical methods for predicting possible

selection bias or error (Sher and Trull, 1996). The

questionnaires were adapted by undertaking dimension

together with it item from distinctive sources.

Communication, commitment and conflict handling items

were adapted from Morgan and Hunt (1994). Items for trust

and relationship quality were adapted from Churchill and

Surprenant (1982) and Oliver (1980).

Fig 1: A Theoretical Framework for Relationship Quality-

Customer Loyalty

Items for trust and relationship quality were adapted from

Churchill and Surprenant (1982) and Oliver (1980). Trust

items are six and include among others, concern for

security, reliable in words and promises, fulfilling

obligation to customer, etc. Relationship quality had five

items to be measure, for example, desirable relationship

with the bank and bank shows high professionalism.

V. FINDING AND DISCUSSIONS

A. Demographic Profile

The percentages of male are 53.32 percent that represent

201 respondents while female are 46.68 percent that

represent 176 respondents. Malay is the majority of the

respondents to answer the questionnaire with the

percentages of 49.6 percent. The second highest percentage

of respondents is other races with 18.30 percent and then it

is follow by Chinese with 16.98 percent. The lowest races

that was answer the questionnaire is Iban with 15.12

percent. Age of respondent is categorized into three levels

that is respondent between age 18-20, 21-24 and 25 and

Trust

Commitment

Communication

Conflict handling

Customer loyalty

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above. The respondent in age of 25 and above is the

majority where it was half of the samples that answer the

questionnaire. The percentage was 50.66 percent that

represent 191 respondents. Then, it is follow by respondent

in age of 21-24 with the percentage of 42.44 percent that

represent 160 respondents. The respondent in ages 0f 18-20

is the lowest percentage with only 6.90 percent that

represent 26 respondents.

Respondent with income of RM 1001-RM3000 is the

highest percentage with 35.81 percent that represent 135

respondents. Second highest percentage is respondent with

income of 1000 or less with 33.69 percent that represent

127 respondents. Then, it is followed by respondent with

income of 3001-5000 with 23.61 that represent 89

respondents. The lowest percentage is respondent with

income of 5001 and above with 6.90 percent that represent

26 respondents.

TABLE 1

DEMOGRAPHIC STATISTIC

There are more than half of samples that were working in

Government Company. It shows 58.62 percent that represent 221

respondents. Then, it is followed by respondent that were working

in Private Company with 27.32 percent that represent 103

respondents. The respondent that was self-employee shows the

lowest percentage with 14.06 percent that represent 53

respondents.

Research Objective 1: To identify the relationship between the

dimension of relationship quality and customer loyalty

The strongest relationship is between Trust and Customer

loyalty (r=0.707) while the weakest relationship is between

Conflict Handling and Customer Loyalty (r=0.647). According to

Cohen (1988), a value ranging from 0.1 to 0.4 would be classed as

a weak correlation and anything above 0.5 would be regarded as a

strong correlation

TABLE 2

CORRELATION OF COEFFICIENT

Therefore, all the value for the connection between independent

and dependent variable is above than 0.5 and it is consider as

strong relationship. The 2-tailed explain that the value of

significant is 0.001 and below. From the table, all the dimension

of relationship quality was very significant to the Customer

Loyalty which is at p=0.000

TABLE 3

MODEL SUMMARY

The multiple regression model with all four predictor (Trust,

Commitment, Communication and Conflict Handling) was

produced R=0.769, =0.591 and adjusted R squared=0.587. In this

research, the actual result is calculated based on adjusted R

square. Using the rule of thumb, a correlation less than or equal to

0.20 is characterized as very weak; greater than 0.20 and less than

or equal to 0.40 is weak; greater than 0.40 and less than or equal

to 0.60 is moderate; greater than 0.60 and less than or equal to

0.80 is strong; and greater than 0.80 is very strong. The adjusted

R squared is 0.587. Therefore, about 58.7% of Customer Loyalty

is explained by Relationship Quality which would be

characterized as moderate.

Research Question 2: To examine the impact of the dimension

of relationship quality on customer loyalty.

Based on Table 4 below, the value of impact can be explained

by its Beta from standardized coefficient. In this research, Trust

has strongest impact on Customer Loyalty where it show the

highest value of Beta=0.229. Second highest was Communication

with Beta=0.226, follow by Commitment with Beta=0.187.

TABLE 4

CORRELATION OF COEFFICIENT

Conflict Handling was the weakest dimension that give impact

Dimension Beta Sig.

Trust 0.229 0.000

Commitment 0.187 0.001

Communication 0.226 0.000

Conflict handling 0.161 0.002

Variables Items N Percentage

Gender Male

Female

201

176

53.32

46.68

Race

Malay

Chinese

Iban

Others

187

64

57

69

49.6

16.98

15.12

18.30

Age

18 – 20

21 – 24

25 and above

26

160

191

6.90

42.44

50.66

Occupation

Government

Company

Private Company

Self - employee

221

103

53

58.62

27.32

14.06

Educational

level

SPM

Diploma

Degree

Master

PHD

64

101

195

15

2

16.98

26.79

51.72

3.98

0.53

Monthly

income

RM 1000 or less

RM 1001 – RM 3000

RM 3001 – RM 5000

RM 5000 and above

127

135

89

26

33.69

35.81

23.61

6.90

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on Customer Loyalty with Beta=0.161. This result is consistent as

Crosby et al. (1990) and Dwyer and Oh (1987) which is both

agree that trust was the most important dimension in relationship

quality rather than others dimension. 2-tailed p-values were

used in testing whether a given coefficient is significant to

Customer Loyalty using an alpha of 0.01. In this Research, Trust,

Communication and Commitment were most significant to

Customer Loyalty where the value of significant=0.000 and 0.001

respectively. However, Conflict Handling still consider as

significant to Customer loyalty where the value of

significant=0.002. The above finding indicates that the dimensions

of Relationship Quality are positively associated to Customer

Loyalty.

VI. CONCLUSION AND RECOMMENDATIONS

From all dimension, trust was at the first place in term of its

relationship with customer loyalty. From correlation of coefficient

analysis, trust was at highest relationship with customer loyalty

followed by commitment, communication and conflict handling.

This can be defining as building trust was the most preferable by

customer in choosing which bank they want to deal with in

order to generate loyalty. Another relationship that has been found

was the relationship among all dimensions. In correlation of

coefficient analysis, trust and commitment has the highest

relationship.

It is explained that the bank need to show their commitment in

building trust among customers. From multiple regressions, trust

was the dimension that gave an impact toward customer loyalty

followed by communication, commitment and conflict handling.

This finding was consistent with (Ndubisi, N. 2007), stated that

trust was the most important dimension between all dimensions of

relationship quality. Taking everything into account, this research

has observed that trust, commitment, communication and conflict

handling capability of the bank focus the quality of the bank-

customer relationship. Based on the result, it was found that trust

was the important dimension in relationship quality. It is

recommended that the trust element must be in the first sight for

the bank manager in managing customer relationship in banking

services. On the other hand, the staff of the banks needs to show

their respect toward customer and being responsible toward

customer’s transactions and problems. Besides that, the bank staff

should show their commitment in servicing their customer and to

maintain bank-customer relationship. Besides that, the banks can offer personalized services that

meet customer’s need and flexible when their services are

changed. The operator should provide timely and trustworthy

information and they need to update when there are new banking

services as well as provide accurate information to the customers.

In addition, the banks should provide skilful staff in dealing with

conflict with customers. All staff of the banks needs to be

motivate continuously as in term of reward by the manager for

anyone who fulfill and follow these dimension of relationship

quality. Lastly, it is recommended that future research by

academician in this field would be done so that the finding

will be more accurate in term of its results and

interpretation.

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Abstract— This research aims to use a scientific approach to

support service providers who are inexperienced or do not possess

business sense. This research presents recommendations by

considering customers’ value and compatibilities with service

providers. We classified 3,447 customers and 133 service

providers according to their values, and needs and abilities,

respectively. We additionally analyse a sales-purchase Bayesian

network, which demonstrates the relationship between

questionnaire survey items and the purchase history of products

and services (after P&S) in each combination between customer

and service provider types. We investigated their hubs.

Furthermore, we investigate the substantial gap in purchase

probabilities, conditioned by the positive and negative answers of

customers to each questionnaire in the purchase Bayesian network,

and whether these are characteristic of the type’s sales. A sales

promotion method is proposed that compares a purchase

probability predicted for all service providers in a type to that for a

service provider in the type.

Keywords—Heterogeneous, purchase Bayesian network,

recommendation, service science

I. INTRODUCTION

HE service sector’s importance is increasing in the

global economy; further, the number of countries is also

increasing in which the ratio of their GDP involving the

service sector has surpassed 70%. However, differences

exist in not only customers, but also service providers

(Zeithaml, Parasuraman, & Berry (1985) and Grönroos

(1990)). Therefore, services’ quality and productivity

depend on the service providers’ experiences and intuition.


Zeithaml, Berry, & Parasuraman (1993) demonstrates

that service providers’ heterogeneity is a factor in the gap

between previous expectations and the actual service

provided. Anderson, Fornell, & Rust (1997) illustrates that

the customisation and promotion of efficiency is a trade-off

relationship. Further, this tends to be stronger in the service

industry than in the manufacturing industry. However,

studies do not discuss whether customer satisfaction depends

on service providers’ heterogeneity in customisation.

Hultman & Ek (2011) shows that service marketing

practices explain how value-creating interactions between

service providers and customers are more transparent than

usual. However, they did not quantitatively analyse the

interaction between customers and service providers. Gąsior,

Skowron, & Sak-Skowron (2014) shows that service

providers are classified based on their motivation. However,

they did not analyse the relationship between service

providers and customers.

This study comprehends the structure of customers’

consumption and use through a factor analysis of

questionnaire survey data regarding their sense of values,

lifestyle, consumption and use. Customers are then classified

using factor scores. Furthermore, this study also interprets

the structure of service providers’ sales behaviours using a

factor analysis of the questionnaire survey data regarding

their sense of values, motivations, and abilities; service

providers are then classified using factor scores.

Additionally, we analyse a sales-purchase Bayesian network,

which demonstrates the relationship between the

questionnaire survey regarding their sense of values, needs,

and so forth, and their purchase history, with P&S in each

combination of customer and service provider types. The

study then investigates the significant gap in purchase

T

A Study on the Promotion of Purchases Based

on Analysing the Effect of the Service by

Combination between Customers Type and

Service Providers Type Using the Bayesian

Network

Yuya Miyamotoa*, Michiko Tsubakia

aThe University of Electro-Communications, 1-5-1 Chofugaoka, Chofu, Tokyo 182-8585, Japan

mailto:[email protected]

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probabilities, as conditioned by customers’ positive and

negative responses to each questionnaire in the purchase

Bayesian network, as characteristics of the type’s sales. The

sales promotion support method is proposed by comparing

the purchase probability predicted for all service providers

in the type to the purchase probability predicted for a service

provider in the type.

II. CLASSIFICATION OF CUSTOMERS BASED ON THEIR SENSE

OF VALUES AND CONSUMING AND USE

A. Questionnaire survey for customers

This survey targets customers with service providers at

Office I in Company A.

The questionnaire is summarised as follows:

Target: Current customers, or 7,948 participants who live in

City I and are purchasing P&S from Company A.

Effective Answers: 3,447 (43.37%)

Purpose: To understand customers’ needs and sense of

values, and confirm obvious factors regarding customer

consumption and usage; to improve the quality of P&S; and

to increase the numbers of both new and repeat customers.

Time period: 2015/07/09—2015/10/30

A. Classification of customers based on the structure of

consumption and use for each customer value type

We analysed questionnaire survey data through factor

analyses (using a principal factor method, promax rotation,

and parallel analysis criteria) as the same conditions in the

works of Shinkawa, Shimada, Hayase, & Inui (2009), Ono &

Shoji (2015) and Watabe & Tsubaki (2016) (reduce

variables in which the factor loading is less than 0.4 and

more than 0.4 in 2 factors, and repeat the factor analysis

until each variable’s factor loading becomes more than 0.4

in 1 factor). At the repeated fourth result, seven factor

structures are adopted through parallel analysis criteria.

Table I illustrates the parallel analysis result, and Table II

displays the factor loadings for seven factor structures.

We then interpreted the extracted seven factor structures,

and investigated their names.

We display the characteristics resulting from the

comprehensive evaluation of type in 6 clusters.

TABLE I

UNITS FOR PROPERTIES WITH PARALLEL ANALYSIS

Eigenvalue Parallel

Analysis

Contribution

Rate

Cumulative

Contribution

Ratio

1st Factor 5.443 1.162 20.20 20.20

2nd Factor 3.153 1.138 11.70 31.80

3rd Factor 2.329 1.123 8.63 40.50

4th Factor 2.029 1.111 7.52 48.00

5th Factor 1.841 1.097 6.82 54.80

6th Factor 1.432 1.083 5.30 60.10

7th Factor 1.144 1.070 4.24 64.30

8th Factor 0.942 1.058 3.49 67.80

9th Factor 0.824 1.048 3.05 70.90

10th Factor 0.761 1.037 2.82 73.70

TABLE II

FACTOR LOADINGS (CUSTOMERS’ QUESTIONNAIRE DATA)

Category Questionnaire Outline 1st

Factor 2nd

Factor 3rd

Factor 4th

Factor 5th

Factor 6th

Factor 7th

Factor Lifestyle Time of raising children 0.001 0.003 1.330 0.058 0.003 0.069 0.011

Evaluation of Housekeeping

Cooking 0.029 0.828 0.021 0.048 0.014 0.017 0.002 Washing 0.016 0.874 0.008 0.028 0.001 0.022 0.018 Cleaning up 0.019 0.827 0.002 0.034 0.005 0.023 0.031 Shopping 0.007 0.742 0.012 0.040 0.009 0.016 0.038

Evaluation of P&S

Realisation of feeling

Spending time with better feeling 0.531 0.013 0.009 0.004 0.008 0.039 0.056

Brand Loyalty

Quality of P&S 0.490 -.018 0.007 0.041 0.012 0.074 0.047 Convenience 0.514 0.019 0.037 0.007 0.005 0.016 0.007 Attachment to P&S 0.810 0.001 -.038 0.025 0.052 0.045 0.021 Trust of P&S 0.816 0.013 0.005 0.086 0.016 0.033 0.040 Recommendation 0.698 0.010 0.026 0.101 0.016 0.063 0.018 Evaluation from close people 0.693 0.007 0.025 0.003 0.000 0.042 0.043 Good products, although expensive 0.720 0.026 0.004 0.036 0.012 0.079 0.005

Consumption Value Focus on convenience 0.009 0.016 0.057 0.020 0.014 0.816 0.037 Focus on after service 0.047 0.003 0.066 0.034 0.022 0.891 0.043

Decision Right Decision right to low price 0.052 0.034 0.021 0.026 0.038 0.041 0.786 Decision right to high price 0.017 0.024 0.008 0.001 0.051 0.049 0.640

Demand for Company A

Enjoy with family 0.082 0.005 0.030 0.612 0.017 0.028 0.014 Explaining how to use P&S 0.042 0.013 0.126 0.569 0.072 0.073 0.001 Delivery service 0.015 0.003 0.054 0.647 0.044 0.031 0.041 One-point lesson 0.073 0.021 0.059 0.736 0.022 0.009 0.054 Organisation lecture 0.091 0.006 0.098 0.699 0.046 0.059 0.014

Communication Communication based on daily conversation 0.079 0.016 0.021 0.022 0.446 0.022 0.005 Communication based on sales products 0.030 0.005 0.001 0.011 0.980 0.014 0.009 Communication based on new products -0.021 -0.005 -0.007 -0.007 0.945 -0.003 0.004

Attributes Number of preschool children 0.031 0.052 0.442 0.087 0.009 0.046 0.006 Number of elementary and junior high school students

0.003 0.057 0.464 0.092 0.018 0.105 0.010

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TABLE III

CHARACTERISTICS OF CUSTOMER TYPES FROM COMPREHENSIVE EVALUATION

6 Clusters Factor’s Name Contribution

Rate Type1 Type2 Type3 Type4 Type5 Type6

1st Factor Royalty Caused by Realizing

Feelings from Using P&S 20.20 high low middle middle middle

low-

middle

2nd Factor The Families' Housekeeping

Evaluation 11.70 high middle middle low high middle

3rd Factor Time Pressure by Childcare 8.63 low low high low low middle

4th Factor Request for Housekeeping

Products and Service 7.52 high low high middle middle middle

5th Factor Communication to Promote

Customer Consumption 6.82

middle-

high middle

middle-

high middle

middle-

high low

6th Factor

Selection Criterion of

Housekeeping Products and

Service

5.30 high low middle middle-

high middle middle

7th Factor Right to Decide 4.24 middle middle middle middle middle middle

Number of people 520 779 544 696 641 267

III. CLASSIFICATION OF SERVICE PROVIDERS BASED ON

THEIR SENSE OF VALUE AND SALES

A. Questionnaire survey for service providers

The questionnaire is summarised as follows:

Target: Current service providers; 163 employees working

for customers living in City I at Company A.

Effective Answers: 133 participants (81.59%)

Purpose: To confirm the important factors for service

providers to understand customers’ needs and sense of

values, to understand service providers’ sense of values and

carrier values to improve the quality of use of P&S, and to

increase the numbers of both new and repeat customers.

Period: 2015/07/09—2015/10/30

Survey Method: Survey by post.

B. Service providers’ classification based on the structure

of sales action

We analysed the questionnaire survey data, using the

same factor analysis method and criteria as in Chapter 2, for

all 91 items. Seven factor structures by parallel analysis

criteria are adopted at the repeated third result.

TABLE IV

CHARACTERISTICS OF CUSTOMER TYPES BY COMPREHENSIVE EVALUATION

4 Clusters Factor’s Name Contribution

Rate Type A Type B Type C Type D

1st Factor The ability to effectively recommend products

and service based on customers’ needs 20.60% high high low middle

2nd Factor Motivation from Brand Loyalty 10.40% high middle-

high low middle

3rd Factor Realizing feelings and satisfaction by using

company A’s P&S 6.92% middle high low middle

4th Factor Motivation to learn housekeeping techniques 5.52% low high middle middle-

high

5th Factor Sense of job and motivation in company A 5.13% middle high middle middle

6th Factor Taste into home and going out 4.70% middle high low-

middle middle

7th Factor Time pressure by childcare 3.84% low low-

middle middle high

Number of people 30 31 49 23

IV. COMPARISON AND INVESTIGATION OF THE STRUCTURE

OF BAYESIAN NETWORK FOR EACH COMBINATION BETWEEN

CUSTOMER TYPES AND SERVICE PROVIDER TYPES

A. Construction and discussion of each purchase Bayesian

Network made for each combination between customer and

service provider types

In this chapter, we construct a purchasing Bayesian

Network for each combination between customer and

service provider types, extracted in Chapters 2 and 3. We

analyse customers who correspond by service provider

types, and who have been typed by customer types (fig. 1).

Fig. 1 Combination between service provider and customer types

Additionally, Bayesian Network models were

constructed using BAYONET, a Bayesian network-

constructing support system. The probability structure

research was conducted using AIC criteria by Greedy

search.

Fig. 2 illustrates an example of a purchasing Bayesian

network with a combination of service provider type D and

customer type 3, noted as ‘spD/cu3’ below.

We examine the connection between customers’ sense of

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values, needs, and preferences and their purchase

behaviours from Fig. 2. The ‘how to use P&S’ node

connects to the ‘lecture of organisation’, ‘delightfully clean

up with family’, ‘delivery service’, ‘trust P&S’ and ‘gift’

nodes. This demonstrates that the ‘how to use P&S’ node is

a parent node of the five children nodes. Therefore, the

‘how to use P&S’ parent node is key among the nodes. The

‘hub’ concept, proposed by Imoto (2011) is introduced in

this paper. Hubs in this study are extremely reduced when

they are defined as having more than five child nodes.

Similarly, hubs extremely increase when they are defined as

having more than three child nodes. Therefore, there is no

merit in discussing ‘hubs’ in this instance, as we define

hubs as having more than four child nodes. Table V

summarises the hubs in each purchasing Bayesian network

for the combination of service provider and customer types.

Each variable’s left digit refers to the number of child

nodes in Table V.

Fig. 2 Purchasing Bayesian network model spD/cu3

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TABLE V

THE HUBS ON EACH PURCHASE BAYESIAN NETWORK

Type1 Type2 Type3 Type4 Type5 Type6

Type

A

5

5

#Explaining

how to use

P&S

#Bath and

lavatory good

5

5

4

#Attachment

to P&S

#Evaluation

from close

people

#Time of

raising

children

#Decision

right to low

price

6

5

#Number of

preschool children

#Good products,

although

expensive

4

4

#Number of

elementary and

junior high school

students

#Smell good

5

4

4

4

4

4

4

4

#Enjoy with family

#Recommendation

#Evaluation of

cleaning

#Evaluation from

close people

#Quality of P&S

#Organisation

lecture

#Bath and lavatory

good

#Cosmetic items

6

4

4

4

4

4

#Evaluation from

close people

#Focus on service

after purchase

#Quality of P&S

#Evaluation of

shopping

#Recommendatio

n

#Explaining how

to use P&S

4

4

4

4

#Delivery

service

#Evaluation of

washing

#Evaluation of

cooking

#Evaluation of

cleaning

4 #Evaluation of

washing

4 4 #Organisation

lecture

Type

B

7 #Evaluation of

washing

6 #Attachment

to P&S

5 #One-point lesson 5

5

5

5

4

4

#Focus on service

after purchase

#One-point lesson

#Kitchen product

#Living good

#Special cleaner

#Laundry good

8 #Evaluation of

washing

6 #Focus on

convenience

5 #Decision right

to high price

4

4

4

#Trust of

P&S

#Convenience

#One-point

lesson

4

4

4

#Delivery service

#Good products,

although

expensive

#Quality of P&S

6 #Evaluation from

close people

4

4

4

4

#Evaluation of

cooking

#Evaluation of

washing

#Evaluation of

cleaning

#Attachment to

P&S

4 #Attachment to P&S

Type

C

5

4

4

4

#Explaining

how to use

P&S

#Enjoy with

family

#Evaluation of

shopping

#Kitchen

product

5

5

5

5

5

#Evaluation

from close

people

#Evaluation

of washing

#Time of

raising

children

#Enjoy with

family

#Communica

tion based on

new products

7 #Recommendation 7

7

6

5

4

4

4

4

#One-point lesson

#Attachment to

P&S

#Focus on

convenience

#Focus on service

after purchase

#Limited time and

areas offer

#Time of raising

children

#Recommendation

#Enjoy with family

9 #Evaluation of

cleaning

5

5

4

4

4

#Recommendatio

n

#Focus on

convenience

#Good products,

although

expensive

#One-point lesson

#Limited time and

areas offer

6 #Good products,

although

expensive

6

5

5

4

4

#Trust of P&S

#Attachment to P&S

#Focus on

convenience

#Evaluation of

cooking

#Bath and lavatory

good

5

5

5

#Attachment to

P&S

#Organisation

lecture

#Bath and lavatory

good

4 #Evaluation of

cleaning

Type

D

4

4

#Evaluation of

shopping

#Communication

based on sales

products

5

5

5

5

#Trust of

P&S

#Attachment

to P&S

#Evaluation

of cooking

#Plumbing

item

6

6

#Focus on

convenience

#Kitchen product

5 #Communication

based on sales

products

6

5

5

4

4

#Spending time with

better feeling

#Good products,

although expensive

#Focus on

convenience

#Evaluation of

cooking

#Explaining how to

use P&S

6

4

4

#Focus on service

after purchase

#Attachment to

P&S

#Evaluation of

shopping

5

5

#Explaining how

to use P&S

#Smell good

4 #Spending time

with better feeling

4 #Number of

preschool children

Table V illustrates that variables with high factor

loading scores of the first factor ‘loyalty caused by

realising feelings from using P&S’ become hubs in

customer types 2, 3, 4, 5, and 6, which are not high

loyalty. This means customer loyalty is an important

element during purchase behaviour for non-loyal

customer types. However, the first factor’s variables do

not appear as a hub in service provider type A/customer

type 4, and service provider type B/customer type 4.

Further, the first factor of customer type 4 is evaluated as

‘middle’, but the average first factor score for customers

corresponding to service provider type A is 0.247; the

average for service provider type B is 0.211, and the

factor score for customer type 4 is second, followed by

customer type 1.

B. Predictions from stochastic reasoning in the Bayesian

network for each combination between service provider

and customer types

This chapter illustrates the predictions from stochastic

reasoning in the Bayesian network for each combination

of service provider and customer types.

It the significant differences in purchase probability, as

evidenced by the questionnaire ‘Do you want products

that can delightfully clean with family?’, as ‘delight with

family’/‘below’ falls under the condition between ‘high’

and ‘low’ (answer : ‘high’, ‘low’). The results are

illustrated in Fig. 3, a graph noting the purchase

probabilities for combinations of service provider type D

and customer type 3, and in Fig. 4, which displays a graph

of the purchase probabilities for service provider A in

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combination with service provider type D and customer

type 3.

Fig. 3 displays the significant differences in the

purchase probabilities of a handy cleaner, as conditioned

by the question involving ‘delight with family?’, which is

characteristic of the combination of spD/cu3.

This is because they are raising children, and may

perceive the handy cleaner as easy for cleaning that

involves children.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Enjoywithfamily(High) Enjoywithfamily(Low)

Fig. 3 Purchase probabilities of spD/cu3 type

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Enjoywithfamily(High) Enjoywithfamily(Low)

Fig. 4 Purchase probabilities of service provider A in spD/cu3

type

Therefore, the handy cleaner has sold well. However,

the analysis results with service provider A do not parallel

the above. It can be recommended that service provider A

recommend the handy cleaner to the customer that

answers ‘high’ in the question ‘delight with family?’

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Gąsior, M., Skowron, Ł., & Sak-Skowron, M. (2014). Multidimensional

structure of employee motivation - Clustering approach,

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Hultman, J., & Ek, R. (2011). Can there only be one? Towards a post-

paradigmatic service marketing approach. International Journal of

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Ono, Y., & Shoji, I. (2015). Senior-Junior(Senpai-Kohai) Relationships

in Secondary School Activities. The Japanese Association of

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Shinkawa, H., Shimada, M., Hayase, M., & Inui, T. (2009). A survey of

the variety, incidence rate, and frequency of minor symptoms

currently experienced by expectant mothers. Japan Academy of

Midwifely, 23(1), 48–58.

Watabe, H., & Tsubaki, M. (2016). A study on the matching between

customers and service providers using the system for analyzing the

effects of the service by customer type. The Japan Society for

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Zeithaml, V. a., Berry, L. L., & Parasuraman, A. (1993). The Nature

and Determinants of Customer Expectations of Service. Journal of

the Academy of Marketing Science, 21(1), 1–12.

Zeithaml, V., Parasuraman, a, & Berry, L. L. (1985). Problems and

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Moment of Truth in Service Competition, Lexington Books.

Imoto. (2011). Statistical Science of the 21th Century. Vol.2. Japan

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Abstract—Obesity has been recognized as a global epidemic and

worldwide public-health crisis in twenty-first century. It was

identified as a factor of reducing productivity at work, life’s quality

deterioration, disability, ill-health and mortality. Obesity rate in

Malaysia is steadily increased each year from 1996 until 2015 and

is currently recognized as the most obese country in Asia. The

major consequence of obesity is due to eating behavior and

sedentary living which are common for Malaysian people. In the

environment where the prevalence of obesity arises, it is presumed

that financial incentive to join any lost weight programs organized

by the government agencies is applicable to encourage a healthier

lifestyle modification. Obese married women were targeted to be

given this financial incentive, which assumed to be the most

influential group as they play important roles in taking care of the

family members and the most influencing figures in the family to

encourage healthy lifestyle.

Keywords— Financial Incentives, Lifestyle Modification,

Married Women, Obesity.

I. INTRODUCTION

BESITY has been recognized as a global epidemic and

worldwide public-health crisis in this era, which

defined as a person having an abnormal weight and

excessive fat with Bio Mass Index (BMI) equal to 30 or

more and it was identified as a factor of reducing

productivity at work, life’s quality deterioration, disability,

ill health and mortality (Eknoyan, 2006; Witkowski, 2007;

Tan, Dunn, Samad, & Feisul, 2011; Ng et al., 2014; Muda,

Kuate, Jalil, Nik, & Awang, 2015; and Shin et al., 2016).

Moreover, obesity is currently known as a major factor

leading to chronic Non-Communicable Diseases (NCDs)

such as cardiovascular and diabetes, while NCDs are

identified as the primary causes of

*Corresponding author: [email protected] a death in many countries (Teh, Tey, & Ng, 2014; Bhurosy

& Jeewon, 2014; Courtemanche, Heutel, & Mcalvanah,

2015; and Shin et al., 2016). Eating too much but moving

too little was the cause of prevalence in obesity as a result of

alterations in eating habits and food policy changes, also

changes in work-related lifestyle in the workplace including

mechanization and computerization (Cheong, Kandiah,

Chinna, Chan, & Saad, 2010; Bhurosy & Jeewon, 2014;

Siahpush et al., 2014; and Shrivastava, Misra, Gupta, &

Viswanathan, 2015). The global obesity number is worrying

as reported by the World Health Organization (WHO), the

latest statistics in 2014 indicated that 30 per cent of the

world population is currently overweight and obese, while

out of this amount, 600 million of them represent as obese

(World Health Organization, 2014). There is no exception with Malaysia. Fig.1 showed that

obesity rate in Malaysia is steadily increased each year from

1996 until 2015, which increase drastically from 4.4 per cent

in 1996 to 14 per cent in 2006, jump to 15.1 per cent in

2011 and keep increase at the highest 17.7 per cent in

2015. In fact, Malaysia was recognized as the most obese

country in Asia, comprise of 49 per cent of women and 44

per cent of men, thus the increasing trend is alarming when it

showed that including 30 per cent overweight people, almost

half of Malaysian population are overweight and obese

(National Health and Morbidity Survey, 2015). Moreover, as

a major factor lead to NCDs, obesity was rated among the

top four of adult risk factors in Malaysia besides raised

blood glucose, raised blood pressure, and tobacco use

(Frantz, 2011). The major consequence of obesity is related

to eating behavior and sedentary lifestyle which are common

Tackling Obesity by Granting Financial

Incentive through Lifestyle Modification among

Married Women in Malaysia

Wan Nor Fatihah Wan Hanafi*, Hasif Rafidee Hasbollah & Noorul Azwin

Md.Nasir

Universiti Malaysia Kelantan, P.O.Box 36, Taman Bendahara, Pengkalan Chepa,

16100 Kota Bharu, Kelantan, Malaysia

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in Malaysian environment (Booth & Booth, 2011; Foo,

Vijaya, Sloan, & Ling, 2013; and Cha et al., 2015).

Unsurprisingly, obesity rate in Malaysia adults is higher in

women compared to men (Tan et al., 2011; Suzana et al.,

2012; and Hamid Jan, Mitra, Zainuddin, Leng, & Wan

Muda, 2013). In addition, being married was identified as a

predictor of obesity in women. It is suggested that social

obligations in the family make women less concern of their

body image and become obese (Dahly et al., 2010; Suzana

et al., 2012; Hamid Jan et al., 2013, and Coll, Del Mar

Bibiloni, Salas, Pons, & Tur, 2015; and Sarma et.al., 2016).

Besides, stressors with housework or office workload make

women easily get hungry and tend to eat more whilst craving

for high energy foods (Epel, McEwen, Seeman, Matthews,

Castellazzo, Brownell, & Ickovics, J. R., 2000; Epel,

Lapidus, McEwen, & Brownell, 2001; and Groesz, McCoy,

Carl, Saslow, Stewart, Adler, & Epel, 2012). This little or

unused energy will then be stored in the body as fat and the

accumulation of fat adding weight day by day (Aritonang,

Siregar, & Nasution, 2016). Furthermore, previous

literatures found that the tendency of a woman to gain the

greatest amount of weight is between 25 until 44 years old

where the metabolism of a woman will be decreased in

accordance with ageing (Dahly et al., 2010; Suzana et al.,

2012; Hamid Jan et al., 2013, and Coll, Del Mar Bibiloni,

Salas, Pons, & Tur, 2015). In the context of a married

woman, with the rapid changes of technologies, most of the

housework automation had simplified a married woman’s

obligations at home. Not to mentioned that a careered

woman also performing less movement at the office where

most of the time were spent by sitting on chair and using

computers (Donath, Faude, Schefer, Roth, & Zahner,

2015).So it is assumed that married women must be

encouraged to change into a healthier lifestyle to prevent

obesity through healthy diets, and at the same time to stay

active by doing frequent physical activities (Booth & Booth,

2011; Graham, 2012; Foo et al., 2013; Drieskens, Van der

Heyden, Demarest, & Tafforeau, 2014; and Cha et al.,

2015).

Fig. 1: Prevalence of adult obesity in Malaysia from 1996-2015.

Source: National Health and Morbidity Surveys (NHMS)

II. ENFORCEMENT FOR MARRIED WOMEN TO PREVENT

OBESITY

To define married women in the context of obesity, they

had a higher prevalence of obesity compared to those who

were still unmarried, with the reason of gaining weight may

be due to the influence of marriage’s inducement to eat for

instance shared meals (Sidik & Rampal, 2009). To change

this attitude, a healthier lifestyle is needed to prevent obesity

among married women. It is important to first targeting the

married women as a subject of obesity prevention because

they play important roles in the family as a manager over the

housework, patterning the food choices for the family

members, and influencer to any family activities (Karupaiah,

Swee, Liew, Ng, and Chinna, 2013). Every single matter in

the family begins with their decisions, so it is believed that

they can inspire the whole family members to modify a

healthier lifestyle and later on will spread among the whole

community with the aim to reduce obesity (Johnstone, &

Todd, 2012). Lifestyle modification involves altering long-

term habits typically of eating and physical activity, while

maintaining that new behavior for months or years is

effectively can combat range of diseases, including obesity

(Amoroso, Kirby, & Kirby, 2011; Wadden, Webb, Moran,

& Bailer, 2012; De Feo, Boris, & Maffeis, 2014; and

Yamamoto-Kabasawa et al., 2015). The combination of

healthy diet and daily physical activity are believed as the

best way to lost weight and to reduce obesity problem.

Nevertheless, it is not easy for people to change their habit

unless such enforcement is made up to encourage them.

Therefore, lifestyle modification with the potential

implementation of financial incentive is applicable

especially for married women.

III. POTENTIAL USE OF FINANCIAL INCENTIVE FOR LIFESTYLE

MODIFICATION

Previous studies agreed that financial incentive may

encourage most of positive behaviors on purpose to motivate

company’s employees, participating in school events,

smoking cessation, also weight loss programs (Collins,

Bronte-tinkew, & Burkhauser, 2008; Behaviour Insight

Team, 2010; Relton, Strong, & Li, 2011; Crane et al., 2012;

Phipps et al., 2013; Purnell, Gernes, Stein, Sherraden, &

Knoblock-Hahn, 2014; B-Lajoie, Hulme, & Johnson, 2014;

Sawada, Ota, Shahrook, & Mori, 2014; and Ryan et al.,

2015). There are strategies taken by other countries to

prevent obesity. To be mentioned, England is one of develop

countries who had successfully slowdown the obesity rate in

the country. Basically, obesity in England was seriously

identified in 1993, however actions were taken massively to

prevent the increases of obesity until 2010, which then

showed a slower rate of increase from an average 0.9%

yearly growth between 1993 and 2002 to an average 0.5%

yearly growth between 2002 and 2010 (Department of

Health, 2012). The government had collaborated with its

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agencies and businesses to educate its people to change into

a healthier lifestyle and these were done massively at a

national level. On the other hand, Japan was in the opposite

direction where it has implemented the Metabo Law which

every workers in Japan must maintain an ideal weight

otherwise penalty will be charged if they do not meet the

requirement (Onishi, 2008). By taking into account of these

two countries, it is believed that to educate Malaysian people

for lifestyle modification, such financial incentive may help

and assumed as a financial support to motivate people to

change.

IV. THE GOVERNMENT ROLES

Basically, Malaysian government had implemented

various strategies to prevent obesity such as campaigns,

school interventions, and programmes for instance ‘Jom

Kurus 1Malaysia’(JK1M) organized by a famous trainer

Kevin Zahri, ‘Fit and Cool’ by Ministry of Health and

Promotion Board(mySihat) and so on (Ministry of Health,

2011; and Verma, Chua, & David, 2013). However, the

programs seem like less interested to be joined by Malaysian

based on the increasing rate of obesity statistics every year

(NHMS, 2015). In addition, such health educational

programs are commonly unappealing by the Malaysian

people (Al-Haddad, 2008). The most possible reason why

they refused to join is that they don’t have money or they

rather spend it for other things that they prefer to be more

important for them (Cobiac, Vos, & Veerman, 2010).

V. CONCLUSION

Therefore, such a financial incentive is believed to

motivate people to join any lost weight programs provided

in order to educate them to change their lifestyle. Several

studies agreed that financial incentive can be a promising

method in motivating people to perform healthy eating and

active living to combat with obesity (Crane, Tate,

Finkelstein, & Linnan, 2012; Faghri & Li, 2014; Purnell,

Gernes, Stein, Sherraden, & Knoblock-Hahn, 2014; and

Dolan, Galizzi, & Navarro-Martinez, 2015). By targeting

obese married women at the first place, it is presumably that

financial incentive for lifestyle modification can be

effectively applied step by step at a national level as a way

to softly push Malaysian to adopt a healthier lifestyle in a

way to fight with obesity.

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Abstract- Obesity is a worldwide epidemic and one of major

health problems in this era, caused by imbalance energy intake and

energy consumption. It was recognized as a major factor leading to

non-communicable diseases (NCD) such as cardiovascular and

diabetes. Almost 600 million people worldwide considered as

obese while Malaysia is one of them which currently recognized as

the most obese country in Asia. The influential factors lead to

obesity among Malaysian are binge eating behaviour, eating out

late night, less consume of fruits and vegetables, and sedentary

lifestyles. Although many programs for obesity tackling have been

provided by the government and its agencies, Malaysians are still

lack of motivation to join the programs. It is believed that the most

effective and long-lasting way to prevent obesity is through

educating a healthy lifestyle modification. England has been

educating its people of healthy lifestyles thus it can be an

exemplary for Malaysia to adapt for the same purpose. There are

some diet initiatives taken by individuals to lost weight but

regardless of diet types, they all indicate the importance of a

healthy lifestyle to prevent obesity. Further research should

consider effective factors to encourage healthy lifestyle

modification as a medium to tackle obesity in Malaysia.

Keywords- England, Healthy Lifestyle Modification, Public

Health Education, Obesity

I. INTRODUCTION

BESITY is a worldwide epidemic and one of major

health problems in this era. It is defined as a person

who has an abnormal weight or excessive fat with bio mass

index (BMI) of equal to 30 or more than that, and caused by

imbalance energy intake and energy consumption (Noor,

Koon, & Hashim, 2005). Obesity recognized as a major

factor leading to non-communicable diseases (NCD) such as

cardiovascular and diabetes. As for 2014’s data provided by

World Health Organization (WHO), obesity population

globally is almost 600 million, out of 2 billion adults who

are overweight and represented as 30% of the world

population. Malaysia is one of them. In fact, the total

population of overweight and obese people in Malaysia is

45.3% making Malaysia the most obese country in Asia

*Corresponding author: [email protected] which 49% of women and 44% of men are obese (The

Lancet, 2014). The obesity rate is alarming as it keeps

increasing drastically year by year from 4.4% in 1996 to

14% in 2006, and continues to rise at 15.1% in 2011. More

seriously, the 2015’s data had shown a steady increase rate

of obesity at the highest of 17.7% (National Health and

Morbidity Survey, 2015). Moreover, the government had

spent RM1, 645.78 per capita expenditure on health which

including serious illnesses caused by obesity (Malaysian

National Health Account, 2013). This issue must be

addressed immediately in order to prevent obesity that is

alarming.

II. FACTORS OF MALAYSIAN OBESITY

The most influential factors lead to obesity are the

combination of eating too much but moving too little

(Swarna Nantha, 2014). As for Malaysian, binge eating

behaviour is quite common in the society. Easy access of

free food can be found easily in many occasions, meetings,

parties and feasting which regularly held everywhere

throughout the year in the country ((Rezali, Chin, & Yusof,

2012). They serve plenty of mouth-watering and high

calories food and sweet drinks so people tend to eat more

and in large portions (Smith, Blundell, Burns, Ellero,

Schroeder, Kesty, Chen, Halseth, Lush, and Weyer, 2007;

and Majid, Ramli, Ying, Su, Jalaludin, & Mohsein, 2016).

In addition, it is normal when Malaysian eating out late at

night while meeting friends or spending leisure time with

families as these how they reward themselves after having a

daily tiredness routines (Ali, Ali & Abdullah, 2008; and Ali

& Abdullah, 2012). Eating high calories food exceeding the

Daily Calorie Requirement (DCR) can cause a person to

gain weight if he or she did not perform at least 60 minutes

physical activity three times per week because unused

8000kcal will be stored in the body as fat (Riggins, 1996;

Woods, Seeley, Porte Jr., & Schwartz, 1998; and Smith et.al,

2007). Moreover, Malaysian people also less consume fruits

Review Article: Tackling Obesity in Malaysia:

Its Scenario and Strategies


Universiti Malaysia Kelantan, P.O.Box 36, Taman Bendahara, Pengkalan Chepa,

16100 Kota Bharu, Kelantan, Malaysia

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and vegetables which supposed to be taken regularly in daily

diets (Malaysian Dietary Guidelines, 2010). This may due to

higher market price of fruits and vegetables.

Based on the study by Research Institute of Food and

Agriculture Policy of Universiti Putra Malaysia in 2016,

price of fruits and vegetables in Malaysia keep rising and

known as the least productive among ASEAN countries and

that is why they are unaffordable for many people in

Malaysia to buy them frequently (Karupaiah, Swee, Liew,

Ng, & Chinna, 2013; and Arshad, 2016). The farming

sectors in Malaysia must be improved in terms of high-end

technologies which can result in high volume and quality of

fruits and vegetables so that the price could be reduce

according to supply and demand theory that when the

supply is higher than demand, the price will be decreased

(Chamhuri & Peter, 2015).

Another factor leads to obesity in Malaysia is that people

in the country were physically inactive. Therefore, sedentary

lifestyle also recognized as a major contribution to an

increase of obesity rates in Malaysia. According to recent

Malaysian Dietary Guidelines (2010), an individual is

encouraged to perform at least 30 minutes physical activity

of moderate intensity daily or at minimum level of five days

a week. However, majority of Malaysians do not meet this

requirement for physical activity due to poor health

awareness, knowledge, skills and motivation, otherwise it is

perceived that more Malaysian were enjoying conversation

while relaxing, watching television and reading during their

leisure time, also prefer using personal vehicles to reach any

destinations instead of walking, cycling or using public

transports that require much effort of physical movement

(Tong, Low, & Ng, 2011; Minhat & Mohd Amin, 2012;

Ibrahim et al., 2013; and Teh et al., 2014). There is a need

to encourage active living by upgrading the pedestrian and

cycling lanes on the road as well as empowering public

transport especially buses and trains while limiting private

transport in the city so as to foster people to walk more

(Bors, Dessauer, Bell, Wilkerson, Lee, & Strunk, 2009;

Thomas, Sayers, Godon, & Reilly, 2009; and Chriqui,

Nicholson, Thrun, Leider, & Slater, 2016). The access must

be made convenient to all areas in the country in order to

promote active living for the entire population in Malaysia

(Pucher, Dill, & Handy, 2010; and Mohanty, & Blanchard,

2016).

III. STRATEGIES TO SUPPORT HEALTHY LIFESTYLES

Malaysian government has taken various strategies to

tackle obesity and they were quiet promising. In fact, the

government had initiated many programs such as ‘My

Weight, My Health’, MySihat, ‘10,000 Steps A Day’

campaign, Jom Kurus 1Malaysia(JK1M), Fit Malaysia event

and so on (Verma, Chua, & David, 2013). The government

also have been focusing on school children with the

intention to prevent obesity at the very basic roots. Among

the steps taken were improving the canteen service at

schools by implementing the environment of ‘Healthy

Canteen’ and ‘Sekolah Sejahtera’ by upgrading the policy to

only sell healthy food for pupils, setting the outside food

stalls to must be 500 meters away from a school area, while

running campaign of ‘Healthy Settings’ among the pupils

and the school members (Omar, 2010). Other than that, the

Ministry of Health Malaysia was also issued A Strategic

Plan 2011-2015 that stressed in its Second Key Result Area

(KRA2) to spread the awareness of healthy lifestyle among

Malaysian by improving access, motivation, and

opportunities to apply healthy living (Ministry of Health,

2011). Recently, the Ministry of Youth and Sport of

Malaysia (KBS) is directing a Fit Malaysia Programme with

the aim to adopt healthy lifestyles among Malaysian. The

programme provide information of healthy lifestyles, as well

as actively organizing events such as marathons and

triathlons carried out within states around Malaysia on a

tour-basis throughout the year (Fit Malaysia, 2016). Despite

all that, it is still not convincing to reduce the obesity rate if

people’s awareness is still moderately low (Tan, Dunn,

Samad, & Feisul, 2011). Although such medium to prevent

obesity has been provided by the government, there is still

lack of motivation by the Malaysian to join those programs

(Roshdin, Murad, Rahman, & Haque, 2016). An effective

strategy is needed to softly push people to get the ‘know-

how’ of a healthier lifestyle.

IV. EDUCATING HEALTHY LIFESTYLE MODIFICATION

As aforementioned, those strategies done by the

government need a pushing factor to encourage Malaysian to

involve in any healthy lifestyle programs provided. It is

believed that the most effective and long-lasting way to

prevent obesity is through educating healthy lifestyle

modifications, which consists of change to a healthy diet and

exercise more (Johari and Shahar, 2014). All this while,

strategies done by the government seems like less effective

since it does not educate Malaysian regarding the

importance to perform a healthy lifestyle. For instance, the

government’s subsidy reduction of sugar was resulted in

controversial issue which the proponents agreed that the

reduction is crucial to prevent obesity (Yogarabindranath,

2014). Nonetheless, opponents argued that the impact was

little to reduce the prevalence of obesity and other health

problems if the person does not change his or her eating

behaviour and physical activities that is lifestyle

modification (Ahmad, 2016). Although campaigns and

events were done to foster healthy lifestyles to prevent

obesity, the statistic numbers of obesity is not welcoming the

issue (National Health and Morbidity Survey, 2015).

Platforms for lifestyle modification is already exist and

plenty, besides those provided by the government there are

also mushrooming numbers of gymnasiums everywhere

(Rofiei, Tawil, Kosman, & Che-Ani, 2016). The only

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problem is Malaysian are lack of motivation to spend on

healthy lifestyles to fight with obesity.

V. ENGLAND AS A BENCHMARK

As a develop country, England is one of the forefront

countries in educating its people to perform healthy lifestyles

in an effort to tackle obesity problem (Chaudhury et.al,

2008). Basically, England was among the top ten of the most

obese develop countries below the United States, Mexico,

and New Zealand and obesity in this country was seriously

identified in 1993 (Department of Health, 2012; OECD,

2014). For that reason, massive actions were taken to

reduce the increase rate until 2010, which then showed a

slower rate of increase from an average 0.9% yearly

growth between 1993 and 2002 to an average 0.5% yearly

growth between 2002 and 2010 (Department of Health,

2012).

England has been educating its people to perform healthy

lifestyles starting from the early age of children to an older

group of people. The Government Policy and Healthy Eating

of United Kingdom (UK) from 2010 to 2015 has been

launched and collaborated with its partners (Department of

Health, 2012). The Public Health Directors has worked well

with NHS England, local authorities, and other key partners

in promoting Healthy Lives, Healthy People; a mission to

help UK people, particularly in England to be more active

and to eat healthy, by came up with a broad portfolio of

responsibilities through its Change4Life programmes by

providing advices of healthy diets and active

living(Exercise4Less), improving labelling system on

marketable food and drinks, guiding people on how much

physical activity they should do, promoting “5 A Day”

eating programme to promote people to consume fruits and

vegetables in daily diets, and work well with businesses

related to food industries and physical activity sectors

(Department of Health, 2011).

In promoting active travel, the UK government has

strengthened the maximum use of its public transport such as

buses, taxis, and trains to encourage walking and cycling of

the society, at the same time restricted limitation of entry for

particular roads which can only access by public transports

on peak hours. All these policies were made to educate

people regarding the importance to practice healthy lifestyles

while reducing the risk of getting serious diseases

(Chaudhury et.al, 2008). People will be more aware of their

health when they realize of the ‘know-how’ of a healthy

lifestyle (Kristén, Ivarsson, Parker, & Ziegert, 2015). In

addition, the government also improving recreational parks

and outdoor spaces so these opportunities can be used to

stay active without any fees to be paid, where two or three

parks could be found in every residence areas providing

cycling and jogging lanes, green gyms comprise of gym

instruments that can be used free of charge at all time,

altogether with a playground for kids to play while their

parents are doing workouts at the park (Department of

Health, 2011). These enforcements can be adapted by

Malaysian government as suggested by the Malaysian

Association and the Study of Obesity (MASO) in 2014,

which to educate its people to perform healthy lifestyles for

obesity prevention.

VI. INDIVIDUAL INITIATIVES

In spite of obesity prevalence in Malaysia, there are some

initiatives taken by individual to lost weight with the reason

either to get an ideal weight or as a natural treatment for

serious diseases since the other way to fight with serious

illnesses can be done through clean diets and being more

active (King, Jiang, Su, Xu, Xie, Standard, & Wang, 2013).

By performing healthy lifestyle as a habit, it may slowdown

consequences of serious diseases such as cancer, diabetes,

high blood pressure, Lupus (SLE) and so on (Eyler, &

Zwald, 2015; and Sheppard, Hicks, Makambi, Hurtado-de-

Mendoza, Demark-Wahnefried, & Adams-Campbell, 2016).

On the other hand, to fight with obesity, 80% of healthy diet

and 20% of frequent exercise will be helpful to keep losing

weight (Miller, Koceja, & Hamilton, 1997). Because of that,

there are various types of diets favored by Malaysian such as

balanced-diet, low fat-diet, low carb-diet, blood type-diet,

and so on (Goldman, 2014). Recently, low carb diet or

widely known as Atkins Diet become the most popular and

trending diet by Malaysian because the result in lost weight

seems faster than other diets (Stern, Iqbal, Seshadri,

Chicano, Daily, McGrory, & Samaha, 2004). This diet was

introduced by Dr.Robert C.Atkins to help diabetes patient by

controlling carbohydrate and sugar intake but high in protein

and fibre (Stern et.al, 2004). These researchers also added

that a person have to limit the daily carbohydrate intake as

low as 20gram per day, and can add the amount from time to

time in 4 different stages starting from induction phase until

maintaining a lifetime weight phase. The aim is to get

ketosis which known as the process of changing the energy

source in the body from fat instead of carbohydrate, since

the carbohydrate storage is limited and not enough to burn

the calories (Stern et.al, 2004). The process to lost weight

will be faster because what has been burnt by the body to

form energy is totally fat. Above all that, regardless of any

types of diet preferred by Malaysian, they all indicated the

importance of a healthy lifestyle that is necessary to get an

ideal weight and prevent obesity. Gaining the ‘know-how’ of

healthy lifestyles will be at best if Malaysian are aware to

seek knowledge regarding healthy lifestyle for instance by

joining any lifestyle modification or weight loss programs.

The ability of the ‘know how’ could inspire people to be

more motivated, well-disciplined, and diligent to adapt

healthy lifestyles as a habit (Roshdin et.al, 2016). Therefore,

obesity in Malaysia could be overcome by educating public

awareness of healthy lifestyles in a massive national scale.

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VII. CONCLUSION AND FUTURE DIRECTION FOR RESEARCH

A kind of pushing strategy for healthy lifestyle

modification is very potential to be applied to combat with

obesity prevalence in Malaysia. The platform is there only a

stepping stone to perform lifestyle modification is needed

with the aim to tackle obesity comprehensively. Therefore,

further research should consider factors to encourage healthy

lifestyle modification as a medium to tackle obesity in

Malaysia which is effective and long-lasting.

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Abstract— The development of self-concept is an important

developmental task during adolescence. The incident of parental

divorce at this developmental stage will greatly affect the

development of self-concept. However, many past studies did not

take into account the paternal role of non-resident fathers when

examining this issue. Hence, this study examines how father

involvement will relate to self-concept among adolescents from

divorced families. Using a sample of 478 school-going adolescents

from divorced families, the current study found significant

relationship between father involvement and self-concept.

Additionally, results of moderation analysis revealed that gender

moderated the relationship between father involvement and self-

concept. Specifically, the lack of father involvement in daily life

has more detrimental effects on sons than daughters. Findings of

the current study have important implications for guiding secured

father-adolescent relationship, particularly for divorced non-

custodial fathers.

Keywords— Adolescents, Father Involvement, Non-Custodial

Father, Self-Concept

I. INTRODUCTION

ESEARCH on the detrimental effects of parental

divorce towards self-concept among adolescents is not

rare in the literature. While one of the biggest changes

following parental divorced is the absenteeism of non-

custodial father, many past studies in the literature of

parental divorce did not appropriately address the influential

role of non-custodial fathers towards the development of

self-concept among adolescents (Flouri & Buchanan, 2003).

Therefore, the current study aims to fill the research gap by

examining the relationship between father involvement and

self-concept among adolescents from divorced families.


A. Self-Concept among Adolescents

Research on self-concept among adolescents has a long

history in the literature. In short, self-concept can be defined

as general composite or collective view of one's self across

various dimensions of domain specific perceptions (Eccles,

O’Neill, & Wigfield, 2005).

The formation of self-concept is often being viewed as the

major developmental task during adolescence. More

precisely, the Erikson’s Theory of Developmental Stages

suggests “identity versus role confusion” as the main

developmental task during adolescence (Erikson, 1968). In

the transactional period between childhood and adulthood,

adolescents will actively explore, test, and formulate a

unique set of self-concept. Role confusion occurs when the

adolescents failed to manage this developmental task.

Consequently, the role confusion will raise doubts regarding

the meaning of existence among the adolescents, which will

put them at great risk for maladjustments (Sokol, 2009).

Inspired by the Erikon’s theory, considerable amount of

research had been conducted to examine how unsuccessful

formation of positive self-concept will affect the

development among adolescents. For instance, it is

evidenced that poor self-concept among adolescents is

directly associated with increased problematic behaviors and

psychopathological symptoms (Garaigordobil, Pérez, &

Mozaz, 2008; Henderson, Dakof, Schwartz, & Liddle, 2006;

Khajehdaluee, Zavar, Alidoust, & Pourandi, 2013).

B. Post-Divorced Father Involvement and Self-Concept

Of the various factors which may affect the development

of self-concept among adolescents, one robust factor that

should be taken into account is the family context. Indeed, it

is evidenced that major life events during adolescence, such

as parental divorce, will greatly increase the difficulty for

successive formation of self-concept (Turner, Finkelhor, &

R

Father Involvement and Self-Concept among

Adolescents of Divorced Families: Does Gender

Matter?

Siti Nor Yaacoba, Fam Jia Yuinb

aFamily, Adolescent and Child Research Center of Excellence (FACE), Universiti Putra

Malaysia, Malaysia bDepartment of Human Development and Family Studies, Universiti Putra Malaysia, Malaysia

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Ormrod, 2009). For this reason, adolescents from divorced

families tend to report lower self-concept than their

counterparts from intact families (Amato, 2000; O’Connor,

Caspi, DeFries, & Plomin, 2000).

Additional to this claim, from the limited past studies,

there are reasons to believe that post-divorced father

involvement will enhance the development of self-concept

among adolescents (Culp, Schadle, Robinson, & Culp, 2000;

East, Jackson, & O’Brien, 2006). Although fathers are

historically being labeled as the secondary caregivers who

take the role as breadwinner in the family, fathers in recent

years has gained more active role in shouldering parenting

responsibilities and involve in offspring’s daily activities

(Pleck & Masciadrelli, 2004). Thus, it is plausible that the

absence of father following parental divorce will disrupt the

development of self-concept among adolescents. Hence, the

current study aims to investigate the relationship between

father involvement and self-concept among adolescents from

divorced families.

C. Gender as Moderator

The adolescents’ gender may be another factor associated

with the development of self-concept. However, research has

drawn indecisive conclusions on the gender differences in

relation to self-concept among adolescents. While some

claim female adolescents to have higher self-concept (Rath&

Nanda, 2012), some argue for higher self-concept among

male adolescents (Ayub, 2010), and some others find no

gender difference in self-concept (Pauriyal, Sharma, &

Gulati, 2010).

Further, it is probable that the magnitude of the

aforementioned relationship differs between male and

female adolescents. The absence of male figurine in the

divorced family can be disruptive for the development

among adolescents, especially for males (Brown &Portes,

2006).

Altogether, it is the purpose of this study to investigate

how post-divorced father involvement will give impacts on

the development of self-concept among adolescents. In

addition, the present study further examines the moderation

role of gender in the relationship, to see if the magnitude of

the relationship varies according to the adolescents’ gender.

II. METHOD

A. Participants and Procedures

Participants of the current study are 480 school-going

adolescents from divorced families in Malaysia. The

respondents were recruited from four states in Malaysia

through purposive sampling, namely Selangor, Kedah,

Johor, and Pahang. Initially, we planned to recruit all

mother-adolescent dyads through secondary schools in the

respective states. However, due to unavoidable

circumstances, we also identify potential respondents

through community via snowballing technique.

B. Instruments

Beck Youth Inventories Second Edition – Self-Concept

Inventory (BSCI-Y). The BSCI-Y (Beck, Beck, Jolly, &

Steer, 2005) was implemented as measurement for self-

concept among the respondents. This instrument consists of

20 items designed in 4-point likert scale, ranging from 0

(being never) to 3 (often). The summated scores range

between 0 and 60, with higher total score indicates more

positive self-concept. The items are designed to explore self-

perceptions including competence, potency, and positive

self-worth. The psychometric properties of BSCI-Y is

evidenced in the literature (Thastum, Ravn, Sommer, &

Trillingsgaard, 2009; Uddin, Hoque, & Shimul, 2011).

Again, this instrument demonstrated good internal

consistency in the present study, with a Cronbach’s alpha of

.933.

Father Involvement Scale. The Father Involvement Scale

(Finley & Schwartz, 2004) was implemented to measure

father involvement among the respondents. This instrument

consists of 20 domains of father involvement. The

respondents are required to rate how frequent their father

involve in the specified domains in a 5-point likert scale,

ranging from 1 (never involved) to 5 (always involved). The

summated scores range between 20 and 100, with higher

total score indicates higher father involvement. Consistent

with the past research (Finley & Schwartz, 2004), this

instrument demonstrated great internal consistency

(Cronbach’s alpha = .976), indicating that this instrument is

a reliable measure for father involvement.

C. Statistical Procedures

All analyses in the present study were performed using

SPSS 20.0. The moderation effect of gender in the

relationship between father involvement and self-concept

was initially tested using hierarchical multiple regression.

Additionally, the PROCESS macro developed by Hayes

(2012) was used to further examine the moderation effects.

III. RESULTS

A. Means, Standard Deviations, and Correlation

Results of descriptive analysis are presented in Table 1.

Given that the values of skewness and kurtosis for both

variables are in acceptable range of ±2 (Pallant, 2010), we

are confident that the normality assumption was met.

Besides, the result reveals significant positive relationship

between father involvement and self-concept (r = .409, p <

.001). This indicates that adolescents are more likely to

develop positive self-concept when their fathers remain

committed in their daily life even after divorced,

highlighting the importance of post-divorced father

involvement towards successive development among

adolescents.

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TABLE 1

MEANS, STANDARD DEVIATIONS, AND CORRELATION V. M SD Skew Kur. Correlation

(1) (2)

SC 33.3 11.88 .01 -.62 –

FI 55.2 23.10 -.07 -1.16 .409*** –

Note. SC Self-concept; FI Father involvement; *** p < .001

B. Independent t-Test

Results of independent t-test (Table 2) reveals significant

gender difference in self-concept among the respondents.

Contrary to the previous research (Bolognini, Plancherel,

Bettschart, & Halfon, 1996; Östgård-Ybrandt & Armelius,

2003), male adolescents in the current study generally report

lower self-concept than female adolescents (t-value = -2.987,

p < .01). This gap of findings signals a possibility that the

lack of paternal role in the divorced families gives more

impacts to sons than daughters. In light of this consideration,

we further examine the moderation effect of gender in the

relationship between father involvement and self-concept

among the respondents.

TABLE 2

GENDER DIFFERENCE IN SELF-CONCEPT

Variable Mean Score t-value p

Gender -2.987 .003

Male 31.46

Female 34.76

C. Hierarchical Multiple Regression

Results of hierarchical multiple regression were presented

in Table 3. In step 1, we enter the adolescents’ gender into

the regression against self-concept. The result revealed

gender as significant predictor of self-concept among

adolescents from divorced families (β = .138, p < .01).

In step 2, the father involvement was added into the

regression model. The result revealed both gender (β = .099,

p < .05) and father involvement (β = .400, p < .001) as

significant predictors for self-concept among adolescents

from divorced families. Both variables explain around

17.7% of the variance in self-concept.

In step 3, the interaction effect of gender and father

involvement was taken into account. Again, the results

support the predictive role of gender (β = .097, p < .05) and

father involvement (β = .505, p < .001) towards self-

concept. Moreover, the significant interaction effect between

variables (β = -.141, p < .05) provides evidence on the

moderation role of gender in the relationship between father

involvement and self-concept among adolescents from

divorced families.

For better clarification, the moderation effect of gender

in the relationship between father involvement and self-

concept is graphically presented in Figure 1. It is clear that

adolescents of both gender reported similar level self-

concept with the presence of high father involvement.

However, male adolescents reported significantly lower self-

concept than female adolescents when father involvement is

low. Clearly, it is obvious that the magnitude of influence

from father is stronger for male adolescents as compared

with female adolescents.

Fig. 1 Gender as moderator in the relationship between father

involvement and self-concept

IV. DISCUSSION

The current study is intended to examine the relationship

between father involvement and self-concept among

adolescents from divorced families. Overall, we found a

significant positive relationship between father involvement

and self-concept among the adolescents, indicating that the

commitment of non-custodial fathers in the adolescents’ life

is essential to promote healthy development of self-concept.

TABLE 3 HIERARCHICAL MULTIPLE REGRESSION ANALYSIS FOR PREDICTING SELF-CONCEPT

Variable Step 1 Step 2 Step 3

B SEB β B SEB β B SEB β

Gender

(0 = Male, 1 = Female) 3.302 1.088 .138** 2.382 1.002 .099* 2.326 .998 .097*

Father Involvement (FI) .206 .002 .400*** .260 .032 .505***

FI*gender -2.250 .993 -.141*

F 9.213** 51.159*** 36.115***

R2 .019 .177 .186

R2Change .158 .009

Note. * p < .05, *** p < .001

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Given the important role of non-custodial father in

relation to self-concept among adolescents, we sought for

better understanding of the relationship by investigating the

moderation role of gender. To this end, we performed a

series of moderation analysis using hierarchical multiple

regression and Hayes PROCESS macro. Results of the

moderation analysis revealed significant moderating effect

of gender in the relationship. While both gender reported

comparable self-concept with high level of father

involvement, male adolescents reported significantly lower

self-concept than female adolescents when they perceive low

fathers’ involvement. This clearly indicates that the

magnitude of the relationship is stronger among male

adolescents, reflecting that male adolescents are more

vulnerable towards the absenteeism of non-custodial fathers.

Several implications can be drawn from this study.

Specifically, this study highlights the role of non-custodial

fathers in the development of self-concept among

adolescent, hence, divorced fathers should make more effort

to remain engage in the adolescents’ life. Unfortunately, it is

noteworthy that many divorced fathers tend to reduce the

frequency of contact with their offspring overtime due to

various obstacles, such as geographical factors

(Bryner, 2001). Therefore, related authorities, such as

National Registration Department of Malaysia, should

develop programs to strengthen the bonds among the family

members, while creating opportunities for the distancing

family members to meet regularly. Furthermore, while it is

evidenced that the absenteeism of non-custodial fathers

gives more impacts to male adolescents, further research

focusing on male adolescents from divorced families is

highly welcome.

A number of limitations should be taken into account

when interpreting the findings of the current study. Firstly,

the current study is designed as a cross-sectional study,

which can give little information on the direction of

causality. Although the causal relationship in the current

study is supported by previous research, we invite for

longitudinal studies to further examine on this issue.

Secondly, all participants of the current study are recruited

from four states in Malaysia only. Thus, implications of the

current findings should not go beyond this scope. Thirdly,

we would like to acknowledge that the data of the current

study is collected through self-administered questionnaire

only, creating a potential for respondents’ bias.

V. CONCLUSIONS

This study supports the relationship between father

involvement and self-concept among adolescents from

divorced families. Further, this study provides empirical

evidence on the moderation role of gender in the

relationship, signaling the future research to consider gender

differences in related issues.

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Abstract— Background: There are several issues about Nursing

Home or Home Health Care. Elderly need a great environment in

this organization. Quality of life and facilities are one of the

services that should be highlighted. Nursing Home can be a great

place for elderly to end up their life time which is does what are

they want to do.

Methods: This systematic review study was finding in online

database from the internet. The sources were come from J-Store,

Google Scholar, Science Direct, and Scopus. The keyword that was

used is Nursing Home, Facilities, Quality of Life, and Home

Health Care.

Results: Only 10 studies were chosen, and only selected studies

are discussed on quality of life and facilities of Nursing Home

including 10 countries were have great service of Nursing Home or

Home Health Care.

Conclusion: Better promotion for Nursing Home or Home Health

Care is needed to give the residents a better life and health. Quality

of life and facilities are affected for environment of resident’s life.

Keywords— Quality of Life, Facilities, Nursing Home and Home

Health Care.

I. INTRODUCTION

URSING Home is a collective living place for elderly

who do not require hospital service but cannot be cared

for adequately and safely at home. Nursing Home is a

public health services for a hundred years ago. Elderly who

has no family or got chronic disease can be place in Nursing

Home as a second home (Nakrem, 2011). Nursing Home is a

registered or licensed provided professional cares for elderly

who has a disease or not. Nursing home that also can be

defined as long term care definition are broad and generally

referring to services that support the daily needs of

individuals with limitation function or disability (Houser,

2007). Limited functioning or disability is typically

determined according to an individual’s ability in order to

completing activities of daily living such as eating, bathing

as well as managing their food, medication or household

chores (Binstock & Cluff, 1996).

Quality of life is the concept of diversity, and quality of

life in a particular domain under study can vary depending

on the device used to measure (Katschnig, 2006) At present,

there are only a few have agreed on the aspects of the

definition of quality of life. Overall, the researchers argue

that the definition of quality of life must have subjectivity

(that is, the perspective of the individual quality of life), and

various dimensions. Also important is health-related quality

of life and quality of life, in general, being defined

differently (Hickey et al., 2005).

II. METHODS

A. Search strategy

This systematic review study was finding in online

database from the internet. The sources were come from J-

Store, Google Scholar, Science Direct, and Scopus. The

keyword that was used is Nursing Home, Facilities, Quality

of Life, and Home Health Care.


B. Search results

Only 10 studies were chosen, and only selected studies

are discussed on quality of life and facilities of Nursing

Home including 10 countries were have great service of

Nursing Home or Home Health Care. The table shows the

important of quality of life and facilities to the minimum

standard and standard of Nursing Home or Home Health

Care.

Quality of Life and Facilities of Nursing Home:

A Systematic Review Article

Nik Muhammad Faris Bin Nik Nordin*, Hasif Rafidee bin Hasbollah, Mohd

Hafzal Bin Abdul Halim, Mohd Firdaus bin Mohd Nasir, Muhammad Aizat Bin

Mat Ibrahim, Muhammad Shafhuan Bin Yusran

Universiti Malaysia Kelantan

N

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TABLE I:

STUDY CHARACTERISTIC

Year Title Purpose Author Model/Framework/IV/D

V

Method Findings

2015 Quality in

residential care

from the

perspective of

people living

with dementia:

The importance

of personhood

To describe the

meaning of quality

residential care from

the perspective of

people with

cognitive

impairment and

their family

members.

R. Milte

W. Shulver

M. Killington

C. Bradley

J. Ratcliffe

M. Crotty

Good quality care supports

personhood

-individual care

-access to meaningful

activities

-opportunities to feel

useful and valued

-supportive healthcare and

medical management

Supportive physical

environment

-it’s a “home”

-safety

Qualitative data

collection Moving from an old hospital

style residential aged care

facilities (RACF) to a new

purpose build facility. Focus on

considering concepts of quality

of life. In construct focus on the

process of care delivery and

perspective of quality of care

rather than quality of life, and

include both people we

considered both groups to have

an interest in good outcomes in

residential care from a

consumer perspective. 2015 The relationship

between health

care needs and

accessibility to

health care

services in

Botosani

country-

Romania

This paper focuses

on the assessing and

interpretation of the

population’s

accessibility

indicators to health

service and health

care needs index in

Bostani, in period

2000-2013.

Teodora

Estera

Ursulica

The accessibility of the

population to health care

service

-the average distance from

general practician office

-the distance travelled by a

patient to the nearest

hospital

-the average distance

travelled to the nearest

ambulance station

Quantitative

data collection The aging of the population is a

factor which is known to

increase the needs and therefore

the demand for health care

services. The need for health

care varies strongly with age.

Small children, women of child-

bearing age and the elderly are

more likely to need to access

the health-care system than

other age groups. As a

consequence, age structure is an

important predictor of a

population’s need for primary

health care. 2011 Assessing the

Maintenance

Aspect of

Facilities

Management

through a

Performance

Measurement

System: A

Malaysian Case

Study

Performance

Measurement

System (PMS) for

the enhancement of

FM specifically

focusing on the

maintenance

delivery aspect.

N. E. M. Nik-

Mat

S. N.

Kamaruzzam

an

M. Pitt

Functional

-management

-service delivery

Technical

-maintenance service

Image

-building image

Multiple data

collection

techniques

Qualitative and

quantitative

method

The priorities of the three major

elements of maintenance

namely service characteristics,

building services and building

image from both end users and

maintenance managers

perspectives were analysed.

This study also propose the

relationship between the

performance of FM service

specifically on maintenance

service and the management

system focusing on the

maintenance aspects applied.

2106 Patient

satisfaction in

relation to

nursing care at

home

Considering patient

satisfaction in the

relationship aspect

of helping and

communication can

contribute to

improving nursing

care.

Claudia

Chaves

Mario Santos

-patient satisfaction with

regards to the relationship

with nurses during house

calls.

-patient satisfaction with

the manner nurses

communication with them

during house calls.

-patient satisfaction in

relation to how the nurse

conducts health education

during house calls.

Quantitative

method

-16 likart skill

Satisfaction was evaluated in

three dimensions: relationships,

communication and health

education. With regard to

relationships, older males (age

range88-98 years), who are

males (88-98 years), with a

greater degree of dependency,

bachelors, educated and living

in urban parishes are most

satisfied. As for the health

education dimension, younger

men (68-78 years), who are less

dependent, married, educated,

are most satisfied.

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V

Method Findings

2009 Audit

assessment of

the facilities

maintenance

management in

a public

hospital in

Malaysia

The purpose of this

paper is to assess the

existing facilities

maintenance

management

practices and

processes in public

hospitals, in

accordance with the

concession

agreement (CA), in

order to identify the

current performance

status.

Maisarah Ali

Wan

Mohamad

Nasbi Bin

Wan

Mohamad

-leadeship

-policies, plan and

procedures

-training and orientation

-monitoring and

supervision

-service performance

Multi-method

-qualitative

method

-quantitative

method

The status of facilities

maintenance management in the

hospital is categorised as

“maturing”, which implies that

there has been a good planning

and management with all

essential requirements and

compliance with regulations.

Nevertheless, analyses of

finding indicate that the

maintenance organisations in

the hospital still do not realise

the importance and benefits of

effective facilities maintenance

management. 2014 A systematic

review of

instruments to

assess

organizational

readiness for

knowledge

translation in

health care

The translation of

research into

practices has been

incomplete.

Organizational

readiness for change

(ORC) is a potential

facilitator of

effective knowledge

translation (KT).

However we know

little about the best

way to assess ORC.

Therefore, we

sought to

systematically

review ORC

measurement

instruments.

Marie-Pierre

Gagnon

Randa Attieh

El Kebir

Ghandour

France Legare

Mathieu

Ouimet

Carole A.

Estabrooks

Jeremy

Grimshaw

Knowledge Translation in

Health Care

-Readiness

-Commitment and Change

-Organization and

Administration

-health and social services

Mixed method

systematic

review literature

26 eligible instruments

described in 39 publications.

According to the Standard for

Education and Psychological

Testing, 18 (69%) of a total of

26 measurement instruments

presented both validity and

reliability criteria. The Texas

Christian University – ORC

(TCU-ORC) scale reported the

highest instrument validity with

a score of 4 out 4. Only one

instrument, namely the

Modified Texas Christian

University – Director version

(TCU-ORC-D), reported a

reliability score of 2 out of 3.

No information was provided

regarding the reliability and

validity of five (19%)

instruments. 2015 An evaluation

of Snoezelen

compared to

‘common best

practice’ for

allaying the

symptoms of

wandering and

restlessness

among residents

with dementia

in aged care

facilities

This paper reports

on an evaluation of

the use of Snoezelen

compared to

‘common best

practice’ for allying

the dementia related

behaviours of

wandering and

restlessness in two

residential aged care

facilities in Victoria,

Australia

Michael

Bauer

Jo-Anne

Rayner

Judy Tang

Susan Koch

Christine

While

Fleur O’Keefe

-gender

-age

-dementia type

-length of stay

-co-morbidities

Observational

method We found that there was a

significant reduction in reported

behavioural symptoms between

pre-intervention (T0) and

immediately post-intervention

(T1) for both Snoezelen and

non-Snoezelen (‘common best

practise’) interventions.

However, no further differences

between these two types of

interventions were found at any

subsequent time points (T2 and

T3) which suggests that there

are no advantages to the use of

Snoezelen over ‘common best

practice” interventions for

allaying the observed BPSD of

wandering or restlessness.

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V

Method Findings

2016 Nursing home

in 10 nations: a

comparison

between

countries and

settings

To illustrate

demographic

differences and

recent trends in the

provision and

structure of long-

term care system in

the 10 countries

participating in the

Resident

Assessment

Instrument studies

(Denmark, France,

Iceland, Italy, Japan,

The Netherland,

Sweden,

Switzerland, the UK

and the US).

Miel W.

Ribbe

Gunner

Ljunggren

Knight Steel

Eva

Topinkova

Ctherine

Hawes

Naoki

Ikegami

Jean-Claude

Henrard

Palmi V.

Jonnson

Nursing home in 10

countries

(Denmark, France, Iceland,

Italy, Japan, The

Netherland, Sweden,

Switzerland, the UK and

the US)

Data were

assembled from

government

documents,

statistical

yearbooks and

article from

journal:

supplemental

data on ling-

term care and

nursing homes

were solicited

from

colleagues.

-demographic

indicates

-descriptive

definations

All countries in this study are

developed nations with high

life-expectancy. All

experiencing a considerable

ageing of their population,

especially of the oldest told,

that segment of population

which has the highest disability

rate as a result of both age and

chronic illness.

2014 Improving the

quality of

nursing

students’

clinical

placement in

nursing home:

An evaluation

study

To explore students’

experiences during

their clinical

placement in five

nursing homes after

implementing

measures to improve

the learning

environment.

Grethe

Brynildsen

Ida Torunn

Bjork

Karin Bertsen

Margrete

Hestetun

Measures to

improve the

learning

environment

were

implemented as

a result of a

joint effort

between a

university

college and five

nursing homes.

An explorative

design was

develops to

collect

empirical data

concerning the

students’

experience

expressed

through

questionnaires

and logs.

Show more positive than

negative experience during the

placement period in the nursing

homes. Suggests that the

nursing home, despite less

qualified staff, and deficiencies

related to supervision, caring

routines, equipment and others.

III. DISCUSSION & CONCLUSION

Nursing Home is highly professional, standardized

nursing home model. Establishing this type of nursing model

is an inevitable trend in future nursing development, and we

should continuously improve home health nursing systems,

to better promote the health of citizens (Zeng, Shuai, Yi,

Wang .,& Song 2016). Nursing home is a facility that

provides institutional care for people recovering from an

acute illness or chronic that requires skilful nursing care and

assistance with activities of daily living needs such as

bathing, toileting and physiotherapy consultation (Gabrel,

2007). Better promotion for Nursing Home or Home Health

Care is needed to give the residents a better life and health.

Quality of life and facilities are affected for environment of

resident’s life. According to Ursilica (2016) Nursing Home

needs to have standard or minimum standard facilities to

fulfil elderly needs and wants. Facilities must be in good

condition and need to care their maintained.

IV. ACKNOWLEDGEMENT

I would first like to thank my supervisor Dr. Hasif Rafidee

Bin Hasbollah of the Faculty of Hospitality, Tourism and

Wellness at University Malaysia Kelantan. That always

opens whenever I ran into a trouble spot or had a question

about my research or writing. He consistently allowed this

paper to be my own work, but steered me in the right the

direction whenever he thought I needed it.

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health- related quality of life in older patient populations: A review of

current approaches. Pharmacoeconomics, 23, 971- 993.

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Abstract-Background: The person who have low back pain

often report impaired disability to performance daily activities

which passive movement of daily life. The effects of low back

pain on daily function of patients can describe as a patients level

of disability or reduction in physical function it interferes with

the movement of patients for running a daily lives. Purpose:

Therefore, the aim of this study was to conduct a systematic

review to examine the relationship between physical activity

and low back pain. Besides that, the suggestion prevention

program to patient who has low back pain.

Methods: This systematic review study was used internet to

find databases and search engines. Data were collected using

Wiley online library, Bioline International, SAGE, Science

Direct, NCBI, Proquest, Biomed central, American Diabetes

Association, PLOS One and Springer. The search was

performed using keywords of “physical activity”, “non specific

low back pain”, “back pain”, and “activity level”. The study was

reviewed the resources and the results were classified in

different sections

Results: From 200 resources, only 43 studies were chosen, and

only 13 studies were selected to meet the inclusion criteria. The

results were classified based on several sections including years

of reporting, who were reporting, the origins of articles and

their health criteria about physical activity and low back pain.

Conclusion: There are positive associate physical activity and

low back pain from the systematic review. Future intervention

treatment can reduce associate physical activity to low back

pain

Keywords— physical activity ,physical level, low back pain

I. INTRODUCTION

he person who have low back pain often report

impaired disability to performance daily activities

which passive movement of daily life. The effects of

low back pain on daily function of patients can describe

as a patients level of disability or reduction in physical

function it interferes


with the movement of patients for running a daily lives.

There are often perception that patients who has low back

pain have feel more disability functioning physical and

report more daily life restrictions due to low back pain

will be those has who are less physical activity and

passive movement among patients. This will be reflected

in the recommended treatment care for low back pain that

are usually promote increased physical activity such as

exercise to help recovery and reduce disability in patients.

For the patient acute low back pain, mostly patient will

be advised to stay active and avoid bed rest for reduce a

pain (Koes et al, 2010).Besides that, for the chronic low back

pain patients, there are active approaches such as

acupuncture treament and exercise which are

recommended from previous researcher overcome

passive treatments for reduce number who has low back

pain and improve quality of life among the patient (Koes et

al, 2006).However, notion that physical activity and

disability are correlated, but that people with low back

pain who have a disability level also has a low level of

physical activity, not are clearly confirmed (Cohen,

1988)Therefore, there are recent systematic review have

showed that persons with chronic low back pain have

similar levels of physical activity compared with health

control population which are physical activity associated

low back pain. (Weering et al .2007). This paper purpose

examine the physical activity associated low back pain.

The suggestion treatment prevention program for low

back pain patient.

II. METHODS

A. Search strategy

This systematic review study was used internet to find

databases and search engines. Data were collected using

Wiley online library, Bioline International, SAGE,

Science Direct, NCBI, Proquest, Biomed central,

The Association Physical Activity and Low

Back Pain: Systematic Review

Muhamad Aizat bin Mat Ibrahim*, Hasif Rafidee bin Hasbollah, Nor Dalila bin

Marican, Muhd Hafzal bin Abdul Halim, Muhd Firdaus bin Mohd Nasir, Nik

Muhammad Faris bin Nik Nordin

Universiti Malaysia Kelantan

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American Diabetes Association, PLOS One and Springer.

The search was performed using keywords of “physical

activity”, chronic low back pain”, “back pain”, and

“activity level”.

B. Review process, inclusion and exclusion criteria

Physical activity related to health related problems studies

were found as early as 2003. English articles about

physical activity and low back pain were chosen in this

study. These criteria were used for choosing and

reviewing the studies. Therefore, 25 articles were

excluded since they were not met with health related

problems because have ‘depression’, ‘psychosocial’ and

‘lifestyle’. Time and space limitations of this study were

from 30 July to 7 August 2016. Finally, the quality of the

study resources were controlled and confirmed by

supervisors.

C. Search results

There are a total of 200 articles related to physical

activity but only 50 were found to be associated with low

back pain. Furthermore, 25 studies had met the inclusion

criteria while 25 of them were excluded since they do not

meet the criteria for this systematic review. The table

below summarize the list of studies within the inclusion

criteria of physical activity associated with low back pain.

TABLE I:

LIST OF STUDIES ASSOCIATED WITH PHYSICAL ACTIVITY AND LOW BACK PAIN HEALTH FROM 2003 UNTIL 2016

Author STUDY DESIGN Age (SD) Physical activity measure RESULT CONCLUSION

Verbunt et al,

(2008)

Cohort

(n=62)

45.6(9.6) Accelerometry over 7 days Pearson r = 0.19

P = .05

The significant between physical

activity and chronic low back pain.

Huijnen et al,

2010

Cross sectional

(N=66)

48.4(9.9) Accelerometry over 14 days Pearson’s r = 0.12

P = .36

Significant low back pain and

physical level.

Marcedo et al

,2008

randomized

controlled trial

(N=139)

49.3(14.5) International Physical Activity

Questionnaire (IPAQ) short

form

Pearson’s r = 0.11

P = .02

Significant physical and no relation

between low back pain

Ryan et al,

(2009)

Cross sectional (n

= 38)

49.3(14.5) Accelerometry over 7 days

(reported 6 different outputs)

Pearson’s r = 0.21 to

0.42 for the 6

different output

(P =0.01)

There are significant between physical

level and chronic low back pain

Van weering

et al, (2009)

Cross sectional (n

=290

44.4(13.6) Accelerometry over 7 days Pearson’s r = 0.14

P = .55

no significant

physical level and chronic low back

pain

Weiner et al,

2008

randomized

controlled trial (n

=200)

73.9(5.8) Physical activity scale for the

elderly

Pearson’s r = 0.14

P = .05

No significant physical activity and

chronic low back pain

Venseth ,

(2014)

Cross sectional

study

(n=22445)

Not stated Standardized Nordic

Questionnaire

Pearson r =0.45

P=0..04

significant between heavy

workload(physical activity)and low

back pain

Marcedo et al

(2012)

Randomized

Controlled Trial

(n=172)

49.6 (16.3) -Patient-Specific Functional

Scale

-Roland-Morris Disability

Questionnaire

P= -0.14 significant

physical between graded worker

Lela & frantz

( 2012)

Cross sectional

(n=133)

24-54

(6.8)

- International physical

activity questionnaire (IPAQ)

and Nordic musculoskeletal

questionnaire (NMQ).

P=0.026 significant physical activity and low

back pain

Natour et al,

2015)

randomized

controlled

trial(n=60 )

Not stated Roland Morris questionnaire P=0.0387 Significant physical activity and low

back pain

Plouvier, et

al, 2015

Longitudinal

study (n= 1,520)

Not stated Nordic questionnaire P=0.04 Significant physical activity and low

back pain

Schaller etal ,

2015

Cross sectional

(n=78)

Not stated Accelerometer seven day P=0.079 No significant physical activity and

low back pan

Villumsen, et

al, 2016)

Cross sectional

( n= 457)

22.7 (8.8) accelerometer P=0.08 No significant physical activity and

low back pain

Das, 2015 Cross sectional (n

=17

30.3(10.7) modified Nordic

Musculoskeletal Disorder

P=0.018 Significant physical activity and low

back pain

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Questionnaire


Contreras et

al, 2015 prospective

randomized

(n=99)

Not stated Accelerometer seven day P=0.01 Significant physical activity and low

back pain

Bergman et

al, 2015

Randomized

Controlled Trial

( n =20)

Not stated Accelerometers P= 0.04 Significant physical activity and low

back pain

Kangasniemi

et al, 2015

randomized

controlled

trial (n=100)

Not stated Accelerometer nine week P=0.02 Significant physical activity and low

back pain


Koch et al,

2015

Cross sectional

(n=199)

Not stated Nordic Questionnaire P= 0.041 Significant physical activity and low

back pain

Abledu et al,

2014

Cross sectional

(n= 210)

32.

(8.7)

standardized Nordic

Musculoskeletal

Disorder Questionnaire

P= 0.01 Significant physical activity and low

back pain

Gupta et al,

2015

Cross sectional

(n= 201)

43.7 (9.4) two accelerometers (GT3X+

Actigraph)


back pain

Brandt et al,

2015

Cross sectional

(n=80)

Not stated accelerometers P=0.04 Significant physical activity and low

back pain

Seay et al,

2016

randomized

controlled

trial (n =20)

Not stated asymmetric repetitive (manual

task)


back pain.

Mirmohamm

adi, et al ,

2015

randomized

controlled

trial (n =110)

36 (7.5) Nordic Musculoskeletal

Questionnaire (NMQ)

P= .002 Significant physical activity and low

back pain

Kaka et al,

2016

Cross sectional

(n=102)

37. (11.6) Standardized Nordic

Questionnaire.


back pain

Bartlett et al,

2016

Cross sectional

(n= 211)

Not stated IPAQ (International Physical

Activity Questionnaire);

P= 0.039 Significant physical activity and low

back pain

III. ANALYSIS

Studies were reviewed carefully and findings were 25

articles which consist physical activity which has

significant or not in low back pain.

IV. DISCUSSION

From the systematic review, there are 21 significant of

study physical activity associate to low back which

consist variable type of questionnaire that used. This

show physical activity associate low back pain with

different type of questionnaires. Mostly, accelerometers

method has been used from systematic review and it show

the physical activity associate low back pain.

Accelerometer is a survey method to monitor the physical

activity of a person using the instrument such as lift and

carry can be used to check the movement of the patient's

responses or by setting the theme for development

physical activities. However, further studies need to be

required to see if the level of disability of the person can

be solved by changes in the level of physical activity.

Besides that, Nordic questionnaire also have been used

for physical activity associate low back pain among

previous researcher. There are several type Nordic

questionnaire, it can be in qualitative and quantitative of

research. From the systematic review, das et al (2015) has

been used questionnaire quantitative for research

instrument and the result is significant. However,

significantly higher frequencies of musculoskeletal

problems were reported when the questionnaire was

administered as part of a focused study on

musculoskeletal issues and work factors than when

administered as part of a periodic general health

examination.

From the systematic review, some on article has been

suggestion about treatment low back pain by using

physical treatment (Bergman et al, 2015 Das, 2015; Koch et al,

2015). Massage therapy, chiropractic therapy and exercise

can be used as prevention program low back pain.

V. SUGGESTION TREATMENT

A. Exercises

The Exercise programs are suggested by clinical practice

guideline as an effective treatment to reduce pain intensity

and acute, subacute and chronic in low back pain patients

(Airaksenin et al, 2006; Delitto et al, 2012). Most of the

previous interventional studies that has been published

and examined, the efficacy of single intervention

strategies and it make failing to account for the

multifactorial low back pain. The therapeutic treatment

approaches, the European Guidelines for the management

of chronic low back pain recommended has the inclusion

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of cognitive behavioural therapy and a short educational

intervention of exercises activity to reduce number of

patient low back pain (Froud et al, 2012) . The prevention

and treatment of chronic low back pain also can features

stretching and selective muscle strengthening techniques,

such as the “Back School” program, which has proved to

be an effective and lasting method when compared to

other treatments like manipulation, myofascial therapy,

pharmacological therapy and placebo (Andrade, et al,

2008; Tavafan et al, 2008; Wiese et al , 2012).

B. Massage

Massage therapy is commonly used for chronic conditions

including back pain problems (Cheung & Halcon et al,

2011).Massage therapy has been defined as the the

systematic and scientific manipulation of the soft tissues

of the body with rhythmic pressures and stroking for the

purposes of obtaining or maintaining the health and the

quality of life (Weiner et al, 2006; Ersnt, 2011).Basically,

it is an easy way to provide pain relief through relaxation

of the physical and mental well-being (Weerapong et al,

2005).The massage therapy also can promotes a sense of

well-being and sense of receiving good care of the human

body to prevent illness (Imamura et al, 2008).The

Swedish massage can be classified as superficial and

consists of five main are rubbing action to stimulate blood

circulation in the body for the launch and prevented from

blocking the blood stream through the soft tissues of the

body (Cowen et al, 2011).Furthermore, Thai massage

techniques are classified as deep tissue massage with

acupressure and follow two rows behind by the theory of

energy meridian line to improve the rate blood circulation

in the human body (Chatchawan et al, 2013).From

previous studies, the former compared with other types of

treatments or treatments, such as massage, acupuncture,

manipulation of soft tissue, exercise posture, education

and sham laser therapy (low level laser infrared) on low

back pain, there have found that massage therapy

significantly improved ability to function both after the

massage session and in the short term (one month)

(Hernandez et al, 2001; Mackawan et al, 2005).

Chiropractic therapy

Chiropractic is a proven and effective treatment for

muscle conditions including neck and low back pain

(Cooperstein & Gleberzon, 2004).Treatment parents with

alternative medicine has increased, with a recent study

showed that 41% of seniors reported using alternative

medicine (CAM) treatments are complementary and that

chiropractic care is composed of 20% of their treatment

received and Chiropratic can be used as a measure to

prevent of back pain. In this study, 80% of people

reported that they had received great benefits from their

use of CAM and also to provide benefits to reducing the

level of pain to the patient. (Astin et al,

2000).Chiropractic is considered as "so far the largest

health care profession alternative," and more than 30% of

patients using chiropractic treatment for low back pain

(Robert & Wolfe, 2009)A research study listed as one of

the Activator Method chiropractic techniques commonly

used by patients who are older than 55 years (Hawk et al,

2010).

VI. CONCLUSION

There are positive associate physical activity and low

back pain from the systematic review. Future advances in

the development of sophisticated instruments of

movement registration may assist the monitoring of the

type and pattern of activity in persons with low back pain,

provide further insights to the role of physical activity in

low back pain and present new treatment avenues.

ACKNOWLEDGMENT

This research was supported/partially supported by Dr

Hasif Rafidee. We thank our colleagues from University

Malaysia Kelantan who provided insight and expertise

that greatly assisted the research, and give motivation in

this research paper.

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Abstract— Language and culture are interrelated and the

social context of a particular utterance is one of the fundamental

factors that need to be taken into consideration as performing

speech acts. There are quite number of speech acts in the area of

sociolinguistics study, namely apologies, complaints, requests

and many more. To be precise, this study focuses on requests

speech act, in which specifically concentrating on the alerters

used by the person doing the act of request without considering

another two segments of requests i.e. the head act and the

supportive move in it. Alerter refers to the language used in

initiating a conversation or the way of choosing the form of

calls. The choice of requests is basically because it may be

culturally and linguistically different since the way they are

accepted in one culture might be inappropriate in another. In the

Malaysian context, the study of alerters has yet to be ventured.

This study attempts to classify and compare the Malay

categories of alerters used in request speech acts by Malaysians

speakers in alerting their hearer’s attention with English

categories of alerters and to examine whether or not the

pragmatic competence of L1 speakers can be transferred to L2.

The participants are the Malay residents in and around Kuala

Lumpur plus Selangor area ages ranged from 12 to 56 years old

with different social backgrounds. There are 400 respondents

involved directly in this research with 20 respondents for the

pilot round at the earlier stage of the research. The project

coding scheme was based on the frameworks employed from the

Cross Cultural Speech Act Realization Project (CCSARP) by

Blum-Kulka & Olshtain (1984). The study revealed that there

were some differences in terms of categories of alerters found in

Malay and in English which positively affecting their

sociopragmatic competence in the production of request in

English.

Keywords—Alerters, English Request Speech Acts, Malay

Request Speech Acts, Sociopracmatics Analysis

I. INTRODUCTION

LERTER is one of the major aspects to be taken into

consideration in the process of initiating a

conversation. According to Abdul Sukor Shari, Nuraini

Yusoff dan Mohd Isa Awang (2003), alerter refers to the

language used in initiating a conversation or the way of

choosing the form of calls following the rules and the

norms which are based on several social variables

including age, social status, social distance and context of

the utterance.

There are quite number of speech acts in the area of

sociolinguistics study, namely apologies, complaints,

requests and many more. To be precise, I am only

focusing on request speech act, in which specifically

concentrating on the alerters used by the person doing the

act of request without considering another two segments

of request i.e. the head act and the supportive move in it.

To make a request, the action request must be an action

done by the speaker, and the speaker requests for the

effects of that particular action. The expected effect is

that the hearer wants to do the action and the way a

request is accomplished is by getting the hearer to do the

action.

Moreover, a speaker needs to be aware not only for the

attempt of the request itself, but also of the culturally

appropriate ways of addressing people as well as

expressing gratitude to someone. Requests need to be

carefully expressed in order to achieve compliance of the

hearer and gratification of the speaker’s desire. For the

request to be such a successful attempt, the speaker and

hearer must correspond to each other, such as they speak

or understand the same language and the two of them

must play their own role well. The address forms used is

also one of the components that will help the speaker to

get his request to be fulfilled by the hearer. In addition,

both the speaker and the hearer must be mutually

intelligible so that there will never be any communication

breakdown appear in the middle of the conversation.

Awad Mohamed S Youssef (2012:147) further

discussed that:

“…When making a request, the speaker expresses a

desire that the hearer does an action. The hearer is,

therefore, asked to do something, which is mainly for the

benefit of the speaker. Requests can be face-threatening

acts, which call for considerable expertise on the part of

Contrastive Pragmatics Analysis of Alerters in

Malay and English Request Speech Act

Nurul Syafawani Halim1* & Marlyna Maros2

1Universiti Teknologi Mara Seremban 3 Campus, 70300 Seremban, Malaysia 2Universiti Kebangsaan Malaysia, 43600 Baangi, Malaysia

A

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the learner.”

Additionally, the use of address forms can be affected

by certain factors such as the relationship between the

speaker and the hearer, the existence of surrounding

audiences, the age, the sex or the socio-economic

background of the speaker. These are not the only

elements that may give an impact on a person’s address

behavior because language use somehow pervades social

life; so, there should be more interrelated factors might

arise from time to time.

According to Wei (2005:56), language has two

different characters. The first character means

communication and the second one depicts carrier of

culture. Language without culture is absurd, as well as

human culture without language. Brown (1994:165)

discussed about the relation between language and culture

as follows: “A language is a part of a culture and a culture

is a part of a language; the two are intricately interwoven

so that one cannot separate the two without losing the

significance of either language or culture”. Both language

and culture are intertwined with each other and are

inseparable no matter what. They have a reciprocal

relationship and they need to move hand in hand in an

effort to develop the society.

Language communication in Malaysia at all times can

be classified into two levels namely the official and the

unofficial. The official communication is being used in

the official ceremonies or meetings as well as in report

writings while the unofficial communication is meant for

the social interaction outside the meetings or any official

ceremonies (Asmah Haji Omar, 1987). Apparently, a

conversation between interlocutors should depend on the

situation or context in order for both the hearer and the

speaker to be considered as competent in terms of

pragmatic. By knowing how to start the conversation

effectively with the perfect choice of address terms

according to the suitable situation can reveal a person’s

personal ability after all.

In order to become a competent speaker, linguistic

competence must be accompanied by the awareness of the

values and cultures of that particular language itself.

Linguistic competence alone is not enough for learners

who are learning a language to be proficient in that

language (Krasner 1999). Language and culture are

interrelated and the social context of a particular utterance

is one of fundamental factors that need to be taken into

consideration as performing speech acts. This is the

reason why the values and norms of the local community

are very important; since they have resulted to the

formation of a culture, and then will be assimilated by

every members of the society.

II. LITERATURE REVIEW

A. Speech Act

This theory was found by J.L Austin, who is the British

philosopher, in 1962. It concerns on how sentences are

being used in a language. Austin (1962) pointed out that

there are a large number of speech acts and more than a

thousand of verbs in English that refer to them. People do

more things with words in conveying information and by

then, they often convey more than their words encode.

Speech acts are being categorized under an extensive

category of action, in which they share certain universal

elements no matter what is the medium of their

performance.

B. Request Speech Act

Blum-Kulka et al. (1989) defined a request as a pre-

event act by a speaker toward some prospective action to

be done by the hearer. It can also be defined as the

explicit intention of the speaker for the hearer to perform

an action.

In English, the request segments in the scope of Cross-

Cultural Speech Act Realisation Project (CCSARP) by

Blum-Kulka & Olshtain (1984) have been divided into

three categories and they are the alerters, head act and

supportive move with the head act being the only core

part.

a) Alerter/Attention Getter (address terms, etc.):

“An alerter is an element, which often precedes the

requests and whose function is to alert the hearer's

attention to the ensuing speech act. Since alerters serve as

attention-getters, they are equal in function to all verbal

means used for this purpose”. Alerters constitute the

opening move of the request sequence and, besides

gaining the hearer’s attention. Below are the coding

categories of Alerters found in English and at the same

time this will be the framework of data analysis in this

study. This classification by Blum-Kulka et al. (1989)

was used as the coding framework in this study.

TABLE I

ALERTERS CATEGORIES BY BLUM-KULKA ET AL. (1989)

Category Example

Title/Role Professor, waiter,

Surname Johnson

First Name Nick, Judith

Nickname Judy

Endearment term Honey

Offensive Term Stupid cow

Pronoun You

Attention getter Hey, excuse me, listen

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b) Head Act (core of the request sequence, the request

proper):

“The head act is that part of the sequence which

might serve to realize the act independently of other

elements; namely it is the minimal unit which can realize

a request: the core of the request sequence”. For instance,

“Can you remind me later to bring the book for you on

Monday?”.

c) Supportive Move(s) (before or after Head Act):

“In using specific types of supportive moves, a

speaker intends to mitigate or aggravate his request.

Supportive moves are external to the head act occurring

either before or after a head act”. For example,

“Otherwise it may slip out of my mind…”.

Another approach for the classification of speech acts

is Searle’s (1979) distinction between direct and indirect

speech acts according to the relationship between the

structural forms and communicative functions. A direct

speech act refers to utterances whose meaning can be

understood through linguistic forms, while indirect

strategies are used to show an appropriate level of

politeness.

C. Studies on Speech Acts

Marlyna Maros et al. (2010) conducted a study on “A

Sociopragmatic Study On Greetings Patterns Among

Male and Female Students At A Higher Learning

Institutions” mainly to describe the strategy of address

terms used by the students in institutions of higher

learning in Malaysia, particularly the difference in

strategy by male and female students. There were 264

respondents who participated in the Discourse

Completion Task (DCT) questionnaire who answered 14

situations that require greetings, giving 3960 responses

altogether. More than 30 respondents were interviewed

and ethnography observation has been conducted for

about 3 months. The findings revealed that robust

address strategies were used if the social distance between

students are close and female students are more

comfortable using names while the male students most

likely just nodding or say ‘hi’ to greet others. From the

result, it shows that those first year students have

mastered efficiency of communication appropriate to the

context of speech even though some still need to

understand the culture of greeting behaviour in this

context.

Furthermore, in their study “Contrastive Pragmatic

Study and Teaching Culture in English Language

Classroom – A Case Study”, Maryam Farnia and Raja

Rozina Raja Suleiman (2009) employed a contrastive

pragmatic approach in conducting their research. It was

done by comparing and contrasting the specific

behaviours in which two cultures, to be exact the Iranian

and the American, to express gratitude. This study

involved 20 Iranian native speakers of Farsi and 20

American native speakers of English and the data was

elicited from the Discourse Completion Task (DCT).

From the findings of the study done, they found that

particularly it helps teachers to enhance their students'

awareness of the social and cultural differences of the

native language and the language they are learning. This

is where the cross-cultural and contrastive pragmatics

studies become an important or significant endeavor in

helping people to cultivate their pragmatic awareness.

Other than that, Holoch (2009) reported that she found

a lot of similarities between the requests made in English

by German, Danish and British students. However, in

terms of alerters, she said that most German English

learners use surnames in situations that the British

students use first names. On the other hand, Danish

respondents seem to match British speakers’ use of both

first names and surnames better. She concluded that the

German English speakers most likely used a higher

formality level as compared to the British speakers of

English.

Abdul Majeed Al-Tayib Umar (2004) reported the

research results on the request strategies used by the Arab

learners of English as compared to those strategies used

by native speakers of English. It involved 20 Arab

students graduating from English courses in four Arabic

universities and 20 British students perusing graduate

programs in three British universities. A Discourse-

Completion-Test was the instrument used to generate data

related to the request strategies used by each group. The

data analysis showed the differences and similarities

between the two groups. It revealed that the two groups

agreed to similar strategies when addressing or doing

their request to equals or people in higher positions.

However, when requests were addressed to people in

lower positions, the Arabic students tended to use more

direct request strategies in performing their request

compared to the British samples. The researcher found

that the native speakers of English employ more semantic

and syntactic modifiers compared to their Arabic

counterparts and for this reason their requests sound more

polite and thoughtful. These might be due to the culture

that the Arabic students have where certain utterances

may be polite enough to them, but not to others especially

the native speakers of English as this research compared

them both.

D. Rules of Speaking in Malay

Traditionally, the Malays signify indirectness in

speaking as to save face of others and preserving good

relationship among the interlocutors and the society as a

whole. When they experience any uncomfortable

circumstances, they will try to regulate their anger, to

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avoid saying anything or even to deal with those

situations face to face (Mustafa 2002:103-104; Asma

Abdullah 1996:30; Jamaliah Ali 1995:34). Malays are

expected to communicate decent manners and be subtle to

those with whom they interact on a more formal basis. If

these cultural rules are not conformed, these people are

generally considered as unrefined for not be able to select

the content and form of conversation, nonverbal cues, and

the forms of greetings (Asmah Hj. Omar 1996, Asmah

Abdullah 1996, Teo Kok Seong 1996).

E. Language Transfer and Sociopragmatic Competence

First language (L1) is termed by dissimilar names such

as native language, primary language, and mother tongue.

It is assumed to be one which is learned during early

childhood, before the age of about 3 years old. According

to Houmanfar, Hayes, and Herbst (2005), the first and

second languages are interconnected, and the history of

the first language is a contributing factor in the

acquisition of the second language (L2).

However, Selinker (1972) suggests that we might also

expect more learning difficulties and thus more likelihood

of performance interference at those points in L2 which

are more distant from L1, as the learner would find it

difficult to learn and understand a completely new and

different usage. So, contrastive analysis was used as an

attempt to identify areas of convergence and divergence

between the L1 and the L2 in order to predict elements of

the L2 which would be easier or harder for the learner to

learn.

The notion of sociopragmatic competence raised out of

the concept of communicative competence in language

acquisition. Leech (1983) describes sociopragmatics as

“the sociological interface of pragmatics” involving

speakers’ and hearers’ views built on relevant social and

cultural values. Meanwhile, Harlow (1990) defines

sociopragmatic competence as the ability to modify

speech strategies properly according to dissimilar social

variables such as the degree of imposition, social

dominance and distance between participants of

conversation, and participants’ rights and obligations in

communication.

Inability to use the language appropriately would be

considered as a sociopragmatic failure, and speakers are

assumed as having trouble of adjusting to the social

conditions placed on language use. There are three

different contributing factors that lead to sociopragmatic

failure, namely linguistic, sociocultural and

sociopsychological factors. These factors can be

influenced by aspects of the speaker’s first language (L1)

and target language (TL) and also by his or her

proficiency or awareness of the culture of the target

language.

III. PURPOSE OF THE STUDY

The purpose of this study is to examine how Malay

speakers use alerters in their request speech act. It seeks

to fulfil the following objectives:

1. To classify and compare the Malay categories of

alerters used in request speech acts by

Malaysians speakers with English categories of

alerters.

2. To examine whether or not the pragmatic

competence of L1 speakers can be transferred to

L2.

IV. RESEARCH INSTRUMENT

Questionnaires are the most effective instruments

that make it possible to collect a large number of data

relatively and easily. The Discourse Completion Task

(DCT) questionnaire has been employed by researchers

for more than years in order to investigate speech act

behaviour and pragmatic transfer and the researcher found

that it is convenient to this particular research.

The DCT questionnaire used in this research comprises

of fourteen open-ended questions based on the written

discourses that provide the context or situation for the

request speech act to be studied further. It consists of

structured written discourses, which provide the context

or situation for the speech act being studied. In addition,

the written questionnaire incorporates varying degrees of

social distance based on multiplicity of domains.

There are two types of situations involved, in which the

formal and informal situations that may lead to

differences in the form of address given by the speakers.

The following diagram illustrates a clearer picture

showing two situations that may be a significant factor

influencing the utterances made by them.

Fig. 1 Formal and informal situation

Among all situations, the targeted areas for formal

situation are the post office, immigration office, registry

office, KWSP office, banks, and telecommunications

office. In those premises, the more formal situation is

expected to occur in front of the customer counter, while

the informal situation is at the waiting area enabling

customers to interact with each other using less formal

language. Therefore, several questions have been

formulated to describe the two situations in order to

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obtain the types of alerter which may vary according to

particular situations. For an informal situation, some

places as shopping mall, grocery store, recreational park

and neighbourhoods were selected to reflect situations in

the process of constructing questions in the form of

written discourse in this study.

20 questionnaires have been pilot tested at the first

stage of the questionnaire development for the purpose of

verifying the sets of the questionnaire and was conducted

as a ‘snapshot’ survey conducted over a two-week period.

Based on the data gathered at that particular time, a few

amendments have been made to the questionnaire due to

certain restraints. After that, the modified version of the

questionnaire is then ready to be administered to all of the

respondents involved.

The respondents involved were required to respond as

naturally as possible and try to write their response as

what they would say in the given situation. The answers

given will then be analysed and this might shows

interesting findings that illustrate how sociocultural norms

are reflected in the language and are there any pragmatic

transfer detected through examples of language use.

V. METHODOLOGY

The project coding scheme was based on frames of

primary features in the realization of request and

apologies, proposed by Blum-Kulka Blum-Kulka &

Olshtain (1984). In order to analyse the alerters of

requests elicited from the questionnaires, the researcher

have adapted the coding categories based on the

frameworks employed by the Cross Cultural Speech Act

Realization Project (CCSARP) by Blum-Kulka &

Olshtain (1984). These coding categories are equivalent

to each other in some cases. These outlines were used as

the guidelines or the framework in analysing the data

collected. Blum-Kulka & Olshtain (1984) formulated 9

categories of alerters, i.e., title/role, surname, first name,

nickname, endearment term, offensive term, pronoun and

attention getter.

VI. RESULTS AND DISCUSSION

This study sought to examine to examine whether or

not the pragmatic competence of L1 speakers can be

transferred to L2. Determining the understanding of

alerters in Malay will help school teachers to teach speech

function in English.

There were ten categories of alerters in Malay found in

this study. The researcher further elaborates all those

categories in the following by providing examples and

clarifications using tables for clearer explanations about

each specified category.

A. Family Name/Surname

Tan

Family name or surname is very synonymous among

the Chinese population in Malaysia. In this research, some

respondents tend to use their friend’s family name maybe

due to the given situations in the DCT questionnaire in

which the speaker is likely to live in a multiracial

neighbourhood with a mixture of races and the existing

relationship is conventional so that the speaker feels free

to ask for help from his neighbour, who is a Chinese man.

TABLE II

EXAMPLE OF FAMILY NAME CATEGORY

Situation 13 Example

Anda ingin meminjam tangga

daripada jiran anda.

Bagaimanakah caranya anda

memulakan pertanyaan kepada

jiran?

“Tan, boleh pinjam tangga

sekejap?”

B. First Name

Aminah, Abu

As we know, it is a normal thing to start a conversation

by calling other people’s real name and this situation

shows that there must be a tight bond or a close

relationship between the two interlocutors and that was

why the speaker knows how to address his hearer with

names.

Some respondents said that it is even friendlier to use

the hearer’s first name in order to request for help or in an

effort to seek the assistance of a person. It is also said to

be the norm that often occur in clusters of society

regardless of whether they live in the urban or rural areas.

Furthermore, so as to ensure that the request made by the

speaker is accomplished by the listener, the conversation

should begin with a fair, decent and prudent.

TABLE III

EXAMPLE OF FIRST NAME CATEGORY

Situation 13 Example

Anda ingin meminjam tangga

daripada jiran anda.

Bagaimanakah caranya anda

memulakan pertanyaan kepada

jiran?

“Fiqah, umah ko ade tangga

tak? Aku nak pinjam leh?”

C. Nickname

Bob

In this globalization era, the nicknames are widely

being used as a suitable replacement for or additional to a

particular person’s real name. Most of the nicknames are

meant to obscure others about the true identity of a

person. For example, Bob, which stands for ‘badan orang

besar’ is a nickname to the shopkeeper and he may be a

fat guy indeed.

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TABLE IV

EXAMPLE OF NICKNAME CATEGORY

Situation 7 Example

Anda menerima pesanan makanan yang

salah di sebuah restoran dan ingin

meminta menu yang sebenar.

Bagaimanakah anda memulakan

permintaan tersebut kepada pelayan?

“Boy, tukar pesanan

lain boleh tak?”

D. Endearment Term

Sayang

The term of endearment was a positive politeness

strategy. A term like "honey", “love”, "sayang" and so on

did help toward the camaraderie existing between

interlocutors in the focus of request being made. This is

actually one of a positive politeness strategy. Those

mentioned terms above have helped to increase more of

the existing intimacy between speakers and listeners in the

focus of the request made. As we look at the example

below, the word 'love' is used by a speaker to someone of

her sister’s age in an informal situations in the official

domain, in which at the waiting area of the post office.

This indicates that the word ‘love’ was not necessarily

only directed to lovers or listeners who have a close

relationship with us. Nowadays, the society is more open-

minded and can accept other people’s greetings in a fond

manner even though they are not closely related to each

other. This situation illustrates that both the speaker and

the hearer knew each other well and they may have a

cordial relationship as the speaker was being very warm

and friendly to the hearer. Logically, people felt more

appreciated and this will indirectly increase their self-

esteem as if they are called by some other person warmly

and affectionately. At the same time, they eagerly wanted

to meet the demand of the speaker and that was how the

strategy worked out.

TABLE V

EXAMPLE OF ENDEARMENT TERM CATEGORY

Situation 2 Example

Anda ingin menghantar pos laju tetapi tidak

mengetahui bagaimana caranya. Bagaimanakah

anda memulakan pertanyaan kepada orang di

sebelah anda yang juga sedang menunggu

giliran bersama anda?

“Sayang,

macamana nak

hantar pos

laju?”

E. Pronoun

Tuan, Puan, Cik, Abang, Kakak, Adik, Saudara, Saudari,

Makcik, Pak cik, Awak, Wak, Tambi, Macha, Anney, Aya,

Nyonya, Tauke, Amoi, Bro, Makwe

Personal pronouns are often used by today's youngsters

to show their closeness. The use of “Tuan”, “Puan”, “Cik”

shows that the speaker knows how to adapt with the

situation such as the formal or the informal one based on

the given situation in the DCT questionnaire. The use of

“Abang”, “Kakak”, “Adik”, “Pak Cik”, “Mak Cik” were

meant to show respect to the hearer. “Wak” is a pronoun

means uncle in Javanese language while “Aya” also

means the same in Tamil. “Nyonya” and “Tauke”

symbolize the same meaning but as they are said to be the

monopolist of groceries commerce, the kinds of pronouns

have been used by most people in our country.

Additionally, the address term “bro”, which means

“brother” has been shortened and is used by the

youngsters to address people within their ‘so called’

urban population or generation. It goes the same or

equivalent with “Amoi” as well as “Sis” in a certain

condition or situation. Examples given below somehow

illustrate that the speaker knew the most appropriate

address term to be used in order to begin his or her

inquiries with an employee of the Registration

Department counter that was about the same age as his or

her father. The speakers still practice the Malay customs

and norms that have been handed down for ages in the

sense of initiating a conversation by taking into account

the context or circumstances surrounding it. It is because

the speaker started his request statement with the pronoun

“Encik” at a formal setting and that was the best thing to

do while addressing the department’s personnel at the

counter.

TABLE VI

EXAMPLE OF PRONOUN CATEGORY

Situation 4 Example

Anda ingin membuat kad pengenalan

baru di Jabatan Pendaftaran Negara

tetapi tidak mengetahui bagaimana

caranya. Bagaimanakah anda

memulakan pertanyaan kepada petugas

di kaunter?

“Encik, nak tanya, nak

buat kad pengenalan

baru macam mana ya?

F. Greetings

Assalamualaikum, Salam 1 Malaysia, Selamat Pagi,

Selamat Petang, Hello, Hai, Apa khabar, Good Day,

Good Morning

It has become a norm to all communities to start a

conversation with greetings especially with the Malays to

greet or start their words with “Assalamualaikum”. Those

who use “Selamat Pagi Malaysia” or “Selamat Pagi”

usually applied these kinds of greetings at the service or

government counters to show formality and respect. Not

all counter workers are the Malays since we are living in a

multi-racial country; hence, it would be even more

appropriate to use “Selamat Pagi”, “Good Morning” or

“Good Day” to a certain extent.

By starting with a good greeting, the speaker expects

the demand for help will be rewarded with the best. The

example below is given by the respondent in seeking for

help from the staff at the government and private

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department counter. The speaker began to request for

related information by greeting the personnel at the

counter with the purpose of showing respect and for

comfortability purposes.

TABLE VII

EXAMPLE OF GREETINGS CATEGORY

Situation 5 Example

Anda ingin mendaftar talian telefon

bimbit tetapi tidak mengetahui

bagaimana caranya. Bagaimanakah

anda memulakan pertanyaan kepada

petugas di kaunter?

“Good morning, could

you tell me how?”

“Good day, may I

know..?”

G. Sound

Noisy sound (nudge sound)

However, some Malaysians are still unaware of the

language courtesy in conversations. It is because the

younger generation most likely started a request

conversation by making a nudge sound like a sound of a

mouse in order to call or to notice his hearer. This kind

of behaviour is totally inappropriate and can somehow be

considered as rude. Even though not everyone did this,

but this kind of behavior has been spread out among

young people in Malaysia. It begins just with pleasure,

but this may be a very serious problem if it is not being

addressed wisely.

TABLE VIII

EXAMPLE OF SOUND CATEGORY

Situation 7 Example

Anda menerima pesanan makanan

yang salah di sebuah restoran dan

ingin meminta menu yang sebenar.


permintaan tersebut kepada

pelayan?

Produce certain sound to alert

the waiter.

H. Apologizing

Maafkan saya

The Malays are full of politeness in every action they

do. So, they would start their conversation by

apologizing others in order to request for something to be

done in return.

TABLE IX

EXAMPLE OF APOLOGIZING CATEGORY

Situation 5 Example

Anda ingin mendaftar talian

telefon bimbit tetapi tidak

mengetahui bagaimana caranya.


pertanyaan kepada petugas di

kaunter?

“Maafkan saya, boleh saya

bertanya?”

According to Maslida Yusof et. al. (2011), an apology

can follow the request verb in formal situations and can

appear as the initiator element of discretion or (alerter)

that precedes the actual request made by speakers. This

situation happened probably due to the uncomfortable

feeling to interfere others in order to get help from them.

I. Attention Getter / Exclamation

Tumpang Tanya, Sebentar ya, Errr.., Wei, Oi, Deii, Weh,

Hmm.., Emm.., Eh..

Those respondents who used this kind of alerters did

not sure of what would be the most appropriate address

term should be used in order to start their conversation in

making requests. It might be used by a speaker who does

not know whom the addressee is and does not know what

types of address terms to be used in initiating a request

conversation. They tried to alert their hearer by

mumbling around with those “emm..” or “hmm..” or else

started to play safe by saying “tumpang tanya” instead of

calling names or address term “Encik” since some people

may seem quite simple on the outside, but in fact they

were the dignitaries who must be honored. But, those

who used “wei”, “oii”, “deii” and so on were just using

sort of alerters with their close friends especially among

the youngsters. None of the repondents used that kind of

words to address people in the formal situation.

Another example is a request statement made by a

speaker who requested for information about the food

court around a shopping mall area. He asked for help

from someone who passed by and who is more or less at

the same age with him by saying “Excuse me”. This

situation shows that the Malays are concerned with

language courtesy and politeness in which they simply

started their conversation with a stranger by using suitable

alerters.

TABLE X

EXAMPLE OF ATTENTION GETTER CATEGORY

Situation 1 Example

Anda ingin menghantar pos laju tetapi

tidak mengetahui bagaimana caranya.


pertanyaan kepada petugas di kaunter?

“hmm..nak tanya

boleh? Bagaimana

cara hendak

menghantar pos

laju?”

J. Zero Alerters

Smiles, waving hands

For this particular category, the respondents did not know

the best way to start their conversation in making request

from others. They choose to delete or eliminate the

alerters and straight away start making request. Most

respondents did this when they wanted something from

the waiter in one of the situations given in the

questionnaire.

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TABLE XI

EXAMPLE OF ZERO ALERTERS CATEGORY

Situation 7 Example

Anda menerima pesanan makanan

yang salah di sebuah restoran dan

ingin meminta menu yang sebenar.


permintaan tersebut kepada pelayan?

Waving hands to the waiter

and at the same time gave

him non-verbal act saying

that the menu was a wrong

one.

a) A comparison between Malay and English

categories of alerters

Based on the study, there were ten categories of alerters

used by Malay speakers. In the following, I described my

data analysis by discussing the similarities and differences

of alerters categories found in this study with the

categories acknowledged in Cross-Cultural Speech Act

Realisation Project (CCSARP) by Blum-Kulka &

Olshtain (1984). From the analysis, the researcher found

that there were some differences in terms of categories of

alerters in Malay and in English.

TABLE XII

A COMPARISON BETWEEN THE MALAY AND ENGLISH CATOEGORIES OF

ALERTERS

Categories of

Alerters

Malay English

**Title/Role Professor,

Waiter,Teacher,Dr.

Family Name/

Surname

Tan Johnson

First Name Aminah, Abu Judith

Nickname Bob Judy

Endearment

Term

Sayang Honey

Pronoun Tuan, Puan, Cik,

Abang, Kakak, Adik,

Saudara, Makcik, Pak cik,

Awak, Wak, Tambi, Aya,

Nyonya, Tauke, Amoi,

Bro, Makwe

You

Greetings Assalamualaikum,

Salam 1 Malaysia,

Selamat Pagi, Hello, Hai,

Apa khabar?

Hello

*Sound (nudge) Produce sound to alert

waiter

*Apologizing Maafkan saya,

Attention Getter

/ Exclamation

Tumpang Tanya,

Sebentar ya, Errr.., Wei!,

Oi!, Deii!

Excuse me, hey!

Zero Alerters Smiling, Nodding,

Waving hands

**Offensive

Term

Stupid cow

** Appear in English *Appear in Malay

In Malay, there was no offensive term and title/role

being used to initiate the request they made. The use of

title/role is usually dependent on the situation that they

are in. In the DCT questionnaire, there was a situation at

the restaurant in regards with calling the waiter for

mistaken food order. But, none of the respondents use the

role of ‘waiter’ to start their request conversation. The

researcher believed that those respondents involved

imagined that they were in a small restaurant instead of

the exclusive one. Usually, typical Malay people thought

that ‘waiter’ is only to be used at hotels and other

exclusive places.

Malay speakers prefer openers with neutrals, an

alteration from the forms utilized in some situations

(Austin, 1962). Besides that, the offensive terms were

avoided by the Malay community in their request

conversation as they are still aware of the language

politeness or greeting courteous; therefore, they do not

ever start their conversation with such rude words. This

issue correspond to what Marlyna Maros (2006) have

said, in which “Malays are expected to communicate

good manners, breeding and sensitivity to those with

whom they interact on a more formal basis.”

Otherwise, in English, there was no category of sound

and apologizing as compared to Malay and this might be

due to culture differences in which the Malays are very

concerned with language courtesy in everything they do.

But, in English, the more direct the utterance is, the more

polite it will be.

An individual is said to be a cultured and refined

person by looking at the selection of the content and form

of conversation, nonverbal cues, the order of seating, and

forms of greetings (Asmah Hj. Omar 1996, Asmah

Abdullah 1996, Teo Kok Seong 1996). In Malay culture,

it is a norm to request in a polite way; therefore, they used

their own cultural norm of speaking indirectly, starting

their request with “maaf” in their native tongue, which is

equivalent to “sorry” in English. The respondent

responses’ indicated that they needed to offer more than

simply an apology, which specifies their strategy of

requesting something in return.

b) Pragmatic Transfer from L1 to L2

The pragmatic aspects of the language are frequently

overlooked since the traditional language teaching

methodologies accentuate the learner solely of the

grammatical features of the language. Pragmatic

competence in language teaching approaches is very

important, as it is an essential component in the language

learning process. Other than that, contrastive analysis was

used as an attempt to identify areas of convergence and

divergence between the L1 and the L2 in order to predict

elements of the L2 which would be easier or harder for

the learner to learn.

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It is needed for L2 speakers to be rendered to or at least

to be properly taught that pragmatic rules of other

languages are not at all times the same as those of their

own. However, the environment where the speakers are in

may affect the effectiveness of such exposure or teaching.

There is a chance that speakers will endure to prefer their

own social and cultural rules to those of target language

even after clear instruction and consciousness building,

especially as in Malaysia, in the case of English as a

Second Language.

It would be a pleasure to see how the Malays handle

the situations that need requests in a different language, in

which the second language, that is English. Numerous

studies show that although learners may have learned the

target language rules and the target language linguistic

form, they are not able to comprehend the social and

cultural rules which constrain the target language use. In

their communication with native speakers of the target

language, learners are likely to transmit their native social

and cultural norms or customs into the target language,

produce unsuitable linguistic behaviours, and prominent

to pragmatic failure.

The results of the study show that the similarities

mentioned somehow can help school teachers to teach

speech function in English among the second language

learners in Malaysia. Additionally, the findings also show

that there is no significant difference in terms of the

categories of alerters used in both Malay and English.

Probably, the learners may use the pragmatic competency

that they already have in L1 to help them acquire English,

as their target language.

VII. CONCLUSION

This particular study can be used as a reference for

further study by researchers who are interested in

investigating other elements related to request speech

acts. Since several factors have been identified to have an

influence on the process of L1 pragmatic transfer, more

empirical investigations are needed to determine

conditions under which L1 pragmatic transfer occurs.

Based on the findings, the request pattern by Malay

speakers has displayed their L1 linguistic and

sociocultural rules, positively affecting their

sociopragmatic competence in the production of request

in English due to the similarities found in terms of the

categories of alerters in both languages.

It also helps school teachers in understanding the needs

of their students in order to perform better in learning

speech functions of English. Additionally, educators

should always have in mind that when it comes to

teaching culture, the most important thing to be

considered is the need to raise their students’ awareness

of their own and target culture in order to develop their

pragmatic consciousness. Teachers and program

developers are suggested to take the learners'

sociocultural background into consideration in selecting

materials and employ suitable pedagogical approaches for

particular contexts of teaching.

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Abstract— Conflict is inevitable in the workplace. Researchers

found conflicts are able to affect employees’ positive behaviors

negatively. However, conflict is not always bad, it depends on

the conflict types and the conflict resolution strategies. In this

conceptual paper, we will explain the relationship between

conflict types, supervisors’ conflict resolution strategies and

employees’ positive behaviors. Understanding the relationship

of these variables enables us to have a better knowledge of how

the conflict affects employee behaviors. And, the knowledge

will benefit to industrial and organizational psychologist,

workplace counselors and human resource manager.

Keywords— Conflict types, conflict resolution strategies,

and, employees’ behavior

I. INTRODUCTION

MPLOYEES’ positive behaviors (loyal toward the

organization, organizational commitment,

organizational citizenship behavior etc.) are valuable

assets for the organization. The positive behaviors are

able to shield the organization from possible jeopardy.

For many decades, researchers have been exploring

various approaches to enhance employee positive

behavior in the current challenging working environment.

Conflicts that occur in the workplace can damage

employee positive behavior (Wit, 2013) especially in

collectivist societies such as Taiwan, Korea, Indonesia

and Malaysia (Hofstede and Hofstede, 2005). Employees

in collectivist societies value harmony in a group and

avoid direct confrontations (Hofstede, 2001). They tend

to maintain harmony and avoid conflict in the workplace

(Komarraju, Dollinger, Lovell, 2008). However, conflicts

are inevitable among humans. Conflicts exist when

incompatibility, disagreement, or dissonance happen

(Barbuto and Xu, 2006). Conflicts are basically common

experiences in any type of work environment which we


regularly encounter.

It is a natural outcome of human interaction, especially in

the workplace.

II. IS CONFLICT GOOD OR BAD IN THE WORKPLACE?

Conflict can be categorized as both constructive and

destructive. Conflict is not always bad, constructive

conflicts stimulate innovation, creativity (Rahim, 2011),

improved problem-solving quality (Alper, Tjosvold, and

Law 2000), and increase organizational citizenship

behavior (Salami, 2010). Inappropriate supervisors’

conflict resolution strategies will cause destructive

conflicts and lead to counter productive workplace

behavior (Penney & Spector, 2005), cause job stress,

relationship damage, decrease organizational

commitment, loyalty, (Rahim, 2011) and organizational

citizenship behavior (Salami, 2009). Therefore,

constructive or destructive conflict is mainly depending

on how a supervisor handles the conflict.

III. SUPERVISOR’S CONFLICT RESOLUTION

STRATEGIES

Supervisors’ conflict resolution strategies refer to the

supervisors’ conflict handling strategies or pattern when

encountering conflict in the workplace. According to

Rahim (1983), conflict resolution strategies can be

categorized into five divisions namely: Integrating,

obliging, compromising, avoiding, and, dominating.

a. Integrating Strategy – Supervisor who

employs this strategy highly value both

himself/herself and his/her employees as

illustrated in Figure 1. This strategy is also

known as problem-solving. He/she views

conflict as a problem to be solved, and solve the

conflict via collaboration in order to reach a

solution acceptable to both parties. This type of

The Relationship of Conflict Types,

Supervisors’ Conflict Resolution Strategies and

Employees’ Positive Behaviors

Ooh Seow Linga*, Chua Bee Seokb & Ismail Maakipb

aWawasan Open University, 54, Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia bUniversiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Malaysia

E

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strategy is generally known as the best conflict

resolution strategy in managing conflict under

some circumstances (Verma, 1998) because it

provides long-term solution, although it might

take long time.

b. Obliging strategy – The supervisor who

uses this strategy has low concern about

himself/herself, but is highly concerned for

others (employees). When conflicts happen,

he/she has a tendency to focus on areas of

agreement rather than areas of difference until

suppresses his/her needs, interests and goals.

This strategy only provides a short-term solution

and the price the supervisor needs to pay is too

high. It is only applicable when a supervisor has

low negotiation status.

c. Compromising Strategy – The supervisor

who employs this strategy has intermediate

concern for himself/herself and the employees.

When conflict occurs, he/she will take a middle

point, make a mutually acceptable decision and

bargains to reach some degree of satisfaction for

both parties. It involves give and take on both

parties whereby both parties have to give up

something to find the optimal solution in

conflict. This strategy might be able to provide a

definitive solution but not a long-term solution.

d. Avoiding Strategy – The supervisor who

employs this strategy has low concerns for

himself/herself and his/her employees. When

conflict happens, he/she is likely to not address

the conflict at all, and being physically absent,

avoiding issues and remaining silent. This

strategy is considered the worst because it does

not solve the conflict at all.

e. Dominating Strategy - The supervisor who

employs this strategy is highly concern about

himself/herself, but lack concern for employees.

When conflict occurs, he/she tends to use force

and competitive strategies to obtain her or his

objective without concern about others. This

strategy is only advisable to use when the

objective is clear. If a supervisor has a very clear

goal to be achieved, then the dominating strategy

is employable. If not, the hard feelings may come

back in other forms, thus decrease employee

positive behaviors.

Rahim, Magner & Shapiro, 2000 have divided the five

conflict resolution strategies into two primary

components, namely cooperative and uncooperative

conflict resolution strategies. The three strategies

(integrating, obliging and compromising) that have

moderate to high level of concern for others are

categorized as “cooperative conflict resolution strategies”.

While, dominating and avoiding are categorized into

“uncooperative conflict resolution strategies”, both of

these strategies shown little concern for others. The

summary of conflict resolution strategies is shown in table

I.

Concern for Self

Co

ncern

fo

r O

thers

Lo

w

Hig

h

High Low

Integrating

Obliging

Compromising

Dominating

Avoiding

Fig. 1 The dual concern model of the conflict resolution strategies

TABLE I

FIVE CONFLICT RESOLUTION STRATEGIES

Conflict

Management

style

Description Effect

Cooperative

Integrating Value both himself/

herself and others.

Solve the conflict via

collaboration

Best conflict solution

strategy

Provides long-

term resolutions,

but time

consumers.

Obliging Low concern about

himself/herself, but

highly concern for

others.

Accommodating until

to satisfy his/her

needs.

This strategy only

provides a short-

term solution. Use

only when your

negotiation power

is low.

Uncooperative

Compromising Intermediate concern

for himself/ herself

and others.

Making a mutually

acceptable decision

involves give and

take on both parties.

Provide a

definitive solution,

but not a long-

term solution.

Avoiding Low concerns for

himself/ herself and

others

Withdraw from

conflict situations

Worst conflict solution

strategy

Does not solve the

conflict.

Dominating Use forcing and

competitive

strategies to obtain

her or his objective

without concern

about others.

Hard feelings may

come back in

other forms.

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The relationship between supervisors’ conflict

resolution strategies and employee behaviors can be

explained through reciprocity theory.

IV. RECIPROCITY THEORY

Reciprocity theory is developed by Falk and

Fischbacher in the year 2001. They believe that people

are reciprocal in interpersonal relationships. People will

react accordingly to how others treat them. People will

evaluate others’ action based on their intentions before

responding to the action. In other words, the individual

behavior depends on how they have been treated. The

individual will return the kind action if they receive gentle

treatment. Conversely, the individual will punish the

unkind behavior if they receive unkind treatment.

Based on reciprocity theory, we conjecture that an

employees’ behavior is a result of his/her supervisor’s

action. In other words, supervisors’ conflict resolution

strategies will affect employees’ behavior. We surmise

that if the supervisor applies uncooperative conflict

resolution strategies (dominating or avoiding), like

supervisor forcing employee to obtain her or his objective

without concern about them or the supervisor avoiding the

conflict and remaining silent in conflict situation will

make employee fail to receive fair treatment,

consequently it will reducing employees’ positive

behavior.

On the other hand, if supervisors collaborate with

employees and solve the conflicts mutually (Integrating

conflict resolution strategy) or the supervisor and the

employee make a mutually acceptable decision to reach

some degree of satisfaction for both parties in conflict

(Compromising conflict resolution strategy) or the

supervisor give in to the employee although it will

suppress his/her needs, interests and goals (Obliging

conflict resolution strategy), will make the employee feel

he/she is valuable. In return the employees’ positive

behaviors will be increased as illustrate in the following

Fig. I.

Fig. 1 The relationship between supervisors’ conflict resolution

strategies and employees’ positive behaviors

Besides that, Marques, Lourenco, Dimas and Rebelo,

(2015) found that different types of conflict will affect

supervisors’ conflict resolution strategies differently and

thus affect employee behavior (DeDreu and Wieingart,

2003).

V. CONFLICT TYPES

According to Jehn and Mannix (2001), intragroup

conflict can be categorized into three different categories,

namely: task, relationship and process conflict as

following table II:

TABLE II

THREE TYPES OF CONFLICT

Conflict types Description

Task conflict Conflicts or disagreements happen among

employee related to a certain task. It happens

when an employee has a different opinion

about a certain task.

Relationship

conflict

Interpersonal conflict among employees that

happen in the workplace.

Process conflict Conflict or disagreements about how a work

or task in the workplace should be

accomplished. In more specifically, process

conflict pertains to issues of duty and resource

delegation.

Researchers found that both task and relationship

conflicts affected employee positive behavior negatively

(Wit, 2013), performance and satisfaction negatively

(DeDreu and Wieingart, 2003). Wit, Greer and Jehn

(2012) found that compared to task conflict, relationship

and process conflicts affected group performance more

deeply. The influence of task conflict on group

performance more positively compared to relationship

conflict and process conflict. However, research findings

also showed that task conflict is associated positively with

performance (Amason, 1996; Jehn, 1994), creativity

(Nemeth, 1995), group commitment (Behfar, Mannix,

Peterson, &Trochim, 2011).

It is evident that the results appear there are some

discrepant findings in the relationship between the

conflict types and employee behavior. In this regards, we

summarize that there must be some missing link between

the two variables (conflict types and employee behavior).

According to a notorious situationist (Walter Mischel),

an individual’s behaviors are highly depend upon

situations. Supervisors’ conflict resolution strategies will

change accordingly to the conflict situations (conflict

types), and thus affect employee behavior. This statement

is supported by the research finding of Marques et, al

(2015). Their research found that when task conflict

happens, individuals tend to endorse integrating conflict

resolution strategies to solve the conflict. When dealing

with relationship conflict, the individual tends to apply

avoidance conflict resolution strategy to withdraw and

retreats from the conflict. It is noticeable that,

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supervisors’ conflict resolution strategies have an

interrelationship between conflict types and employees’

behaviors.

VI. CONCLUSION

Based on the above mentioned research findings, it can

be hypothesized that conflict resolution strategies will be

able to explain the missing picture between conflict types

and employee behavior as proposed by Rahim (2011)

who stated that there is the urgent need to investigate

mediating effects of conflict management styles on the

relationship between the three types of conflict and

employees’ positive behavior. In this regards, we

conclude there is a need to explore how the supervisors’

conflict resolution strategies mediate the relationship of

conflict types and employee behavior as illustrated in Fig.

2..

Fig. 2 The relationship between supervisors’ conflict resolution

strategies, conflict types and employees’ positive behaviors

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Penney, L. M., & Spector, P. E. (2005). Job stress, incivility, and

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777-796.

Rahim, M. A. (1983). A measure of styles of handing interpersonal

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Abstract—This paper aims to determine the tourist satisfaction

indicators for responsible rural tourism at Kinabalu National

Park. In order to achieve this aim, data collection was

conducted using a semi-structured questionnaire around the

Kinabalu Park headquarter complex. The questionnaire was

constructed based on one of the two components that were

outlined by World Tourism Organisation (UNWTO), which is

determining whether tourists were satisfied upon leaving”. This

study found that the scenery, sense of achievement and whole

experience were rated the highest. Other than that, almost half

of the number of respondents were found to have experienced

water insufficiency and did not agree that the management of

waste at Laban Rata is efficient. In terms of perception of value

for money, the study found that RM10-RM50 is the range of

amount of once in a lifetime donation that the majority of the

respondents are willing to pay, while the highest stated amount

is RM10,000.00.

Keywords— Kinabalu National Park, responsible rural

tourism, tourist satisfaction, WTO.

I. INTRODUCTION

HE concept of responsible tourism were first

introduced at The Cape Town Conference, which

states that responsible tourism are minimized negative

economic, environmental and social impacts; makes

positive contributions to the conservation of natural and

cultural heritage, to the maintenance of the world’s

diversity; provides more enjoyable experiences for

tourists through more meaningful connections with local

people, and a greater understanding of local cultural,

social and environmental issues (Cape Town, 2002)

Thus, responsible tourism provide a win-win situation

where consumer satisfaction are sustained while the

tourism destination kept conserved.

Tourism satisfaction is based on many different factors,

such as the range of attractions of a destination, its

marketing positioning, the quality of services, the

expectations of tourists and the experiences of each

tourist (UNWTO, 2004). Customer’s satisfaction

generally is a psychological concept that involves the

feeling of well-being and pleasure that results from

obtaining what one hopes for and expects from an

appealing product and/or service (WTO, 1985). In

addition, past studies have shown that tourists’

satisfaction is one of the most important determinants in

the quality management of an industry (Lo et al., 2011).

Based on previous tourism literature, it is well

established that tourist satisfaction and a tourist’s

intention to return are partially determined by their

assessment of the destination’s different characteristics

(Alegre and Garau, 2010). In order for a tour destination

to sustain in the market, it is important to understand the

visitors’ perception and satisfaction for the destination

(Talib et al., 2014). There has been limited information

about key indicators used to monitor the park impacts

such as the level of visitor satisfaction in relation to parks

attractions and facilities, the amount of budget allocation

Tourist Satisfaction Indicators for Responsible

Rural Tourism Framework: A Case of Kinabalu

National Park

Timothy Ajeng Merenga*, Hamimah Taliba & Jennifer Kim Lian Chanb

aFaculty of Science and Natural Resources (Forestry Complex), Universiti Malaysia Sabah, Kota

Kinabalu, Sabah, Malaysia. bFaculty of Business, Economics and Accounting, Universiti Malaysia Sabah, Kota Kinabalu,

Sabah, Malaysia.

T

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for nature park conservation activities and staff training.

According to UNWTO, indicators are measures of the

existence or severity of current issues, signals of

upcoming situations or problems, measure of risk and

potential need for action and means to identify and

measure the results of a specific action for a destination

(Nepal, 2011).

Kinabalu National Park (KNP) which is located in

Ranau, Sabah; a rural area in the land of Borneo, was

chosen as the site for this study. Due to its location in the

rural part of Borneo, hence the term “rural” is added to

the existing term “responsible tourism” specifically for

this study. KNP was chosen because it was declared as a

UNESCO Heritage Site due to its outstanding cultural or

natural importance to the common heritage of humanity in

December 2000. The main attraction in KNP is Mt.

Kinabalu. The mountain offers a great spot for the

outdoor recreation enthusiasts along with flora and fauna-

rich biodiversity landscape as its background. Hence,

determining the tourist satisfaction indicator serve as the

aim of this paper as well as to identify issue that might

affect their satisfaction while participating in mountain

climbing activity on Mt. Kinabalu.

UNWTO (2004) outlined two main components of

issue to guide identification of indicators for tourist

satisfaction that should be tailored to the needs of a

particular destination. The two components are

“determining whether tourists were satisfied upon

leaving”, and “measuring the impact of satisfaction levels

on the industry and destination”. To achieve the purpose

of determining the tourist satisfaction indicators, only the

first component, which is “determining whether tourists

were satisfied upon leaving” was used as a guide.

Outlined under this component are 3 indicator categories

namely the level of satisfaction by visitor on upon

leaving, perception of value for money and complaints

received. This study is a continuation of previous pilot

survey done by Talib et al., (2014), hence the parameters

for the indicators used are the same.

TABLE 1:

CORE INDICATORS OF DETERMINING TOURIST

SATISFACTION UPON LEAVING BASED ON WTO (2004)

Components of the issue Indicators

Determining whether tourists

were satisfied upon leaving Level of satisfaction

(including specific question/s to

key activities and attractions)

- Perception of value for money

- Complaints received

II. METHODOLOGY

The data collection period was from 10th April 2016

until 16th April 2016. Research team gathered at two main

points, which are at the Timpohon Gate and the

headquarters office. The population of interest for this

study is the climbers of Mt. Kinabalu. A number of 130

questionnaires were conveniently distributed to the

climbers and a total of 107 were returned and usable.

The questionnaire consists of two main parts, where

the first section is for the purpose of collecting

background information of respondents and the second

section is for satisfaction level based on the experience

while participating in climbing and staying in the park,

using a 5-point Lickert scale, ranging from 1 point

indicating “bad” to 5 points indicating “excellent”. The

baseline indicators for tourist satisfaction issues were

elicited based on the construct adapted from UNWTO

(2004). Prior to the pilot survey, a discussion with the

park management were done to ensure all important park

components were included. There were 24 items listed out

in the questionnaire on which the tourist satisfaction level

measurement were based under four main elements,

namely the resource (mountain trails, facilities, scenery),

activity (climbing experience), guide and staff service

performance as well as satisfaction towards crowding.

Additional questions were also included to find out

whether respondents experience traffic congestion and

water insufficiency as well as semi-structured questions to

gauge visitor complaints. Finally, respondents were asked

about their perception of value for money in terms of their

willingness to pay for a single, once and for all, one-time

donation to preserve KNP as a World Heritage site.

Iii. Results

Briefly, the respondents are 75.49% Malaysian and

24.51% international tourist. Other than that, 50.47% of

the respondents are female, and 49.53% male; while 42%

of them are between the age of 20-24 years old. Most of

the respondents (70.8%) have completed tertiary

education.

A total of 88% of the respondents purchased climbing

package and 12% purchased it separately. When asked

about the price of the package that they have paid,

majority of the respondents, (61.3%) stated that the

package price is reasonable. A total of 71% of them are

first-timer at climbing Mt. Kinabalu. Lastly, 83.67% said

“yes” when asked for their intention to return. The data

are shown in the Table II.

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TABLE II:

RESPONDENT’S DEMOGRAPHY

N

o

Nationality n %

1 Malaysian 77 75.49

2 International 25 24.51

N

o

Age Group n %

1 19 and below 5 4.67

2 20-24 45 42.05

3 25-29 23 21.50

4 30-34 16 14.95

5 35-39 4 3.74

6 40-44 4 3.74

7 45-49 4 3.74

8 50-54 2 1.87

9 55-59 3 2.81

1

0

60 and above 1 0.93

N

o

Gender n %

1 Male 53 49.53

2 Female 54 50.47

N

o

Level of Education n %

1 Masters/PhD 16 15.54

2 Diploma/ Bachelor Degree 73 70.87

3 Secondary Education 11 10.68

4 Primary Education 3 2.91

N

o

Packaged Tour n %

1 Yes 84 91.30

2 No 11 8.70

N

o

What do you think of the amount

you have paid for this package?

n %

1 Expensive 33 35.48

2 Reasonable 57 61.29

3 Cheap 3 3.23

N

o

Is this your first visit? n %

1 Yes 71 71

2 No 29 29

N

o

Intention to return n %

1 Yes 82 83.67%

2 No 16 16.33%

A. Tourist’s Level of Satisfaction

Based on Table 3, the highest rated items are related to

scenery, experience and achievement (mean score

between 4.00 to 4.26). The item “satisfaction towards the

scenery at Low’s Peak” has the highest mean score, while

the lowest is “satisfaction towards the sufficiency of water

supply”. The items with the mean score between 3.92 to

3.99 are related to the mountain guide services, trail

condition, scenery at headquarter, facility at Laban Rata

and towards park staff services, whereas the items with

the mean score between 3.82 to 3.88 are the facility at the

headquarters, the park operation and management, facility

along the trail and the waste management. The items with

the mean score between 3.71 to 3.79 are the satisfaction

towards travel agency services, the scenery at Timpohon

Gate, crowding at Low’s Peak and crowding at Timpohon

Gate. Items with mean score between 3.62 to 3.68 are the

satisfaction towards the crowding along the trail,

crowding at Laban Rata, crowding at the Summit and

crowding at the headquarters. Lastly, the item with the

lowest mean score which is 3.57 is the level of

satisfaction towards sufficiency of water supply.

TABLE 3:

TOURIST ‘S LEVEL OF SATISFACTION

No Visitor Satisfaction Mean N

1 Towards the scenery at Low’s Peak 4.2596 104

2 Towards your whole experience 4.2212 104

3 Towards the scenery at Trail To Summit 4.2000 105

4 Towards your achievement 4.1429 105

5 Towards the scenery at Laban Rata 4.0849 106

6 Towards the scenery along the Trail 4.0190 105

7 Towards mountain guide services 3.9905 105

8 Towards the trail condition 3.9712 104

9 Towards the scenery at Headquarters 3.9528 106

10 Towards the facilities at Laban Rata 3.9143 105

11 Towards park staff services 3.9126 103

12 Towards the facilities at Headquarters 3.8846 104

13 Towards park operation and management 3.8738 103

14 Towards the facilities along the trail 3.8381 105

15 Towards waste management 3.8208 106

16 Towards travel agency services 3.7917 96

17 Towards the scenery at Timpohon Gate 3.7736 106

18 Towards the crowding at Low’s Peak 3.7200 100

19 Towards the crowding at Timpohon Gate 3.7115 104

20 Towards the crowding along the trail 3.6827 104

21 Towards the crowding at Laban Rata 3.6635 104

22 Towards the crowding at the Summit 3.6408 103

23 Towards the crowding at the Headquarters 3.6250 104

24 Towards sufficiency of water supply 3.5714 105

B. Climber’s Complaints

The responses by the respondents when asked about

their opinion on the responsible use of the natural

resources, the respondents agree that “no vandalism or

irresponsible act towards the

resource/vegetation/wildlife” regarding responsible use of

the natural resources. It has the highest mean score which

is 4.4, followed by “no vandalism or irresponsible act

towards the facilities” and “no other irresponsible acts

towards the park by the visitor” which has the mean score

of 4.3. “No littering, by the visitors in the park area” and

“no other irresponsible act towards other visitors” have

the mean score of 4.2, while “no noise pollution by the

visitors in the park area” score the lowest mean score of

4.1. Overall, the respondents agree with all the statements

regarding responsible use of the natural resources.

Based on the analyses, 58.17% of the respondents are

found to experience water insufficiency during their

climb, while 41.83% did not. When asked about the place

where they have experienced water insufficiency, 50%

stated that they experienced it at Laban Rata Resthouse,

followed by 18.43% at along the trail, 15.79% stated that

they experienced water insufficiency at other hut they

stayed in and lastly 7.89% stated they experienced water

insufficiency at Gunting Lagadan Hut.

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TABLE 4:

CLIMBERS COMPLAINTS

No Your opinion on the responsible use of the

natural resources:

Mean

1 No vandalism or irresponsible act towards

the resource/vegetation/wildlife

4.4095

2 No vandalism or irresponsible act towards

the facilities

4.3524

3 No other irresponsible acts towards the park

by the visitors

4.3143

4 No littering by the visitors in the park area 4.2913

5 No other irresponsible act towards other

visitors

4.2762

6 No noise pollution by the visitors in the

park area

4.1250

No Did you experience any insufficiency of

water supply during your mountain

climbing?

N %

1 Yes 4

1

41.83

2 No 5

7

58.17

No If Yes, please specify the place: N %

1 At Laban Rata Resthouse 1

9

50

2 At Gunting Lagadan Hut 3 7.89

3 Other hut you stayed in 6 15.79

4 Along the trail 7 18.43

5 All the above 3 7.89

No Do you think that the management of waste

is properly and efficiently done on Mt

Kinabalu?

N %

1 Yes 8

8

89.79

2 No 1

0

10.21

No Did you experience any traffic congestion

from the headquarters to Timpohon Gate?

N %

1 Yes 1

3

13

2 No 8

7

87

No Did you experience air pollution along the

trail?

N %

1 Yes 1

1

10.89

2 No 9

0

89.11

No Did you notice any unpleasant view or

sight along the trail?

N %

1 Yes 7 7.07

2 No 9

2

92.93

When asked whether the waste management is proper

and efficient at Mount Kinabalu, 89.79% stated “yes” and

10.21 stated “no”. Regarding traffic congestion, 87% did

not experience any traffic congestion from the

headquarters to Timpohon Gate and 13% did experience

traffic congestion.

When asked whether they experienced air pollution

along the trail, the majority, 89.11% indicated they did

not experience it. In addition, 92.93% of the respondents

indicated they did not experience any unpleasant view or

sight along the trail. The details of questions asked and

the responses are as shown in Table 4.

C. Perception of Value for Money

The respondents were asked how large a single once

and for all, one time donation they are willing to make to

preserve the World Heritage Site. This question aims to

gauge their perception of value for money for KNP. The

result shows that the majority (45.95%) of the

respondents are willing to give RM10-50. The highest

willingness to pay for this one-time, once and for all

donation is RM10,00.00 The results are as shown in the

Table 5.

TABLE 5:

PERCEPTION OF VALUE FOR MONEY

No How large is a single, once

and for all, one time

donation you are willing to

make to preserve this

World Heritage Site,

knowing that we are only

paying RM3 (local) / RM15

(international) as

conservation fee?

Total %

1 Below RM10 29 39.18

2 RM10-RM50 34 45.94

3 RM51-RM100 3 4.05

4 RM101-

RM200

1 1.35

5 RM201-

RM300

1 1.35

6 RM300 and

more (max:

RM10,000)

6 8.13

IV. DISCUSSION

In order for a prime tourist destination to sustain its

tourist satisfaction while responsibly managing its

resources, it is important to identify the key indicators and

find a holistic responsible tourism framework that can be

applied (Talib et al., 2014). Tourist satisfaction has been

supported by many researchers as one of the important

indicators in the quality management of organization, to

determine the quality delivered to customers, and the

assesment must be a basic parameter used to evaluate the

performance of destination products and services (Talib et

al., 2014; Lo et al., 2011; Vavra, 1997; Yoon and Uysal,

2005).

This study found that the scenery, sense of

achievement and whole experience were highest rated

item when asked about the level of satisfaction. Based on

the result, the crowding at Kinabalu National Park needs

further attention by both climbing coordinator and the

park management as 6 items related to crowding were

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among the lowest item that have the lowest mean. This is

an alarming issue that the park management should take

care of and ensure the average number of climbers per

day would not cause discomfort for future climbers.

Compared with the previous pilot study, the quality of the

facilities have slightly improved; from mean score of 3.6

to 3.8, whereas the crowding and water insufficiency have

dropped to the lowest among 24 items stated. However,

the smaller number of respondents during the pilot survey

should be taken into account, and thus the results should

be used with caution. Overall, climber’s level of

satisfaction are within the satisfactory level as the mean of

each item are above 3.5 Lickert scale point.

Secondly, the climber’s perceptions of value for

money shows that the majority are willing to pay between

RM10-RM50, and the highest stated amount is

RM10,000.00. The willingness to pay are related to the

tourist loyalty. Three indicators that tourist loyalty are

intention to continue buying the same product, intention

to buy more of the same product, and willingness to

recommend the product to others (Hepworth and Mateus,

1994). Also, based on the result, the majority (83.67%) of

the respondents indicated that they would like to come

again if there is another chance in the future. Hence, this

shows that KNP has a firm tourist loyalty towards its

product which is Mt. Kinabalu. In terms of whether the

respondents perceived the experience they have gained in

KNP is worth the money they have paid, it is evidenced in

the response of the majority (61.29%) that the amount

they have paid is reasonable.

Apart from satisfaction level and perceptions of value

for money, this study also identified “water insufficiency”

and “waste management” as worrying issues which could

also serve as indicators for satisfaction. Based on

previous pilot survey, it was found that “water

insufficiency” and “traffic congestion” were mentioned by

more than half of the respondents. It seems that the water

insufficiency is still an ongoing issue for the park. This

should not be neglected as it was mention by more than

half of the respondents.

V. CONCLUSION

This study deployed the three indicator categories

adapted from UNWTO to determine tourist satisfaction

indicators – level of satisfaction, perception of value for

money, and complaints received. Although the climbers

are generally satisfied with their overall experience at

KNP, there is plenty of room for improvement in the

aspect of crowding and water management. The

complaints emerged from the findings of this study should

not be taken lightly as it affects the overall satisfaction of

the climbers. The climber’s willingness to pay for a

single, once and for all, one-time donation provides a

picture of the visitors’ perception of value for money to

preserve KNP as a World Heritage Site. Thus,

deployment of the three-indicator categories for

responsible tourism in this study has not only determined

the tourist satisfaction indicators performance, but also

has identified issues that might cause changes in both

tourist satisfaction levels as well as the quality of

resource.

ACKOWLEDGEMENT

The funding for this project was made possible through a

research grant obtained from the Ministry of Higher

Education, Malaysia under the Long Term Research

Grant Scheme 2001 [LRGS Grant No:

JPTS.S(BPKI)2000/09/01/015Jld.4(67)].

REFERENCES

Alegre, J., Garau, J. (2010) Tourist Satisfaction and Dissatisfaction.

Annals of Tourism Research, Vol. 37, No. 1, pp. 52-73,

Cape Town (2002) The Cape Town Declaration of Responsible

Tourism in Destinations, Responsible Tourism : Critical Issues for

Conservation and Development. Taylor and Francis.

Lo, M. C., Songan, P., Mohamad, A. A., Yeo, A. W. (2011). Rural

destionation and tourists’ satisfaction, Journal of Services

Research. Pp. 58-74.

Hepworth, M., Mateus, P. (1994). Connecting customer loyalty to the

bottom line. Canadian Business Review 21(4): 40-44.

Kano, N. (1984). Attractive quality and must-be quality. Journal of

the Japanese Society for Quality Control, 1(4), 39-48.

Kano, N., Seraku, N., Takahashi, F., & Tsuji, S. (1984). Attractive

quality and must-be quality. Quality: The Journal of the Japanese

Society for Quality Control, 14(April), 39-48.

Nepal, S. K. (2011). Mountain tourism and climate change:

Implications for the Nepal Himalaya. Nepal Tourism & Development

Review, 1(1).

Talib, H., Chan, J. K. L., Mereng, T. A. (2014). Sustaining Tourist

Satisfaction on Mount Kinabalu, Sabah. SHS Web of Conferences

12, 01024.

Vavra, T. G. (1997). Improving your measurement of customer

satisfaction: a guide to creating, conducting, analysing, and

reportuing customer satisfaction measurement programs, ASQ

Quality Press.

World Tourism Organization (WTO). 1985. Identification and

Evaluation of those Components of Tourism Satisfaction and

which can be Regulated and State Measure to Ensure Adequate

Quality of Tourism Services.

World Tourism Organization (UNWTO), 2004.

Yoon, Y., Uysal, M. (2005). An examnination of the effects of the

motivation and satisfaction on destination loyalty: A structed mode.

Tourism Manage, 26(1) pp. 45-46.

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Abstract - Corporate philanthropy (CP) disclosure research is

scarce and need to be given further attention. This paper aims to

discuss the needs and roles of disclosing this initiative. Based

on the review of literature, it is noteworthy to point out that CP

communication indeed act as a source of competitive advantage

for companies while mitigating the agency issues surrounding

the CP executions. This paper also provides an overview on the

practice of CP disclosure by 200 Malaysian Public Listed

Companies (MPLC). Through the application of content

analysis, it is indicated that most of the MPLC disclosed issues

on direct cash donations, in-kind givings, volunteering program

and sponsorship. Beside, the descriptive analysis suggested that

education aspects are given special attention by the MPLC

through various initiatives involving it.

Keywords - corporate philanthropy, corporate social

responsibility, Malaysian public listed companies, voluntary

disclosure.

I. INTRODUCTION

ORPORATE philanthropy is defined as a company's actions in donating part of its profits and resources

for the purpose of society benefit (Choi & Wang, 2007;

Leisinger, 2007). It’s also acts as a conduit in solving

problems and fulfilling the needs of society. This includes

effort with the goal of bringing changes to the cause of

social problems (Leisinger & Schmitt, 2012). Corporate

involvement in addressing social issues is in line with the

Malaysian government’s aspirations as postulated in the

Government Transformation Plan (GTP) and Vision 2020

(Pelan Hala Tuju, Program Transformasi Kerajaan, 2010;

Pusat Maklumat Rakyat, 2012).


As a platform to demonstrate their concerns to the

stakeholders, particularly the community (Ahmad, 2010),

corporate philanthropy is also important to support the

improvement of the living standards of the surrounding

communities, parallel with the modernization of life and

in achieving the objectives of becoming a high-income

nation. The initiative also assists in mitigating poverty in

Malaysia (Pelan Hala Tuju, Program Transformasi

Kerajaan, 2010). Nonetheless, corporate philanthropy is

used by the company's leadership as a strategic tool in

improving business’s performance and prospects by

integrating the goal of social and economic development

(Porter & Kramer, 2002; Saiia, Carroll & Buchholtz,

2003; Choi & Wang, 2007).

As one of the key activities in the realm of corporate

social responsibility (CSR), CP benefits various

stakeholders, especially the community while enhancing

corporate’s reputation, shareholders value, financial

performance and sustainability of the company (Zhou,

Pan & Wang, 2015; Hogarth, Hutchinson & Scaife,

2016). Companies in Malaysia seem to put their priority

on CP activities when it comes to CSR (Amran, Zain,

Sulaiman, Tapan & Ooi, 2013; UNICEF, 2013; Md

Yusoff & Yee, 2016). However, CP poses greater

potential to affect legitimacy and perceptions from the eye

of the stakeholders if it is communicated (Moir, 2003).

This is important due to the fact that corporations are

pressured by the internal and external stakeholders to

report not only financial performance but its performance

and contribution to the community (Tsang, Welford &

Brown, 2009). Hence, CP disclosure plays a vital role to

accomodate this issue (Zhou, Pan & Wang, 2015).

Even CP is one of the main components of CSR,

studies specifically related to its disclosure were given

less attention compared to other CSR themes (Campbell

& Slack, 2008; Ahmad, 2010; Morris & Bartkus, 2015).

This view is consistent with Hossain and Mohamad Diah

Corporate Philanthropy Disclosure in

Malaysia: An Insight

Mohd Farid Asraf Md Hashima* & Mohd ‘Atef Md Yusofb

*aTunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, 06010, Sintok.

Kedah Darul Aman, Malaysia. bTunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, 06010, Sintok.

Kedah Darul Aman, Malaysia.

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(2015). They have opined that are no studies that

specifically examine the disclosure of contributions and

givings provided by companies in Malaysia, primarily on

specific issues such as health and education. Therefore,

this paper aims to provide an initial insight on the roles of

CP and CP related activities disclosure made by the

MPLC. It is also expected that the discussion in this paper

will help to identify in details the corporate philanthropy

strategies applied by the Malaysian corporate sector, as

neglected by most of the CSR studies.

II. THE ROLES OF CP DISCLOSURE

Information disclosure in the annual report is one of

the ways to reduce the information asymmetry between

management and stakeholders (Chobpichien, 2008;

Shapira, 2012). Along with the issue of corporate

philanthropy, corporate giving programs disclosure can

reduce the problem of asymmetric information, especially

between the company's management and shareholders

(Lev et al., 2011). Important criticisms to be pointed out

here is the possibility of using the donation program for

the purpose of achieving individual goal rather than the

goal of shareholders (Lev et al., 2011; Shapira, 2012). By

utilising corporate donations as a manifestation of ‘social

currency’, the management tends to maximise personal

benefit compared to the real goal of achieving the

company's objectives (Shapira, 2012; Bereskin, Campbell

II & Kedia, 2013; Masulis & Reza, 2013).

Corporate donations are also given attention by the

relevant government agencies including the Companies

Commission of Malaysia (SSM) and the Malaysian Anti-

Corruption Commission (MACC) through a set of

guidelines entitled ‘Dari Ikrar Kepada Amalan: Panduan

Pelaksanaan Sistem Integriti Korporat Malaysia’ (SSM,

2014)'. Among the issues emphasized by the guideline is

the establishment and execution of policy and controls on

donations and sponsorships by companies. This situation

may be associated to the Malaysia Fraud, Bribery and

Corruption Survey 2013 by KPMG (KPMG 2014).

Among the findings of this report indicated that donations

and political contributions is one of the most common

forms of bribery among Malaysian corporates. Although

the ‘abuse’ of corporate donations is not the main reason

for the failure of corporate governance, but it is important

enough to be given continous attention by the authorities

(Shapira, 2012) and corporates’ leaders.

Agency problems also arise due to the differences of

views between shareholders and the company's

management in terms of the purpose, benefits and impacts

of corporate philanthropy (Werbel & Carter, 2002; Faris,

2010). It is difficult to assess the management’s real

purpose of engaging such activities. On this basis, Bidin

(2008), Lev et al. (2011) and Shapira (2012) suggest that

the disclosure of corporate giving program serves as a

mechanism that may help to mitigate management’s

‘opportunistic behaviour’ and at the same time,

overcoming the issue of asymmetric information between

the management and other stakeholders.

CP proves to have a significant impact on the market

share of a company (Owen & Scherer, 1993). Undeniably,

corporate philanthropy disclosure would also assists to

influence the perceptions of different stakeholders,

particularly the investors, customers, suppliers, employees

and prospective employees, as well as the non-profit

organizations (Saiia et al., 2003; Wymer, 2006; Ahmad,

2010; Morris & Bartkus, 2015). Relevant to the

Malaysian context, consumers view that corporate

organization in Malaysia should put in place its priority

on community work, donations and education sponsorship

prior to the environmental and products issues.

Philanthropic responsibility seems to have more

significant effect in shaping consumers’ buying behavior

and loyalty rather than the ethical responsibilities or even

legal responsibilities (Abd Rahim, Jalaluddin & Tajuddin,

2011; Hassan, Nareeman & Pauline, 2013). In fact, its

disclosure offers a positive impact on corporate financial

performance compared to other CSR issues (Saleh,

Zulkifli & Muhamad, 2011). Thus, it is fair to assert that

CP disclosure would provide immense benefits to the

corporates’ competitive advantage.

A. Theoritical perspectives

Two theories were applied to explain the phenomena of

CP disclosure, namely agency theory and stakeholders

theory. From the perspective of agency theory, the

shareholders may legitimately expect that all resource

allocations are used to attract a measurable positive

return. Thus, philanthropic activities, causes that are

capable to support the company's strategy, should be

reported to the shareholders regularly and in detailed

manner.The ability to communicate CP initiatives

effectively to stakeholders should be considered seriously

for the long-term success and growth of a company (Moir,

2003). In this sense, taking into account the stakeholder

theory, CP disclosure acts as an expression that the

behavior and the company's goal are in line with the needs

and expectations of stakeholders especially the

communities who have different culture and value (Saiia

et al., 2003, Genest, 2005; Wymer, 2006; Lev et al.,

2011).

III. CP DISCLOSURE PRACTICE IN MALAYSIA

Table 1 shows an insight on the CP disclosure practices

via annual reports made by 200 Malaysia Public Listed

Companies (MPLC). Data was obtained through the

application of content analysis and all of the companies

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were chosen randomly, thus providing a better

generalization of findings as exercised by previous studies

(Craig & Diga, 1998; Hughes, Djajadikerta & Smith,

2009; Rouf, 2011; Alikhani & Maranjory, 2013). A

checklist developed, which comprises of 13 corporate

philanthropy items (items were adapted from Ahmad

2010) was used to identify any CP related activities

disclosed in the annual reports.

Based on the data collected, 65% or 129 of the sample

companies disclose direct cash contribution activities in

the annual report. 121 out of 200 companies also disclose

on the in-kind giving programs which comprises mainly

on merchandise givings activities followed by free

services / consultations and assets and real estate gifts.

The details of in-kind givings were as Table 2.

TABLE 1:

DESCRIPTIVE STATISTICS OF CP DISCLOSURE BY MPLC

Category No. Companies %

Sponsorship 77 39

Scholarship 31 16

Grant 8 4

Disaster relief 34 17

Award 22 11

Fund raising 35 18

Direct cash 129 65

In-kind 121 61

Time (Volunteer) 123 62

Partnership 23 12

Foundation establishment 22 11

Trust / Fund 7 3.5

General statement 22 11

TABLE 2:

DETAILS STATISTICS ON IN-KIND GIVINGS

Type of In-Kind

No.

Companies %

Asset or real estate gifts 5 2.5

Free Services or consultations 39 19.5

Merchandises / products 103 51.5

The results were not surprising since most of the cash

and product donations were handed during festive seasons

such as Hari Raya, Deepavali and Chinese New Year.

Consistent with what have been discussed by Amran et al.

(2013), the initiatives were realised with the aim of

improving the image and reputation of the company

(Thompson & Zakaria, 2004). Thus, they are vital to be

communicated not only via the press but also in the

annual report.

Giving in time which includes volunteering and local

community training (educational and non-educational)

was the second most frequent CP inititives

communicated. 62% or 123 companies disclosed this

issue. A relatively high number of companies disclosing

this altruistic activities giving us the impression that there

are supports from both the company's management and

their staff to involve in such community engagements.The

statistical results were quite similiar to the result obtained

by Abdullah, Mohamad and Mokhtar (2011). They found

that cash, product givings and employees’ service were

among the most disclosed CSR items by Malaysian listed

companies (82% of the surveyed sample).

The results of descriptive statistics also convey a

perspective on the propensity of the MPLC to employ

non-financial philanthropy activities. This could be due to

the fluctuation of economics environment that contributes

to the depletion of earnings and cash flow. Thus, with

tightened cash budgets, companies are still able to pursue

its social agenda by exploring new ways to contributes to

the community which include merchandise givings,

volunteer or professional services (Center of Encouraging

Corporate Philanthropy (CECP), 2013).Community

related sponsorships stand at number four with 39% or 77

companies communicated this strategy. Among the

community sponsorships areas embarked by the MPLC

were sport, sosial event, education, health and cultural.

Details were as Table 3. TABLE 3

TYPES OF SPONSORSHIP

Types No. Companies %

Sports 34 17

Cultural 10 5

Health 12 6

Education 41 21

Social 28 14

Descriptive analysis also demonstrated the

importance of education development involvement via

scholarship by the MPLC. This was evident when 16

percent of the sampled companies revealed the issue.

Fundraising activities also gain its popularity among

MPLC when 35 companies disclosed this approach. As

discussed by some of the sample, fund-raising activities

were conducted typically by organizing charity concert,

charity dinner, charity sales and also charity match. The

funds raised will be donated predominantly to educational

institutions, charities and foundations. From the data

analysed, 17% or 34 companies revealed issues pertaining

to disaster relief donations. This figure was contributed by

the execution of assistance program catered largely for

the flood victims in Pahang, Kelantan and Terengganu

which occurred in 2013.

22 (11%) companies discuss the award giving

activities to individuals who are excellent in their

respective fields (mostly academic achievement). By

looking at the percentage as a sake of comparison, it

could be suggested that Malaysian companies seems to be

more compelling in awarding individuals rather than their

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counterparts in Australia Stock Exchange (4.98% or 13

companies) (Ahmad, 2010). 23 (12%) of the sample

studied disclosed issues related to the partnerships

between companies and non-governmental bodies or

community groups. Most of the partnerships were long

term in nature, similar to the practice as disclosed by the

Australian Stock Exchange (ASX) firms (Ahmad, 2010).

In fact, education was given a great attention by MPLC in

the implementation of the partnerships program

Disclosure on the partnership issue by the MPLC has

shown that there is a growing effort between the

government, non-profit organizations and corporate sector

to inculcate this initiative. It is also suggested that there is

a rising concern by the MPLC on the importance of

forming long-term relationships with the local

communities. The engagement in fact, offers a platform

for the companies to build up confidence from the eyes of

society while playing its role in unravelling societal

problems (Ahmad, 2010).

In addition to partnerships, 22 or 11% of the sample

surveyed disclosed the establishment of company’s

foundation. The foundation serves to carry out activities

or programs that are relevant to corporate philanthropy

mostly on the area of education (20 companies). The area

(s) focuses by the foundations was as Table 4.

TABLE 4

FOUNDATION FOCUS AREA (S)6

Focus No.Companies %

Charitable causes 14 63.7

Education 20 91

Art and culture 3 13.1

Sport 2 9.1

Research 2 9.1

Environment 2 9.1

Medical 5 22.7

It was intriguing to state that the percentage of MPLC

which revealed this issue were relatively higher than

Australian listed companies which stand at 9.96%

(Ahmad, 2010). However, the percentage seems to be

lower when compared to the foundation related

disclosures made by companies in the United Kingdom,

which was accounted for 27.3% (Campbell & Slack,

2008).

Out of 200 samples analyzed, 22 (11%) companies

decided to disclose their philanthropics effort in the form

of general statements. This situation is most probably

contributed to the lack of legal or financial standards

specifically for corporate donations reporting (Campbell

& Slack, 2008; Shapira, 2012). Two CP items that were

6 Most of the companies have more than one focus area.

least disclosed comprised of the formation of trust fund

and grant at 3.5% (7 companies) and 4% (8 companies)

respectively.

Based on the disclosure made by the sample, it is

interesting to point out that even the MPLC involved in

various types of philanthropic activities, there are few

initiatives that can be explored as part of their givings

strategies. As reported by Saiia et al. (2003), Ahmad

(2010) and CECP (2013), there are other CP strategies

that have been employed by firms particularly from the

developed countries such as stock endownments and

shareholders donations (donate all or part of their bi-

annual dividend to charity). In fact, matching employee

givings and employees giving program whereby

employees make direct deductions from pay

(administered by company) to chosen charitable

organisations are considered as among the common

approaches of CP by some of companies from the Anglo-

Saxon countries (Saiia et al., 2003; Ahmad, 2010; CECP,

2013.)

For instant, CECP (2013) found that the median value

of employee matching gifts was growing for the period of

2007 to 2012. Meanwhile, Ahmad (2010) indicated that

17.62% of Australian sampled companies disclosed

employee givings while 12.26% of them discussed their

involvement in employee matching program in the annual

report. Perhaps, companies in Malaysia would have to

embark in such activities in order to diversify its CP

strategies. At the same time, inculcate the participation of

employees and shareholders towards community related

program.

IV. POSSIBLE REASONS FOR NOT DISCLOSING

CP disclosure by the MPLC mainly focuses on four

categories namely direct cash contribution, in-kind, time

and sponsorship. However, there are possibilites that not

all of the philanthropics initiatives were communicated

via annual report (Ahmad, 2010; Morris & Bartkus,

2015). First of all is the interpretation of materiality by

the management (Moir, 2003; Ahmad, 2010). Normally,

corporate contribution is small. Thus, it is sometimes

perceived as insignificant and too immaterial to be

disclosed in the key reports. Second, diclosing

philanthropics activities may lead to an increased of

demand for donations and continuous contribution by

various charities and non-profit organizations (Morris &

Bartkus, 2015). Hence, companies may prefer to remain

silent about their philanthropic disbursement (Raja

Ahmad, 2010).

The third reason is to protect the management from

criticism by the shareholders if the giving activities are

not strategic (Ahmad, 2010; Morris & Bartkus, 2015). In

addition, there are companies that do not disclose some of

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its donations due to the desire to hide management’s ‘pet

charities’ (Ahmad, 2010). The last reason factor may be

due to the fact that although many other aspects of

resource allocations are prescribed in the various financial

reporting standards, no such standard exists for the

management or disbursement of charitable donations.

Thus, any related disclosure on the issue is entirely

voluntary. There is no provision by the authorities (e.g

Bursa Malaysia or Security Commission) or even the

Malaysian Companies Act 1965 to mandate such

disclosure.

V. CONCLUSIONS

Despite the importance of corporate philanthropy to the

formation of corporate’s competitive advantage, the

research on its communication in details remain scarce.

As this paper is explanatory is nature, its attempts to

describe the practices of CP disclosure by the MPLC is

somewhat inadequate. The paper does not measure the

extent of both corporates’ contribution value and the

quality of its disclosure. Hence, future research is needed

to explain the possible factors of disclosing CP from both

corporate’s internal and external context. It is indeed vital

to place such attention on CP since it is considered as one

of the most attentive CSR activities by the Malaysian

corporate sector.

ACKNOWLEDGEMENT

This research is funded by Universiti Utara Malaysia

(UUM) and Ministry of Higher Education Malaysia.

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Abstract— The establishment of the corporation is to make

profits for its shareholders. The shareholders’ capital must be

utilized by the corporation to achieve maximum profit in order to

boost shareholders’ value. Looking at Islam’s principle as well,

Islam forbids riba’ (interest) but agrees on profit. Trading in Islam

is permissible and profit making out of trading is regards as

reward. Muslims who trade sincerely shall enjoy their profit after

taking into consideration their obligation as Muslim such as zakat

payment. Nonetheless, profit maximization has been debated as

conflicting with Islamic taught whereby the foundation is based on

Islamic framework. In addition, the practice of profit maximization

has been condemned as inconstant with Islamic taughts. Therefore

the aims of this study to explore the perspective of profit

maximization and to review the Islam's taught on profit

maximization. The methodology adopted is literature and archives

reviewing. Then, it analyses the consequences of profit

maximization, and argue that these have a number of beneficial

effects. The implication of this study is to unleash the reality of

profit maximization and what does Islam stands on it. It is hope

that it can enrich the knowledge for the academician and for the

industry players regarding the truth on profit maximization.

Keywords— profit maximization, Islam, behavior, business

I. INTRODUCTION

N a corporation, the valuable things to be considered must

be the profit. To maximize shareholders value, the

practice of profit maximization is unavoidable. Every

stakeholder in the corporation must have their interest

protected. In a scenario of building a business, profit is

really crucial matters to be think of. Considering the

entrepreneurs have given up everything to ensure the

business run, profit serves as monetary return that they


desired to achieve. Investment made by the entrepreneurs is

targeting a return; hence profit earned can be used as

benchmark to measure the attainment of that investment.

In addition, profit serve as indicator to the funder of

business such as banks, suppliers and others who are

interested to see the amount of profit generated by the

business. This will demonstrate that the business is capable

to repay the debts if the profit is strong. If the creditors saw

a ‘loss’ made by the business, this will tarnish the image of

the business which make the business will not be able to

borrow in the future. Therefore, profit is considered as main

aspiration of the business because underneath the profit

reflects a positive or negative impact of the business itself.

Besides, profit is needed for the sustainability of

business. To keep the business continues, entrepreneur

should make sure that the profit is there. Growth of the

business is depending on the profit. If there is insufficient

profit, it is difficult for the business to survive and continued

in this tight competitive world.

II. AGENCY THEORY

By looking at the company and shareholder relationship,

it can be postulate that it carries an agency relationship. The

manager act as an agent on behalf of the owner who is the

shareholder to maximize the wealth of the shareholder.

According to Delves & Patrick (2006), agency relationship

arises when the power of decision making has been entrusted

to agents by the principal to perform duty or service on their

behalf. If both parties are intend to maximize self interest,

this would be a motive that agent will deviate from their act

on behalf of the principal. It means, agent will seldom act in

the best interests of the principal.

In profit maximization scenario, if the principal is also the

Profit Maximization: Islamic Taught and Ethical

Principles

Sri Wahyu Sakina Ahmad Sanusi, Nurauliani Jamlus Rafdi & Noor Aimi Mohd

Puad

Lecturer, Department of Accounting & Finance, Faculty of Management and Muamalah.

International Islamic University College of Selangor (KUIS)

[email protected]

I



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agent, i.e; owner is also a manager, problems on agency

relationship can be avoided. There is no doubt that the

owner always want to maximize their profit for thousands of

benefits. The agency problems occurred when there is a

conflict between the principal and agents. For instance; on

one side the principal aim to maximize profits by reducing

expenses such as staff incentives, on the other side the

agents aim to fulfill their own interests in terms of staff

entertainment, bonuses and others. This conflict will cause

both parties unable to satisfy their own desires and therefore

principal will fail to maximize their profits.

The agency problems have been identified by Mitnick

(2006). First and foremost would be the principal’s problem.

It is to identify the best mechanism to motivate agent to

behave in a way that can accomplish the principal’s goals.

Agents need to be rewarded in order for them acting in the

best interest of the principal. For instance; financial

incentives and other preferences that should be think of by

the principal. Secondly, the agent’s problem. Agent might be

in dilemma in how to act. Agent may have to face a situation

to decide whether to favor the principal’s interest, his own

interest or both compromises among the twos. Thirdly,

policing mechanisms and incentives. For instance, specific

incentives aimed to limit the agent’s freedom in performing

his task, such as consistent monitoring and tasks which

specifically directed.

The discussion continues with Jensen & Meckling (1976)

who stated agent seldom behave in line with the principal

interests if both parties regularly maximize their own wants.

Therefore, principal may put a boundary on agents act by

creating proper incentives for the agent to control unusual

activities performed by the agent. This theory embedded in

the profit maximization if the principal and the agent would

be a different person. Both parties would come across

consensus if they oversee the significance of profit

maximization.

III. AL QURAN AND HADIS REVIEW ON TRADING PROFIT

There are number of reviews in Al-Quran and Hadis

regarding on profit. Surah An Nisa verse 29 stated that:

‘O you who believe, consume not your goods between you

wrongly, unlawfully according to the Law, through usury or

usurpation, except it be trading (tijāratan, also read

tijāratun), so that the goods be from trade effected, through

mutual agreement, through mutual good-will: such [goods]

you may consume. And kill not yourselves, by committing

what leads towards destruction on account of some

affiliation, be it in this world or the Hereafter. Surely God is

ever Merciful to you, when He forbids you such things’.

This verse clearly mention what Allah has forbids when

become an entrepreneur. Goods that been trading must free

from any elements of uncertainty, interests and it should

have consensus from both parties, i.e; seller and buyer. No

parties are allowed to bring detriment effects to another.

Agreement must be on free will and not by being threatened

by someone. Allah is such forgiven and He knows what is

best for us by putting all the non-permissible doings.

Whilst Surah Al Baqarah verse 16 mentioned that:

‘Those are they who have bought error for guidance, that

is, they have exchanged the latter for the former; so their

commerce has not profited them, that is to say, they have

gained nothing from it, indeed, they have lost, because their

destination is the Fire, made everlasting for them; nor are

they guided, in what they did’.

Apart from that, The Prophet (PBUH) quoted that:

‘Therefore, anyone who carries on the business of

business whether small or large but still within the business,

has a position and a high rank in the sight of Allah SWT’.

The Prophet (PBUH) also forbids the traders from oath

and saying lies by quoted:

‘The Oath will sell the merchandise but bless will vanis'

(Hadith narrated by Bukhari).

In addition the traders must be constantly ready to provide

facilities and assistance to those in need. They have to

remember that the purpose of the business not just of making

a profit but also actually concept of giving facilities and help

other parties, especially consumers.

Elements of deception or tricks are also need to be

avoided by the trader; this is because it can get rid of the

blessed in the business. The Prophet (PBUH) has said that

reads: 'Those who fool us, he is not from the us' (Hadith

narrated by Muslim). This Hadith arises due of events

occurring in a market during the age of the Prophet (PBUH),

where he had found a trader committed fraud by putting wet

wheat at the bottom and dry wheat at the top. This kind of

action is purposely to deceive the customer because they

only see the good quality wheat without knowing that the

wet wheat putted inside.

Al-Quran verses and hadith by The Prophet (PBUH)

encourage Muslims to be an entrepreneur as Allah will grant

them the highest ranking among others. Nonetheless, there

are restrictions i.e; (usury, liers,) that needs to be abide by

Muslims in dealing with the customers and the way they

trade their merchandise. A good Muslim entrepreneur will

obtain blessing from Allah but if they ignore the restrictions;

hellfire and cataclysm punishment will await them.

In addition, there is one hadith which mentioned on the

reward for good traders:

“Honest traders and trust (will be placed) together with

the prophets, siddiqin and syuhada' (Hadith narrated by

Tirmidhi). This implies that the traders who able to practise

honesty and trust will be granted a reward from Allah similar

with those in a high rank.

Surah Al Baqarah verse 275 also stated that:

The practice of usury should be avoided as it is

considered as great sins.

‘Those who devour usury shall not rise again, except as

one whom Satan has made prostrate from touch; that is

because they say, 'Trade is like usury': God has permitted

trade, and forbidden usury. Whoever receives an

admonition from his Lord and desists, he shall have his past

gains, and his affair is committed to God; but whoever

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reverts - those are the inhabitants of the Fire, abiding

therein’.

Allah granted permission for trading but forbidden usury.

Whoever ignores this caution, he shall bear the

consequences and punishment from Allah. This can be seen

significantly in the ordinary business practice whereby loan

given together with interest that being set. Islam also

prohibits the elements of gharar when trading.

Consequently, in a route achieving profit maximization,

the traders should abide to the restrictions imposed by Allah

s.w.t. Usury and gharar need to be evaded as it will bring a

detrimental effect to the customer. Obtaining a blessing from

Allah would be the utmost important objective when we are

dealing in business.

According to Islamic teaching, trading must be on mutual

understanding not by favouring one party only. For example;

the practise of profit maximization must be agreed by the

stakeholders in the business and it shall not bring any harm

to the parties involved. We shall hinder ourselves from

making sins and Allah is the most benevolence. Whoever

commits the wrongdoing should faced Allah’s wrath. Allah

will not release them from fierce punishment if they practise

aggression and injustice.

IV. PROFIT IN THE ISLAMIC AND NON-ISLAMIC

PERSPECTIVE

Islam encourages the Muslims to win in worldly life but

never more than in the thereafter life. It is no doubt that

Muslims have been urging to take part in almost all aspects

of material quest. This include involved in trading or

business as well as enjoyed the profit within Allah’s bounty.

Surah Al-Adiyat verse 8:

‘And violent is he in his love of wealth’.

Whenever a Muslim in love with his wealth more than

Allah’s bounty; it will summon Allah’s wrath. Therefore

Islam taught Muslim to be moderate in a quest of profit, act

accordingly and obtain only the reasonable profit, rather

than maximum. Other than that, Islam also encourages

integrity when dealing in business. Rather than thinking

about profit, the seller needs to uphold integrity in doing his

business.

Islam is such a beauty religion as it clearly defines the

concept of ‘Halal’ and ‘Haram’. Hence, Muslim should

avoid all the don’ts and follow all the dos. The utmost

important goal is heaven or jannah. Jannah waited for those

who fulfill their obligation as Muslim. Siddiqi (1992) and

Yusof (2003) asserted that whatever action being practiced

in a firm must be denote by Islamic values and ethics as it

reflect what Islam means and uphold in its teaching.

Furthermore, business shall abide with the Islamic concept

of justice and the capitalist decisions must be inspired by

delivering an ideal service to the society. Profit

maximization can be implemented if it is accordance to the

restrictions underlying in Islam’s taught to hinder any harms

to the stakeholders especially the customers. The

establishment of business should targeting reward in

hereafter rather than satisfying material and worldly needs

(Kahf, 1992; Mannan, 1992).

Both Yusof (2003) and Ali et.al (2012) proposed detailing

on profit maximization as well as Islamic business ethics.

Yusof (2003) demonstrated that the possibility of profit

maximization application in Islamic framework to obtain

anticipated outcomes provided that Islamic value has been

incorporated specifically in the determination of production

cost. Indirectly, it affects the profit maximization application

in a firm. Furthermore, by captivating ethical values in the

estimation of opportunity cost which consists of part and

parcel of the total production costs will assist in resolving

the production of precise goods and accurate amount. This

will stimulating efficiency disperses in the market.

In contrasts, Ali et.al (2012) stands that though profits is

regarded as reward for participating in fundamental

activities to serve the social needs; i.e; provide product or

render service as demanded by public, the practice on profit

maximization is not endorse. Consequently, it must not be

the target of business which ethically guided by Islam’s

principle. This stands also highlighted by Primeaux and

Stieber (1994) who vigorously argued that profit and ethics

were interconnected. This relationship assists to emphasis

the purpose of the firm establishment, their role in society

and also type of profit which significant to social welfare

and prosperity. Undoubtedly, decision on to maximize profit

or not need to refer to the ethics principle and specifically

for Muslims; we must go back to Islamic ethics. That is why

some scholars (Ali et.al 2012; Primeaux and Stieber 1994)

endeavor in highlighted the issue on profit maximization

from aspect of religion as well as ethics philosophy.

Ali (2011a) asserted that Islamic ethics in working

environment is known as mould which shapes and encourage

the involvement of parties in a market to practice

transparent, accountable and dedicated to serve their

interests without endanger the welfare of society. Generally,

Islamic ethics refers to stipulated regulation which directs

the person and organization conduct aiming to promote

kindness, frankness and accountability in terms of conduct at

the same time preserves the interest of all. Likewise, Islamic

ethics coordinate and encourage commitment of market

players to practice transparent, accountable and dedicated to

serve their interests by considering the benefit of others and

no harm to society.

In support of declination towards profit maximization,

previous scholars (Al-Sadr 1982; Chapra 2001) suggested

that business will fail on its legitimacy when the business

loses its function to serve the society. Specifically, Chapra

(2001) mentioned that the practice of profit maximization

will direct to the unjust business practice and definitely fail

to serve the society. Islam permits competition among the

traders, property rights and title and controlled government

intervention in marketplace but Islam never encourage

market exploitation, dishonesty, or dominant market

attempts. This serves as indication that unethical doings are

not sanction in Islamic teaching.

Other than that, Prophet Muhammad stated; ‘‘God bless a

person who is benevolent at selling and buying’’(quoted in

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Al-Qurni 1987, p.120). This suggests that concept of

benevolence or ‘ihsan’ should be upheld in trading.

Benevolence is the trustee’s ability to do good to

individuals who entrust them other than motif which leads to

personal gain (Mayer et al., 1995). God commands justice,

the doing of good, and liberality to kith and kin, and He

forbids all shameful deeds, and injustice and rebellion: He

instructs you, that ye may receive admonition. (Quran

19:90,). This verse illustrates the relationship of man in the

world which based on justice, goodness and stay away from

all tyranny and boastfulness. It should be followed by all

Muslims. Justice is a platform of Islamic teachings and

become a ‘syariat’ of this religion. Allah s.w.t. will not bring

any harm to his servants and object any cruelty to other

human beings. If we be kind more than what it should have

been received by another person, it is considered as

benevolence among humans.

There is one narrative by Abu Talib al-Maki (1995, p.

508). The action of the merchant refused to trade the almond

above the market value implies that profit maximization

cannot be practiced extremely. No transactions happened

among the merchant and the auctioneer even though

auctioneer offered an attractive price to buy the almond from

the merchant. The auctioneer abides and respects the

merchants’ ethics in trading. Both parties avoid exploiting

each other for their own self interest.

Extremely high profit margin is against the concept of

‘ihsan’ in Islam. Whenever profit maximization becomes an

ultimate aim of the business; it will reverse the concept of

‘ihsan’ and kindness in trading (Ali 2011a). It is because if

business people follow the concept of ‘ihsan’, they will not

practice profit maximization as it will cause a detriment to

the customers especially to the poor. Somehow or rather,

they should sell at a lower price to the poor and willing to

buy at higher price from poor suppliers to promote survival

in industry.

In support of that, Freeman et al. (2004) advocate that ‘for

a profit is the result rather than the driver in the process of

value creation’. According to Islamic views, whoever

involved in trading or business shall possess strong ethical

philosophy by putting the welfare of others at the top

priority. Any actions that cause detriment to stakeholders

whilst fulfill self interest shall be hinder. It can be seen that

in doing business, profit is not the prevailing matters to be

concern on by neglecting the other parties’ welfare.

Moreover, ethically practice on profit maximization will

facilitate the sustainability of the business to keep on

growing by avoiding any harm to others.

Due to the absence of support towards profit

maximization from both Islamic religions and ethics; thus

this practice is not sanction and encourage. The impact

would lead to extremely or aggressively hiking in selling

price which burden the society especially the poor one. It

can’t be arguably that profit is deemed importance and

considered as motive on nurturing the economy growth as

well as support the welfare of society. However in Islam,

there is a restrictions imposed on this practice because the

negative impact will be suffered by society. Neither Islam as

a religion nor ethics (Freeman et al. 2004) sanction the profit

maximization as it is not deemed as right moral conduct to

be practiced.

Realistically, businesses support the conception that the

business establishment should be particularly targeting

profits for the purpose of shareholders return (Kolstad,

2007). As layman shareholders, it is definitely they

anticipated returns on investment made and in order to

achieve that, the profit maximization shall prevail. As

mentioned by Friedman (1970); ‘the social responsibility of

business is to increase its profits’. He was very clear in

stated that it is unlawful for business to behave in a manner

that cause harmful to other shareholders returns in the case

of owner-manager firm. This is when the person owns a

business and manages it. The arguments were based on four

matters. Firstly, there is an agreement bonded between

shareholders and manager of the firm which entails the

manager to fulfill the interest of shareholders rather than

their own interest. Secondly, if the firm tends to focus on

maximize profit which sort of maximizes owner returns; it

will preclude the duty towards other shareholders. Thirdly,

profit maximization implies that firm got special duty

towards its owner. Fourthly, it is illegitimate to depart from

maximizing owner returns which means the dedicated duty

to owners shall not undermine the duties to other

stakeholders.

The Friedman ideas was that in case of owner-manager

firm, the firm hold supreme duty to maximize return to the

owner and this duty prevails against other duty to other

stakeholders. This view did favor the practice of profit

maximization in a view of owner manager.

Although Islamic religion and ethically right moral

conduct did not vote for profit maximization; based on

Friedman’s idea, it does not mean there is big “NO” for

profit maximization practice. Somehow or rather, the duty to

the owner of the firm must be put in a priority above others.

This implies that the supreme responsibility of the firm

would be maximizing the return of the owner because profit

maximization will lead to maximizing welfare and efficient

economy condition (Estaing 2003; Waheed et.al 2012).

Rapid growth of the business will assist in economy

flourish and market stability. We need to confess that profit

is definitely essential to enable the business sustain and keep

on operating. Estaing (2003) further stressed that profit is

one of the significance element which control and gear up

the business. Without profit, the continuity of the business

can be questionable. He further stressed that profit

maximization serves as tool to oversee and analyze every

decisions on the businesses function such as; price imposed,

employee’s remuneration, investment decision, matters

pertaining to technical, marketing, financial as well as

payment of dividend.

Hence, the business should able to maximize its profit

for a long period of time rather than short term focus profit

maximization.

V. REVIEW THOUGHTS ON PROFIT MAXIMIZATION

Koch (2010) put a question whether it is appropriate for

managers to grab profit maximization as their supreme goal

because this issue became essential and spotlight issues in

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today’s business. Previously, Jones et al., (2002) had a

contrast view on profit maximization. He held to stakeholder

theory which asserted that top gun in the business shall work

out to meet the interests of every stakeholders who involved

either directly or indirectly in the business. It stressed on

meeting the interests for the whole rather than focus solely

on profit maximization which obviously will favor the

interest of the management.

Meanwhile, according to virtue ethics back then during

the year 1998; profit maximization should not be practiced.

Crisp (1998/2004) highlighted on virtue ethics. Virtue ethics

is about considering both on agent (i.e; manager) character

and the exceptional actions. It shall include the stake of

others such as the consumers. Virtue itself carries meaning

as integrity, morality, honesty and righteousness. This

attitude definitely against the practise of selfishness among

the agent towards the principal as well as other stakeholders.

Nonetheless, in reality this will be not the case. If we are

customer, we still buy the product no matter the seller is

virtue or not since we need to pay the same price. Therefore,

virtue ethics in realistically is impossible.

Meanwhile, Koch (2010) suggested that consequentialist

ethics would be better off as a guide on practicing an agent.

This ethics targeted on how the actions will be in a specific

case or rule created which may lead to react with positive

outcomes. Therefore there are two types; one is case

consequentialism, the other one is rule consequentialism.

This leads to a selection on rule consequentialism whereby if

the agent follows the rules given by the firm and principal, it

would lead to positive impact. It seems appropriately based

on ethical judgment because the person who obeys the rules

will make a decision according to case- consequentialism.

They will consider the impact to others when they make a

decision.

Both scholars; Drucker (1974) and Karns (2008)

suggested that profit should be a limited goal in a business

and should not be the ultimate quest. Drucker (1974) was

known as pioneer in supporting that profit is not the sole

goal of business organizations, by stating;

‘‘… profitability is not the purpose of but a limiting factor

on business enterprise and business activity. Profit is not the

explanation, cause, or rationale of business behavior and

business decisions, but the test of their validity.’’

Likewise, Karns (2008) asserted that it is true that profits

are needed to serve the prosperous of mankind but it should

not became the supreme target of business activity as agreed

by the shareholders.

According to the above discussion, there are various

thoughts on profit maximization practice which ethically

unacceptable but it does not mean that it is totally wrong.

There are some restrictions that need to be look into as it

brings effect towards all the stakeholders.

VI. CONCLUSION

By looking at numerous taught, findings, Islamic beliefs

and ethical principles, it can be concluded that profit

maximization is a ‘healthy’ practices in a business provided

that it does not violate the restrictions imposed by Islamic

teaching specifically for Muslims. In addition, it should

comply with the ethical principles in considering the impact

of the action towards society. If the profit maximization

being implements to favor the interest of one party; it is not

encouragable. In making a harmony and balance economy

among the society, the businesses are advisable to look up

their role as caliph in this world because the jannah will be

awaited for them.

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Microeconomics: An Islamic Perspective. Petaling Jaya: Longman

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Abstract—Trade cost comprises of costs of getting a goods from

manufactures to consumers. Many empirical works used

transportation cost as a proxy for trade cost. However, this method

had been criticized for treats transportation cost rather than trade

cost. Utilizing the newly found micro measure of bilateral trade

costs, this study estimates the impact of trade institutions on trade

costs for Malaysia’s top twenty trading partners for years 2007-

2011. The results show that trade institutions have emerged as one

of the important factors in determining trade costs in addition to

the fundamental determinants. Hence it suggests that better trade

institutions can lead to a reduction of bilateral trade costs for

Malaysia.

Keywords—Trade Costs, Trade Institutions

I. INTRODUCTION

RADE costs according to Anderson and Wincoop

(2004) are large and account for about 170% of the ad

valorem tax equivalent of a rich country. They have four

sources, namely, local distribution costs, transport costs,

policy barriers, and border-related costs. For Malaysia, tariff

policy barriers are nearly negligible with the exception of the

non- tariff barriers. However, these non- tariff barriers are

soothed by Malaysian involvement in various trade

agreements. Meanwhile, transport costs have been reduced

significantly through an efficient and coordinated logistic

distribution of goods. Further, local distribution costs, which

can be divided into wholesale distribution and retail costs,

have improved through better networking between supplier

and buyers, thus reducing the role of the intermediary parties

and hence a cheaper goods available for consumers.

However, the last barrier, which is border-related costs,

tends to vary between countries due to different economic

and social environments. Different local legal and regulatory

efforts will produce a different economic climate where

countries that are friendlier to investors, exporters, and

importers will likely incur lesser costs even from the

corruption perspective.

In 2013, the Malaysian economy had an exports-GDP


ratio of 82% (World Bank Database). For countries like

Malaysia, the costs of doing trade are an important issue,

given that Malaysia is a country that relies heavily on trade,

and thus small changes in the trade environment can hugely

impact their national economy. Hence, Malaysia has begun

its own initiatives to increase trade competitiveness through

a gradual reduction of tariffs along with taking on various

memberships in international trade organizations. However,

as shown in Fig. 1, Malaysia’s bilateral trade costs still

remain substantially high when coupled with several other

countries that have experienced stagnant trade for the past

30 years. Indeed, the possible culprit of this phenomenon, as

shown in Fig. 1, could be border- related costs, where the

different characteristics of nations can and do matter.

The report from Transparency International shows that the

index for corruption has remained unchanged for the past 22

years. However, the ranking of Malaysia in terms of

corruption has slid downwards to 50. Meanwhile, according

to WDI (2014), Malaysia Liner Shipping Connectivity has

shown a promising improvement over the past ten years.

Despite this positive improvement in shipping connectivity,

Malaysia’s quality of port infrastructure remains the same.

In addition, The Global Competitiveness Report of 2009-

2010 (The World Economic Forum) indicated that

inefficient government bureaucracy, corruption, and policy

instability are all problematic factors for doing business in

Malaysia and will subsequently affect import and export

activity.

Therefore, it is in our interest from both a theoretical and

a policy perspective to examine how the trade institution

indicator affects Malaysian trade costs.

Further still, this study seeks to understand the role trade

institutions play in determining trade costs. Previously, the

main sources of trade costs were various common factors

like transportation costs and tariffs. However, as

transportation becomes more efficient and coordinated, with

lower tariffs available for most goods, the major obstacles to

increased trading for a country have fallen significantly.

T

Impacts of Trade Institutions on Malaysia

Trade Costs

Tan Jiunn Woei & Lee Chin*

Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia,

43400 UPM, Serdang, Selangor, Malaysia

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Fig.1 Trade Cost Timelines for Malaysia and Its Top Twenty Trading Partners

Hence, there is a rising concern about the prices that are

escalating on goods even though the major factors

contributing to those same prices, such as transportation and

tariffs, are declining. There is an urgent need to seek the

possible causes of the increasing prices for goods. Since less

attention had been given by both researchers and policy

makers to the role played by trade institutions in shaping

trade, this study seeks to fill that gap in the literature. The

outcome of this study should demonstrate whether trade

institutions actually have any impact on overall trade costs.


Renewed interest in the empirical study of trade cost came

from Anderson and Wincoop’s (2003) efforts on the

staggering amount of costs that are involved, namely, 170%

of the equivalent of the ad valorem tax, as contributed by

various determinants. Since then, various empirical efforts

related to trade costs have emerged. Notably, in the

beginning, the empirical work on trade costs focused on the

fundamental determinants, which consisted of both

geographical factors and historical factors, as supported by

Novy (2006) and reflecting the lack of any significant

contribution by institutional factors.

Among the earliest studies on the role of institutions in

relation to trade costs was one done by Anderson and

Marcouiller (2002) on both corruption level and trade costs.

Their results indicated that any increase in corruption raised

the trade costs and lowered traded volume due to insecurity.

Supporting the empirical evidence obtained by Anderson

and Marcouiller (2002), Clark et al. (2004) stressed that the

quality of the institution in addition to the corruption level,

i.e., logistical efficiency and other factors, also plays an

important role in determining the port efficiency of maritime

transportation.

Studying the differences in the trade costs associated with

the different modes of transportations, Pomfret and Sourdin

(2010) showed that institutional quality does matter to

transport costs, and air transportation matters more than the

maritime mode. In addition, according to Pomfret and

Sourdin (2010) institutional quality affects trade costs and

can vary according to the type of commodities even though

manufactured goods matter the most. Olper and Raimondi

(2009) shared the same point of view, namely, that

institutions are important as well as related geographical and

historical factors when exporting processed food to the

developing and developed nations. Findings by Milner and

McGowan (2013), when examining the legal institutions,

showed that improvements in legal institutions across

countries will not impact trade costs, but do help lift the

export shares of traded cost -intensive goods.

Generally, all of the studies above agreed on the point that

trade institutions do matter and are negatively related to

trade costs. However, the trade costs employed by these

studies are mainly proxies of transportation costs, which are

not really trade costs. This study adopts the latest trade cost

computation offered by Novy (2006, 2013) with

modifications by Arvis et al (2012). Further, the above-

mentioned studies look at the issue of trade institutions and

trade costs of only certain goods. Thus, the results vary

according to the type of goods, mode of transportation, and

country characteristics. This current study does fill the gap

for how trade institution impacts a country as a whole, but

not specific to certain conditions. This paper provides new

insights and a base study on Malaysian bilateral trade costs

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and trade institution indicators that have been recently set

up.

III. EMPIRICAL METHODOLOGY AND STUDY DATA

For the purpose of this study, the trade costs of twenty

countries were comprised of Malaysia’s major trading

partners, i.e., Australia, Brazil, China, France, Germany,

Hong Kong, India, Indonesia, Italy, Netherlands, Pakistan,

Philippines, Singapore, South Korea, Thailand, United Arab

Emirates, United States, United Kingdom and Vietnam, as

estimated annually for the period of 2007 to 2011. It’s

expected that our main intention, which is that trade

institutions will have a negative relationship to trade costs

due to trade institutions, can produce an efficient

environment for traders, which in turn will lower trade costs.

The general model used for the regression was as follows:

wherein tc denotes the bilateral trade cost; distance is the

geometric distances between two capitals; area is the

geometric average between two countries; common border is

a dummy variable that takes the value 1 if both share the

same border and 0, if otherwise; common official language

is a dummy variable that takes the value 1 if both share the

same official language and 0, if otherwise; exchange rate is

the geometric average of the official USD exchange rate of a

country in country i, and j (LCU per USD). Regional Trade

Agreements is a dummy variable that takes the value 1 if

both countries belong to the same RTA and 0, if otherwise.

Lastly, a trade institution indicator is defined as an

institution that provides services and facilitation related to

trade as represented by corruption, the quality of port

infrastructure and shipping connectivity. All the variables,

except for distance, will have a negative relationship to trade

cost. As the trade cost measure nets out multilateral

resistance components, the regressions do not have to

include additional fixed effects to control for multilateral

resistance. All the variables are in log form.

First, this study applied (1) where trade institution

indicators are an aggregate of three different types of

indicators (see Model 1). Subsequently, Model 2 was

formed to consist of three disaggregated trade institution

indicators and lastly (1) was replaced by sub-trade

institutions, namely corruption, quality of port infrastructure,

and shipping connectivity one at a time (Models 3, 4, and 5).

All five models were subjected to five separate regressions

and estimated using robust OLS panel regression for

consistency checking.

Trade cost was computed using the approach by Novy

(2006). According to Novy (2006), trade costs computations

are defined as follows:

Where represents bilateral trade costs between country j

and k; represent goods exported from country j to k;

represents goods exported from country k to j; represents the

exports of country j; represents the exports of country k;

represents the gross domestic product (GDP) of country j;

represents the exports of country k; represents the share of

tradable goods, and is the elasticity of substitution between

domestic goods and foreign goods.

Anderson and Wincoop (2003) developed a multi-

country, general equilibrium model, which was among the

earliest work carried out to estimate the magnitude of trade

costs, using a bottom-down approach where the estimation is

based on the assumptions for what will likely be the

components of the trade costs. However, Head and Ries

(2001) and a much more recent study by Novy (2013a) used

the top-down, perspective estimation technique, based on

patterns of trade and production without having to utilize

individual policies. This recent Novy (2013a) technique for

estimating bilateral trade costs has the advantage of

controlling multilateral resistance with the additional ability

to relax the assumption made by Anderson and Wincoop

(2004) that all goods are tradable.

However, as mentioned by Novy (2013a), the

computation of trade costs by applying gross domestic

product is deemed not suitable as a proxy of income for an

individual country. Hence, Novy (2013a) suggests using

gross domestic shipment to represent income, where Wei

(1996) approach for obtaining gross output is adapted. In

this research, gross domestic shipment is represented by

gross output, available at the United Nations National

Accounts Database using ISIC Rev 3.4 and then converted

to US dollars using the nominal exchange rate supplied by

International Financial Statistics. Where gross output was

unavailable, this study follows the Arvis et al. (2012)

methodology, using the value added obtained from the

United Nations National Accounts Database and rescaling

based on a multiplier factor between value added and gross

output for those countries where both sets of data were

available. All variables in (1) are shown in the geometric

average format to reflect their bilateral relationship.

IV. RESULT AND DISCUSSION

The panel regression results are presented in Table 1. The

dependent variable is the logarithmic relative trade cost

measure. Model 1 and Model 2 consist of aggregate and

disaggregate trade institution modes; meanwhile Models 3,

4, and 5 consist of a single trade institution determinant. The

explanatory power of the trade cost proxies is very high with

the minimum R2 value at 0.86 for all five models. All the

regressors for the five different models have the expected

sign except for Model 5 where the exchange rate was a

positive sign, but insignificant. Proxies for trade costs, such

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as distance, are the only variable that tended to increase

trade costs significantly, while land area, common border,

common language (official), exchange rate, and trade

institution indicator, namely, the quality of port

infrastructure, corruption, and the shipping connectivity

index were all found to be associated with the lowering of

trade costs.

Observing the results in Table 1, which is based on

Models 1 and 2, it is clear that trade institutions started to

place weight on Malaysia bilateral trade costs. In Model 1,

when three institution variables are aggregated, trade

institutional effects are far larger than other determinants of

trade cost where 10% improvement in the institutions

contributed to a 4.8% reduction in trade costs. Further, when

trade institutions are disaggregated in Model 2, the highest

reduction in trade costs was due to an improvement in

corruption, whereas for every 10% decrease in corruption,

trade costs lowered by only 2.6%. The determinant for a

reduction of trade costs was followed closely by

infrastructure quality with a reduction of about 1.9% and a

lesser influence of shipping connectivity, but by only 0.7%

per cent. The bare reduction in trade costs resulted from the

efficiency of the major shipping line using world sea lines

and substituted well for the loop of the missing connection

in the trade network. Hence, for consistency in the results for

Models 1 and 2, Models 3, 4, and 5 were performed to

ascertain that the results remained robust, whereas Models 3,

4, and 5 looked at the individual effects of a trade institution

proxy. The results show that the trade institution determinant

remained significant and does have a negative relationship

with trade costs.

In Model 2, the coefficients of geographical variables

provided a few interesting points worthy to note. First,

distance remained an important determinant of overall

bilateral trade costs between Malaysia and its trading

partners. Hence, in line with the gravity model literature, the

death of distance as a hypothesis is overly exaggerated (e.g.,

Disdier & Head, 2008). We found that an increase of 10%

for the distance between two capitals will cause an increase

of 2.1% in trade costs.

TABLE 1

REGRESSIONS RESULT

Model 1 Model 2 Model 3 Model 4 Model 5

Geographical Variables

ln (Distance) 0.251* 0.205* 0.158* 0.178* 0.282*

(0.035) (0.034) (0.037) (0.034) (0.037)

ln (Area) -0.021* -0.031* -0.025* -0.024* -0.008

(0.005) (0.005) (0.005) (0.005) (0.005)

Common Border -0.093 -0.152** -0.158** -0.255* -

0.114***

(0.063) (0.065) (0.067) (0.059) (0.064)

Institutional Variables

Common Official Language -0.052 -0.214* -0.291* -0.297* -0.012

(0.041) (0.049) (0.039) (0.041) (0.049)

ln (Exchange Rate) -0.009*** -0.024* -0.017* -0.031* 0.002

(0.005) (0.006) (0.006) (0.006) (0.007)

Regional Trade Agreement -0.155* -0.177* -0.186* -0.116** -0.057

(0.058) (0.053) (0.069) (0.052) (0.063)

Trade Institutional Variables -0.476*

(0.049)

ln (Quality of Port Infrastructure) -0.191* -0.552** - -

(0.071) (0.059)

ln (Corruption) -0.259* - -0.375* -

(0.034) (0.031)

ln (Linear Shipping Connectivity ) -0.073** - - -0.224*

(0.031) (0.033)

Number of Observations 100 100 100 100 100

R2 0.909 0.934 0.897 0.919 0.861

Notes: The dependent variable is the logarithmic trade costs

Standard error is given in parentheses *,** and *** to indicate significance at 1%, 5% and 10%, respectively

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These results are quite consistent with the findings of both

Novy (2013) and Arvis et al (2012). The effects of other

geographical variables, such as land area and common

borders, were much smaller in magnitude, but did have a

significant effect on trade costs. The small coefficient for

variable land area on trade costs suggests an improvement in

infrastructure connecting inland regions to the outer regions

(Novy 2006). Meanwhile, a common border currently still is

an important factor that affects trade costs, suggesting that

border- related costs still do impact trade costs.

Secondly, observing the institutional factors, namely

official languages, signals that there is a similar magnitude

for influencing trade costs where a 2.1% reduction in trade

costs occurs for every 10% increase in use of an official

language. This result suggests that a common language

(official) is still relevant in helping to lower trade costs

through the facilitation of bilateral transactions. However, in

terms of the exchange rate, a lowered exchange against the

US dollar does reduce trade costs, however, as a smaller

magnitude for all models, except for Model 5 where the

exchange rate was not significant. Hence the exchange rate

does not impose much of an impact due to a lower exchange

risk and less reliance by Malaysia on the US dollar as a

currency.

Third, our results show that RTA has a negative

relationship to trade cost, which implies that non-tariff

measures and other non-traditional forms of trade policy are

a much more important determinant of trade costs where

they play a big role as a tariff in the previous time. This

finding offers new insights for how trade costs are shaped

today. Further, it adds new counter empirical evidence that

clearly illustrates the insignificant RTA regarding trade costs

before this study was conducted. Hence, we suggest RTA is

as important as other geographical and institutional variables

when determining bilateral trade cost.

V. CONCLUSION AND POLICY IMPLICATION

This study sought to estimate the impact of trade

institutions on trade costs for Malaysia’s top twenty trading

partners. In the paper, trade institutions are represented by

three indicators, namely, quality of port infrastructure,

corruption perception, and linear shipping connectivity

index. By applying a new measure of trade costs using

Novy’s (2013) computations, this study identifies the role of

trade institutions and their impact on trade costs for

Malaysia’s important trading partners. These results indicate

that all trade institution variables significantly do affect trade

costs in a negative manner, a result that implies that better

trade institutions will likely lead to a reduction of bilateral

trade costs for Malaysia.

Given the situation shown in Fig. 1, this finding suggests

that more attention is needed by both the government and

private sector to improve existing trade institutions and

infrastructure still further via stronger anti-corruption

enforcement and improvement of logistics thru better

efficiency and management. In dealing with the

improvement of shipping connections, various modes of

routes that are well connected, both through highways or

railways, must be continuously built and improved.

Meanwhile, a serious priority should be well-equipped ports,

as they can translate into more efficiency in terms of the

number of containers handled and shorter stop time at ports.

These improvements will cause large shipping companies to

choose these ports as a favourite stop. By applying all these

positive measures and improvement to existing trade

institutional quality, Malaysia will have the potential to

reduce its bilateral trade costs still further and make its

current trade institutions quality more satisfactory.

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Anderson, J. E. & Van Wincoop, E. (2004). Trade cost. Journal of

Economic Literature, 42(3), 691-751.

Arvis, J. F., Duval, Y., Shepherd, B. & Chortip, U. (2012). Trade Cost in

the Developing World 1995-2010. ARTNet Working Paper No.121,

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Clark, X., Dollar, D. & Micco, A. (2004). Port efficiency, maritime

transport costs, and bilateral trade. Journal of Development

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Head, K. & Ries, J. (2001). Increasing Return Versus National Production

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Milner, C. & McGowan, D. (2013). Trade cost and trade composition.

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Novy, D. (2006). Is the iceberg melting less quickly? International trade

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panel data. Economic Inquiry, 51(1), 101-121.

Novy, D. (2013b). International trade without CES: Estimating translog

gravity. Journal of International Economics, 89(2), 271-282.

Olper, A. & Raimondi, V. (2009). Patterns and determinants of

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Pomfret, R. & Sourdin, P. (2010). Why do trade costs vary? Review of

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Abstract—Child depression is one of the most devastating

pediatric mental disorders, yet it is one of the most undetected

childhood mental disorders. This study aimed to explore the

feasibility of using Emotional Stroop Task (EST) as a new

pediatric depression screening tool that can supplement existing

tool and improve the recognition of pediatric depression. The

current study revealed that EST showed excellent convergent

validity in relation to Patient Health Questionnaire-9 Modified for

Adolescents (PHQ-A), excellent divergent validity with Screen for

Child Related Anxiety Disorders (SCARED) and excellent test-

retest reliability over 2 weeks. Besides that, current study also

examined the impacts of age and gender on EST performance and

found that they do not affect EST performance significantly. This

implicated that EST, as a pediatric depression screening tool, is

relatively free from the influence of demographics. Results of

current study provides preliminary evidences that EST is a valid

pediatric depression screening tool that can help improve the

recognition of pediatric depression.

Keywords—Emotional Stroop Task, Childhood Depression,

Depression Screening Tool, Psychometrics

I. INTRODUCTION

A. Childhood Depression

EPRESSION has only recently been recognized as a

possible health disturbance for children. Prior to 1970s,

the clinical consensus is that depression is only possible

among teens and adults, and it is impossible for children to

suffer from depression (Thompson, 2012). However, this

idea is now rejected following advances in mental health

research. It is now widely recognized that children and

adolescents can suffer from depressive disorders similar to

adults (Tisher, 2007), and childhood depression could lead

to a host of profound concurrent and future consequences in

one’s life.

It is well documented that children suffering from

depression tend to also exhibit concurrent mental disorders

such as anxiety disorders (Mathew, Pettit, Lewinsohn, &

Seeley, 2011). Other than that, individuals who experienced

childhood depression were found to be at elevated risk for

other disorders later in life, such as personality disorders and

psychotic disorders (for review, see Costello et al., 2003).

They also tend to experience impaired daily functioning

throughout their life. As a student, they may not perform

well in school (Schwartz, Gorman, Nakomoto, & Toblin,

2005). In life, they may lack effective coping skills, exhibit

pessimistic thinking, and have unrealistically low self-

esteem (Lewinsohn et al., 2004). Like a chain reaction, these

impairments caused by childhood depression will lead to

another whole host of negative life outcomes in adulthood,

such as poor career progression, relationship problems,

financial adversities, and completed suicides (Birmaher et

al., 1996; Jaycox et al., 2009). Since early-onset depression

tends to be associated with an array of negative outcomes,

early recognition is essential. This highlighted the

importance of effective depression screening tool to be

utilized so that signs of depression in young children can be

recognized.

B. Current Screening Tools

Despite the numerous pediatric depression screening

methods that exists, recognition of depression among

children remains as low as 12.5% (Allgaier et al, 2012). The

limitations of the existing pediatric depression methods are

perhaps why the recognition of depression in children

remains low.

The problem of proxy report instrument is that parents or

teachers can be insensitive to the emotions and inner

experiences of their children (Kazdin & Peiti, 1982; Chen &

Li, 2000). Depressive symptoms in children can therefore be

missed, particularly when the depressive symptoms are

subtle or indistinct, as in the cases of sub-threshold

depression (Costello et al., 2003).

Using Emotional Stroop Task as a Child

Depression Screening Tool

Ker Sing Ling & Wan Yeng Chiah*

Department of Psychology, UCSI University, Kuala Lumpur 56000, Malaysia

D

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For self-report method, while soliciting information from

the child may offer unique insight into the internal struggles,

the child may not necessarily be able to provide valid report

of their internal states. For example, as children tend to

focus on “here and now”, they tend to provide reports of

how they feel at the time of testing instead of what they felt

for the past weeks or months (Coles & Martin, 2005). Other

than that, children may not necessarily cooperate with the

clinicians to complete the paper and pen self-report

assessment. For younger children, they may not be able to

sustain attention long enough to complete the assessment

(Finch, Casat, & Casey, 2014). Some other children may be

hesitant to share information, particularly if they believed

that reporting problems are associated with punishments,

due to their past experience (Finch et al. 2014).

Play observations, on the other hand, are time and money

consuming to conduct. Direct observations have always been

associated with the challenge of standardization and scoring

guidelines. Different clinicians may have different

interpretations for the behaviors exhibited by the child

during play situations. Consequently, problems of inter-rater

reliability and validity arise (Finch et al., 2014).

All in all, most of the existing pediatric depression

screening tools are either too insensitive, too lengthy, or too

costly, making them ineffective or impractical for screening

depression in children. This phenomenon calls for more

effective childhood depression screening tool to be

developed, and to supplement the existing screening tools.

Recently, researchers have started to look beyond

traditional pediatric depression screening paradigms and

started looking into usage of cognitive tasks to screen for

depression tendency. This line of research was started based

on the assumption that anomalous cognition patterns such as

negative attributational style, increased accessibility of

negative materials and rumination are involved in the

etiology and maintenance of depression, and that these

anomalous cognition patterns can be identified from

responses on cognitive tasks, which in turn can serve as a

marker for identifying depression in human (Abramson et

al., 2002). One cognitive task that has been adapted for

pediatric depression screening is the Emotional Stroop Task

(EST).

C. Emotional Stroop Task (EST)

Emotional Stroop Task is one of the many variants of the

Classic Stroop Task (Stroop, 1935), a cognitive task

designed to measure cognitive inhibition. In the Classic

Stroop Task, color names are presented in fonts of the same

color in the congruent condition (e.g., the word GREEN in

green color font) and presented in fonts of different color in

incongruent condition (e.g., the word GREEN in red color

font). When required to name the font color of the words,

people consistently exhibit slower reaction time in the

incongruent trials compared to the congruent trials, an effect

known as Stroop effect (MacLeod, 1991). Stroop effect is

posited to happen, because humans need time to resolve the

cognitive dissonance created by the incongruity between the

semantic and the color information of the stimuli words in

incongruent condition and suppress the dominant response

of naming the font color (MacLeod, 1991). In congruent

trials, such resolution is not needed, resulting in a faster

reaction time.

In EST, the color words used in original Stroop are

replaced by negative and neutral emotion words. In an EST

negative emotion trial, a negative emotion word is used as

stimulus. In an EST neutral emotion trial, a neutral word is

used. In all types of EST trials, emotion words are presented

in colored fonts, and subjects are to name the color of the

fonts. As there are no conflicts between the semantic

meaning and the color information of the stimuli words in

EST trials, the subjects are supposed to exhibit similar

reaction time across all types of EST trials. If the subject

exhibited longer reaction time in responding to any

particular type of EST trials, it is assumed that the subject

have a special attentional bias towards the type of emotion

corresponding to that type of EST trials (Williams et al.,

1996). Studies using EST to detect depression draw upon

Beck's cognitive theory of depression (Beck, 1967). Based

on Beck’s model, depressed individuals are predicted to

display longer reaction time on negative emotion trials on

EST compared to non-depressed individuals, due to the

special attentional bias they have for negative emotion.

Beck proposes that negative early life experiences form

the basis for interconnected negative schemas about the self,

the world, and the future (Dozois & Dobson, 2001). People

with deeply rooted negative schemas tend to interpret

ambiguous situations in a distorted manner, unconsciously

filter out incongruent positive information and perceive

negative information as more important than it objectively

is. They also remember negative information better than

positive or neutral information (Dozois & Beck, 2008).

Such cognitive bias in interpretation, attention and memory

is said to contribute the development of depression, as the

individual can rarely interpret anything in a good light, let

alone to remember anything good that happened in their life

to actually feel happy. Such cognitive bias in interpretation,

attention and memory is also said to be involved in the

maintenance of depression developing more negative

schemas, again in turn result in more cognitive bias in

interpretation, attention and memory, and ultimately results

in depression. Beck also predicted depression increases

accessibility of negative schemas, which again contribute to

the vicious cycle of negative schemas-cognitive bias-

depression (Dozois & Beck, 2008).

D. Previous Studies Using EST

All in all, according to Beck’s model, it can be predicted

that depressed individuals will exhibit longer reaction time

than non-depressed individuals on EST negative word trials,

due to the special attentional bias they have for negative

emotion. The existing body of literatures supported this idea.

One of the earliest studies which looked into the differences

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of depressed and non-depressed sample on EST is Gotlib

and Cane (1987). Using a sample of 25 hospitalized

depressed subjects, the authors found that the depressed

showed delay in naming negative emotion words compared

to controls. In contrast, both groups showed similar reaction

time in naming neutral emotion words, which indicated that

the depressed group’s ability to perform color-naming Task

on EST is not compromised. Later studies of Emotional

Stroop paradigms have observed similar trend of increased

reaction time on negative word trials relative to neutral word

trials in clinically depressed individuals (Klieger & Cordner,

1990; Segal & Vella, 1990; Segal, Gemar, Truchon,

Guirguis, &Horowitz, 1995; Lim & Kim, 2005;

Mitterschiffthaler et al., 2008).

E. Literature Gap

Although the current body of literature consistently show

that delayed color naming is connected to clinical depression

status in adults and that provided criterion validity evidence

for EST as a depression screening tool, a proper validation

study in pediatric population have never been conducted.

Hence, an investigation of the psychometric properties of the

EST as a depression screening tool is imperative before its

usage in the pediatric population can be recommended.

As a pediatric depression screening tool, EST has a few

advantages over existing pediatric screening tools. Firstly, it

has a game-like interface, making it less boring than paper

and pen questionnaire, hence rendering better acceptance

and longer attention span in children. Secondly, it is more

objective than proxy-report and self-report screening, as it is

based on automated cognitive processes of the subjects, and

is therefore less subjected to respondents’ and interpreters’

bias. Thirdly, it is more time and cost effective to conduct

compared to direct observations. Provided that it is a reliable

and valid pediatric depression screening tool, the successful

implementation of it in clinical settings would be

tremendously helpful in improving the recognition of

depression in children. Proper validation is an important step

in establishing the diagnostic power of an assessment tool,

and it is also an important component of evidence-based

clinical practice (Cohen, Swerdlik, & Phillips, 1996). Hence,

as an effort to facilitate the implementation of EST as a

pediatric depression screening tool, the current study aimed

to examine its reliability and validity in a pediatric

population. Specifically, the test-retest reliability, the

convergent validity and the divergent validity of EST as a

pediatric depression screening were examined in this study.

Lastly, although the existing body of literatures has

converged on the fact that delayed color naming on EST

negative emotion trials is unique to depressed individuals,

the impact of demographic variables on EST performance

still remains unknown. These are important omissions

because a good depression screening tool should be

relatively free from the influence of demographic factors

such as age, gender, and culture, to ensure the reaction time

is not caused by confounding pre-existing demographic.

There were studies that revealed demographic factor such

as age can influence one’s color-naming performance on

traditional Stroop Task. For example, in an experiment

conducted by Ikeda, Okuzumi, Kokubun, & Haishi (2011), it

was found that one’s Classic Stroop performance gets better

as age increases. This is posited to be possibly linked to the

increasing ability of human to exert inhibition as they age,

an ability brought on by the biological maturation of brain as

an effect of aging (Davidson, Zacks, & Williams, 2003).

Applying this into the context of Emotional Stroop Task,

will children’s age have an effect on how well they can

inhibit their attentional bias towards negative information?

Following the vein of logic found in the trend of Classic

Stroop Task studies, one’s cognitive inhibition ability should

increase with age and can inhibit their attentional bias

towards negative information, hence the shorter their

reaction time on EST negative emotion trials will be. It can

then be predicted that older children should perform better

than younger children on EST negative emotion trials.

As for gender, although there is no evidence in the

literature to indicate gender differences on the Classic

Stroop Task (MacLeod, 1991), women are

disproportionately represented in the depression population

(APA, 2013), thus it is worthwhile to examine whether

gender affect EST performance. With that said, the current

study set out to explore the impact of age and gender on

children’s EST performance.

II. METHODS

A. Participants

The sample of this study consisted of 200 students aged

11 to 12 years old (with a mean age of 11.48 years) recruited

from three Malaysian public primary schools (“Sekolah

Kebangsaan”) located in Miri City, Sarawak, Malaysia

using convenience sampling. Out of the 200 participants,

94(47%) of them were female, and 106 (53%) of them were

male.

Firstly, written invitations to participate in the research

were issued to all primary schools located in town area of

Miri City, Sarawak. Three schools accepted the invitation to

participate in this study. The researcher obtained parental

consent for the study during a meet up with parents. Parents

and children were briefed in a large group regarding the

purpose and the procedures, and they were invited to

participate in the study after the briefing.

The sole inclusion criterion for this study is that the

participants have to be between 11 to 12 years old at the

time of the experiment. This age range was chosen to ensure

that the participants have the proficiency in English to

answer two English questionnaires, PHQ-A and SCARED.

There were four exclusion criteria for this experiment.

Firstly, people who are color blind were excluded from this

study, because it is likely that they will have difficulty

performing Stroop Task due to their deficits in

differentiating certain colors. Other than that, people who

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were diagnosed with Attention Deficit and Hyperactivity

Disorder (ADHD) were also excluded from this study. They

were excluded based on the consideration that they might

have difficulties concentrating to perform Stroop Task, as

found by Lansbergen and colleagues (2007). Besides that,

participants who cannot explain meaning of all emotional

words used in the EST were excluded from the study at the

pre-experimental stage. This is to ensure that the emotional

valence attached to each word is processed properly by each

subject, thus paving the way for eliciting the predicted

attentional bias in depressed subjects. Lastly, if the subjects

made two or more errors during the EST tasks (i.e press a

color key that was incongruent with the color shown), they

were excluded from the study. This is to ensure that the

results are not influenced by delay in naming due to

unfamiliarity with EST rules.

B. Research Instruments

Four measurements, namely demographic form,

Emotional Stroop Task (EST), Patient Health Questionnaire-

9 Modified for Adolescents (PHQ-A), and Screen for Child

Anxiety Related Disorders (SCARED) were used in this

study. Among the four instruments, the demographic was

completed by the parents, while the rest were completed by

the child participants.

A demographic form was used to collect demographic

data from the parents. The child’s demographic data that

were collected includes child’s name, age and gender. The

demographic form also contains a check question asking

whether the child have color blindness or attentional deficit

hyperactivity disorder (ADHD).

The Emotional Stroop Task used in this experiment was

modified loosely based on what was described in Williams

et al. (1996). There are two types of trials in this EST,

negative emotion trials and neutral emotion trials. All the

stimuli words used in the current study EST were selected

from a previous study, Doost et al. (1999). In Doost et al.

(1999), 221 British children aged 10 to 14 years old were

asked to generate emotional and non-emotional words in

response to 10 prompt questions, in order to create lists of

emotional and non-emotional words which are at the

children’s understanding level. Each participant completed

18 trials for each type of trials in this study, and the EST in

this study was presented on computer using an experiment

software called Psychopy (Pierce, 2007). The order of

appearance of the stimuli words during the EST was entirely

randomized by Psychopy.

PHQ-A (Johnson et al., 2002) is a self-report instrument

designed for detecting depression in adolescents. One can

receive a total depression score ranges from 0 to 27 on

PHQ-A, with higher scores indicating more severe

depression. As a depression screening tool, PHQ-A has been

validated against the Primary Care Evaluation of Mental

Disorders (PRIME-ED) interview and Patient Health

Questionnaire (PHQ) and exhibited sensitivity and

specificity that are comparable to PRIME-ED and PHQ

(sensitivity=73%, specificity= 95%) (Johnson et al., 2002).

SCARED is a 41-item questionnaire designed to screen

for child anxiety related disorders in children aged 8 years

old to 18 years, based on DSM-IV-TR classified categories

(Birmaher et al., 1997). SCARED was found to possess

good convergent validity (r=.65, correlated with Revised

Children’s Manifest Anxiety Scale total score) and good

internal consistency, α=.89 (Boyd et al., 2003).

C. Research Procedures

1. Pre-experiment Preparations

As emotion words are the main stimuli in EST, subjects’

understandings of the words are crucial to possible

elicitation of emotions on EST and proper execution of EST

in this study . Precautions were taken to ensure that they

understood the meaning of the words that will be used. To

ensure this, the list of negative and neutral emotion words

which will be used in the EST were distributed to the

English teachers of all the classes involved in this study two

weeks before the actual experiment. The English teachers

then taught these words to their students in class as part of

the syllabus.

2. Experiment Procedures

During the experiment, the subjects were given the list of

emotional words, and they were asked to briefly explain the

meaning of each word on the list. Participants who failed to

explain the meaning of any emotional words on the list were

excluded from the study. Participants who managed to

explain the meaning of all emotional words will then

proceed to the next stage of the study, which is filling in

PHQ-A and SCARED. Then, the subjects were asked to

perform 8 practice trials for EST on Psychopy program.

Subjects were subsequently tested on the actual EST trials.

Lastly, they were thanked and given a written debriefing

form. In order to investigate the test-retest reliability of EST,

EST was administered to the subjects again after four weeks.

The procedures of second administration were identical to

the first.

III. RESULTS AND DISCUSSIONS

A. Convergent Validity

In this study, the convergent validity of EST was

examined in relation to PHQ-A depression score. EST

negative word trials and PHQ-A were both proposed to

assess depression. Theoretically, the higher the EST

negative word trials reaction time and PHQ-A depression

scores, the more severe the depression. Hence, they should

correlate positively on a correlation test to establish

convergent validity.

To test the convergent validity of EST in relation to PHQ-

A, Spearman Rank correlation tests were used to test the

correlation between the two variables. Spearman Rank

correlation test was chosen over Pearson correlation test due

to the fact that the current study sample was taken from a

non-clinical population. The result of the Spearman Rank

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correlation test revealed that EST negative word trial

reaction time and PHQ-A depression scores were positively

correlated, rs=.93, p<.001. As PHQ-A depression scores

increases, EST negative word trial reaction time increases. Current study found a strong positive correlation between

EST negative word trial reaction time and PHQ-A

depression scores. In psychometric terms, strong positive

correlation relationship between two measurement tools

most likely indicates that the two tools are measuring the

same construct. PHQ-A had previously been validated

against PRIME-ED diagnosed clinical depression status and

showed a satisfactory sensitivity of 73% and an excellent

specificity of 95% (Johnson et al., 2002), hence it can be

assumed that PHQ-A measures depression. A strong

converging relationship between EST negative word trial

reaction time and PHQ-A depression scores in a pediatric

sample mean that they are actually measuring the same

construct in children, which is presumably depression. Such

results therefore provide preliminary evidence of validity for

EST negative word trial as a pediatric depression screening

tool.

B. Divergent Validity

In this study, the divergent validity of the EST was

examined in relation to SCARED anxiety scores. EST

negative word trials was designed to measure depression,

and SCARED was designed to assess anxiety. Hence, to

establish divergent validity, they should not show any

significant relationship on a correlation test.

To test the divergent validity of EST negative word trial

reaction time in relation to SCARED anxiety scores, a

Spearman Rank correlation test was used. The result of the

correlation test revealed that there was no significant

relationship between EST negative word trial reaction time

and SCARED anxiety scores, rs=.05, p=.952.

The current study found no significant correlation

between EST negative word trial reaction time and

SCARED anxiety scores. This means that EST negative

word trial reaction time as a depression screening tool, does

not agree with a construct that it is theoretically not

supposed to agree with, which in this case is an anxiety

index, which can be taken as an evidence of divergent

validity of EST negative trials. As a depression screening

tool with divergent validity against an anxiety screening

tool, this means that when screening for depression, EST

will be able to differentiate between a depressed subject

from an anxious subjects who is not depressed. The fact that EST negative trials demonstrated divergent

validity against an anxiety screening tool makes it a better

depression screening tool than most of the existing validated

pediatric depression screening tool. As noted by Beck &

Perkins (2001), high correlations have been consistently

found between several validated pediatric depression and

anxiety screening tools, for example between CDI and

STAIC (Muris et al., 2002) and between BDI and MASC

(Rynn et al., 2006). Such inter-correlations between self-

report scales assessing children’s depressed and anxious

symptomatology have been a real challenging issue for the

clinicians. With depression screening instruments lacking

consistent specificity, diagnostic decisions were difficult to

justify quantitatively and misdiagnosis can often occur. For

example, when a child scored high on a depression screening

tool, it is difficult for clinicians to judge whether the child

really scored high because he is depressed, or that he is

actually anxious and only scored high on the depression

screening test because of the high correlation between the

two tests. According to Beck & Perkins (2001), cases where

the clinicians mistakenly take anxiety for depression because

the subject scored significantly high on a depression score

contributes to 15 to 20% of misdiagnosis cases in pediatric

depression. In conclusion, the fact that EST negative trials

demonstrated divergent validity against a validated anxiety

screening tool illustrated that it has the potential to be a

good pediatric depression screening tool that can help to

reduce the rate of such misdiagnoses and improve the

recognition of pediatric depression.

C. Test-retest Reliability

The last psychometric property of EST as a depression

screening tool examined in this study is test-retest reliability. Even though consistency of a test over time may not

necessarily ensure the validity of the test results over time, it

is still an important component of a good psychological test.

For the current study, a retest period of 2 weeks was chosen

in accordance DSM-V definition of major depressive

episode. A major depressive episode is a period

characterized by primarily depressed mood or loss of

interest in life activities for 2 weeks or more (APA, 2013).

According to this definition, a person suspected of having

unipolar depression need to experience the symptoms for at

least 2 weeks to be considered as having a major depressive

episode. Hence, as a depression screening tool, it is really

important for EST to demonstrate good test-retest reliability

for at least 2 weeks, so that the screening results produced

will be consistent over time and will not confuse the

clinician in charge of screening. To test the test-retest reliability of the EST over 2 weeks,

a Pearson correlation test was conducted to examine the

correlation between reaction time on EST negative emotion

trials from different administrations. The analysis result

revealed a significant positive correlation between EST

negative trials reaction time from two different

administrations, r=.92, p<.001.

The findings revealed that EST negative word trials used

in current study possessed excellent test-retest reliability,

evidenced by the high test-retest reliability coefficient

obtained. The test-retest reliability coefficients obtained in

this study are higher than the coefficient obtained by Strauss

et al. (2005). In this previous study, Strauss and colleagues

examined the test-retest reliability of a computerized color-

word format EST, which is similar to the EST used in the

current study. The results of Strauss et al. (2005) revealed

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that for sadness word trials (equivalent to negative word

trials in current study), a test-retest reliability coefficients of

r=.89 was obtained. On the other hand, the current study

results show that EST exhibited a test-retest reliability that is

comparable to some of the commonly used pediatric

depression screening tools, for example, Beck Depression

Inventory (BDI) which showed a test-retest ability of r=.81

over the span of 2 weeks ( Masip, Amador-Campos, Gómez-

Benito &Gándara, 2010). This piece of information, coupled

with the fact that EST showed convergent and divergent

validity with a pediatric sample in current study, further

strengthen the idea that EST has great potential as a

pediatric depression screening tool.

D. Effect of Demographic on EST Performance

Other than examining the psychometrics of EST as a

pediatric depression screening tool, the current study also

examined the impacts of age and gender on EST

performance. To assess the effects of each demographic

factor have on EST negative emotion trials performance,

multiple t-tests were conducted. The two independent t-tests

conducted on age and gender yielded similar results. Male

and female were not found to differ significantly on negative

emotion trials reaction time, t(198) =.66, p=.51, Mmale=1.19,

Mfemale=1.19 . Similarly, age were not found to affect

negative emotion trials reaction time significantly, t(198) =-

.50, p=.62, M11years=1.18, M12years=1.16. A separate two-way

ANOVA test was also conducted to check if the age and

gender interact with each other in affecting EST negative

emotion trial performance. The ANOVA results revealed

that there was no significant interaction between the two

factors, F(1, 196)= .24, p=.63.

Overall, the results of current study showed that age and

gender did not affect negative emotion EST trials reaction

time significantly. For age, such results were not in

accordance with the prediction the current study derived

based on previous studies conducted on Classic Stroop Task

(Ikeda et al., 2011), which is that older children should

perform better than younger children on EST negative

emotion trials, due to enhanced cognitive inhibition ability

as an effect of age-related brain maturation. In the current

study, there are no significant differences between the 11

years old and the 12 years old on EST performance.

However, it should be noted that the results is limited by the

fact that current sample only have a very narrow age range,

which is 11 to 12 years old. One year may be too short a

range for any substantial age-related brain maturation to

show, which is probably why the two groups did not differ in

their inhibition ability, and ultimately EST negative trial

performance. Had a sample with more diverse age range

been used, it is possible that a difference between the

younger age group and older age groups could be found.

Future study should try to rectify this methodological flaw

and examine the effect of age on EST again using a pediatric

sample with more diverse age range.

Since the current study is the first study to investigate the

effect of gender on EST negative word trials performance,

the current study made a unique contribution to the EST

literatures, by providing the first evidence to support the

idea that EST is a stable pediatric depression screening tool

in which both gender react to in a similar fashion. Hence,

any delay in EST negative emotion trials is not likely to be

confounded by pre-existing gender differences.

In summary, none of the demographic factors examined in

the current study were found to affect EST performance

significantly. One possible interpretation of such results is

that the EST, as a depression screening tool, is relatively

free from the influence of demographic factors, which makes

it a good depression screening tool that can be used across

populations. However, it is also possible that the null results

have been caused by the confounding factors mentioned

above. Future studies should seek to control these

confounding factors so that the effect of age and gender on

one’s EST performance can be better accessed.

IV. CONCLUSIONS, LIMITATIONS & IMPLICATIONS

A. Conclusions and Limitations

One main goal of this study is to examine the reliability

and validity of Emotional Stroop Task as a pediatric

depression screening tool. The results revealed that EST

showed excellent convergent validity in relation to PHQ-A

depression score, excellent divergent validity with SCARED

anxiety score and excellent test-retest reliability over two

weeks.

Another goal of this study is to validate EST performance

across demographic profiles. Both factors examined in this

study, namely age and gender were not found to affect EST

performance significantly. This implicated that EST could

be, as a pediatric depression screening tool, is relatively free

from the influence of demographic factors, which makes it a

universal depression screening tool that can be used across

populations.

Taken altogether, the results of current study implicated

that EST has the potential to be a universal pediatric

depression screening tool that can supplement existing

screening tool improve the recognition of pediatric

depression. However, the conclusion of this study is limited

by a few constraints. Firstly, as the sample of current study is

made up of entirely Malaysians, it is unknown the

psychometrics properties found in this study are

generalizable to pediatric populations other than Malaysians.

To find out if the psychometric properties are generalizable,

the above reported preliminary evidence of reliability and

validity needs to be replicated in pediatric populations from

other countries or cultures. Other than that, this study used a

community sample to examine the validity and reliability of

EST as a pediatric depression screening tool. Thus, the

findings from this study may not be generalizable to a

clinical sample. Future researcher should try to replicate the

results of current study in a clinical sample to confirm that it

is a valid depression screening in clinical sample.

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B. Implications

The results of current study have important implication

for psychological test developers. It is well known that a

huge problem faced by clinicians in multilingual countries

when screening for pediatric depression is the lack of

depression screening tools written in local language, as most

of the current screening tools are written in English.

Although translations have been attempted, progress has

been slow. As a depression screening tool, EST can be

modified more easily compared to a conventional

questionnaire. Since only single words are used as stimuli,

modifying EST would not have as much grammar and

sentence structure problem as modifying in a traditional

questionnaire. As the current study have evidenced

preliminary reliability and validity of EST, it provides

support to the idea of using EST to develop a valid yet

localized pediatric screening tool for multilingual countries,

which undoubtedly will improve recognition of depression

in children from vary backgrounds.

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Abstract—The growth of Islamic estate management alongside

the rapid development of Islamic banking and finance industry in

Malaysia shows that Malaysian positively accepting Islamic related

products. Among the Islamic estate management products are

called Hibah and Will. Hibah and Will are two essential

instruments in Islamic estate management according to Islamic

law. Hibah is a gift of property that occurred during the life of the

grantor, while Will is a gift of property that occurred after the

death of the testator. This paper is focusing on Hibah, as the

instrument in managing the wealth of a person. This paper

discussed on the concept of Hibah and determined the awareness

level of Hibah among UiTM Negeri Sembilan staffs. A number of

fifty (50) respondents were randomly selected to answer the

questionnaire. The study shows that majority of the respondents

still has low awareness level on Hibah concept. Majority of the

staffs are still not really understood what is Hibah means and its

contribution towards the Islamic Estate /Wealth Management. It is

important for the researcher to further investigate on Hibah and its

significance in society.

Keywords—Islamic Estate Management, Hibah, Will, Islamic

banking and finance industry, Islamic Wealth Management

I. INTRODUCTION

SLAMIC Wealth Management is concerned with

providing end-to-end solutions using products and

services throughout the wealth management cycle in

compliance with Shariah. Malaysia is moving towards

becoming a Hub for Islamic Wealth Management including

Islamic estate management. According to Lim, M.W.

(2008), Malaysia has an availability of products for multiple

customer segments. The country has diversified financial

players including Islamic Banks, Investment Banks, Takaful

Companies, Development Financial Institutions and Trustee

Company. There are more than 100 Islamic financial

products and services to fulfill the demand of customers.

The growth of Islamic estate management alongside the

rapid development of Islamic banking and finance industry


in Malaysia shows that Malaysian positively accepting

Islamic related products. In fact, the Malaysia’s Prime

Minister, Datuk Seri Najib Razak in the 12th World Islamic

Economic Forum (WIEF) recently identified Islamic wealth

management as a new growth area which it’s potential to be

further explored. Malaysia continues to be the global leader

in the sukuk market, commanding 54.3 percent of the global

sukuk outstanding at the end of 2015, while total assets

under management of Islamic fund management industry

remains the world’s second largest.

Among the Islamic estate management products are called

Hibah and Will. Hibah and Will are two essential

instruments in Islamic estate management according to

Islamic law. The Hibah is a gift of property that occurred

during the life of the grantor, while the Will is a gift of

property that occurred after the death of the testator. Both

these instruments are encouraged in Islam, in that if it is

done properly and in accordance with the requirements of

Islamic law so it can avoid quarrels and disputes over

inheritance. Hibah and Will also can assist relatives who

need help.

According to Nazrul Hazizi et al (2016), the

administration and distribution of a Muslim deceased’s

estates in Malaysia begin by determining whether the

deceased has died intestate or testate. The Shari’ah Court

has the ultimate power to determine the eligible heirs and

ascertain their portions by issuing an inheritance certificate.

The claimed assets worth more than RM 600,000 will be

settled at the High Court regardless whether the deceased

died intestate or testate. The difference between both is that

an executor (if died testate) is required to obtain Grant of

Probate while an administrator (if died intestate) is required

to obtain Letter of Administration with two sureties provided

by the legal heirs.

On the other hand, small intestate1 matters will be

managed by the Department of Director General of Lands

and Mines after a petition is lodged by any person claiming

to have an interest in the estate. In the event of the deceased

leave a wasiyyah (died testate) with the total value of his

I

Awareness on Hibah Concept: Towards

Cultivating Islamic Estate/Wealth Management

Aini Hayati Musa

Faculty of Business Management, UiTM Negeri Sembilan,

72000 Kuala Pilah, Malaysia

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assets are less than RM 600,000 the High Court will then be

referred to (Nazrul Hazizi et al, 2016).

A good Islamic wealth management and estate

management is vital in ensuring better life planning in

future. Effective wealth and estate planning is required in

order to reach peaceful of mind and reach society well-

being. According to Nor Azzah and Mohd. Zaidi (2011) ,

the importance of Islamic wealth management are to (i)

avoiding wealth freezing, (ii) ensuring the circulation of

wealth, (iii) eliminating “Madhmumah” nature, (iv)

strengthening economic ummah, and (v) social justice.


A. Islamic EstateManagement/Planning

According to Nazrul Hazizi et al (2016), it is observed

that there is lack of awareness in the public on the

importance of estate planning in Malaysia. Buang (2008)

revealed that the number of frozen estates in Malaysia is

increasing yearly in proportion to the increase of the national

income levels and asset possession. In 2011, there were

frozen estates amounted up to RM42 billion was not being

distributed to its 500,000 beneficiaries and this amount

continued to increase to RM45 billion in the following year

(Mujani et. al, 2012; Shahrul Anuar, 2012). This, however is

argued to be an underestimated figure as there were huge

amount of unclaimed monies in various agencies such as

Amanah Raya Berhad (ARB), Employee Provident Fund

(EPF) and other financial and banking institutions yet to be

taken into the calculation (Ahmad and Laluddin, 2010;

Mujani et al., 2012; Kamarudin and Alma’amun, 2013).

More recent figures received from the Malaysia’s

Department of Director-General of Lands and Mines

(JKPTG) through the Estate Distribution Division (BPP)

show that up to March 2016, there are estates of decease

people worth RM60 billion have not been claimed by their

eligible heirs, with a big portion of it is believed belongs to

Muslim.

B. Hibah

In the contemporary Islamic estate planning, hibah can be

executed either in the form of direct hibah or hibah trust.

Direct hibah involves a less complex way of transferring the

ownership of the donor’s property to the donee through ijab

and qabul. Hibah trust, on the other hand is a combination of

hibah and trust features itself. In general, it is a gift from the

donor to the beneficiaries during his lifetime, which the

assets will be held by an appointed trustee for a certain

period of time and can only be transferred to the

beneficiaries after the donor’s demise in accordance to the

parties’ agreement in the Trust Deed. The main difference

between direct hibah and hibah trust is that in a direct hibah

the ownership of the asset is transferred completely to the

hibah receiver hence the donor no more has any right or

interest over the asset. In contrast, in hibah trust, although

the asset has been transferred to the beneficiaries either

legally or constructively, the donor can still enjoy the

benefits from the asset upon receiving consent (written in a

separate agreement) from the beneficiaries. (Nazrul Hazizi et

al, 2016).

Hibah (gift inter vivos) is one of the wealth distribution

methods in Islamic law. It is considered as one of the most

effective methods because the property owner is free to

determine the beneficiary as well as the amount of property

to be disposed (Nasrul Hisyam, 2012). According to Nazrul

Hazizi et al (2016), in Malaysia, hibah trust or often

interchangeably referred as hibah amanah, trust hibah or

Hibah harta recently started to gain tremendous popularity in

the Islamic estate management since Permodalan Nasional

Berhad (PNB), a major Malaysian fund management

company via Amanah Saham Nasional Berhad (ASNB)

introduced Hibah Amanah, a hybrid product using the

concepts of hibah and trust in 2013. Among other hibah trust

products introduced in Malaysia include; (i) Pri-Hibah by

CIMB-Principal Asset Management Berhad; (ii) Hibah

Harta Trust by CIMB Islamic Berhad; (iii) Pri-Hibah by As-

Salihin Trustee Berhad and (iv) Hibah AmanahRaya by

Amanah Raya Berhad. Figure 2 illustrates the hibah trust

model used by a number of Islamic estate planning service

providers in Malaysia.

C. Will

According to Taiwo Moshood Salisu (2016), writing a

will, to our mind, is economical in the sense that it is

relatively inexpensive, for dying intestate one’s family will

have to apply to the courts (probate registry) in order to

administer ones estate which processes and procedures,

which are not only lengthy but also too expensive as well.

From the foregoing, it has been made lucid that death is a

necessary requisite for will-making in Islam. Indeed, if the

ḥadīth of the Prophet that a conscious Muslim who has

property to bequest should always within three nights

endeavour to document it is properly digested and

internalized, it is a reminder of the inevitable phenomena

(al-mawt). It is also argued that bequest in Islam is

antithetical to sympathy; favoritism and partiality, for there

are clear Qur’ānic and aḥādīth positions that lay credence to

the concept. Indeed, there is the sharp contrast between will-

making in Islam and all other conventional systems. This

paper fairly dwells on the divergent views of jurists

(fuqahā’).

III. METHODOLOGY

The target population of this study comprises of fifty (50)

respondents of UiTM Negeri Sembilan staffs including

lecturers. The self-administered questionnaires were

distributed among respondents who participated in

answering the questionnaires. Survey instrument consists of

cover letter and questionnaires. Simple interview were also

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conducted during questionnaire distribution in order to get

the responds from the staffs. Random sampling method was

chosen in this study.

IV. RESULT ANALYSIS

TABLE 1:

AWARENESS OF HIBAH CONCEPT

Table 1 shows that only fifteen (15) respondents have ever

heard the concept of Hibah in Islamic estate/wealth

management. Ten (10) of them are neutral and twenty five

(25) were not familiar with the concept of Hibah in Islamic

estate management. The concept of Hibah is not widely

familiar among the staff.

TABLE 2:

KNOWLEDGE LEVEL OF HIBAH CONCEPT

Table 2 shows the knowledge level of Hibah concept

among UiTM Negeri Sembilan staffs. Out of score eight

(deep in Hibah knowledge), majority of the respondents fall

in score 4. From the random interview held, majority of the

respondents only have little knowledge of this concept.

TABLE 3:

HIBAH AS ONE OF THE ISLAMIC ASSET/ESTATE MANAGEMENT

Table 3 illustrates majority of the respondents (21) are

neutral with the statement of Hibah as one of the method to

asset management in Islamic Asset/Estate management.

Sixteen of them are not agree with this statement. Out of

fifty (50) respondents, there are only 13 respondents showed

positive responds agreeing Hibah as one of the Islamic

method in managing their asset.

TABLE 4:

HIBAH AS METHOD TO AVOID ASSET FREEZING

Table 4 shows majority of the respondents (25) neutral

when being asked about Hibah as one of the method that can

avoid asset from freezing upon death. There are only

fourteen (14) of them agreed with this statement. Most of

them did not notice Hibah as one of the way that can avoid

our asset freeze upon death.

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TABLE 5

HIBAH CAN ENSURE THE CIRCULATION OF ASSET

Table 5 shows twenty (20) respondents are neutral and

twenty (20) respondents agreed with the statement effective

Islamic Estate Planning (e.g. Hibah) can ensure the

circulation of wealth and social justice. There are only ten

(10) of the respondents disagree with the statement.

V. CONCLUSION

From the analysis conducted, we can conclude that

knowledge of Hibah as one of the Islamic Estate/Wealth

management is in the moderate level. Majority of the staffs

are still not really understood what is Hibah means and its

contribution towards the Islamic Estate /Wealth

Management. It is important for the researcher to further

investigate on Hibah and its significance in society.

REFERENCES

A. O. Omotosho. (2004). The Language Factor in the Interpretation of

Islamic Law: The Word Amr in Focus. Nasarawa State University Law

Journal, Vol. 1 No. 1, Pp. 131-142.

Buang, A. H. (2008). Appreciation of Syariah principles in property

management in contemporary Malaysian society. Jurnal Syariah, Vol.

16, Pp. 555–566.

Mohd Willieuddin Lim (2008). Malaysia as a Hub for Islamic Wealth

Management. The International Financial Planning Advisors

Conference 2008.

Mujani, W. K., Abdul Rashid, R., Wan Hussain, W. M. H., & Yaakub, N.

I. (2012). Gift inter vivos for charged property. The Social Sciences,

Vol. 7 No. 2, Pp. 196–199.

Nasrul Hisyam Nor Muhamad. (2012). ‘Umra and Ruqba: An Analysis of

Their Impact on the Hibah Contract and Their Potential as

Instruments of Wealth Distribution. Jurnal Syariah, Vol. 20 No. 1 Pp.

1-46.

Nasrul Hisyam Nor Muhamad. (2008). Bidang Kuasa Hibah di Mahkamah

Syariah di Malaysia. Jurnal Syariah, Vol. 16 No. 2 Pp. 1-23.

Nazrul Hazizi Noordin, Muhammad Issyam Ismail, Muhammad Abd Hadi

Abd Rahman, Siti Nurah Haron & Adam Abdullah. (2016). Re-

evaluating the practice of hibah trust in Malaysia. Humanomics, Vol.

32 Iss 4.

Noor Lizza Mohamed Said, Mohd. Ridzuan Awang & Amir Husin Mohd

Nor (2012). Conditional Hibah in Favour According to the Opinions

of Islamic Jurists and Its Position inThe Civil Law of Jordan. Jurnal

Syariah, Vol. 20 No. 3 Pp. 309-328.

Nor Azzah Kamri, Mohd. Zaidi Daud (2011). Islamic Wealth

Management: A Review on the Dimension of Values. Jurnal Syariah,

Vol 19 No. 3, Pp 187-212.

Sheikh Ghazali bin Hj Abd. Rahman (2010). Perkembangan terkini

undang-undang hibah di Malaysia. Prosiding Konvensyen

Kebangsaan Perancangan & Pengurusan Harta Dalam Islam.

Special Address by the Hon. Dato’ Sri Mohd Najib Tun Razak in 12th

World Islamic Economic Forum (WIFE 2016), retrieved 23rd October

2016.

Taiwo Moshood Salisu (2016). Will-Making (Wasiyyah) in Islam: A

Juristic Exposition. Jurnal Syariah, Vol 24 No. 1, Pp 157-180

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Abstract—Assessing and improving performance efficiency has

become a main concern for the management practices in the

banking industry. In this study, we employ non-parametric Data

Envelopment Analysis (DEA) to measure technical efficiency of

seven conventional banks and ten Islamic banks operating in

Malaysia over the period of 2012 – 2014. This study also compares

the level of efficiency of both types of institutions. Total deposits,

fixed assets and equities constituted the inputs of the study;

whereas other earning assets and load and advance to the banks

were the outputs. The findings of the study suggests that Islamic

banks perform better than conventional banks.

Keywords—Commercial Banks, Efficiency, Data Envelopment

Analysis, Islamic Banks

I. INTRODUCTION

HE banking industry plays an increasingly significant

role in the development of the financial system. A

developed financial system of the country has significant

effects on the economic growth of a country. Many studies

have shown that banking sector provided the monetary and

financial stability that is aimed for providing a useful

environment for the continual growth. Therefore, the

efficiency of the banking sector has become an imperative

issue among policy makers and always getting great interest

for numerous shareholders and customers.

The development of Islamic banking started after 1983

with the establishment of the first Islamic bank. Malaysian

Islamic banking sector has been growing rapidly since then

where there are now five wholesome Islamic banks (local

and foreign) and eleven Islamic subsidiary banks owned by

local and foreign conventional banks. Therefore, in this

competitive banking industry, both conventional and Islamic

banks should enhance their performance in terms of its

efficiency in order to ensure that banks remain profitable

and strong.

In light of the above situation, it is interesting to examine

efficiency and the sources of efficiency for both

conventional and Islamic banks in Malaysia. The data is

obtained from BANKSCOPE that available over the period

of 2012 to 2014. While comparing the performance for both

types of banking system in Malaysia, this study also

identifies which type has the better performance that can be

referred as a benchmarking.

For this purpose, this research employs Data Envelopment

Analysis (DEA) because of its strength to handle multiple

inputs and multiple outputs. The remainder of this paper is

organized as follows. Section 2 provides review of

literatures and hypotheses. Section 3 describes the data and

methodology used in the study. Section 4 presents the results

and discussion on the findings. Last section concludes the

study.


The efficiency of banks has been the topic of interest in

banking research. At large, most of the previous studies

applied DEA to measure banks efficiency. A study done by

Kamarudin, Nordin, Muhammad & Hamid (2014) on the

efficiency level of Islamic and conventional banks in Gulf

Cooperation Council found that lower Islamic banks profit

efficiency level was due to the higher level on banks revenue

inefficiency. Another study done by Sufian & Kamarudin

(2015) also find the similar finding where the Islamic banks

revenue efficiency has greater influence on the profit

efficiency levels in the selected Southeast Asian countries

consists of Malaysia, Indonesia and Brunei over the years

Efficiency Analysis in Conventional and Islamic

Banks in Malaysia: An Application of Data

Envelopment Analysis

Nur Azlina Abd Aziza*, Nurfatin Zahidb, Jamilah Mohd Mahyideenc, Norfazira

Abdullahd & Nur Farah Naila Suleimae

aedUniversiti Teknologi MARA (UiTM), 74000 Seremban, Malaysia bUniversiti Teknologi Malaysia (UTM), 81310 Johor, Malaysia

eUniversiti Teknologi MARA (UiTM), 40450 Shah Alam , Malaysia

T

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2006–2011. The results show that the level of profit

efficiency in the domestic Islamic banks is higher than

foreign Islamic banks due to the higher level of revenue

efficiency on domestic Islamic banks.

In the Malaysian Islamic and conventional banks cases,

Kamarudin & Yahya (2013) measured the cost, revenue and

profit efficiency on both banks ownership. This research

employed Data Envelopment Analysis (DEA) method on the

sample of 39 Islamic and conventional banks. They

discovered that the levels of profit and cost efficiency for

Islamic banks wew lower than conventional banks due to

the factors of bank-specifics characteristics and

macroeconomic conditions.

Mohd Tahir, Razali, & Haron (2013) used two inputs and

one output. Total deposits and total overhead expenses were

the inputs while total earning assets was the output. The

results acquired showed that the local banks were operating

in increasing returns to scale. AlKhathlan & Malik (2012)

stated that banking system is an important part in the

economic improvement of any nation. In the banking system,

commercial bank plays an important role to develop the

growth of economic to be more productive or the banking

institution will hitch the rapid economic growth.

Eken & Kale (2011) employed Data Envelopment

Analysis (DEA) to measure the performance of a set of 128

bank branches of a major bank in Turkey. The objective

was to measure the relative productivity and potential

improvement capabilities of bank branches by recognizing

their strengths and weaknesses. Another objective was to

examine the production and profitability aspect of branches.

DEA is found to be an effective as measurement tool

because it is able to set the branches according to their

performances and provides information that cannot be

studied using other method such as ratio analysis.. The

research applied output oriented CCR and BCC models.

To ensure consistency and free from biasness, Maghyereh

and Awartani (2012) used a non-parametric bootstrap DEA

estimation approach to investigated the efficiencies in

banking sector. This research covers the integration in Gulf

Cooperation Council (GCC) within year 1998 to 2009.

Moreover, this research conducted two tests: a beta

convergence test and sigma convergence test. DEA method

allows comparing banking sector of different size. The aim

of this research is to identify the impact of integration and

coordination efforts on banking efficiency, and convergence

within the GCC countries (Maghyereh & Awartani, 2012).

The researcher also proved that the banking integration in

the GCC area have occurred when ongoing process

established for a single currency zone.

In a recent study, Zakaria et al.(2014) applied Bootstrap

Data Envelopment Analysis (BDEA) approach when

measuring efficiency of Islamic banks in Malaysia. The

analysis was based on data of twelve Islamic banks from

Bankscope for the period 2006 to 2010. The use of BDEA

approach enable them to tackle the issue of uncertainty when

using traditional DEA by changing the estimated efficiency

based on bias-corrected. In this study, total deposits and

total assets are considered as inputs while outputs are net

loans and earning asset. The result of BDEA suggested that

the current practices in Islamic banks could depend over its

result. Islamic banking personnel can improve their

operational strategies to earning competitive support in the

banking sector.

III. METHODOLOGY

This study applied the method of Data Envelopment

Analysis (DEA) to determine the efficiency of the bank.

DEA methods can be categorized into two models which are

Charnes, Cooper and Rhodes (CCR) and Banker Charnes

and Copper (BCC). This study used CCR model due to its

strength in handling financial analysis and multiple inputs

and multiple outputs. Output orientation is used in this study

to increase the outputs without changing inputs.

The data of inputs used in this study are total deposits

(Weiguo & Ming, 2008), fixed assets (Subramanyam &

Reddy, 2008) and equity capital (AlKhathlan & Malik,

2012) while other earning assets (Varias & Sofianipoulou,

2012) and loan and advances to bank (AlKhathlan & Malik,

2010) are the output variables.

The data for this study is obtained from BANKSCOPE

and it consists of 7 commercial banks and 10 Islamic banks

in Malaysia over the period 2012-2014.

Let s be the number of outputs, m is the number of

inputs. ur is weight of output r, yrj is the amount of output r

produced by the DMU’s, vi is weight of input i and xij is the

amount of input i used by the DMU’s. The model is :

m

i

ii xvh1

00min

Subject to:

011

s

r

rjr

m

i

iji yuxv

11

0

s

r

rr yu

0, ir yu

(1)

The equation (1) shows the CRR output orientated. If

=1, it means that is efficient relative to other

units, otherwise it is inefficient.

IV. RESULTS

Figure 1(a) shows the relative efficiency scores and

efficiency means for the seventeen banks over the period

2012 to 2014. Five banks are consistently efficient over the

three year period where one is a conventional bank where

the other four are Islamic banks. This shows that these

banks use their resources efficiently to maximize their

outputs. As for other banks, their efficiency scores varies

from year to year with both increasing and decreasing trend.

Figure 1(b) compares the efficiency between commercial

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banks and Islamic banks. Efficiency average of

conventional banks in 2012, 2013 and 2014 are 0.8219,

0.680 and 0.733 respectively. In contrast, the scores for

Islamic banks are higher that are 0.901 in 2013, 0.777 in

2013 and 0.810 in 2014. Obviously, the Islamic banks are

more efficient than conventional banks over the three year

period.

Fig. 1 (a): Efficiency Scores of 17 banks

Fig. 1(b) Efficiency means for Commercial banks vs.

Islamic banks

As shown in Table 1, the highest efficiency score of

0.8640 is in 2012 where 2013 suffered the lowest efficiency

score that is 0.7370. In 2012, 9 banks are identified as

efficient but drop to 6 and 5 efficient banks in 2013 and

2014 respectively.Table 2:

SUMMARY OF EFFICIENCY SCORES 17 BANKS IN MALAYSIA

The least efficient bank is ISLC8 where the efficiency mean

is 0.3047. It is worthwhile to highlight that ISLC8 obtained

the lowest efficiency score over the three year period where

the scores are 0.3630, 0.2490 and 0.3020 in 2011, 2013 and

2014 respectively.

V. CONCLUSION

This study applied the DEA to measure efficiency of 7

conventional banks and 10 Islamic banks in Malaysia over

the period 2012 to 2014. The results revealed that the

Islamic banks on average perform better than conventional

banks. There are five banks that are consistently efficient

and these banks can be regarded as models for other banks

to benchmark. These findings are useful to bank managers

and policy makers. This information can assist them in

managing their resources more effective.

REFERENCES

AlKhathlan, K., & Malik, S. A. (2010). Are Saudi Banks Efficient?

Evidence Using Data Envelopment Analysis (DEA). International

Journal of Economics and Finance, 2(2), 53–58.

Basso, A., & Funari, S. (2014). Constant and Variable Returns to Scale

DEA Models for Socially Responsible Investment Funds. European

Journal of Operational Research, 235(3), 775–783.

http://doi.org/10.1016/j.ejor.2013.11.024

Drake, L., Hall, M. J., & Simper, R. (2009). Bank Modelling

Methodologies: A Comparative Non-Parametric Analysis Of

Efficiency In The Japanese Banking Sector. Journal of International

Financial Markets, Institutions and Money, 19(1), 1–15.

Eken, M. H., & Kale, S. (2011). Measuring Bank Branch Performance

Using Data Envelopment Analysis (DEA): The Case Of Turkish Bank

Branches. African Journal of Business Management, 5(3), 889–901.

http://doi.org/10.5897/AJBM10.584

Gregoriou, G. N., Rouah, F., Satchell, S., & Diz, F. (2005). Simple and

Cross Efficiency of CTAs Using Data Envelopment Analysis. The

European Journal of Finance, 11(5), 393–409.

http://doi.org/10.1080/1351847042000286667

Hemmati, M., Dalghandi, S., & Nazari, H. (2013). Measuring relative

performance of banking industry using a DEA and TOPSIS.

Management Science Letter 3(2): 499-504.

Kamarudin, N., Tahir, H. M, Mohd, M. A, & Muhammad, M. F. (2012).

Measuring the efficiency of investment banks in Malaysia: An

application of data envelopment analysis (DEA) approach. Paper

Presented at the Statistics in Science, Business, and Engineering

(ICSSBE), 2012 International Conference On.

Kamarudin, F., & Yahya, M. H. (2013). Cost, revenue and profit efficiency

in islamic vs. conventional banks: Empirical evidence using data

analysis (DEA). Pertanika Journal of Social Sciences & Humanities,

21(s), 1–18.

Kumar, N. (2015). Measuring Technical and Scale Efficiency of Banks in

India Using DEA. IOSR Journal of Business and Management (IOSR-

JBM), 17(1), 66–71. http://doi.org/10.9790/487X-17126671

Kumar, N., & Singh, A. (2014). Efficiency Analysis of Banks Using DEA.

International Journal of Advance Research and Innovation, 1.

Luo, X. (2003). Evaluating The Profitability And Marketability Efficiency

of Large Banks: An application Of Data Envelopment Analysis. Journal of

Business Research, 56(8), 627–635.

Maghyereh, A. I., & Awartani, B. (2012). Financial Integration of GCC

Banking Markets: A non-Parametric Bootstrap DEA Estimation

Approach. Research in International Business and Finance, 26(2), 181–

195. http://doi.org/10.1016/j.ribaf.2011.10.001

Mohd Tahir, I., Razali, A. R., & Haron, S. (2013). Analysing Islamic Bank

Efficiency in Malaysia Using the Standard and Alternative Approaches

to Data Envelopment Analysis. Journal of Economic and Behaviour

Studies, 11(5), 798–804.

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S

ubramanyam, T., & Reddy, C. S. (2008). Measuring the Risk in Indian

Commercial Banking-a DEA Approach . East-West Journal of

Economic and Business, 11(1-2), 76–105.

Varias, A. D., & Sofianopoulou, S. (2012). Efficiency Evaluation of Greek

Commercial Banks Using DEA. Journal of Applied Operational

Research, 4(4), 183–193.

Weiguo, X., & Ming, L. (2008). Empirical Research of M&A Impact on

Chinese and American Commercial Banks’ Efficiency Based on DEA

Method. . Management Science and Engineering, 2(1), 38–47.

Zakaria, S., Salleh, M. I., & Hassan, S. (2014). A Bootstrap Data

Envelopment Analysis ( BDEA ) Approach in Islamic Banking Sector :

A Method to Strengthen Efficiency Measurement, (1), 657–661.

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Abstract— Purpose –This study examines the association

between audit committee effectiveness and the financial reporting

lag. Originality – Internationally, the requirement to submit

financial reports to regulators has been tightened due to the

importance of timely information to the investors.

Design/methodology/approach- The sample consists of 91

companies listed on the ACE market of Bursa Malaysia for the

year 2012 and 2013. Multivariate regression analysis is used to

analyze the relationship between audit committee effectiveness and

financial reporting lag.Findings- The results of this study reveals

that only audit committee size and audit committee meeting are

significantly related to financial reporting lag.

Keywords—Audit Committee, Audit Committee Effectiveness,

Financial Reporting Lag, ACE Market, Malaysia

I. INTRODUCTION

ECURITY commission of Malaysia and Bursa Malaysia

has issued a guideline for public listed firms to present

their accurate, timely disclosure of Material information

under the Malaysian Companies Act (1965). The regulatory

authorities worldwide have issued rules concerning the

timeframe for annual financial report submission by

companies. In Malaysia, Chapter 9 of the Listing

Requirement has require that the submission shall not

exceed six months. A delay in submission means breaching

the requirement of this section, which can cause the

company to be publicly reprimanded. The delay, which is

number of days that elapse between the year end and the

date of providing the financial report to the public is defined

as Financial Reporting Lag (FRL)(Owusu-Ansah &

Leventis, 2006; Owusu-Ansah, 2000). Due to the importance

of timely financial information to the investors in the capital

market, recently, the timeframe for companies to lodge their

annual reports has been shorted from six months to within

four months of the company's financial year-end and it is to

be effective for all annual reports issued for financial year

end on and after 31 December 2015 (Bursa Malaysia, 2013).

The revision is also to be on par with the international

benchmark standards.

There are a number of factors that can be associated with

FRL. Among important factors include corporate

governance mechanisms. Audit committees are responsible

for financial reporting quality and oversight of the financial

reporting process. An effective audit committee (Abernathy,

Beyer, Masli, & Stefaniak, 2014; DeZoort, Hermanson,

Archambeault, & Reed, 2002) could ensure the reliability of

financial reporting, the internal control system and risk

management. The impact of good quality audit committee

(such as the large in size, more independent, more

experienced members, held more meetings or chair with

appropriate expertise) could reduce client-related risks and

subsequently reduce the timing and extent of substantive

testing in an audit. Hence, this argument justifies that audit

committee characteristics lead to speedy audit (Mohamad-

Nor, Rohami, & Wan-Hussin, 2010) and subsequently,

could reduce the time required to issue financial report to the

stakeholders i.e. they reduce FRL.

Therefore, the purpose of this study are: to examine the

association between audit committee characteristics (audit

committee size, independence, financial expertise, number

of audit committee meeting held (Mohid Rahmat, Mohd

Iskandar, & Mohd Saleh, 2009) and financial expertise of

the chair) with financial reporting lag. We investigate audit

committee characteristics in this regard because audit

committees have been identified as a powerful source of

improvement in corporate governance since the initial

recommendations of the Cadbury Committee (1992)

(Ghafran & O’Sullivan, 2013; Vinten & Lee, 2012).

Audit Committee Effectiveness and Financial

Reporting Lag: Evidence from ACE Market in

Malaysia

Rohaida Ismaila*, Norman Mohd-Saleha & Amariah Hanum Hussinb

aFaculty of Economics and Management, Universiti Kebangsaan Malaysia, bFaculty of Accountancy, Universiti Teknologi Mara

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II. BACKGROUND AND HYPOTHESIS

Financial reporting lag (FRL) has been considered to be

an important factor for firms, investors, regulators and

external auditors. An increase in financial reporting lag will

lead to a reduction relevance of the information to investor’s

decisions (Givoly & Palmon, 1982). There are many studies

that have investigated factors associated with timely

financial reporting. For example in Malaysia (Ayoib Che-

Ahmad & Shamharir Abidin, 2009; Mohamad-Nor et al.,

2010; Shamsul Nahar, 2006; Wan Nordin Wan-Hussin &

Hasan Mohammed Bamahros, 2013) in UK (Abdelsalam &

Street, 2007), in Indonesia (Rochmah Ika & Mohd Ghazali,

2012), in US (Vyas, 2011), in Arab countries (Al-Ajmi,

2008; Alzeban & Gwilliam, 2014). Recent research focuses

more on corporate governance factors related to the

production of financial reports (e.g. Wan-Hussin &

Bamahros, 2013; Abernathy et al., 2014).

In the High Level Finance Committee Report on

Corporate Governance (1999, p.10), corporate governance is

defined as, “… the process and structure used to direct and

manage the business and affairs of the company towards

enhancing business prosperity and corporate accountability

with the ultimate objective of realizing long-term

shareholder value, … “.As premised on agency theory,

Fama and Jensen (1983) posit that a firm’s internal

governance plays an important role in shaping and

effectively enhance the operations of its internal control

system (Sherliza Puat Nelson & Siti Norwahida Shukeri,

2011). According to agency theory corporate governance

assists corporate boards of publicly held firms to become

more effective structurally and operationally in order to

mitigate agency costs between the shareholders and the

managers. In this study the audit committee is functioning as

a monitoring mechanism to reduce agency problems. The

committee also serves as representative of shareholder

interests and it is seen as an important component of a firm’s

overall corporate governance structure and to encourage or

advise the management to produce financial information on

a timely basis (Jihe Song & Brian Windram, 2004).

Therefore, if audit committee is effective in performing its

oversight duty of financial reporting process, it will affect

the quality of financial reporting which may lead to timely

presentation of financial information (Rochmah Ika & Mohd

Ghazali, 2012).

A. Audit committee size

Consistent with agency theory, audit committee is

entrusted with the task to monitor management in its

financial affairs. It is acknowledged that the effectiveness of

audit committee increases when the size of the audit

committee increase because it would allow members to use

their experience and expertise for the best interest of

stakeholders. It has been well spelt out by Bursa Malaysia

that there must be not less than three members to be

appointed as audit committee members. This number of

members should be optimal enough for the committee to

work effectively and efficiently so that financial report can

be produced on time (Mohamad-Nor et al., 2010). Bédard &

Gendron (2010) had an opinion that the size and

composition of audit committee does not matter much.

However, Mohd Saleh, Mohd Iskandar, & Mohid Rahmat

(2007), suggest that audit committee size have significant

effect on the monitoring of earning management and to

address the issues faced by companies. On the other hand,

Dalton, Daily, Johnson, & Ellstrand (1999) found that if

audit committee size is either too small or too large, it will

become ineffective. A large number of audit committee

members tends to make the discussion lose focus and

become less participative compared to those of a smaller

size. On the other hand, a small number of members lacks

diversity of skills and knowledge, and hence can become

ineffective. Prior study done by Pucheta-Martínez & De

Fuentes, (2007) have found that audit committee size affects

the probability of firms to receive qualified audit report. As

mentioned above, the theory and findings from prior studies

on audit committee size suggest a negative association

between audit committee size and financial reporting lag.

Therefore, the first hypothesis is:

H1: There is a negative relationship between audit

committee size and financial reporting lag.

B. Audit committee independence

Past study by Klein (2002) has shown that there is a

negative relationship between audit committee independence

and earning management since independent audit committee

members are effective in controlling earning management

practices. Whereas, a study done by Wan-Hussin &

Bamahros (2013) have found that the audit report lag

decreases as the audit committee independence increases.

Prior research documents that a strong corporate governance

which include (audit committee independence) are likely to

increase audit efficiency and effectiveness by reducing the

auditor’s perception of client business risk, the auditor’s

control risk judgments for specific audit assertions and the

amount of planned substantive testing. Thus, it is likely to

reduce the time spent by the auditor to accomplish the audit

work (Cohen & Hanno, 2000). Therefore, it is expected that

an independent audit committee could provide effective

monitoring and helps strengthen internal controls which may

lead to lower the financial reporting lag (Abbott et al., 2004;

Klein, 2002; McMullen & Raghunandan, 1996) Thus, our

next hypothesis will be as follows:


committee independence and financial reporting lag.

C. Audit committee expertise

There are various studies on the association between the

audit committee financial expertise and timeliness of

reporting. For example, Mohamad-Nor et al. (2010) have

investigated the association between audit committee

financial expertise and timeliness of audit reporting for

Malaysian listed companies in 2002 but they found an

insignificant association between financial expertise and the

timeliness of audit reporting. Whereas, studies by Nelson

and Shukeri (2011) and Wan-Hussin and Bamahros (2013),

using Malaysian sample, Knechel, Sharma, & Sharma

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(2012) which used New Zealand sample, also reported that

there is no association between audit committee accounting

or auditing expertise and audit report timeliness. These

results do not support prior literature that highlights the

importance of accounting expertise in improving the

effectiveness of audit committee. In the study using sample

from the US, Abernathy et al., (2014) found that accounting

expertise has significant effect on reporting lag. The

intention of this study is to investigate whether prior

evidence on accounting expertise obtained earlier in

different context of the market, is applicable to technology

companies in Malaysia which are relatively younger and

smaller with somewhat different level of other corporate

governance mechanisms’ control. Given the findings from

prior studies on audit committee expertise, we predict a

negative relationship between the audit committee expertise

and financial reporting lag. This leads to our next

hypothesis:


committee expertise and financial reporting lag

D. Audit committee meeting

The audit committee also has to ensure that the activities

is carried out effectively through its meetings (Bédard,

Chtourou, & Courteau, 2004). Prior studies found that the

frequency of meetings has a significant positive relationship

with audit committee effectiveness (Collier & Gregory,

1999; Jihe Song & Brian Windram, 2004). Moreover, it is

evident from prior research done by McMullen &

Raghunandan (1996) that companies with financial

difficulties do not hold audit committees meetings as

frequently as those without financial difficulties which in

result significant lag in the time to produce the financial

reporting. In addition, Abbott et al. (2004) noted that with

frequent meetings, audit committee members will be keep

informed and knowledgeable about accounting or auditing

issues and can direct internal and external audit resources to

address the matter in a timely fashion. Thus, higher

frequency of meeting will ensure the internal control and

procedures of the company is implemented properly and this

process will reduce the auditor working hours and

subsequently reduce the financial reporting lag. As such,

audit committee meeting is expected to have negative

relationship with financial reporting lag. Thus, this leads to

the next hypothesis, which is:


committee meetings and financial reporting lag.

E. Audit committee chair expertise

The Audit Committee Chair (ACC) is the person who lead

audit committee and determines its effectiveness (Bromilow,

2010). This is because he/she is the primary point of contact

between the AC and management, internal and external

auditors (Ghafran & O’Sullivan, 2013). However, the ACC

also a person who will be held responsible for breakdowns

in financial reporting process (Engel, Hayes, & Wang,

2010). He/she is also responsible in setting the meeting

agenda, controlling the meeting and discussions, building the

appropriate relationships with auditors and management, and

thus will influence the timeliness of a company’s financial

reporting (Bédard & Gendron, 2010). Carcello,

Hollingsworth, & Neal (2006) noted that very little research

has separately examines the role of the ACC in facilitating

audit committee effectiveness. In a research done by

Abernathy et al., (2014), they found that ACC with financial

expertise is negatively associated with audit report lag and

timeliness of financial reporting. It is suggested that ACC

accounting financial expertise will facilitate timelier

financial reporting. As a result, we expect the ACC to be the

AC member most responsible for and influential in a

financial reporting process. Thus for the next hypothesis we

expect that audit committee expertise will be most valuable

when it is provided by the ACC. H5 is as follows:

H5: There is a negative relationship between ACCs with

financial and accounting expertise and financial reporting

lag.

III. RESEARCH AND METHODOLOGY

A. Sample and Design

Data was collected from listed public companies in ACE

Market on Bursa Malaysia. In achieving the research

objectives, the sample study is focused on the companies

that listed under ACE Market for the year 2012 and 2013.

Systematic sampling method is used in this study.

Companies listed as odd numbers in the alphabetically

sorted list were chosen. There are 107 companies listed

under ACE Market and a total of 54 companies were chosen.

Following Owusu-Ansah and Leventis (2006), this study

eliminates two companies that were listed for the first time

in 2012. From the sample, there are 15 companies excluded

from the sample because of lack of data on some variables

of interest. This process makes the final sample consists of

91 company-year (observations) representing 85 percent of

total population.

B. Research model

In this study, the research model are financial reporting

lag and audit committee effectiveness. For the audit

committee effectiveness, it includes size, independence,

experience, number of meeting held, and the chair of audit

committee expertise. While for the control variables that

include in this study are company auditor type, leverage and

size. Below is the empirical model to test association

between the audit committee effectiveness, the internal audit

function arrangement and financial reporting lag:

FRLit = β0 + β1 ACSIZEit + β2 ACINDit + β3 ACEXPit + β4

ACMEETit + β5 ACCHAIRit + β6 BIG4it + β7 LEVERAGEit +

β8 SIZEit + + εit ……….(1)

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Where FRL is financial reporting lag, (ACSIZE) is audit

committee size, audit committee independence (ACIND),

audit committee members who has accounting or financial

management experience (ACEXP), the number of meeting

held during the financial year (ACMEET), audit committee

chair who has accounting or financial management

experience (ACCHAIR), internal audit function sourcing

arrangements (IAFSOU), auditor type (BIG4), leverage

(LEVERAGE) and firm size (SIZE). Subscript i and t refers

to firm and years, respectively.

IV RESULTS

Table 1 presents the pattern of submission dates of annual

reports of the sample firms during the period under this

study. The table shows that all companies in the sample

firms are on time reporters and meet regulatory deadline by

Bursa Malaysia which cannot exceed 6 months after

financial year ended (around 180 days). Results show that 49

out of 91 companies file their annual accounts to the stock

exchange in the range of 151-160 day after the financial year

end, representing the highest percentage of sample firms

(53.8per cent). It shows that, this sample firms are ready and

could meet the new requirement of Bursa Malaysia to

shorten the timeframe to within 4 months (around 160 days)

effectively for financial year end on and after 31 December

2015. TABLE I

PATTERN OF REPORTING DATE

Days to release

financial

statement

Frequency Percentage Cumulative

percentage

0-90 1 1.1 1.1

91-110 1 1.1 2.2

111-120 3 3.3 5.5

121-130 14 15.4 20.9

131-140 4 4.4 25.3

141-150 18 19.8 45.1

151-160 49 53.8 98.9

161-170 0 0.0 98.9

171-180 1 1.1 100

Total 91 100

Table 2 presents descriptive statistics of variables

investigated in this study. As can be seen in the table, it

takes 145 days on average for listed companies of ACE

Market to release audited financial statement to the public

after the financial year end. On average, audit committee has

three members and about a third has experience in

accounting and finance. It also appears that audit committee

meets around four to five times a year and nearly half of the

members are independent. Normality of distribution in the

variables is detected by skewness and kurtosis. It appears

that FRL has a very high kurtosis, thus the use of normal

transformation procedure is justified. Therefore, all the

continuous variable is transformed to become normal score.

Table 3 shows that the correlation between independent

variables seems to indicate no severe multicollinearity

problems. Tabachnick & Fidell (2001) suggest that

multicollinearity may be a problem when the correlation

between independent variable is 0.90 or above. Results show

that financial reporting lag is negatively correlated with

audit committee size suggesting that as ACSIZE increases,

FRL reduces. The result also shows that there is positive

correlation between the audit committee independence and

audit committee expertise which suggest that an increase in

audit committee independence is associated with more audit

committee expertise. The result also reveals that larger and

more leveraged companies are more likely to use Big Four

auditors compared to smaller and less leveraged companies.

Overall, significant correlations exist for a number of our

variables of interest, suggesting that a comprehensive

multivariate analysis is warranted.

TABLE II

DESCRIPTIVE STATISTICS

Variable Min Max Mean SD Skewness Kurtosis

FRL 35 184 145.36 17.932 -2.943 15.162

ACSIZE 3 4 3.14 .352 2.076 2.360

ACEXP .000 1.00 .305 .256 .332 -.784

ACMEET 4 7 4.87 .600 .370 1.136

ACIND .010 1.00 .465 .456 .143 -1.881

ACCHR 0 1 .79 .409 -1.457 .125

IAFSOU 0 1 .10 .300 2.732 5.588

BIG4 0 1 .13 .340 2.213 2.961

LEV .00 .67 .130 .124 1.457 3.056

SIZE 8.93 13.9 10.796 .875 .755 1.531

Table 3 shows that the correlation between independent

variables seems to indicate no severe multicollinearity

problems. Tabachnick & Fidell (2001) suggest that

multicollinearity may be a problem when the correlation

between independent variable is 0.90 or above. Results show

that financial reporting lag is negatively correlated with

audit committee size suggesting that as ACSIZE increases,

FRL reduces. The result also shows that there is positive

correlation between the audit committee independence and

audit committee expertise which suggest that an increase in

audit committee independence is associated with more audit

committee expertise. The result also reveals that larger and

more leveraged companies are more likely to use Big Four

auditors compared to smaller and less leveraged companies.

Overall, significant correlations exist for a number of our

variables of interest, suggesting that a comprehensive

multivariate analysis is warranted.

Multivariate regression analysis is conducted to examine

factors influencing the FRL. The variance inflation factor

(VIF) as presented in Table 4 below has been less than two

for each variable indicating that multicollinearity is not

severe problem (Jonhnston, 1984). The results show that

audit committee size (ACSIZE) is negatively related to FRL.

This result is consistent with Nelson & Shukeri (2011) and

support H1. It provides evidence that companies with large

audit committee size would give some pressure or demand

on the management to expedite their publication of financial

report.

It has also been suggested that larger audit committee size

tends to ensure that internal control of the company is

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strong. Consequently audit committee size may influence

auditor’s assessment of business ad audit risk, reduce

planned of audit hours and the level of substantive testing.

Hence, large audit committee size could reduce the FRL.

For audit committee meeting (ACMEET), the result

shows the more frequent meetings, the longer the financial

reporting lag. This result indicates that more frequent audit

committee meeting is indicative of lengthy negotiations

between an auditor and a client concerning unresolved

auditing issues, and more stringent level of auditing which

can prolong the audit process. This result is consistent with

study have done by Wan-Hussin & Bamahros (2013) but it

fails to support H4 which expects a negative relationship

between ACMEET and FRL. The result is in contrast with

earlier finding by Mohamad-Nor et al. (2010) which suggest

that by meeting more frequently, the audit committee will be

better equipped to detect and report internal control

weaknesses and therefore likely to reduce the time taken to

produce the financial reporting factor. This study focuses

only on a high technology companies on ACE market.

TABLE III

PEARSON

PRODUCT

-MOMENT

CORRELA

TION

FRL ACSIZE ACEXP ACMEET ACIND ACCHAIR BIG4 LEV SIZE

FRL 1

ACSIZE -0.292** 1

ACEXP -0.062 -0.058 1

ACMEET 0.175 -0.068 -0.019 1

ACIND 0.015 -0.052 0.451** -0.048 1

ACCHAIR 0.021 -0.022 0.103 0.113 0.037 1

BIG4 -0.179 0.027 0.022 -0.077 -0.045 0.040 1

LEV 0.033 0.014 -.113 -0.189 -0.039 -0.238* 0.279** 1

SIZE -0.064 0.062 0.008 -0.087 0.037 0.000 0.238* 0.274** 1

Notes: Correlation is significant at: *0.05 and **0.01 levels (two-tailed

TABLE 4

RESULT OF MULTIPLE REGRESSION

(1) (2)

Variable Exp.

sign Coef. t VIF Variable

Exp.

sign Coef. t VIF

constant -.015 -0.067 constant -.015 -0.067

ACSIZE** - -.1480 -1.439** 1.045 ACSIZE** - -.1480 -1.439** 1.045

ACEXP - -.0360 -.310 1.375 ACEXP - -.0360 -0.310 1.375

ACMEET** - 0.155 1.489** 1.072 ACMEET** - 0.1550 1.489** 1.072

ACIND - -0.056 -.480 1.374 ACIND - -0.056 -0.480 1.374

ACCHAIR - 0.134 -0.551 1.068 ACCHAIR - 0.134 -0.551 1.068

BIG4** - -0.188 -1.72** 1.131 BIG4** - -0.188 -1.72** 1.131

LEVERAGE** + 0.272 2.465** 1.068 LEVERAGE** + 0.272 2.465** 1.068

SIZE** - -0.15 -1.414** 1.077 SIZE** - -0.15 -1.414** 1.077

ROA2 - 0.105 1.085 1.023

ACMEET2 - 0.155 0.989 1.023

Number of

observation 91

Number of

observation 91

Prob >F 0.04 Prob >F 0.04

F-statistics 2.055 F-statistics 2.055

R2 0.186 R2 0.186

Adjusted R2 0.095 Adjusted R2 0.095

Notes: Significant at: *0.05 and **0.01 levels (one-tailed)

H2 predicts a negative relationship between audit committee

independence (ACIND) and financial reporting lag. The

result fails to show there is any relationship between audit

committee independence and financial reporting lag. This

outcome are contrary with Owusu-Ansah & Leventis (2006)

and Afify (2009) that an independent audit committee is

likely to be better able to resolve key financial accounting

issues such as dealings with the external auditor and

therefore likely to reduce the time taken to produce financial

report. A possible explanation for this difference might be

due to the industry

The result also does not support H3. Audit committee

expertise is found to be not related to financial reporting lag.

This finding contradicts Hashim & Abdul Rahman (2011)

because it fails to support argument that the presence of

members with financial expertise enhances the audit

committee’s ability to ensure the reporting process is

competently undertaken and mediate during

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auditor/corporate management disagreement, thereby

ultimately help in reducing the reporting lag.

We also fail to find support for H5 that predicts audit

committee chair with financial expertise reduces financial

reporting lag. The result contradicts a study by Abernathy et

al. (2014) that the audit committee chair is playing a critical

role in facilitating timelier financial reporting.

Besides that, the result show significantly positive

association between the company leverage and financial

reporting lag. This finding suggests that companies in higher

leverage need a longer time to release financial information

to the public as compared to companies in low leverage and

it supports Jaggi & Tsui (1999). The result reveals that

companies in higher leverage is likely poses a greater audit

risk which in turn increases auditor’s time to review the

account and for publish the annual report.

The findings also show that there is negative relationship

between the type of auditor and financial reporting lag which

is in line with Owusu-Ansah & Leventis (2006). However, it

appears only 9.5 per cent of the variance of FRL can be

explained by the independent variables in the model. While

this result is quite similar with Mohamad-Nor et al. (2010),

this low explanatory power has become a major limitation

for this study.

V. CONCLUSION

This study investigates the association between audit

committee effectiveness and financial reporting lag. The

results of this study reveals that from the attributes of the

audit committee effectiveness, it show that only audit

committee size and audit committee meeting is significantly

related to the financial reporting lag. This study is unable to

find a clear association between the IAF sourcing

arrangement and financial reporting lag. This study

documents that the three control variables, namely the

auditors type, the level of leverage and companies’ size, to

have a consistent and significant influence on the financial

reporting lag. The direction of the influence indicates the

higher the leverage levels, the longer the day lapsed to issue

the financial reporting. This finding is consistent with the

findings in the previous studies (Carslaw & Kaplan, 1991)

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Abstract—The Malaysia is focusing on becoming Halal hub as a

new platform to increase the financial and investment portfolio of

the nation. The interest in understanding the concept of Islamic

Marketing and consumer buying behavior practices has been

increasing in recent years. It is important for us to determine

consumer perspective in Islamic viewpoint in order to meet the

demand of the industry nowadays. Creating Islamic environment

and business platform is necessary since there are more than 50%

of the Malaysians are Muslim. This paper is focusing on Islamic

marketing, as a basis for consumer purchasing Halal products and

services. This paper discussed on the concept of Islamic marketing

and determined consumer behavior in purchasing Halal products.

A number of fifty (50) respondents in Seremban were randomly

selected to answer the questionnaire. From the analysis conducted,

we can conclude that the respondents understand the meaning and

practice of Halal concept in their daily lives. They are also having

enough knowledge to differentiate between Halal products and

Haram products. To them, Halal is important and they will only

purchase Halal products. The respondents are also aware with the

Halal requirement in their religious practice. They are also willing

to spend more money to buy Halal products even though Halal

products are expensive to compare with non-Halal products.

Keywords— Islamic Marketing, Halal Concept, Muslim

Consumer, Consumer Behavior

I. INTRODUCTION

HE interest in understanding the concept of Islamic

Marketing and consumer buying behavior practices

has been increasing in recent years. Moreover,

Malaysia is focusing on becoming Halal hub as a new

platform to increase the financial and investment portfolio of

the nation. We can see the growing number of research and

publish


papers on this matter. Islamic marketing is contrary with

conventional marketing in several ways. The application of

Syariah Compliance is applied in Halal Marketing.

According to Sandikci (2011), the “Islamic” implies that

when addressing Muslim consumers the practice of

marketing needs to take on a particular Islamic character.

Such marketing is assumed to be different from marketing in

general. Second, it implies that Islamic marketing targets

Muslim consumers, consumers who are distinctively

different from consumers in general and that it utilizes

specific resources, skills and tools that are relevant and

appealing to this particular segment.

It is important for us to determine consumer perspective

in Islamic viewpoint in order to meet the demand of the

industry nowadays. Creating Islamic environment and

business platform is necessary since there are more than

50% of the Malaysians are Muslim. Sandikci (2011) also

said that a closer look at the making of the ethnic markets

suggests that similar processes are in operation in the

development of the Muslim market. For example, one can

observe the emergence of consulting, research and

communications companies or units within existing firms

specialized in marketing to Muslims. Segmentation surveys

aimed at profiling Muslim consumers are now being

conducted. There is targeted advertising appearing in

specialized media. As we can see in our media such as TV,

there are a lot of advertising focusing on Muslims and Halal

products.


A. Islamic Marketing

According to Wilson (2012), the term “Islamic

marketing” is still very new, and reflective of an emergent

Towards Islamic Marketing – Consumer

Behavior in Purchasing Halal Product

Aini Hayati Musa1, Siti Hajar Md Jani1, Nabilah Abd Shukur1, Tengku

Sharifeleani Ratul Maknu1, Rohasmizah Hashim2, & Nur Nafhatun Md Shariff3

1Faculty of Business Management, Universiti Teknologi MARA Negeri Sembilan, 72000,

Malaysia 3Academy of Contemporary Islamic Studies, Universiti Teknologi MARA, 40450, Malaysia

T

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phenomenon which stretches across the Muslim world and

beyond. It draws from established subject disciplines in

Business and Management, but also reaches into areas of

Islamic studies and other social sciences. Furthermore, its

interest and applicability has garnered support from those

regardless of any Islamic faith.

Conventional Marketing deliver products and services

according to the needs of the consumers; while Islamic

Marketing plays role in delivering products and services

which suit the needs of the consumers according to Syariah

compliance.

According to Arham (2010), there are four characteristics

that surround Islamic marketing concept. These are

spiritualistic, ethical, realistic, and humanistic (Sula and

Kartajaya, 2006). Spiritualistic means that all business

conducts must be coherent with the teaching of al-Quran and

Sunnah. Ethical refers to the spiritual enhancement within

Islamic marketing will form Islamic ethics within the

business transaction. Realistic is viewed as being realistic in

developing opportunity for creativity. Humanistic means

teaching people the values that could differentiate people

from any other creatures that inhabit this world. As a

consequence, one should be able to distant oneself with

inhumane desire such as greed (Sula and Kartajaya, 2006).

Arham (2010) also found that there are five fundamental

elements of Islamic marketing strategy which are

segmentation, targeting, positioning, Shariah marketing

tactics, and Shariah marketing value. Islam could be applied

in the realm of modern marketing theory. Though not all of

its elements could be applied in Islamic society, modern

marketing theory will provide some elements which could be

utilized in developing Islamic marketing theory.

B. Halal Concept

Islam is a comprehensive way of life which rules

everything, including commercial activities. Through Al-

Quran and Hadith, the two main references for Islamic law,

Islam exhorts its followers to avoid taking usury and instead

maintain the quality of their wealth through just trading

(Arham, 2010).

According to Wilson and Liu (2010), halal is an Arabic

word linked to the Islamic faith. Halal in its general sense

can be translated as meaning allowed, or permissible. A

basic acceptance and understanding of what is Halal, is

central to every Muslim’s belief – falling under the umbrella

of what is considered to be information that is known by

necessity. A general rule of Islamic jurisprudence holds

everything as Halal, unless stated otherwise, with the

exception of meat. Therefore, a Muslim should be able to

identify what is Halal and what is not.

Moreover, the Halal market has seen a growing number of

products outside of the food sector, overtly carrying Islamic

classifications. Examples range from Halal soap, Halal

perfume, Halal chocolate and even Islamic Hip-Hop. A

study conducted by Ahmed (2008) on marketing Halal meat

in the UK, finds that all respondents selected, stated that the

authenticity of the meat being Halal, was the most important

factor (Wilson and Liu, 2010). Abd Rahman et al (2015) in

their study have found that Malaysian consumers have more

positive attitudes and intentions towards Halal food

products.

C. Muslim Consumer

Malaysia, Indonesia, and Brunei have more than fifty per

cent Muslim citizens. This number gave marketers an

advantage to market Halal bases products and services. The

numbers of Muslim are also increasing in other countries.

For example, Abdullah (2008) cites predictions of Muslims

becoming a significant religious group in America.

Mukhtar and Butt (2012) in their research stated that

Pakistan is considered to be the second most populated

Muslim country after Indonesia (Huda, 2010). In 2009,

many international companies in Pakistan, like Frito lay,

faced a major challenge when controversy emerged

regarding the alleged use of the impermissible ingredients in

its famous brand of chips.

According to a Global Futures and Foresights study, 70

per cent of the world’s population in 2050 (which will have

increased from 7 billion people today to 9 billion people)

will be born in Muslim countries (The Philippine Star,

March 2014). This provide a huge market for Halal

products, and the subject of assessing the relationship

between consumers’ attitudes towards and intention to

choose Halal products has thus attracted many researchers’

attention (Abd Rahman et al, 2015).

Alserhan and Alserhan (2012) stated that the Muslim

population is forecast to grow at about twice the rate of the

non-Muslim population until 2030 – an average annual

growth rate of 1.5 percent, compared to only 0.7 percent for

non-Muslims (Pew Research Center, 2011). These numbers

clearly show the massive size of the Muslim consumer group

in comparison to the other three segments. However, while it

has been established that the Chinese, Indian, and women

consumers can be aggregated into actual and targetable

billion consumer segments each, no evidence has been

provided thus far on whether Muslim consumers do indeed

make up a similar homogenous billion consumer segment.

D. Consumer Behavior

McKechnie (1992) stated that understanding the nature of

consumer buying behaviour has been a key component of

research in marketing for some considerable time. If

organizations are to be able to anticipate likely customer

reactions to their marketing strategies and influence them

where appropriate, it is crucial that they understand the

needs and motivations of their customers and prospects.

McKechnie (1992) also said that in understanding buyer

behavior it will be important to consider the interaction

between buyer and supplier. Since services depend on input

from both service employees and consumers for their

production, the quality of the service output very much

depends on the nature of the personal interactions of these

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parties. This makes the potential for variability in the service

performance high, which leads to the final distinctive

characteristic of services, namely heterogeneity.

Kolyesnikova et al (2009) stated that consumer product

involvement is associated with the perceived importance of a

product to consumers (Hupfer and Gardner, 1971).

Similarly, Zaickowsky (1985) defined involvement as a

degree of “a person’s perceived relevance of an object based

on inherent needs, values, and interests”. The existing

research on reciprocity focuses mainly on the gratitude and

obligation effects, with virtually no reference to personality

characteristics of respondents. However, it is logical to

expect that at least some personality factors could potentially

increase or decrease the likelihood of reciprocal actions. In

terms of consumer behavior for example, consider product

knowledge. A highly knowledgeable consumer may perceive

an educational presentation about the product less valuable

than a consumer who knows little about the product.

Consequently, levels of gratitude to the presenter and/or

obligation to reciprocate (e.g. make a purchase) may differ

for these two consumers. In the proposed study, product

knowledge may become a determinant of consumers’ levels

of gratitude and/or obligation and possibly, their further

reciprocal actions.

III. METHODOLOGY

The target population of this study comprises of fifty (50)

respondents randomly selected in Seremban Town, Negeri

Sembilan. The self-administered questionnaires were

distributed among respondents who participated in

answering the questionnaires. Survey instrument consists of

cover letter and questionnaires. Simple interview were also

conducted during questionnaire distribution in order to get

the responds from the staffs. Random sampling method was

chosen in this study.

IV. RESULT ANALYSIS

The results are as follow:

TABLE 1:

UNDERSTANDING ISLAMIC LAWS OF HALAL AND HARAM

*Note: SD = Strongly Disagree; D = Disagree; N = Neutral, A = Agree;

SA= Strongly Agree

Table 1 shows the level of understanding among

respondents towards Islamic laws of Halal and Haram.

Majority of the respondents are agree (25) and strongly

agree (15) with the statement. They are aware and

understand the meaning and practice of Halal concept in

their daily lives. There are only ten respondents who are

neutral. Their levels of understanding are at moderate

level.

TABLE 2:

KNOWLEDGE IN DIFFERENTIATE HALAL AND HARAM


SA= Strongly Agree

Table 2 demonstrates majority of the respondents (20

agree and 13 strongly agree) having enough knowledge to

differentiate between Halal products and Haram products.

They have strong religious background in determining

what is permitted and what is not in daily lives. There are

twelve respondents neutral with this statement and only

five of them do not have enough knowledge in

determining Halal and Haram.

TABLE 3:

INTENTION TO PURCHASE ONLY HALAL PRODUCTS


SA= Strongly Agree

Table 3 illustrates all of the respondents having intention

to buy only Halal products. Twenty of the respondents agree

and thirty of them strongly agree with the statement. To

them, Halal is important and they will only purchase Halal

products.

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TABLE 4:

SEARCHING FOR HALAL LABEL BEFORE PURCHASING


SA= Strongly Agree

Table 4 shows twenty of the respondents agree and twenty

two of them strongly agree that they will always search for

Halal label in product packaging and labeling before making

any purchase decision. Only eight of them not always check

for the label. This shows that majority of the respondents are

aware and alert with the Halal requirement in their religious

practice.

TABLE 5:

WILLINGNESS TO PAY MORE FOR HALAL PRODUCTS


SA=Strongly Agree

Table 5 shows that majority of the respondent (thirty

respondents are agree while fifteen of them strongly agree)

are willing to spend more money to buy Halal products even

though Halal products are expensive to compare with non-

Halal products.

V. CONCLUSION

From the analysis conducted, we can conclude that the

respondents are aware and understand the meaning and

practice of Halal concept in their daily lives. They are also

have enough knowledge to differentiate between Halal

products and Haram products. They have strong religious

background in determining what is permitted and what is not

in daily lives. To them, Halal is important and they will only

purchase Halal products. The respondents are also aware

and alert with the Halal requirement in their religious

practice. It is proven that majority of the respondent are

willing to spend more money to buy Halal products even

though Halal products are expensive to compare with non-

Halal products.

REFERENCES

Abdullah, Z. (2008), “Negotiating identities: a history of Islamization in

black West Africa”, Journal of Islamic Law and Culture, Vol. 10 No. 1,

pp. 5-18

Abd Rahman, A., Asrarhaghighi, E., and Ab Rahman, S. (2015),

“Consumers and Halal cosmetic products: knowledge, religiousity,

attitude and intention”, Journal of Islamic Marketing, Vol. 6 No. 1, pp.

148-163

Abdul Talib, A.N. and Abd Razak, I.S. (2013), “Cultivating export market

oriented behavior in halal marketing”, Journal of Islamic Marketing,

Vol. 4 No. 2 pp. 187-197

Ahmed, A. (2008), “Marketing of halal meat in the United Kingdom –

supermarkets versus local shops”, British Food Journal, Vol. 110 No. 7,

pp. 665-670

Aliakbar Jafari, (2012), “Islamic marketing: insights from a critical

perspective”, Journal of Islamic Marketing, Vol. 3 No. 1 pp. 22-34

Alserhan, B.A. and Alserhan, Z.A., (2012), "Researching Muslim

consumers: do they represent the fourth-billion consumer segment?",

Journal of Islamic Marketing, Vol. 3 Iss 2 pp. 121 - 138

Arham, M. (2010), “Islamic perspectives on marketing”, Journal of Islamic

Marketing, Vol.1 No. 2 pp. 149-164

Hupfer, N.T. and Gardner, D.M. (1971), “Differential involvement with

products and issues: an exploratory study”, paper presented at the 2nd

Annual Conference of the Association for Consumer Research, College

Park, MD.

Kolyesnikova, N., Dodd, T.H., and Wilcox, J.B. (2009), “Gender as a

moderator of reciprocal consumer behavior”, Journal of Consumer

Marketing, Vol. 26 No. 3 pp. 200-213

McKechnie, S. (1992),"Consumer Buying Behaviour in Financial Services:

An Overview", International Journal of Bank Marketing, Vol. 10 No. 5

pp. 5 – 39

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Mukhtar, A. and Butt, M.M. (2012), “Intention to choose Halal products:

the role of religiosity”, Journal of Islamic Marketing, Vol.3 No. 2 pp.

108-120

Sandikci, O. (2011), “Researching Islamic marketing: past and future

perspective”, Journal of Islamic Marketing, Vol.2 No. 3 pp. 246-258

Sula, M.S. and Kartajaya, H. (2006), Shariah Marketing, Mizan, Bandung.

Wilson, J.A.J. and Liu, J. (2010), “Shaping the Halal into a brand?”,

Journal of Islamic Marketing, Vol.1 No. 2, pp. 107-123

Wilson, J.A.J. (2012), “The new wave of transformational Islamic

marketing”, Journal of Islamic Marketing, Vol. 3 No. 1 pp. 5-11

Wu, S.I. (2002), “Internet marketing involvement and consumer behavior”,

Asia Pacific Journal of Marketing and Logistics, Vol. 14 No. 4, pp. 36-

53

Zaichkowsky, J.L. (1985), “Measuring the involvement construct”, Journal

of Consumer Research, Vol. 12 No. 3, pp. 341-52.

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Abstract— Although CSR has traditionally been dominated by

big business, the Small and Medium Sized Enterprise (SME) has

led to emphasis on their economic, social and environmental

impact. Currently, the SMEs have actively engaged in it, as they

are aware the impact of the CSR practices that can increase the

value of the business. Thus, the aim of this article is to discuss the

CSR activities that have been done by SME. In addition, this

article has also discussed the factors that drivers and motivates of

CSR practice among the SMEs.

Keywords—CSR, Corporate Social Responsibility, SME, Small

and Medium Sized Enterprise

I. INTRODUCTION

N recent decades, the CSR practice becomes one of the

important considerations to companies which an

activities have been conducted with the involvement in

employees, communities and environment. This practice

becomes a priority in line with profit motives. The welfare

and interests of clients, employees, shareholders,

communities and ecological concerns are very crucial in any

businesses (Tam 2007). The operations and activities carried

out businesses can bring good effects as well as bad effects

the community and environment. For example, the pollution

cause and violation of employee’s rights may impair the

reputation and image of the businesses. Thus, the companies

have to gain trust and confidence from public by engaged in

CSR activities (Chi Vo 2011).

Although CSR performance is hard to measure and

observe like corporate financial performance, the CSR

activities must be the top priority of the business

(McWilliams & Siegel, 2001). The CSR concept is

applicable to organizations regardless of type and size, from

public to private, from small to medium-sized enterprises to

multinational enterprises (MNEs), from manufacturing to

service organizations (Nejati & Amran 2009). Small

Medium Enterprises (SMEs) are practicing CSR with some

limitations such as financial and sources scarcity, lack of

workforces, and inefficient management (Santos 2011).

Factors that lead towards the implementation of CSR

activities by large companies and SMEs implementing CSR

activities are such as stakeholders’ expectation, regulation,

business performance, and owner’s characteristics. Demands

for corporate social responsibility (CSR) can vary

considerably across nations, regions, and lines of business

(McWilliams, Siegel, & Wright, 2006). According to Jamali

and Mirshak (2007), companies are interested to engage in

CSR due to the changes and complexity of business which

requires transparency, corporate citizenship, and the role of

business to society in order to differentiate themselves with

competitors. Moreover, CSR activities researched to provide

a number of advantages such as company reputation,

competitive advantage and financial performance (Kassinis

& Vafeas 2006).

Small and medium enterprises (SMEs) play significant

role in economic development in any countries due to

increasing numbers of establishment from year to year

(Santos 2011). Although the focus on CSR activities of some

SMEs only on internal scope such as employees dimension,

yet SMEs are implementing CSR based on their own reasons

and have courage to employ the practice of larger companies

(Santos 2011). The growing of SME sector has led to an

emphasis on their social and environment effect similar to

large companies. Even though many owners of SMEs

believe that they have a little impact towards environment

and society, but due to their great number, the impact is

significant and need attention. Owners and companies who

implement CSR practices have their own motivation and

reasons which might be different from large companies due

to unique characteristics that they hold (Stewart 2010).

SMEs are considered as main economic contributor in

Malaysia where 98.5% made up of small and medium

enterprises which provide 59% employment opportunities

(SMECORP, 2012). According to Rahim et al. (2011), CSR

is the existence of an organization that can be seen in the

social contract that requires the corporation to take the

interests of the community in decisions making. CSR is one

of the ways that corporations meet their obligations and

employees as their large communities. Among the benefits

Corporate Social Responsibility: SMEs

Viewpoint

Salwa Mudaa, Amariah Hanum Hussina, Musliha Musmana & Jamil Mohamed

Saparib

aFaculty of Accountancy, Universiti Teknologi Mara, Negeri Sembilan bFaculty of Applied Sciences, Universiti Teknologi Mara, Negeri Sembilan

I

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of the CSR practices to SMEs are creating jobs to local

community and creating growth to companies (Chi Vo

2011). In Malaysia, local companies are aware with of the

advantages and values of CSR. With that belief, many

companies are actively pursuing CSR activities to enjoy the

benefits of CSR (Tan 2007). To prove that Malaysian

government is serious on encouraging companies to involve

in CSR activities, a CSR framework has been launched in

2006 with four focus areas, namely marketplace, workplace,

community and environment (Bursa Malaysia, 2006). CSR

activities in Malaysia usually carried out similar to their

business activities ranging from different levels of activities,

and seasonal such as during festive seasons (Zulkifli &

Amran2012).

Despite the involvement in CSR practices and huge role

plays by SMEs in developing the economic, most attention

is focused on CSR practices of large companies only, and

limited research is conducted for SMEs (Andy & Mustapha

2013; Santos 2011; Nejati & Amran 2009). The SMEs may

not use the term of CSR in their social engagement with

communities and environment, but the impact of the

activities to general public should not be underestimated.

Moreover there are lack of studies of CSR in SMEs setting

as compared to large companies in aspect of motivation,

impact and strategies (Cochet and Chi Vo 2011;Andy and

Mustapha 2013).

The literature on CSR in SMEs are fragmented and

underdeveloped (Chi Vo 2011). The unique characteristics

of SMEs in CSR practice as compared to large firms need to

be attended as an important area for further studies if CSR.

Thus, the objectives of this paper are twofold. Firstly, this

conceptual paper aims to highlight the importance of CSR

practices in the context of SMEs by discussing the drivers

and benefits of the CSR practices towards the companies.

Secondly, the study aims to provide insights on the

differences of CSR practices between large firms and SMEs.

This study is hoped to contribute to the existing literatures of

CSR practices as well as provides valuable information to

the owner and management team on the benefits derived

from the CSR practices, simultaneously encourage them to

engage in social relationship with communities and

environment. In addition, the study offers information on

CSR practices among SMEs to general public who might

help and provide moral support for SMEs to start and

maintain the social responsibilities, hence both SMEs and

public may gain advantages from the engagement in CSR

activities. The following section presents the literature

review on the overview of CSR concept, CSR practices in

the context of SMEs, and factors and benefits of CSR

towards SMEs.


A. Corporate Social Responsibility

There have been growing concern of Corporate Social

Responsibility (CSR) and has become an important research

topic to be studied (Sweeney 2009). Generally, the term

Corporate Social Responsibility (CSR) refers to voluntary

approach taken by firm for the sake of stakeholders of the

firm such as community and environment. According to

Carroll (2000), businesses must treat the responsible towards

society and environment as important as responsibility of

being profitable and responsibility in obeying laws and rules

in doing business. The accountability is very crucial for

business in communicating and implementing vision and

values (Chen 2011) and explaining decisions, actions and

commitments towards shareholders (Wood & Winston,

2007) to stakeholders.

Barnett (2007) defines the term of CSR as “a

discretionary allocation of corporate resources toward

improving social welfare that serves as a means of enhancing

relationships with key stakeholders”. The definition focuses

on sharing the wealth with stakeholders by allocating the

economic resource. It is similar with the definition by Kok

et.al. (2001), who defines CSR as “a general statement

indicating a company’s obligation to utilize its economic

resources in its business activities to provide and contribute

to its internal and external stakeholders”. According to

Massoud (2010), the definition of CSR is vary according to

country and researchers. Some researchers define CSR in

more specific term according to construct. For examples,

Sweeney (2009) used constructs of community and society,

employee involvement, environment and customers focus in

defining CSR, and Riyanto and Toolsema (2007) who claims

CSR is focus on corporate governance.

In the CSR studies, stakeholder theory offers a useful

basis for collecting and analyzing CSR data, and serves as a

framework for empirical studies (Post et al. 2008). In

general, Stakeholder Theory refers to the relationship that

exists between organization and stakeholders. Freemans

(1984) defines Stakeholder Theory as ‘any group or

individual who can affect or is affected by the achievement

of the organization’s objectives.’ The Stakeholder Theory is

usually used in studies of CSR which represents the

engagement of stakeholders in business’ operation.

B. Profiles of Malaysian SME’s

Malaysian Small and medium enterprises (SMEs) play a

vital role in the economy and are considered to be the

backbone of industrial development (Salleh, Caputi &

Harvie 2006). With the aim to improve the people’s welfare

and restructure economic imbalances among ethnics, the

government has introduced the New Economic Policy (NEP)

in 1971 (Salleh & Ndubisi 2006).

TABLE 1:

DEFINITION OF SMES

Micro Small

Manufacturing,

manufacturing-

related services

and agro-based

industries

Employees

Turnover

Less than 5

employees

Less than

RM300,000

Between 5 & 75

employees

Between

RM300,000 &

Less than

RM15 million

Services,

primary

agriculture and

ICT)

Employees

Turnover

Less than 5

employees

Less than

RM300,000

Between 5 & 30

employees

Between

RM300,000 &

Less than RM3

million

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SMEs in Malaysia is defined according to the annual

turnover or number of full-time employee. Effective 1st

January 2014, the new definition of SMEs is used where the

qualifying threshold for annual turnover and number of

employees has been revised in both manufacturing and

services sectors (SMECORP, 2013). The definition of SMEs

s illustrated in Table 1 as below:

SME Annual Report 2012 reported that only 1.5% of

companies in Malaysia are multinational and public listed

companies, and another 98.5% made up of small and

medium enterprises which provide 59% employment

opportunities. The 2011 Economic Census conducted by

Department of Statistics, Malaysia shows that the services

sector provides the most employment opportunities of 71%,

followed by manufacturing sector of 19%, then agriculture,

mining and construction. For the number of establishment by

sector, services sector dominate with 90.1%, followed by

manufacturing with only 5.9%.

For geographical location, most of the SMEs are

operated in Selangor (19.5%), Wilayah Persekutuan Kuala

Lumpur (13.1%), and Johor (10.7%) with the major

operation in service sector. According to Salleh and Ndubisi

(2006), these states that are located in the West Coast of

Malaysia have high number of SMEs due to the availability

of ports facilities, availability of cheap labor, and

communication and transportation infrastructure.

C. CSR Activities in SMEs

The CSR concept is generic and is applicable to

organizations regardless of type and size, be it public or

private firms, large or small and medium enterprises, and

manufacturing or non-manufacturing firms (Nejati & Amran,

2009). Due to no universally accepted definition for CSR,

most researchers agreed that the term can be referred to

Stakeholder Theory (Vos 2003; Jones 2005). Although

SMEs aware of the CSR term, but the term is not widely

used by SMEs because some of them felt that the term is not

appropriate in representing the activities and programs

(Sweeney 2007, Chi Vo, 2011). A study done by Nejati and

Amran (2013) regarding the terminologies used indicated

that SMEs prefer to use the term ‘Responsible Business

Practices’ in describing their engagement in social

responsibilities. Regardless the terminologies adopted in

discussing the CSR practices in SMEs, the objective is to

give back and sharing their wealth with stakeholders such as

customers, shareholders ad communities.

SMEs are very crucial and important as an economic

driver of countries. However, some SMEs managers think

that their existence do not give big impact to the

environment as a whole (Lee 2000) in which they operate.

However, the higher numbers of SMEs indicated the need

for them to engage in CSR activities due to their unique

characteristics as compared to large companies. SMEs which

operate in smaller community leads to close relationship

with their stakeholders, thus it is better for them to engage in

social responsibility in order to improve relationship and

gaining trusts (Nejati & Amran, 2013).

However, Jenkins (2004) argued that the distinct

characteristics between small enterprises and large

companies in terms of size, resources, and personal

relationship hinder them to engage in similar CSR practices

of larger firms. Jenkins (2006) listed the differences in CSR

practices between large firms and SMEs as below:

TABLE 2:

DIFFERENCES OF CSR PRACTICES BETWEEN LARGE FIRMS AND SMES

CSR practices of large firms

CSR practices of SMEs

Responsible to wide range of

stakeholders

Responsible to fewer stakeholders

Protection of image, brand, and

reputation

Protection of customers business

Pressure from consumers Pressure from businesses down

the supply chain

Based on corporate values Based of owners-manager

principles

Prominent and publicized CSR

activities

Small scale activities and often

unrecognized as CSR activities

Key involvement of CSR

professionals

No dedicated personnel for CSR

programs

Balluchi and Furlotti (2013) identified some additional

characteristics of SMEs that lead towards the CSR activities

engaged by SMESs, such as the internal and external

activities drove by spontaneous and improper plan instead of

having formal, strategic, and precise method.

CSR activities in some SMEs focused more on

community and environmental projects, for examples

conducting charitable donations and free of charge charity

programs (Longo et. al. 2005). SMEs which are concerning

on employees welfare treat their employees as family

members and no formal relationship involved in executing

the CSR activities (Nielsen and Thomson, 2009).

D. Drivers of CSR

There are numerous literatures regarding the drivers and

motivation of CSR practices among firms. Murillo and

Lozano (2006) claimed that companies pursue CSR

responsibilities due to legal requirements. Laws on

employment, health and safety and environmental protection

urge companies to engage in CSR although the companies

receive no benefits from the environmental activities

conducted (Williamson et. al., 2006). Some companies

involved in CSR activities due to avoid interferences from

regulatory body such as economic disincentives for not

implementing CSR. According to Robert (1992), companies

attempt to undertake the voluntary work to meet the

governmental expectations and assumed the government as

their most influencing stakeholders. Some studies have

shown evidence of positive relationships between company

image and CSR activities (Hess et al. 2002; Sen and Longo

et.al.2005).Reputation and brand management also

considered as factors for companies to conduct CSR

activities. The industries such as retail and food that have

end customers are very aware on their reputation and image

for the fact that CSR can influence the decision of customers

whether to buy or to refrain (Brown &Dacin, 1997).

Moral and ethics such as ‘doing the right thing’, and

‘integrity’ found to influence the CSR practices among

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companies, where some companies stated that they executing CSR due to moral and ethical values (Jenkin

2006). Some SMEs practice CSR due to its contributions

towards the company’ values and because of moral and

ethical reasons (Longo et al. 2005).Other driver in

implementing CSR activities is firm size. The involvement

in CSR activities depends on the size of the companies,

where the greater the companies, the greater the involvement

in CSR activities that lead to greater advantages to the

businesses (Santos, 2011). Perrini et. al. (2007) found that

the larger firm involved in more formal CSR activities and

corporate strategies.

Supply chain pressure from larger companies is also

considered as a driver towards the CSR activities (Revell &

Blackburn, 2007; Jenkins 2006). Larger companies seem to

force their smaller suppliers to incorporate certain CSR

issues into their practices (Santos, 2011). Small companies

have to implement CSR in order to be welcomed as part of

the family of larger business. According to Murillo &Lazano

(2008), the characters of founder are an important driver in

CSR practices among SMEs. Founders or owners possess a

significant level of control on how they carry out the

business operation and maintaining the business for longer

period. The values and beliefs of the owners often lead to

actual practices of CSR and influence the organization’s

culture (Jenkins 2006; Spence 2007). Founders who

perceived the importance of better consumer loyalty, better

public relations with the community and the public

authorities, fostering good relationships with clients and

business partners, employee satisfaction and motivation will

not hesitate to pursue the CSR practices in in their business

(Santos 2011).

Stakeholders’ expectation is crucial in today’s

businesses, where the complaints and expectations of

different categories of stakeholders must be taking into

accounts (Perrini et.al. 2007). Clarkson (1995) stated that

firm survival is based on meeting the needs and anticipations

of primary stakeholders because these stakeholders supply

critical resources, rather ‘secondary’ stakeholders as they are

actors (e.g. media) and not engaged in dealings with the

firm. In today’s business environment, stakeholders are no

less interested in the quality of products and services

provided, but are increasingly focusing on a company’s

social responsibility (Dawkin& Lewis 2003).

E. Benefits of CSR activities

Williamson et.al. (2006) found that the CSR practices

benefited SMEs. The involvement of the government to

promote CSR benefits will slowly increase the commitment

to CSR in Malaysian companies. Benefits of CSR practices

may bring economic and non-economic benefits to

organizations. Generally, the benefits can be related to

reputation and attractiveness of future employees.

The organizational reputation gained from the CSR

activities are shown by the suppliers and customers who

prefer to deal with organization that have good track record

and relationship with them. A company's reputation is the

perceptions of its relevant stakeholders, such as customers,

employees, owners, suppliers and strategic partners, society

and community, government or non-governmental

organizations (Martinez & Bosque, 2013). CSR activities

can reduce reputational risks and increase corporate

reputation (Gonzalez &Moneva, 2008).CSR can benefit

organization by attracting more productive and efficient

future workforce. Banchauset. al. (2002) found that there is

an association between CSR practice and company

attractiveness as an employer to future and potential

workers.

Internal efficiency and skills can also be enhanced

through CSR practices. The know-how and skills in

organization is very important in corporate environmental

performance although it is not communicated in any media

report (Russo, 1997). Among other benefits that CSR

practices brought to organizations are reducing business

risks (Orlitzkly & Benjamin, 2001) and can improve

relations between employers and communities.

III. CONCLUSION

This conceptual paper discussed an overview of CSR

practices among SMEs in Malaysia. The growing of SME

sector caused awareness on social and environmental

practices similar to large companies. Due to the great

number, the impact of CSR practices becomes significant

and need attention even though many owners of SMEs

believe that they have a little impact towards environment

and society. This article has also discussed the factors that

drivers and motivates of CSR practice among the SMEs.

Among the benefits of CSR are having a good reputation by

stakeholders and enhance an internal efficiency and skills

towards organization. Hence, it is important for SMEs to

continuously adopting CSR practices to remain competitive

in today’s challenging business environment and

continuously serve their roles as significant driver in

economic development.

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Abstract— There are lack of entrepreneurial website in Malaysia

context that can be referred to. Most of the available websites are

based in developed countries and not suitable with Malaysian

entrepreneur. Therefore a Startup Business Kits (SBK) website is

developed to help public and students who sit for entrepreneur

class to access online materials in a convenience way. A measure

of users’ satisfaction towards the website must take into account to

create pleasure for the users. Hence, a research study is conducted

to 235 small entrepreneurs to examine the effect of usability,

content and design of SBK website on users’ satisfaction. The

results show that usability, content and design are positively

significant influence users’ satisfaction towards SBK website. It is

hope that more feedback is received to deliver a good entrepreneur

website and thus increase users’ satisfaction.

Keywords— Users’ Satisfaction, entrepreneur website, usability,

content, design.

I. INTRODUCTION

NTREPRENEURS plays an important role to the

economy. Even though they are motivated by their own self-

interest to make profits, they are indirectly providing

employment, create goods and services and generate revenue

to the country. They also enhance the quality of life, reduce

poverty and others (Scott and Twomey, 1988).

Entrepreneurship is always dealing with uncertainties to

remain competitive. Formal entrepreneurial education helps

them reduce failure by learning techniques such as finance,

marketing, business plan and others. However not all people

get opportunity to attend entrepreneurial course due to time

and money constraint. Yet learning process can also involve

in self-study such as online learning. Online learning offer

many advantages in terms of ease of use and up to date

content (Abedin, 2015). It provide the potential for

"anytime, anywhere" learning experiences especially mobile

learning. Online learning also allows learners especially

those who have employed, family, and other responsibilities

to update their knowledge and skills related to their job. It is

not only can save travel costs but also allowing a flexible

schedule. A rapid increase in the use of internet as a main

source of information give initiative to enterprises and

universities to focus on online learning.

There are many websites that provide knowledge and

guidance to entrepreneur. However, it is irrelevant to

Malaysia context especially the rules and regulation to set up

a business. Most of the available websites are based in

developed countries and the existing Malaysia entrepreneur

websites are not explaining the entrepreneurial knowledge in

details. Being aware of this issue, a Start-up Business Kits

(SBK) website is developed to guide Malaysian future

entrepreneur in creating a new venture and guiding existing

entrepreneur to grow their business. The website provides a

basic entrepreneurial knowledge and steps require to create a

new venture. It explain in details the basic entrepreneurship

knowledge such as opportunity assessment plan, business

plan, business entity and regulation. Therefore the website is

also suitable for diploma and degree students who sit for

entrepreneur course. Indeed the framework of the website is

developed based on entrepreneur course offers by

universities.

User’s satisfaction is an important variable to consider in

an online context as it predicts favorable intentions toward

the website (Anderson & Srinivasan, 2003; Notebart, 2005;

Chang & Wang, 2008; Audrain-Pontevia et al., 2013). The

concept of satisfaction has been extensively studied in the

literature and is still of interest to both academics and

managers. There are many factors that influence users’

satisfaction on the website. The main factors are usability,

content and design as studied by past researches. A general

definition of usability is given by the International

Organisation for Standardisation (1998), which states that

usability is the extent to which a product can be used by

specified users to achieve specified goals with effectiveness,

efficiency, and satisfaction in a specified context of use.

Content and information display in the website should be

concise and up to date to attract users. It is also important

for the web designers to design the website in such a way

that it makes it easier and not harder for the mind to see the

pattern (Muhtaseb, 2012).

Hence, the objective of this paper is to examine the effect

of usability, content and design of SBK website on user’s

Users’ Satisfaction of Start-up Business Kits

Website

Nur Fadhlina Zainal Abedin

Faculty of Business Management, Universiti Teknologi MARA, Seremban, Malaysia

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satisfaction. The paper is presented with discussion on

previous studies and proceeded with methodology part. The

output of this study is represented in results section. The

following section are conclusion and suggestion for future

study.


User’s satisfaction towards a website is widely studied by

previous researchers especially in measuring customers’

loyalty for online shopping (Tarafdar and Zhang, 2008;

Nsairi & Khadraoui, 2013; Dingli & Cassar, 2014; Branjik,

2006 and Krug, 2006). User satisfaction is said to be a vital

predictor of user behavior that lead to the success of a

website. The user is likely they will keep using the system if

they satisfied with the services received through the website.

In contrast, if they get frustrated and dissatisfied with the

website, they would be unlikely to come back for a visit

(Xiao and Dasgupta, 2005). Wagner & Rydstrom (2001)

claim that satisfaction is achieved if consumers perceive that

resources provided by an online retailer meet their needs.

Definitions of online and offline satisfaction are quite similar

as they both include processes comparing the lived

experience to a given standard. Definition by Malhotra

(2002) in e-service quality context refer to the extent to

which a website facilitates efficient and effective shopping,

purchasing and delivery of products and services.

Satisfaction is an affective state that is the emotional

reaction to a product or service experience (Cristobal,

Flavian and Guinalıu, 2007).

Past researches highlighted several constructs on online

satisfaction. Among other contructs is the usability or

accessibility to access the website (Dingli & Cassar, 2014;

Branjik, 2006; Krug, 2006). World Wide Web Consortium

(2005) defines accessibility on the Web as an attribute by

which “people with disabilities can perceive, understand,

navigate, and interact with the web, and they can contribute

to the web.” Website usability can also be defined in terms

of satisfying the customer’s needs. The needs are the ability

to surfing around the navigation structure of the website and

getting the desired information with minimal effort. Specific

website quality characteristics such as ease of use,

understandability, visual clarity or user guidance are always

refer to website usability. The level of usability of a website

that determines if a user stays or abandons it for another

competing one. So it is crucial to understand the importance

of usability on the web, and the need for its evaluation

(Dingli & Cassar, 2014). There are several evaluation tools

are developed to measure users’ satisfaction and help to

assist designers in creating more usable websites in order to

increases users’ level of satisfaction. For example Dingli &

Cassar (2014) proposed an Intelligent Usability Evaluation

(IUE) tool to automate the usability of evaluation process.

Some literature studies attempt to focus not only on

website usability, but also on the content of the website

(Doll & Torkzadeh, 1994 and Yang et al., 2005). Yang et al.

(2005) refer content to the value, reliability, currency and

accuracy of information. In specific, information value is

concerned with relevancy and clearness, information

reliability refers to its accuracy, dependability, and

consistency. Meanwhile information currency is concerned

with information timeliness and continuous update. The

relevance of the provided information need to be assured

that the content is aligned with user expectation. The

attractiveness of a website on the basis of information

provided will satisfy and pleasure users during the

navigation (Schaupp & Bélanger, 2005).

A measure of website satisfaction has also take into

account on the design of the website. The design includes

colour that affect users’ first impression of a website. Other

criteria of design are legibility, link quality and page

organization, animations and website structure as considered

by Ladwein (2001). Manganari et al. (2009) proposed a

website environmental design into four groups: virtual layout

and design, virtual atmospherics, virtual theatrics and virtual

social presence. Meanwhile research by Muhtaseb et al.

(2012) suggested a consistency of user interface design.

Muhtaseb et al. (2012) divided design structure into website

design, homepage, graphical interface, page background,

color consistency, information structure and organization

and text consistency.

III. METHODOLOGY

The online questionnaires are distributed to the

participants of entrepreneur course. The valid questionnaires

for analysis were 235. The questionnaire consisted of two

parts: Part A was a demographic of the respondent and Part

B is a set of statement about website satisfaction using a

Likert-type scale ranging from 1 (strongly disagree) to 5

(strongly agree). This study theorized that the three

constructs namely the usability, content and design of the

website have a significant influence on user’s’ satisfaction.

Figure 1 shows the theoretical framework and the

hypothesized relationship among the constructs in the study.

The items are measured by adapting previously studies

where usability, content, design and satisfaction were

adapted from Brady (2005), Adel & Prashant (year), Sauro

(2015) and Abedin (2015) respectively.

Fig. 1: Theoretical Framework

The statement of two items reflecting satisfaction of the

website are developed by Brady (2005). The items are (1) I

will recommend the website and (2) I am satisfied with the

website. Content construct are adapted from Adel &

Prashant (year), and it is comprised of five items: (1) The

content of the web site is useful, (2) The content of the web

site is clear, (3) The content of the web site is current, (4)

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The content of the web site is concise, and (5) The content

of the web site is accurate. Three items under usability

construct are from Sauro (2015). The statements are (1)

This website is easy to use, (2) I am able to find what I need

quickly on this website and (3) It is easy to navigate within

the website. The last construct, design are from Abedin

(2015) where (1) The design is well organized and in ease

manner and (2) I am comfortable with the design.

This study uses SPSS to perform basic statistical analysis

and AMOS software to perform structural equation

modeling analysis and path diagram. Path diagram displayed

the full sets of relationships among the model constructed.

Path coefficient can be calculated by the variance of

observed variables and the significance of the coefficient is

estimated by using standard error of covariance between the

variables. The reliability of the study are assess using

Cronbach’s Alpha test.

A good fitting measurement model is required before

interpreting the causal paths of the structural model.

Goodness-of-fit of the structural model can be measured by

using Absolute Fit Index (AFI), Incremental Fit Index (IFI)

and Parsimonious Fit Index (PFI). AFI measures the overall

goodness-of-fit for both the structural and measurement

model. On the other hand, ICI measures goodness-of-fit that

compare the current model to a specified null model to

determine the degree of improvement over the null model.

Meanwhile PFI measures the overall goodness-of-fit, which

represents the degree of fit per estimated coefficient. It

attempts to correct any ‘over-fitting’ of the model and

evaluates the parsimony of the model compared to

goodness-of-fit. The popular measure of fit is Root Mean

Square Error of Approximation (RMSEA). RMSEA less

than 0.06 is considered as a good model fit.

IV. RESULTS & DISCUSSION

The first step is to check the normality of the data. The

distribution of the data must not depart from normality

because statistical analysis is not valid if the data collected

do not follow the normal distribution. Next, the reliability

test was conducted. The popular measure to determine

reliability for the measuring items in each component is by

using the Cronbach’s alpha. The Cronbach’s alpha above 0.6

provides a reliable measure of internal consistency. The

Cronbach’s α coefficients of usability scale, content scale,

design and satisfaction are 0.92, 0.87, 0.78 and 0.90,

respectively. All above the generally accepted level of 0.80.

It proves that samples are of good reliability to achieve the

basic requirements for surveying and research. Among

indicators of influencing factors model, CMIN/DF < 3,

RMSEA < 0.08, GFI, AGFI, IFI, CFI are greater than 0.9. In

accordance with the usual standards of management

research, CMIN/DF should be between 1 and 3, RMSEA is

preferred to be less than 0.08, but less than 0.1 is acceptable,

GFI, AGFI, IFI, CFI should be over 0.9. From the above, the

overall fitness of our model is high and it works well, which

indicates that the assumption of our theoretical model

structure is reasonable

TABLE 1:

CRONBACH’S ALPHA

Component No of Items Cronbach’s α

Usability 3 0.92

Content 5 0.87

Design 2 0.78

Satisfaction 2 0.90

Three hypotheses are examined with coefficient and p-

value. All p-values are less than 0.05. Therefore, the

hypotheses can be accepted as represented in Table 2. Figure

2 shows the relationship between the variables of the

structural equation model and the path coefficients where

usability, content and design has a significant positive effect

on satisfaction. When usability, content and design rise by 1

standard deviation, satisfaction goes up by 0.354, 0.666 and

1.152 standard deviations respectively

TABLE 2:

THE STANDARDIZE REGRESSION WEIGHTS AND ITS SIGNIFICANCE FOR

EACH PATH

Parameter Estimate P Hypotheses

Satisfaction <--- Usability .354 .021 Accepted

Satisfaction <--- Content .666 .044 Accepted

Satisfaction <--- Design 1.152 *** Accepted

Fig. 2: The Output of the Model

V. CONCLUSION

Determining users’ satisfaction on the web is becoming

increasingly important including SBK website. The main

criteria in the study is to examine the relationship among

usability, content and design to users’ satisfaction. The

multiple regression results show prediction of the dependent

constructs and independent variables. The results support the

hypotheses made. The important of these constructs should

115

be incorporated into all websites to support the website

satisfaction and pleasure of the users.

Every study has its limitations, and this one is no

exception. This paper focused on information kind of

website. The second limitation arises from the components

of satisfaction. There are some other components of

satisfaction that have not been considered in this study.

Future research should attempt to identify additional

components of satisfaction that are specific to an informative

website.

ACKNOWLEDGMENT

The author would like to thank to MNNF Network for

approving the survey conducted during the workshop

organized by them. Many thanks to all participants during

their cooperation.

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Abstract— The global financial crisis started from US housing

market in 2008 affected to the rest of the world. Different countries

have been affected differently, depending on the nature of their

financial and trade linkages, the quality of financial institutions and

polices. The purpose of the study is to determine empirically

whether monetary and fiscal policy have important effects on

output growth performance in Malaysia. Time series data from

1960 to 2011 are analyzed using Vector Autoregressive (VAR)

approach. Money supply (M1), government expenditure (GOV)

and gross domestic product (GDP) are the proxies for monetary

policy, trade policy and output growth, respectively. The results

showed that expansionary monetary and fiscal policies are

significantly correlated with larger output gained.

Keywords: Monetary policy, fiscal policy, economic growth

I. INTRODUCTION

HE global financial crisis (GFC), triggered by the

bursting of a speculative bubble in the United States

housing market in 2008, percolated to the rest of the

world. Different countries have been affected differently,

depending on the nature of their financial and trade linkages

with the rest of the world, the quality of financial institutions

and polices. For Malaysia and other countries in the region,

the ‘trade shock’ was by far the most important.

A contraction in aggregate demand caused a significant

drop in exports to United States. Report from Department of

Statistic (2009) stated that GDP growth slowed down to 0.1

percent in the last quarter of 2008, and decelerated by -6.2

percent and -3.9 percent respectively in the first two

quarters of 2009 as a consequence. This situation has slow

down the GDP in overall. GDP growth in the fourth quarter

of 2008 was significantly lower at 0.1 percent compared

with an average of 6 percent in the first nine months of the

year. The deteriorating GDP growth in Malaysia proved

that the global financial crisis has transmitted to Malaysian

economy.


Thus, the purpose of the study is to determine

empirically whether monetary and fiscal policy have

important effects on output growth performance using

Vector Autoregressive (VAR) approach. Money supply

(M1), government expenditure and gross domestic product

were used as proxies for monetary policy, trade policy and

output growth, respectively.


Malaysia and countries around the world were hit hard

by global financial crisis of 2008-2009. Many researchers

study how to overcome the crises that spread badly. There’s

a lot of suggestion and opinion come out after many study

about it. Government policies play a fundamental role in

influencing economic growth in Malaysia (Cheng, Ming-Yu,

2003). Fluctuations in policy instruments, namely Money

supply, Government budget deficit would significantly

affecting real GDP. Recent study for the case of Malaysia,

Harun Alp (2012) found that the monetary regime

implemented by BNM which under period by a flexible

exchange rate, was well suited to the characteristics of the

Malaysians in the context of 2008-09 global financial crisis.

Without the counter cyclical and discretionary interest rate

cuts along exchange rate flexibility, the global financial

crisis would have been associated with much deeper

economic contraction in Malaysia.

Meanwhile, Huttchison.M.M (2010) study about the

effect of monetary and fiscal policy on output growth during

sudden stop balance and payment crisis in emerging markets

in developing countries. He found the evidence of monetary

tightening (rise in discount rate or unsterilized rise in

international reserve) and discretionary fiscal contraction are

significantly correlated with larger output losses following a

sudden stop. Fiscal expansion is associated with smaller

output losses following a sudden stop, but monetary

expansion has no discernible effect.

Paper from Jie Li & Li Hua Tan (2010) concluded their

findings about twin crises during 1977-2010, monetary

expansion measures contribute to reduce the output losses.

However, comparing with the policy effectiveness on single

crisis, banking crisis and currency crisis separately, they

Time Series Analysis on Monetary, Fiscal

Policy and Growth in Malaysia

Maziah Mohamed Arifa, Nur Fadhlina Zainal Abedinb* & Habsah Kassimc

aUniversiti Teknologi MARA, Seremban, Malaysia

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found only monetary expansion help to reduce output losses

associated with banking crisis. Monetary policy has no

discernible effect on currency crisis while fiscal policy,

expansionary or contractionary has no effect on banking and

currency crisis either.

Ambreen Fatima & Azhar Iqbal (2003) urged there’s a

strong bi-directional causality between fiscal policy and

economic growth and also between monetary policy and

economic growth in Thailand. But, there’s an unidirectional

causality between monetary and fiscal policy with economic

growth in the case of Indonesia and Malaysia. Mouthford

(2005), Fatas (2003), Tan Juat Hong (2009) trusted fiscal

policy to enhance growth. Fatas said that governments that

use fiscal policy aggressively induce significant

macroeconomic stability. Hong agreed for the case of

Malaysia in the short term because the implementation of

fiscal budget deficit strategy is to mitigate sluggish economy

growth momentum. Strongly supported by Claus (2006),

there’s period where the measure differ significantly on the

contribution of fiscal policy towards GDP. Fiscal policy

subtracted from positive deriation in GDP from trend in the

early 1990s, but made contribution during period 1995-

1998.

Chimobi at al & Charles (2010) and Afonso (2010) have

another idea which support monetary policy can contribute

to output growth. As for Chimobi et al, they conclude from

their study for Nigeria, monetary stability can contribute

towards price stability in Nigerian economy because

inflation in Nigeria is too much extent a monetary

phenomenon. M2 appears to have a strong causal effect on

the real output as well as on prices.

Srinivasan (2006) explained that there are two major

aspects of Thai government response on the Asian crisis of

1997: a). The Thai government obtained a rescue package of

US$17.2 billion from the IMF in August 1997; b). Thailand

implemented a financial restructuring package by increased

the power of the Bank of Thailand (BoT) including giving it

more authority to order commercial banks or finance

companies without having to go to shareholders’ meetings.

Hoontrakul (2008)and Tarachai (2008) explained that there

are five policy implications that Thailand has to be aware of

regarding the global financial crisis of 2008: a). Protecting

the unsophisticated retail depositor against bank failures; b).

The International Accounting Standard Board (IASB)

amended IAS 39 as its commitment to enhance market

confidence in a coordinated and timely manner; c). Blocking

the vicious circle of financial liquidity; and d).

III. METHODOLOGY

Data have been gleaned from World Development Indicators published by World Bank. The samples are from

1960 to 2011. All data are in constant local unit currencies

with 2000 as a base year. As part of the empirical design,

our base estimating equation in log-linear form is specified

as follows:

lnYt = β1lnM1t + β2lnGOV t + ut (1)

where, Y = gross domestic product, M1 = narrow money

supply and GOV = government expenditure. There are two

reasons why variables are converted into natural logs. First,

the coefficients of the cointegrating vector can be interpreted

as long-term elasticities if the variables are in logs. Second,

if the variables are in logs, the first difference can be

interpreted as growth rates. The expected signs of the

parameters are positive. The error-term u is assumed to be

independently and identically distributed. The subscript (t)

indexes time.

For execution of the empirical design, we proceed as

follows. First, the time series property of each variable is

investigated under a univariate analysis by implementing the

ADF (Augmented Dickey- Fuller) test for the unit root

(nonstationarity. Likewise, the PP (Phillips-Perron) test is

also implemented. If these tests confirm stationarity in time

series data of each variable, equation (1) is estimated

appropriately by the Ordinary Least Square (OLS) method.

Otherwise, its application leads to misleading inferences in

the presence of spurious correlation. These tests are

conducted with and without a deterministic trend (t) for each

of the series.

Second, in the event of the nonstationarity of each

variable, the cointegrating relationship among variables

(tendency for variables to move together in the long-run) is

studied by the Johansen-Juselius procedure to overcome the

associated problem of spurious correlation and misleading

inferences. The basic idea behind cointegration is that if two

or more series move together in the long-run, even though

the series themselves are trended, the difference between

them is stationary, and it is possible to regard these series to

have a long-run equilibrium relationship. For cointegration,

however, all the variables must be in the same order of

integration or depiction of I(d) behavior. However, in the

short run, the disequilibrium may happen due to shock in

economic system. To solve this problem, Vector Error

Correction Model (VECM) will be employed. A basic error

correction model would appear as follows:

tttt uxy )( 110 (2)

where τ is the error correction term coefficient, which

theory suggests should be negative and whose value

measures the speed of adjustment back to equilibrium

following an exogenous shock. The error correction

term 1tu , which can be written as:)( 11 tt xy,is the residual

from the co-integrating relationship in Equation (1).

However, if the long run relationship did exist, we do

not know the direction of the causality, whether x led y or

vice versa. Normally, Granger causality test is considered as

a useful technique for determining whether one time series is

good for forecasting the other. Furthermore the number of

lags should be determined before running the test because

the result is sensitive with the lag. The Granger Causality

test (multivariate model) can be expressed as follows:

tkt

p

k

jjt

n

j

jit

m

i

it ZXYY

111

0

(3)

where ∆Y is change in GDP and ∆Yt-i and ∆Xt-j and ∆Zt-k

are changing or differenced lagged Y, changing X and

changing ER respectively. The Granger test assumed t to

be serially uncorrelated with zero mean. The Granger F-

P

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Malacca, Malaysia

statistic, tests the null hypothesis that lagged X and Z does

not Granger-cause (predict) Y. The null is rejected if the j

coefficient and j are significantly different from zero.

IV. FINDING & DISCUSSION

When dealing with time series data, most of them have

trends. The data is said to be non-stationary if it has different

mean at different points in time and its variance increases

with the sample size. Thus, it will no longer provide valid

interpretations in OLS regression. A result from ADF test

indicates that the t-statistics for all level series are

statistically insignificant to reject the null hypothesis of non-

stationary at 5 percent significance level. This indicates that

these series are non-stationary at their level form. Therefore,

these variables contain a unit root process or they share a

common stochastic movement. To solve this problem, we

differentiate variables at the first difference. The results

from ADF test for the level and the first difference are

presented in Table 1.

TABLE 1:

THE ADF AND PP TEST FOR STATIONARITY AT LEVEL AND FIRST

DIFFERENCE

Test for I(0) At Level Test for I(1) First Difference

GDP M1 GOV ΔGDP ΔM1 ΔGOV

ADF Test 3.48 6.24 1.47 -4.84* -3.36* -5.47*

PP Test 3.48 6.84 1.66 -5.07* -3.28* -5.47*

Note: * indicates the rejection of the null hypothesis of non-stationary at 5

percent significance level.

We then precede with Johansen’s cointegration

procedures to define the number of cointegration vectors.

The number of lag is set at 1 based on significant results

obtained from Information Criterion. The results from trace

statistic indicate that the null hypothesis of zero and one

(r=0, r=1) are rejected at the 95% critical value, which

means that two cointegration vectors exist. However,

maximum eigenvalue statistics showed that there is 1

cointegrating vector exist. In this case, the maximum

eigenvalue result is preferred. The output for lag VAR

selection and Johansen’s test is shown in Table 2 and 3.

TABLE 2:

RESULTS OF INFORMATION CRITERION

Lag LR FPE AIC SC HQ

0 NA 0.000181 -0.103813 0.026802 -0.057765

1 271.3530* 7.92e-08* -7.840143* -7.317683* -7.655952*

2 12.02468 8.73e-08 -7.754479 -6.840175 -7.432144

3 12.58317 9.16e-08 -7.734036 -6.427887 -7.273557

4 8.920516 1.08e-07 -7.619238 -5.921243 -7.020615

5 3.967085 1.59e-07 -7.321660 -5.231821 -6.584894

LR: sequential modified LR test statistic (each test at 5% level)

FPE: Final prediction error

AIC: Akaike information criterion

SC: Schwarz information criterion

HQ: Hannan-Quinn information criterion

TABLE 3:

RESULTS OF JOHANSEN’S COINTEGRATION TEST

Hypothesised Eigenvalue

Trace

Statistic

0.05

Critical

Value Prob.

None * 0.493313 35.32296 29.79707 0.0104

At most 1 0.160111 8.808377 15.49471 0.3834

At most 2 0.050073 2.003452 3.841466 0.1569

Hypothesised Eigenvalue

Max-Eigen

Statistic

0.05

Critical

Value Prob.

None * 0.493313 26.51459 21.13162 0.0079

At most 1 0.160111 6.804925 14.26460 0.5125

At most 2 0.050073 2.003452 3.841466 0.1569

Max-eigenvalue test indicates 1 cointegrating eqn(s) at the 0.05 level

* denotes rejection of the hypothesis at the 0.05 level

Since the cointegration test indicates the presence of a

long-run equilibrium relationship among variables, the

Vector Error Correction Model is estimated. The reason for

estimating VECM is to verify whether disequilibrium

converges to the long-run equilibrium because in the short-

run there may be deviations from this equilibrium. It

provides a means that a proportion of the disequilibrium is

corrected in the next period. Statistically, the ECM term is

significant at 5 percent level, suggesting that 18 percent of

the discrepancy between long term and short term is

corrected in the next years.

TABLE 4:

LONG RUN COEFFICIENT IN VECM

Eq.

lnGDP

(-1) C

lnM1

(-1)

lnGOV

(-1)

ECT

CointEq1 1.0000 0.0043 0.3001 0.1300 -0.1821

(0.0437) (0.0582) (0.3458)

[6.8700] [2.2312] [-5.2685]

Note: Standard errors in ( ) & t-statistics in [ ]

In order to determine which variable causes the other,

pair-wise granger causality tests are used. Table 5

summarizes empirical results of Granger causality tests

between three variables used in this study. Granger causality

tests are very sensitive to the selection of lag lengths. In this

purpose, the lag lengths are determined by Akaike

Information Criteria (AIC). The result shows the existence

of bidirectional causality between economic growth and

fiscal policy or government spending. For the case of

economic growth and monetary policy, the causality is

unidirectional or it can be said that the monetary policy

Granger cause economic growth, but the economic growth

does not Granger cause monetary policy. The result also

shows the existence of unidirectional causality between M1

and GOV.

Lastly, the stability test runs to make sure all the

analyzed results as discussed above are meaningful. VAR

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Malacca, Malaysia

and VECM are said to be stable if the variables are less than 1 and lie inside the unit circle. In this analysis, there is no

root lies outside the unit circle which means that VAR

satisfies the stability condition.

VI. TABLE 5:

VII. GRANGER CAUSALITY TEST

Null Hypothesis: F-Stat Prob.

M1 does not Granger Cause GDP 0.28503 0.5965

GDP does not Granger Cause M1 5.68375 0.0222

GOV does not Granger Cause GDP 0.89722 0.3495

GDP does not Granger Cause GOV 3.36215 0.0746

GOV does not Granger Cause M1 7.69339 0.0085

M1 does not Granger Cause GOV 0.09080 0.7648

V. CONCLUSION & FUTURE RECOMMENDATION

The goals of this paper are to investigate the long run

and short run relationship and causality between monetary

policy, fiscal policy and economic growth in Malaysia over

the period from 1960 to 2011. The analysis starts with

stationarity property examination of the underlying time

series data. The estimated results confirmed that GDP, M1

and GOV are non-stationary at the level data but stationary

at the first differences. Hence, they are integrated of order

one.

We next examined the existence of co-integration among

the stationary variables. The estimated results declared that

there is co-integration of order one and hence, showed the

existence of long run equilibrium relationship between the

variables. The result of the Granger- causality test finally

confirmed that there exists bidirectional causality between

monetary policy and economic growth. A relationship

between fiscal policy and economic growth is unidirectional

which shows monetary policy does lead to growth, but it

does not happen inversely. The results also showed that

there is unidirectional causality relationship between

independent variables.

The policy implication of this result is that monetary and

fiscal policies are considered as the policy to accelerate

economic growth. To achieve a sustainable economic

growth, it is crucial to undertake essential measures to solve

inflation and deflation problems. According to the theory,

and increase in government expenditure and also in money

supply will boost economic growth. It is also known as

expansionary policy that will result in an increase in

aggregate demand. However, a policy must be made in a

very careful manner to prevent an increase in the general

price that will cause the inflation problem.

Future recommendation should be taken into

consideration for future research on the specifying the

relative impact of each variable in interpreting shocks in Y

and X. It can be conducted by employing the methodology

of impulse response function.

ACKNOWLEDGEMENT

The authors thank to all administrative staff for assistant.

This paper is sponsored by Universiti Teknologi MARA

under Excellent Fund (600-RMU/SSP/DANA 5/3/Dsp).

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