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POPULATION FRAME
The unit of analysis in this study is organisation. Before determine the number of
samples, the list of the population needs to establish first. The lack of a comprehensive up-todate database of manufacturing SMEs posed a problem when selecting a sample population,
representing a problem often cited by other researchers (Abdul Hamid et al., 2003; Ahmad,
2007). In order to overcome this obstacle, the sample of manufacturing firms was compiled
through the following sources;1) SME Corporation Malaysia
2) Federation of Malaysian Manufacturers (FFM) and
3) Malaysia External Trade Development Corporation (MATRADE)
The list was then analysed and a new list was compiled to only include manufacturing
firms. The firms were then classified as manufacturing-related services or agro-based industries,
which have either of the following;1) More than 5 and fewer than 150 full-time employees or
2) An annual sales turnover between RM250,000 and less than RM25 million
Additionally, the following criteria were used in sample selection;1) The contact person in the directory is the owner-manager of the firm
2) The full name of the owner has been stated in the directories
3) The firm must been operating a minimum of six years, and
4) The firm is not a franchise-based. This is due to the lack of control over their business
and tailored to the requirement of their parent company
The sectors included in the study are;1) Textiles, apparels and leather
2) Food and beverages
3) Wood-based products
4) Plastic-based products
5) Rubber-based products and
TABLE 4.1
Sample Calculation in Each Region
Regions
North
States
Perlis
Kedah
Pulau Pinang
Perak
Selangor
Negeri Sembilan
Kuala Lumpur
Melaka
Johor
Pahang
Kelantan
Terengganu
Sabah
Sarawak
West
South
Central
East
TOTAL
Number of
Firms
30
316
1036
349
1148
190
673
98
824
295
130
273
89
125
5576
Total number of
Firms
Number of sample
1731
111
2011
129
922
59
698
45
214
13
5576
357
INSTRUMENTATION
The current research utilised mailed questionnaires and self-administered questionnaires
to obtain data from the sample companies in Malaysia.
Mail Questionnaires
In order to collect data which was geographically dispersed in both Peninsular Malaysia
and Borneo,15 this study used mailed questionnaires as suggested by Sekaran (2003). This
method is considered effective as it limits transportation cost in data collection.
The benefits of mailed questionnaires have also been highlighted by previous scholars
(Aaker et al., 2007; Awang, 2011; Czaja and Blair, 1996; and Cooper and Schindler, 2001). The
authors identified the benefits of mailed questionnaires as follows;1) Represents a suitable medium to engage in sensitive questions
2) Cost effective when compared to personal and telephone interviews
3) Does not require the interviewer to be present
4) Respondents have the option to complete it in their own time
5) Incentives may be used to increase the response rate
15
OPERATIONALISATION OF VARIABLES
Each variable in this proposed research will be evaluated using measurements previously
developed by other authors. The measurements have been shown to exhibit acceptable levels of
reliability and validity.
The self-report survey technique was used to gather data on independent variables such
as network size, network activity, network density and network centrality. The survey-based
study of the social network used the name generator technique to assess the egos network
structure. This technique allows the ego to list down the alters in their social network.
Business Performance
The proposed study incorporates both financial and nonfinancial business performance
aspects.
1) Financial Business Performance
In terms of financial indicators, the items were adopted from Ahmad (2007), Chandler
and Hanks (1993), Dess and Robinson (1984) and Robinson (1982) by using the subjective
measure. The respondents were asked to rate the items using a 5 points Likert scale where 1
point meant that the firm experienced in decreasing rate whilst 5 points signified that the firm
experienced increasing significantly to the items given.
The sample items are as follows;1. Sales growth
2.
3.
4.
disagreed. Both researchers reported a high internal consistency alpha of 0.94 in their research.
The items are as follows;1. My firm is successful in increasing employee productivity (employees productivity)
2. My firm is successfully in increasing the yield of products (product quality)
3. My firm is successful in keeping the consistency of product quality (product quality)
4. My firm is successful in cutting production time of a product (product delivery)
5. My firm has the ability to produce product variety (product flexibility)
6. My firm has the ability to increase production rates quickly (product flexibility)
Table 4.3 compiles the item numbers in the questionnaire according to the dependent
variables and the researchers attributed to developing these variables.
Summary of Item Numbers and the Dependent Variables Developed by Previous Researchers
Variable Name
Financial Business Performance
Sources
Chandler and Hanks (1993), Robinson
(1982) and Dess and Robinson (1984)
Non-Financial Business
Performance
Variable Name
Management Skills
Sources
Lerner and Almor (2002), Lerner et al.
(1997); Lerner and Haber (2001)
3) Management Skills
Management skills were measured using eight items. The modified items were adopted
from Hisrich and Brush (1984). The variable is measured using the 5 points Likert scale ranging
from 1 which signifies poor to 5 which signifies excellence. Lerner and Almor (2002) had used
the variable and indicated the alpha to be 0.74 whilst Lerner et al. (1997) indicated the reliability
of alpha to be 0.74. Lerner and Haber (2001) showed the internal consistency to be 0.70.
The following are the items for measuring management skills;-
1. Finance
2. Dealing with people
3. Marketing
4. Sales
5. Idea generation
6. Product innovation
7. Business operation
8. Planning
Respondents Profile
1) Entrepreneurs Age
The age of the entrepreneurs were categorised by using an ordinal scale; 1 = 25 or below,
2 = 26 to 30, 3 = 31 to 35, 4 = 36 to 40, 5 = 41 to 45 and 6 = above 45.
2) Gender
Gender variable was measured using a nominal scale; 0= female, 1= male.
3) Education Level
The level of education was categorised into SPM, STPM, certificate, diploma, bachelor
degree, Masters degree and Ph.D.
4) Work Experience
Work experience was measured by the following scale; 1 = 5 years and below, 2 = 5 to 10
years, 3 = 11 to 15 years, 4 = 16 to 20 and 5 = above 20 years.
Data analysis.
1. Reliability assessment
This study defines reliability as measurements for a particular test that are repeatable and
produce equivalent results even when distributed amongst different people (Nunnally, 1970). It
implies that the measurement of variables should consistently produce results that are repeatable.
Cronbachs alpha is a perfect measure of reliability.
The closer the Cronbach Alpha is to 1.0, the more reliable the items are. Sekaran (2003)
stated that reliability levels of less than 0.6 are weak, the range of 0.6 to 0.7 is acceptable and
that those above 0.8 are good. Scholars have suggested that a reliability measure of at least 0.7 is
sufficient for research (Hair et al., 2010; Sekaran, 2003).
2. correlation analysis
Correlation analysis was conducted to determine the strength of association between two
variables using the Pearson product-moment test. Piaw (2008) provides guidelines for correlation
coefficients as follows;
r= 0.91 up to 1.00 or r= -0.91 up to -1.00 very strong effect
r= 0.71 up to 0.90 or r= -0.71 up to -0.90 strong effect
r= 0.51 up to 0.70 or r= -0.51 up to -0.70 moderate effect
r= 0.31 up to 0.50 or r= -0.31 up to -0.50 weak effect
r= 0.10 up to 0.30 or r= -0.10 up to -0.30 very weak effect
r= 0.00
no correlation
Sample of questionnaire.
Management skills.
Please circle one of the following responses to indicate your management skills level based on
the criteria given:
1
Poor
1
2
3
4
5
6
7
8
2
Fair
3
Good
4
Very Good
Management Skills
Finance
(capital, forecasting and budgeting)
Dealing with people
(managing workers, development and training)
Marketing
(marketing research)
Sales
Idea generation
Product innovation
Business operation
(managing inventory, day-to-day operations)
Planning
(planning for business strategy)
5
Excellent
Scale
3 4
1
1
1
1
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
Business performance
a) Financial business performance.
Please circle one of the following responses to indicate your companys business performance
growth for the past 12 months based on the criteria given.
1
Decreasing
1
2
3
4
2
Holding
its own
Business Performance
Sales growth
Net profit growth
Market share growth
Cash flow growth
3
Increasing
slightly
4
Increasing moderately
5
Increasing
significantly
Scale
1
1
1
1
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
Please circle the answer to indicate your agreement and disagreement with each of the following
statements.
1
Strongly
Disagree
1
2
3
4
5
6
2
Disagree
3
Neutral
4
Agree
Business Performance
My firm is successful to increase employee productivity
My firm is successful in increasing the yield of products
My firm is successful in keeping the consistency of product quality
My firm is successful in cutting production time of a product
My firm has the capability to produce product variety
My firm has the capability to increase production rate quickly
5
Strongly Agree
1
1
1
1
1
1
2
2
2
2
2
2
Scale
3
3
3
3
3
3
4
4
4
4
4
4
5
5
5
5
5
5