The Influence of Human Capital on Company Performance: a Preliminary Study of Telekom Malaysia

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The Influence of Human Capital on Company Performance: A Preliminary Study of Telekom Malaysia

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Mohamad Hanapi Mohamad Universiti Utara Malaysia Mazlan Ismail Telekom Malaysia Background The telecommunication industry has entered a very competitive environment for the past few decades and the industry has been deregulated. The Malaysian government has established a vision to be a developed nation by year 2020 and the deregulation of telecommunication services is one of the most important steps towards achieving that vision. To achieve the aspiration and realise the vision of making Malaysia a developed nation, and to survive in this highly competitive and challenging business environment, Telekom Malaysia has to be competitive, dynamic and robust. With the advancement made in the telecommunication technology, with the formation of various forms of business coalitions between local telecommunication services operators and other worldclass telecommunication companies, the challenge for the business survival of Telekom Malaysia is inevitable. Thus Telekom Malaysia that holds 97% of the market share of the fixed telecommunication services, 39% of the mobile services and 54% of the internet customers in Malaysia customers (Malaysian Communication & Multimedia Commission, 2004) has to maximize the utilisation ofTelekom Malaysia's resources, especially it's intellectual capital. As a former government department, Telekom Malaysia has inherited the 28,000 employees, all the systems, technologies, business network and customers of Jabatan Telekom Malaysia. In 1996, the value of the human capital in Telekom Malaysia which in this case refers to only the salaries and allowances to the employees, stood at RM 836 million and in 2003, the value of its human capital was RM 1,412 million, an increase by 69% within seven years (Telekom Malaysia Annual Report, 1996, 2003). That is only in term of salaries and allowances, how about long-term relationship, know-how and others? This means that the only way for Telekom Malaysia to have an edge over its competitors will be to develop and put greater the use of its intellectual assets.

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Journal of International Studies 2007 Vol. 312007

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In attempting to achieve Telekom Malaysia's vISion of being the communication company of choice, it faces these major-problems in the area of intellectual capital: (i) The deteriorating trend of fixed network telecommunication services customers and market share of telecommunication services. Could this be due to the degree of availability and utilisation of intellectual capital? (ii) The information on the effective intellectual capital is either not determining Telekom Malaysia's intellectual capital does not matter strategy. management and leveraging of available or not utilised for strategic direction. It's as if in the realisation of its business

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(iii)

The influence of intellectual capital to Telekom Malaysia ' s performance, in the present as well as in the future competitive business environment and K-economy is not being addressed at all. The effectiveness in implementing the "Change Program" and the results from the budget spent, times and effort for the program and other related activities are not known for further actions and improvements.

(iv)

Hence this paper aims to address the importance of intellectual capital on the performance of Telekom Malaysia and this study also intends to show that the dimension of spiritual capital is integral to the development of intellectual capital that will contribute to the outstanding performance of Telekom Malaysia as proven in many ' world-class' corporations. The whole of this paper comprises of five parts. Part I introduces the background of this paper. Part 2 presents the related literature on intellectual capital and knowledge management. Part 3 presents the methodology used in the study. Part 4 discusses the finding and...
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