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About Malaysia

by: Jaime Ong-Yeoh, Associate Partner of Hofstede Insights

 

Currency: Malaysian Ringgit (MYR)                                 
Capital: Kuala Lumpur
Time Zone: GMT +8
Population: 32.6 million (2019) [1]
Ethnicity: Malay (67%), Chinese (25%), Indian (7%), indigenous & others (1%) [1]
Religion: Islam (official religion), Buddhism, Christianity, Hinduism, others [1]
Border countries: Singapore, Thailand, Indonesia
 

 

Overview

Malaysia is a multiethnic, multicultural society. Rather than assimilation, in Malaysia, the different cultural identities of the ethnicities that make up the majority of its population (Malays, Chinese, and Indians) remain very much intact.

The official language is Malay, and it is common for people to speak two or more languages including Malay and English, plus a mother tongue such as Chinese (Mandarin or other Chinese dialects) or Tamil (or other Indian languages). Official government matters are conducted predominantly in Malay, while English is widely used as the language of business in the private sector.

The official religion is Islam and Malaysia is a relatively progressive, liberal Muslim country. All Malaysian Malays are Muslim, and for them, religion plays an influential role not only in private life but also in matters of business. Non-Muslims are free to practice other religions, but for them, religion tends to be less of an influence.

Being a multicultural society, Malaysia has many public holidays (some say the most in the world!) to celebrate the various cultural and religious holidays of its people. Major festivals include Hari Raya Aidilfitri (Eid), Chinese New Year, Deepavali (Diwali), and Christmas. Aside from the faithful, these festivals are seen as a time of celebration by all and many partake in the festivities by visiting family and friends and feasting. Businesses may be closed for an extended period during this time with many employees going on leave. In the workplace, it is common to mark the occasion by decorating the office, dressing in traditional attire, and having small office parties.

Gender equality in the workplace is generally not seen to be a large concern in Malaysia, especially among skilled labour. Although the participation rate of Malaysian women in the labour force is relatively lower compared to other countries in Southeast Asia [2], Malaysia has the highest ratio of women on boards (26.4%) of any Asian country [3] and it is not uncommon for women to hold senior leadership positions.

Malaysia has affirmative action policies in place for the ‘Bumiputera’ (‘sons of the land’ or ‘sons of the soil’, comprising Malays and indigenous peoples) in various areas such as government, public sector, economic activities, education, etc. These were created to defuse inter-ethnic tensions following racial riots in the 1960s by creating economic opportunities, and are still in place today. For the most part, racial and religious harmony exists, except for when issues are deliberately played up for political leverage.

 

Some cornerstones of Malaysian culture

Due to its multiethnic, multicultural society, the cornerstone of Malaysian culture is one of tolerance or a ‘live and let live’ attitude - one tolerates the opinions and behaviour of others and similarly they tolerate yours. People will also be largely forgiving of cultural faux pas which foreigners may make as long as it is not done with malice.

Malaysia is a highly collectivist society with a high power distance. This means that:

  • There are different rules for different people. Those in positions of power or authority are usually accorded special privileges.

  • One does not openly challenge people in positions of power or authority. Someone may do what their superior tells them to but this does not necessarily mean they agree with it.

  • With power comes great responsibility. In turn, people in positions of power or authority offer their patronage and are expected to take care of those who are loyal to them.

  • Negative messages and alternative views are delivered indirectly, the underlying message is communicated subtly and the recipient is expected to read between the lines. This is done to avoid either party from having to ’lose face’, i.e. look bad and/or feel embarrassed.

  • Open conflict is avoided, both to preserve group harmony and to ‘save face’. Aside from using indirect communication, conflicts are handled through an intermediary or in private.

  • Relationships are very important. WHO you know can be more influential than WHAT you know and following standard process.

See ‘Level 3 - Dimensions’ for more details on the culture of Malaysia according to Hofstede’s cultural dimensions.

 

When in Malaysia

  • Expect to be asked what may seem to be personal questions by people you have just met and do not know well. For example, “Have you eaten?”, “Are you married?”, “Do you have children?”, etc. These are just meant to be friendly ice breakers.

  • For some, titles do matter especially if they are honorary titles bestowed by the sultans or the king such as ‘Tun’, ‘Tan Sri’, ‘Puan Sri’, or ‘Datuk/Dato’ and not just salutations such as ‘Encik’ (Mr.), ‘Puan’ (Mrs.), or ‘Cik’ (Ms.).  If titles are used when someone is introduced to you, you should refer to the person in the same way.

  • Avoid open conflict or openly disagreeing with someone in matters of importance, especially in public or when there are others present.

  • If you need to disagree or voice a negative opinion, either soften the message by phrasing it indirectly or do it in private.

  • Similarly, you may experience the same with people not being forthright with you so as to avoid conflict.

  • Do not always take things at face value. If you sense there may be something underlying the situation, you might want to probe gently. 

  • Make the effort to build relationships. A lot more can be achieved if you have (or make) the right connections and relationships.

  • Malaysian time is known as ‘rubber time’, i.e. it is flexible. Expect that meetings and social events will start late, but you do not want to be in a position where you are the cause of this so plan to arrive early or on time.

  • Malaysians are very sociable and hospitable,  you can expect to be taken out for meals by your hosts.

 

Good to know 

Malaysia is a very diverse country - there are not only variances between its different sub-cultures, but variances within each sub-culture. What applies in one situation may not necessarily apply in another. A successful person is one who is able to pick up on these nuances and adapt to the situation.

Government, government-linked companies, and Malaysian multinationals are typically more traditional and conservative, while the private sector and global multinationals operating in Malaysia tend to have more cosmopolitan cultures. When in doubt, ask your host for advice or follow the cue of others around you.

 

Body language

Like its neighbours in Southeast Asia, Malaysians are warm and welcoming and will offer a smile to anyone they meet. You should offer a smile in return. 

During introductions, you may extend your hand and shake hands with both genders but a more conservative Muslim member of the opposite gender may not offer their hand in return. You can instead smile and nod your head slightly. A gesture that has been increasing in use recently is bringing one’s right hand up to one’s heart, and this will start to become more common now in view of the recent Covid-19 global pandemic.

Malaysians are generally quite reserved and private with their emotions and you will not often see overt expressions of anger, joy, sadness, etc. in public. An emotional outburst from you will make you seem emotionally unstable to them and/or will be taken personally. Conversations are held at low to moderate volume and hand gestures are not extravagant.

Silence does not mean agreement in Malaysia. It is more likely that the person disagrees with you but does not want to say so openly.

People at lower levels may feel uncomfortable in the presence of higher-ups or foreigners. They will find making small talk awkward, giggle nervously, or may excuse themselves and avoid the interaction altogether.

 

Dress code

The workplace dress code in Malaysia is best described as business casual. It may be more conservative and formal for the government/government-linked sectors, and less conservative and more relaxed for the private sector and global multinational companies.

Both traditional attire and Western-style office attire is worn at the workplace. The following will be suitable for most occasions:

  • Men: Lightweight blazer, long sleeved shirt, formal trousers, leather dress shoes. Wearing a tie is less common these days when not visiting government officials, but you should have one at hand in case. A matching suit is not expected except for formal events such as meeting with VIPs, important events, or when the media is present.

  • Women: Skirts or dresses (knee length), trousers, covered shoulders, avoid showing cleavage. A lightweight blazer will add a smart touch. A matching skirt suit/pantsuit is not expected except for formal events such as meeting with VIPs, important events, or when the media is present.

You will notice that it is the practice for many Muslim women to dress in traditional attire that fully covers their arms and legs, as well as a headcovering. However, this is not expected from non-Muslims and foreigners.

When in doubt, it is always better to dress more modestly.

 

[1] Department of Statistics Malaysia (https://www.dosm.gov.my)

[2] Tan, H.L. (2019, October 18.) Govt's push to boost women workforce lauded. Retrieved from https://www.nst.com.my/opinion/letters/2019/10/530922/govts-push-boost-women-workforce-lauded

[3] Ho, S. (2020, March 9.) More women are entering company boardrooms, but not everywhere. Retrieved from https://www-aljazeera-com.cdn.ampproject.org/c/s/www.aljazeera.com/amp/ajimpact/women-entering-company-boardrooms-200306112126791.html

 

The expert recommends

In line with the ASEAN (Association of Southeast Asian Nations) principle of non-interference, Malaysia generally has an apolitical and neutral stance in the face of international trade conflicts, enabling the country to maintain good trading relations with most countries. It also practices a policy of non-interference in the politics and internal matters of other countries with the exception of crimes against humanity.

In general:

  • Processes are numerous but are not always followed and have inconsistent results.

  • Plan for everything to be more complicated and take longer - negotiations, paperwork, approvals, payments, etc.

  • While decisions will need to travel up many levels of authority, it will ultimately be the decision of the person at the top. Reaching the top is sometimes determined by those along the chain.

  • Deals may be concluded based on conventional factors, such as quality/price/expertise, but could also involve intangible factors such as connections, relationships, familiarity and trust.

  • Offers of technical expertise and knowledge transfer will be well received.

  • Prioritise mutual benefit (win-win) and long term relationship, over competition (win-lose).

 

Doing business in Malaysia can vary widely depending on who it is you are doing business with - whether it is with the government sector/government-linked companies, or the private sector.

For the government sector or government-linked companies:

  • It is common and sometimes necessary to engage through appointed local intermediaries or form partnerships with a local company. Therefore, be aware that the party you are dealing with may not be the immediate provider or customer.

  • The function of these third parties is for coordination, communication and general ease of business. It could also be for direct access to the customer. Be prepared that there will be additional costs attached to these services.

  • Relationships and being connected are very important. However, in more politically-connected areas of business, affiliations can be unstable and subject to whoever is currently in favour with people in positions of power or authority.

  • Respect for and use of honorifics and titles are important and expected.

 

Malaysia has a thriving private sector, it contributes to 38.3% of the national GDP [4] and makes up 66% of employment in the country [5].

  • It is generally made up of companies offering a diverse range of products and services, led by industrious and ambitious business owners for whom entrepreneurship is a key characteristic.

  • There is a relatively high level of knowledge and skill, and businesses are willing to improve product technology and techniques.

  • Malaysia is strategically located within a cluster of vibrant and emerging economies in Southeast Asia. This encourages the Malaysian private sector to expand beyond its borders and they are able to do so with relative ease making them very export centric, making it a hub for sales and distribution in the region.

  • Titles matter less, but best to use them initially until jokingly dismissed by the person.

 

 

[4] Human Resources Development Fund (HRDF) Human Capital Report. (2019, September 1.) Retrieved from https://www.hrdf.com.my/wp-content/uploads/2016/12/11.-issue_Sept01_2019-Human-Capital-Report-SMEs-in-Malaysia.pdf

[5] Chong, J.H. (2019, July 31). Malaysia SME contribution to GDP up at 38.3% in 20198. Retrieved from https://www.theedgemarkets.com/article/malaysia-sme-contribution-gdp-383-2018

 

 

Dimensions

Power Distance

Malaysia has a score of 100, which means it is a very hierarchical society. People accept that power is distributed unequally and that everyone has a place in society. Titles are important, VIPs and people in positions of power or authority are accorded special treatment. At the workplace, subordinates prefer guidance and the ideal boss is more paternalistic or a benevolent autocrat. Challenges to leadership are not well-received.

 

Individualism

With a score of 26, Malaysia is a highly collectivist society - being part of a group and one’s responsibilities towards the group are more important than standing out as an individual and pursuing one’s individual needs. These groups could be one’s immediate and extended family, as well as other formal or informal groups both in and out of the workplace. Relationships are very important, being connected (or working with those who are) will serve you well - who you know can be more important than what you know. Loyalty is paramount and overrides most other societal rules and regulations. Open conflict is avoided as this will disrupt group harmony and may cause someone to ‘lose face’ or be embarrassed in front of others. Difficult messages are often expressed indirectly or in private.

 

Uncertainty Avoidance

With a score of 36, Malaysia demonstrates low Uncertainty Avoidance. This means that society has a more relaxed attitude and is comfortable with uncertainty and ambiguity. Deviance from standards is more easily tolerated, for example, processes exist but are not always followed/applied and results can be inconsistent. Punctuality is not critical, time is flexible and meetings often start late. The overall tendency is one of adaptability - rather than having a detailed plan in advance, people will adjust along the way according to results and circumstances.

Together, the combination of a highly hierarchical, collectivist society that has low uncertainty avoidance forms what can be called a ‘Family’ culture [6] - there is a patriarch who provides guidance, one does not speak up against one’s ‘father’, and one is loyal towards one’s own ‘family’ (in-group). The key concepts are loyalty and hierarchy.

 

Masculinity

A high score (Masculine) in this dimension indicates that society is driven by competition, achievement and success, with success being defined by the winner/the best. A low score (Feminine) in this dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where the quality of life is the sign of success and standing out from the crowd is not admirable. With an intermediate score of 50, Malaysia does not exhibit a strong preference either way - achievement and success are desired, yet caring for others also plays an important role in society.

 

Long Term Orientation

With a relatively low score of 41, Malaysia is more Short Term Oriented. Rather than looking forward into the future (Long Term Oriented), its focus is more on the past and present. Traditions and norms of the past are maintained, while societal changes are viewed with suspicion. There is also a preference for quick gratification, for example spending now instead of saving for the future, and buying/building new things instead of reuse and maintenance.

 

Indulgence

With a score of 57, Malaysia leans more towards being Indulgent. They are generally optimistic and possess a positive, can-do attitude. While working hours are longer than what one may be used to in Europe, work-life integration is important including going out for lunch (or for prayer if Muslim), taking a little time out during the workday for quick personal errands, and leaving the office in the late evening to go home to family or for recreational activities. Malaysian have the propensity to spend money rather freely and often beyond their means, as evidenced by its household debt to gross domestic product (GDP) ratio of 82.2%, making it among the highest in Asia and exceeding that of several high-income nations including the United States and Japan [7]. Despite that, consumers are price sensitive and actively seek out discounts and promotions.

 

[6] Wursten, H. (2019). The 7 Mental Images of National Cultures. Helsinki, Finland: Hofstede Insights.

[7] Dhesi, D. (2019, December 16.) Household debt to GDP may inch up. Retrieved from https://www.thestar.com.my/business/business-news/2019/12/16/household-debt-to-gdp-may-inch-up