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CHAPTER 3



 



THE EMERGENCE AND EVOLUTION OF

MULTINATIONAL CORPORATIONS (MNCs) FROM MALAYSIA

 

 

 



3.0 

Introduction

 

This chapter


CHAPTER 3



 



THE EMERGENCE AND EVOLUTION OF

MULTINATIONAL CORPORATIONS (MNCs) FROM MALAYSIA

 

 

 



3.0 

Introduction

 

This chapter

is devoted to the history of Malaysian multinational corporations. 

 



3.1 

The Emergence of Malaysia-based Multinational Corporations: Economic and

Political Development  

 



(i)                 

Transformation from the British Colonial Period to the 1970s

 

To understand

the origins of Malaysia-based MNCs is to understand the economic and political

history of Malaysia (formerly known as Malaya on that particular of time) as a

British colonial heritage. The cession of Penang by Sultan of Kedah to the

British East India Company in 1786, the formation of the Straits Settlements

uniting Malacca, Penang and Singapore in 1826, the designation of this

settlement as Crown colony in 1867, and the independence of Malaya from the

British in 1957, had important implications on the emergence of the first

Malaysian-based multinational corporations. 

 

Historically,

in general, the development of the Malaya economy was largely a function of the

British Colonial Administrative State interest and attention (Edmund and Jomo,

1997). Prior to 1957, the Malaysian economy was heavily dependent on primary

products specifically tin and rubber to generate growth, and employment.

The prosperity of many British trading companies namely Sime Darby Corporation,

London Tin Corporation, Anglo Malayan Tin Limited, Kinta Kellas Tin Mining

Limited and Malayan Tin Dredging Limited derived from these two main products.

A diversification into palm oil began in the late 1960s, and

about the same time, forest resources in the form of saw logs and swan timber

proved to be the leading primary commodities. During British control, a

well-developed system of public administration was established, public services

were extended and large-scale rubber and tin production was developed (Edmund

and Jomo, 1997). Immigrants from China and India were brought to Malaysia for

construction of public works and also as labourers in production sectors (Snograss,

1980; Anand, 1983; Saw, 1988; Faaland et. al., 1990). They were not only needed

as additional manpower but also for their skills and technology. In comparison

with the indigenous population, they were found to be more advanced in nature

and highly developed. (Lim, 1967). 

 

 

 

 

 



                                                         
 

 



(ii)               

From Export-Oriented Raw Materials (EORM) to Import-Substitution

Industrialisation (ISI): 

 



(iii)              

From Import-Substitution Industrialisation (ISI) to Export-Oriented

Industrialisation (EOI): 

 



(iv)             

The Development of New Economic Policy

 

 



3.2 

Development and Characteristics of Indigenous Malaysian
Multinationals

 

Early

Contribution by the Chinese Community

 

Dominance by

the Government Controlled

 

Dominance by

Politically Influential Businessman

 

 



3.3 

The Evolution of Malaysia-based Multinational Corporations: International

Expansion and Outward Investment

 



(i)                 

Malaysia Economic Development towards Malaysian Multinationals

 



(ii)               

Distribution of Malaysia Outward investment (1970 – presents)

 



3.4 

Present and Future Challenges

 

 



3.5 

Summary and Conclusion

 

 

 

 

 



              




 

 

is devoted to the history of Malaysian multinational corporations. 

 



3.1 

The Emergence of Malaysia-based Multinational Corporations: Economic and

Political Development  

 



(i)                 

Transformation from the British Colonial Period to the 1970s

 

To understand

the origins of Malaysia-based MNCs is to understand the economic and political

history of Malaysia (formerly known as Malaya on that particular of time) as a

British colonial heritage. The cession of Penang by Sultan of Kedah to the

British East India Company in 1786, the formation of the Straits Settlements

uniting Malacca, Penang and Singapore in 1826, the designation of this

settlement as Crown colony in 1867, and the independence of Malaya from the

British in 1957, had important implications on the emergence of the first

Malaysian-based multinational corporations. 

 

Historically,

in general, the development of the Malaya economy was largely a function of the

British Colonial Administrative State interest and attention (Edmund and Jomo,

1997). Prior to 1957, the Malaysian economy was heavily dependent on primary

products specifically tin and rubber to generate growth, and employment.

The prosperity of many British trading companies namely Sime Darby Corporation,

London Tin Corporation, Anglo Malayan Tin Limited, Kinta Kellas Tin Mining

Limited and Malayan Tin Dredging Limited derived from these two main products.

A diversification into palm oil began in the late 1960s, and

about the same time, forest resources in the form of saw logs and swan timber

proved to be the leading primary commodities. During British control, a

well-developed system of public administration was established, public services

were extended and large-scale rubber and tin production was developed (Edmund

and Jomo, 1997). Immigrants from China and India were brought to Malaysia for

construction of public works and also as labourers in production sectors (Snograss,

1980; Anand, 1983; Saw, 1988; Faaland et. al., 1990). They were not only needed

as additional manpower but also for their skills and technology. In comparison

with the indigenous population, they were found to be more advanced in nature

and highly developed. (Lim, 1967). 

 

 

 

 

 



                                                         
 

 



(ii)               

From Export-Oriented Raw Materials (EORM) to Import-Substitution

Industrialisation (ISI): 

 



(iii)              

From Import-Substitution Industrialisation (ISI) to Export-Oriented

Industrialisation (EOI): 

 



(iv)             

The Development of New Economic Policy

 

 



3.2 

Development and Characteristics of Indigenous Malaysian
Multinationals

 

Early

Contribution by the Chinese Community

 

Dominance by

the Government Controlled

 

Dominance by

Politically Influential Businessman

 

 



3.3 

The Evolution of Malaysia-based Multinational Corporations: International

Expansion and Outward Investment

 



(i)                 

Malaysia Economic Development towards Malaysian Multinationals

 



(ii)               

Distribution of Malaysia Outward investment (1970 – presents)

 



3.4 

Present and Future Challenges

 

 



3.5 

Summary and Conclusion

Hong Kong Essays

Tuesday, February 26, 2008

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