AN EXAMINATION OF INTEGRATED

MARKETING COMMUNICATION IN

GOVERNMENT-LINKED COMPANIES AND

CULTURES INFLUENCE ON THE

IMPLEMENTATION AND PRACTICE

BY

NAZRI BIN MOHAMAD YASIN

Thesis submitted in fulfilment of the requirements

for the degree of

Doctor of Philosophy

December 2016

ii

ACKNOWLEDGMENT

In the name of Allah S.W.T. the Most Gracious and the Most Merciful.

Alhamdullillah, all praises to Allah S.W.T. for the strength and His blessing in

completing this thesis. In the process of the preparation of this dissertation, I

am indebted to various parties, from the conceptualization stage until the

preparation of the final report.

Special appreciation goes to my respectful supervisor Associate Professor

Tuan Haji Mohamad bin Md Yusoff for his supervision, guidance, monitoring

and constant support. His invaluable help of constructive comments and

suggestions throughout this thesis works have contributed to the success of

this research.

Not forgotten, my deepest gratitude goes to my beloved wife Rohani Mokhtar;

my beautiful children Nazrein, Nazrafiq, Nazraliff, Nazdiannie, Naznurreina,

Nazreilisyam, Nor Hazwah, and Mohamad; and my grandchildren Nufael

Rizq, Mellisya Maisoon, and Naureen Emelda, for their endless love, prayers

and encouragement and support in completing this assignment.

Sincere thanks to all my friends especially Mohd Dat, Ismail Hashim, Fadhal

Illahi Abdul Ghani, Mohd Khalil Sreedaran, Faizul Mohd Noh, Hasni Meon,

Wan Maharuddin, Nora Salena Abdul Rashid, Hazween Syarina Hassan,

Uzaimah Ahmad Nizam, Suzie Lagis, Norazian Abd Aziz, Adlene Aris, M

Shahid Laghari and others for their kindness and moral support during my

study. Thanks for the friendship and everlasting memories.

To those who indirectly contributed to this research, your kindness means a

lot to me.

Thank you very much.

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TABLE OF CONTENTS

ACKNOWLEDGMENT ................................................................................ii

TABLE OF CONTENTS ..............................................................................iii

LIST OF TABLES .......................................................................................viii

LIST OF FIGURES ......................................................................................xii

LIST O ABBREVIATIONS AND SYMBOLS ..........................................xiii

ABSTRAK ....................................................................................................xv

ABSTRACT ................................................................................................xvii

CHAPTER 1: INTRODUCTION

1.1 Introduction ......................................................................................1

1.2 Background of the study ..................................................................4

1.3 Statement of Problems .....................................................................8

1.4 Purpose of the Study ......................................................................11

1.5 Significance of the Study ...............................................................11

1.6 Nature of the Study ........................................................................13

1.7 Rationale of the Study ....................................................................14

1.8 Research Questions ........................................................................15

1.9 Researcher’s Assumptions .............................................................15

1.10 Limitations of the Study ................................................................16

1.11 Organization of the Dissertation ....................................................17

1.12 Chapter Summary ..........................................................................17

CHAPTER 2: REVIEW OF LITERATURES

2.1 Introduction ....................................................................................19

2.2 Development of Integrated Marketing Communications ..............21

2.3 Integrated Marketing Communication Concept ............................26

2.4 Definition of Integrated Marketing Communication .....................30

2.5 Evolution of Integrated Marketing Communication Framework ……………………………………………………………………34

2.6 The Four Stages of IMC Framework .............................................37

2.6.1 Stage 1: Tactical Coordination of Marketing

iv

Communications ………………………………………..38

2.6.2 Stage 2: Redefining the Scope of Marketing

Communication ................................................................39

2.6.3 Stage 3: Application of Information Technology ............40

2.6.4 Stage 4: Financial and Strategic Integration ..................41

2.7 Integrated Marketing Communication Pillars ................................42

2.7.1 First IMC Pillar: Stakeholders ..........................................43

2.7.2 Second IMC Pillar: Content .............................................45

2.7.3 Third IMC Pillar: Channel ...............................................47

2.7.4 Fourth IMC Pillar: Results ...............................................49

2.8 Linkage of IMC Pillars with the Four Stages of IMC Framework ………………………………………………………………..…..51

2.8.1 Linkage of “Content” with Stage 1 of IMC Framework .........................................................................................52

2.8.2 Linkage of “Channels” with Stage 2 of IMC Framework .........................................................................................53

2.8.3 Linkage of “Stakeholders” with Stage 3 of IMC

Framework ……………………………………………..53

2.8.4 Linkage of “Results” with Stage 4 of IMC Framework

………………………………………………….............54

2.9 Hofstede’s Cultural Dimensions Theory .......................................55

2.9.1 Power Distance ...............................................................57

2.9.2 Uncertainty Avoidance ...................................................58

2.9.3 Masculinity versus Femininity ........................................60

2.9.4 Individualism versus Collectivism ..................................61

2.9.5 Long-term Orientation ....................................................63

2.10 Cultures in Organization ................................................................65

2.11 Linkage of Culture with Integrated Marketing Communication ...70

2.12 Benefits of Integrated Marketing Communication to GLCs .........73

2.13 Challenges to the implementation and practice of IMC in GLCs ..75

2.14 Research Conceptual Framework ………………………….……79

2.14.1 The four stages of IMC framework ................................81

2.14.2 Cultural Dimension Theory ............................................83

2.14.3 Integrated Marketing Communication Pillars .................85

2.15 Definition of Key Terminology .....................................................90

2.16 Chapter Summary ..........................................................................91

v

CHAPTER 3: METHODOLOGY

3.1 Introduction ....................................................................................93

3.2 Rationale for Research Approach ..................................................94

3.3 Research Design ............................................................................94

3.4 Sampling ........................................................................................97

3.4.1 Sample Size ………………………………….………..99

3.5 Instrumentation ............................................................................100

3.6 Demographic Profile ....................................................................102

3.7 Questionnaires Items ....................................................................103

3.7.1 Operationalization of dependent variables ...................104

3.7.2 Operationalization of independent variables ................109

3.8 Interview Questions .....................................................................114

3.8.1 Questions Based on the First IMC Pillar ......................115

3.8.2 Questions Based on the Second IMC Pillar ..................117

3.8.3 Questions Based on the Third IMC Pillar .....................119

3.8.4 Questions Based on the Fourth IMC Pillar ...................121

3.9 Reliability of the Scales ...............................................................123

3.10 Pilot Study ....................................................................................124

3.11 Procedure for Data Collection .......................................................12

3.12 Administration of Questionnaires ................................................125

3.13 Interviews Process ......................................................................126

3.14 Data Analysis and Interpretations ................................................127

3.14.1 Descriptive Analysis …………………………...……128

3.14.2 Multiple Regression Analysis .......................................130

3.14.3 Qualitative Data Analysis .............................................131

3.15 Ethical Issues ...............................................................................132

3.15.1 Data Security .................................................................132

3.15.2 Risks and Benefits of Participants ................................133

3.15.3 Consent Form and Confidentiality Agreement .............133

3.16 Chapter Summary ........................................................................134

CHAPTER 4: DATA ANALYSIS AND RESULTS

4.1 Introduction ..................................................................................135

vi

4.2 The Demographic Context ...........................................................135

4.2.1 Item 1: Gender of Respondents ....................................137

4.2.2 Item 2: Position of Respondents ...................................137

4.2.3 Item 3: Title of the Chief Marketing Officer ................138

4.2.4 Item 4: Reporting Structures of the Chief Marketing Officer ………………………………………………..139

4.3 Data Analysis and Results in relation to the Four Stages of IMC

Framework ...................................................................................139

4.3.1 Perceived level of IMC practice in GLCs .....................140

4.3.2 Summary of Mean Scores based on stages ...................178

4.4 Analysis and results of level of IMC practice based on assigned weight ...........................................................................................179

4.4.1 Summary of Perceived Level of IMC Practice .............186

4.5 Data Analysis and Results based on Cultural Dimension Theory

......................................................................................................187

4.5.1 Perceived Power Distance ............................................187

4.5.2 Perceived Uncertainty Avoidance Dimension ..............188

4.5.3 Perceived Masculinity versus Femininity Dimension .......................................................................................189

4.5.4 Perceived Individualism versus Collectivism dimension. .......................................................................................190

4.5.5 Perceived Long-term Orientation Dimension. ..............191

4.5.6 Summary of Mean Scores for each of the cultural dimensions.....................................................................192

4.6 Multiple Regression Analysis ......................................................193

4.6.1 Data Analysis Procedures .............................................194

4.6.2 Predictive Variables Used .............................................198

4.6.3 Results Based on the Predictive Variables ...................206

4.7 Interview Responses Analysis .....................................................208

4.7.1 Responses related to the first IMC pillar ......................209

4.7.2 Responses related to the second IMC pillar ..................216

4.7.3 Responses related to the third IMC pillar .....................223

4.7.4 Responses related to the fourth IMC pillar ...................231

4.7.5 Summary of the relationships between pillars of IMC theory and responses …………………………...……..235

4.8 Chapter Summary ........................................................................241

vii

CHAPTER 5: DISCUSSION, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction ..................................................................................243

5.2 Study Summary ............................................................................243

5.3 Purpose of the Study ....................................................................244

5.4 Theoretical Models Discussion ....................................................245

5.4.1 The four stages of IMC framework ..............................245

5.4.2 Cultural dimensions theory ...........................................248

5.4.3 The Integrated Marketing Communication Pillars …..256

5.5 Limitations of the Study ..............................................................258

5.6 Conclusion ...................................................................................259

5.7 Implication to theories .................................................................262

5.8 Implications to GLCs policy and management / recommendation …………………………………………………………………..265

5.9 Recommendation for Further Research .......................................267

REFERENCES ............................................................................269

APPENDIX 1: List of GLCs’ Survey Sample ............................285

APPENDIX 2: Questionnaire ......................................................286

APPENDIX 3: Interviews Questions ...........................................294

APPENDIX 4: Survey Results – Descriptive Statistics ...............300

APPENDIX 5: Survey Results – Individual Questions ...............318

APPENDIX 6: Request for Permission to Conduct Research.....330

viii

LIST OF TABLES

Page

Table 2.1 Operationalizing the concepts of Stakeholders 86

Table 2.2 Operationalizing the concepts of Content 87

Table 2.3 Operationalizing the concepts of Channels 87

Table 2.4 Operationalizing the concepts of Result 89

Table 3.1 List of Participating GLCs 98

Table 3.2 List of variables and number of items based on the Four Stages of IMC Framework

101

Table 3.3 List of variables and number of items based on the Cultural Dimension

102

Table 3.4 Operationalizing the concepts of the four stages of IMC

104

Table 3.5 Operationalizing the concepts of the Cultural

Dimensions Theory

109

Table 3.6 Reliability coefficient of the research instrument 124

Table 4.1 List of respondents participated based on respective industries

136

Table 4.2 Gender of Respondents 137

Table 4.3 List of Respondents participated based on Positions 138

Table 4.4 Title of the Chief Marketing Officer 138

Table 4.5 Person noted in Q3 reports to 139

Table 4.6 Perceived ‘Tactical coordination of marketing communication’ for Airport Management

141

Table 4.7 Perceived ‘Redefining the Scope of Marketing Communication’ for Airport Management

142

Table 4.8 Perceived ‘Application of Information Technologies’ for Airport Management

143

Table 4.9 Perceived ‘Financial and Strategic Integration’ for

Airport Management

144

Table 4.10 Perceived ‘Tactical coordination of Marketing

Communication’ for Cellular Telecommunication

145

Table 4.11 Perceived ‘Redefining the Scope of Marketing Communication’ for Cellular Telecommunication

146

Table 4.12 Perceived ‘Application of Information Technologies for Cellular Telecommunication

147

Table 4.13 Perceived ‘Financial and Strategic Integration’ for 148

ix

Cellular Telecommunication

Table 4.14 Perceived ‘Tactical coordination of Marketing

Communication’ for Financial Institution

149

Table 4.15 Perceived ‘Redefining the Scope of Marketing

Communication’ for Financial Institution

150

Table 4.16 Perceived ‘Application of Information Technologies’ for Financial Institution

151

Table 4.17 Perceived ‘Financial and Strategic Integration’ for Financial Institution

152

Table 4.18 Perceived ‘Tactical coordination of Marketing Communication’ for Fixed Lines Telecommunication

154

Table 4.19 Perceived ‘Redefining the Scope of Marketing

Communication’ for Fixed Lines Telecommunication

155

Table 4.20 Perceived ‘Application of Information Technologies’

for Fixed Lines Telecommunication

156

Table 4.21 Perceived ‘Financial and Strategic Integration’ for Fixed Lines Telecommunication

157

Table 4.22 Perceived ‘Tactical coordination of Marketing Communication’ for Islamic Banking

158

Table 4.23 Perceived ‘Redefining the Scope of Marketing Communication’ for Islamic Banking

159

Table 4.24 Perceived ‘Application of Information Technologies’

for Islamic Banking

160

Table 4.25 Perceived ‘Financial and Strategic Integration’ for

Islamic Banking

161

Table 4.26 Perceived ‘Tactical coordination of Marketing Communication’ for Oil and Gas

162

Table 4.27 Perceived ‘Redefining the Scope of Marketing Communication’ for Oil and Gas

163

Table 4.28 Perceived ‘Application of Information Technologies’ for Oil and Gas

164

Table 4.29 Perceived ‘Financial and Strategic Integration’ for Oil

and Gas

165

Table 4.30 Perceived ‘Tactical coordination of Marketing

Communication’ for Power Utility

166

Table 4.31 Perceived ‘Tactical coordination of Marketing Communication’ for Power Utility

168

Table 4.32 Perceived ‘Tactical coordination of Marketing Communication’ for Power Utility

169

Table 4.33 Perceived ‘Tactical coordination of Marketing Communication’ for Power Utility

170

x

Table 4.34 Perceived ‘Tactical coordination of Marketing Communication’ for Property and Plantation

171

Table 4.35 Perceived ‘Redefining the Scope of Marketing Communication’ for Property and Plantation

172

Table 4.36 Perceived ‘Application of Information Technologies’ for Property and Plantation

173

Table 4.37 Perceived ‘Financial and Strategic Integration’ for

Property and Plantation

174

Table 4.38 Perceived ‘Tactical coordination of Marketing

Communication’ for Transportation

175

Table 4.39 Perceived ‘Redefining the Scope of Marketing Communication’ for Transportation

176

Table 4.40 Perceived ‘Application of Information Technologies’ for Transportation

177

Table 4.41 Perceived ‘Financial and Strategic Integration’ for Transportation

178

Table 4.42 Average Mean scores based on each of the stage 179

Table 4.43 Perceived level of IMC practice for Airport Management

180

Table 4.44 Perceived level of IMC practice for Cellular Telecommunication

181

Table 4.45 Perceived level of IMC practice for Financial

Institution

181

Table 4.46 Perceived level of IMC practice for Fixed Lines

Telecommunication

182

Table 4.47 Perceived level of IMC practice for Islamic Banking 183

Table 4.48 Perceived level of IMC practice for Oil and Gas 183

Table 4.49 Perceived level of IMC practice for Power Utility 184

Table 4.50 Perceived level of IMC practice for Property and

Plantation

185

Table 4.51 Perceived level of IMC practice for Transportation 185

Table 4.52 Summary of the perceived level of IMC practice for

GLCs

186

Table 4.53 Perceived “Power Distance” Dimension 188

Table 4.54 Perceived “Uncertainty Avoidance” Dimension 189

Table 4.55 Perceived “Masculinity versus Femininity” Dimension 190

Table 4.56 Perceived “Individualism versus Collectivism”

Dimension

191

Table 4.57 Perceived Long-term Orientation Dimension 192

xi

Table 4.58 Average mean scores and standard deviations for each of the cultural dimensions

192

Table 4.59 Collinearity: Pearson Correlation 194

Table 4.60 Coefficients and Multicollinearity, Tolerance and

Variance Inflation Factor (VIF)

196

Table 4.61 Model Summary 197

Table 4.62 Coefficients and Multicollinearity, Tolerance and

Variance Inflation Factor (VIF)

198

Table 4.63 Results based on the Predictive Variables 206

Table 4.64 Model Summary 207

Table 4.65 Descriptive Statistics (N = 288) 207

Table 4.66 Summary of interview responses based on

‘Stakeholders’

236

Table 4.67 Summary of interview responses based on ‘Content’ 237

Table 4.68 Summary of interview responses based on ‘Channels’ 238

Table 4.69 Summary of interview responses based on ‘Result’ 239

xii

LIST OF FIGURES

Page

Figure 2.1 Four Stage of IMC Framework (Adapted from Kitchen & Schultz (2001): 108)

38

Figure 2.2 The Four Pillars of IMC and the IMC process (Adapted from Kliatchko (2008)

43

Figure 2.3 Interplay of stages of IMC framework and Pillars of

IMC (Adapted from Kliatchko’s, 2008)

52

Figure 2.4 Cultural influence towards IMC Practice 84

Figure 4.1 Partial regression plot of Power Distance 199

Figure 4.2 Partial regression plot of Uncertainty Avoidance 200

Figure 4.3 Partial regression plot of Masculinity versus

Femininity

202

Figure 4.4 Partial regression plot of Individualism versus

Collectivism

203

Figure 4.5 Partial regression plot of Long-term Orientation 205

xiii

LIST OF ABBREVIATIONS AND SYMBOLS

AAA American Association of Advertising Agencies

APQC American Productivity Quality Centre

ASEAN Association of South East Asia Nation

CEO Chief Executive Officer

DV Dependent Variable

G20 Selection of large GLCs under GLCTP

GLC Government-Linked Companies

GLCTP Government-Linked Companies Transformation

Programme

GLIC Government-Linked Investment Companies

IMC Integrated Marketing Communication

IT Information Technology

IV Independent Variable

M Mean

MOF Ministry of Finance

N Number of respondents

NEP New Economic Policy

NGO Non-Governmental Organization

P/p Correlation coefficient of a population

PE Per earning value

POP Point-of-purchase

PR Public Relations

R/r correlation coefficient of a sample

ROC Registrar of Company

ROCI Return on Customer Investment

xiv

ROI Return on Investment

RQ Research Question

SBU Strategic Business Unit

SD Standard Deviation

SMS Short Messages System

SPSS Statistical Package for Social Science

TV Television Commercial

USA United State of America

USM Universiti Sains Malaysia

% Percentage

RM Ringgit Malaysia

xv

PEMERIKSAAN KE ATAS KOMUNIKASI PEMASARAN BERSEPADU DI SYARIKAT BERKAITAN KERAJAAN

DAN PENGARUH BUDAYA TERHADAP PELAKSANAAN DAN AMALAN

ABSTRAK

Tujuan kajian ini adalah untuk menentukan tahap amalan Komunikasi

Pemasaran Bersepadu (IMC) di syarikat berkaitan kerajaan Malaysia (GLCs),

untuk memahami pengaruh budaya di dalam pelaksanaan dan amalan IMC,

dan untuk memahami perspektif pengurusan atasan terhadap IMC di GLCs.

Kajian ini menggunakan kajian kuantitatif untuk menganalisa tahap amalan

IMC dan pengaruh budaya ke atas pelaksanaan dan amalannya. Empat

peringkat kerangkakerja IMC Schultz & Schultz dan rukun IMC Kliatchko

digunakan sebagai asas untuk penyelidikan ini. Di samping itu, teori dimensi

budaya Hofstede juga dikaji sebagai faktor-faktor yang mungkin

mempengaruhi pelaksanaan dan amalan IMC. Untuk mengembangkan lagi

hasil kajian, penyelidikan kualitatif secara temu bual telah dijalankan dengan

pihak pengurusan tertinggi GLC.

Dapatan kajian menunjukkan bahawa GLC telah dilihat sebagai telah

mengamalkan kebanyakan konsep IMC. Walau bagaimanapun, pengaruh

budaya terhadap amalan IMC tidak berapa penting kerana keputusan

menunjukkan bahawa hanya dimensi "Uncertainty Avoidance” mempunyai

pengaruh penting ke atas amalan IMC di GLCs.

xvi

Kemungkinan wujud dalam kajian kes GLCs ini yang menyarankan bahawa

pergerakan empat tingkat kerangkakerja IMC sebenarnya bermula dari Tahap

4 (financial and strategic integration) bergerak ke tahap 2 (redefining the

scope of marketing communication), terus ke tingkat 3 (application of

information technology) dan ke tahap 1 (tactical coordination of marketing

communication). Kebanyakan GLCs yang dulunya merupakan sebuah jabatan

kerajaan, masih mengamalkan sistem pengurusan seperti pemusatan kuasa dan

keputusan, formalisasi tugas dan fungsi bersilang jabatan yang juga

merupakan sifat utama tahap 4 ini. Oleh kerana GLCs telah pun berada

ditahap 4, penyelidik berpendapat bahwa tahap satu dua dan tiga dalam

kerangkakerja IMC secara langsung juga dipraktik oleh GLCs dalam sistem

komunikasi pemasaran mereka yang sedia ada. Oleh itu pergerakan ini

mungkin adalah kerangkakerja yang lebih ideal untuk kajian berkaitan GLCs.

xvii

AN EXAMINATION OF INTEGRATED MARKETING COMMUNICATION IN GOVERNMENT-LINKED

COMPANIES AND CULTURES INFLUENCE ON THE IMPLEMENTATION AND PRACTICE

ABSTRACT

The purposes of this study are to determine the level of Integrated Marketing

Communication (IMC) practice in Malaysia Government-Linked Companies

(GLCs), to understand cultural influence towards IMC implementation and

practice, and to understand top management perspectives on IMC in GLCs.

This research used quantitative survey to analyze the level of IMC practice

and the cultural influence towards its implementation and practice. The

Schultz & Schultz’s four stages of IMC framework and Kliatchko’s IMC

pillars served as the foundation for the research. In addition, Hofstede’s

cultural dimension theory was examined as possible factors that influence the

implementation and practice of IMC. To further expand upon the findings of

the survey, qualitative interview research was conducted with the top

management of GLCs.

Findings indicate that GLCs were perceived as already practicing most of the

IMC concepts. However, the cultural influence on IMC practice is not

significant as the results show that only “uncertainty avoidance” dimension

has significant influences towards IMC practice in GLCs.

xviii

Possibility exists that in GLCs’ case study, the four stages of IMC framework

may actually follow a progression of Stage 4 (financial and strategic

integration) to stage 2 (redefining the scope of marketing communication), to

stage 3 (application of information technology) and Stage 1 (tactical

coordination of marketing communication). Most of the studied GLCs that

used to be a government department still practicing government management

systems such as centralization of power and decision making, formalization of

job responsibilities and departmental cross functionality that constitutes the

main attributes of stage 4 of the IMC framework. Since the studied GLCs are

already at stage 4, other stages are also indirectly being practiced by GLCs in

their marketing communication system. Hence, researcher is of the opinion

that this progression may be more ideal framework for studies on GLCs.

1

CHAPTER 1: INTRODUCTION

1.1 Introduction

The creation and establishment of Government-Linked Companies’ (GLCs) in

the 1980s has brought many controversial issues to the government of

Malaysia. In the earlier studies, there were many arguments that GLCs, as a

large size companies, suffer from the problem in internal control and lack in

strategic direction resulting in a poorer return on capital and shareholders’

value (Azman, 2004). GLCs are also said to have higher gearing ratio, lower

productivity, inefficient procurement handling, and ineffective performance

management systems. Consequently, these GLCs’ business performance

became major concerns to the government of Malaysia. Hence, in 2004, a

programme called the GLC transformation programme (GLCTP) was initiated

by the Government. This programme is specifically written up to intensify the

commercial orientation culture among the GLCs with the focus on bringing

the GLCs to be at far with the successful locals companies and other regional

competitors.

GLCs in Malaysia are defined as companies in which the government has the

controlling stake (Malaysia, 2007). The controlling stake refers to, among

others, the Malaysia government having rights to appoint members of the

board of directors, nominate senior management staff, award of tenders and

contracts and provide policy direction for GLCs either directly or through

government-linked investment companies (GLICs). While GLCs undertake

business activities, GLICs on the other hand, act as an investment arm for the

2

government, investing in selected and strategic companies, including

investment in GLCs (quoted in Nordin & Fatimah, 2011).

The establishment of GLCs is noted to have rooted from the privatisation and

corporatizations of many government departments such as “Jabatan Telekom”,

“Lembaga Letrik Negara”, and “Jabatan Pos”. Those effected companies were

then transformed into private limited companies registered under “Registrar of

Company” (ROC), and some of them are wholly-owned by the government

(Malaysia, 2007).

Retrospectively, the creation of GLC is based on the “Privatisation Policy”

introduced in 1980s that focuses on two pronged objectives. The first objective

is to expedite the achievement of the “New Economic Policy” (NEP) in which

GLCs play their roles in encouraging participation of “Bumiputra” or the

Malay or indigenous ethnics, in business and commercial activities in order to

achieve 30 percent of the economy and business equity to be owned by

Bumiputra’s within 20 years of its implementation.

The second objective of privatisation is to reduce government’s expenses in

running those affected companies that basically provide services such as

telecommunication, electrical power, constructions of roads or highways,

medical services, and many more. Bumiputras that were capable and having

the right expertise in those related areas were appointed to lead these GLCs

(Malaysia, 2007). Initially, many of the existing GLCs such as Telekom

Malaysia Berhad and Tenaga Nasional Berhad were previously one of the

government’s departments that were already generating income or the “cash

cow” for the government. These companies and other GLCs are given special

3

preferences in government projects and contracts to ensure their survival and

success as Bumiputra entity.

Subsequently, according to Khazanah (2013), the GLCs’ successful strategies

and improved business performance have transformed them into important

institutions that drive Malaysian economy. As a result, high performing GLCs

such as Telekom Malaysia, Tenaga Nasional, Maybank, Sime Darby, became

partially listed as private companies in the Malaysian Stock Exchange.

In another literature, the study conducted by Ab Razak, et al, (2011) on GLCs’

business performance, has revealed that most of the GLCs have tendencies to

exhibit higher valuation as compared to non-GLCs. These are due to the

GLCs’ ability to earn higher returns on their investments. They also reveal that

GLCs have also been reported to have run and efficiently managed with lower

operation expenses as compared to non-GLCs. The results of the previous

studies also depicted that GLCs have outperformed non-GLCs in market based

valuation measures.

Currently, many Malaysia GLCs have also been reported as having

strengthened their financial capacities and they are on clear track to be at par

with local and international competitors. Some of them have even become

regional champions. It was also reported that the market capitalisation of the

20 large GLCs also known as the G20, have grown three point two times to

RM431.1 billion as of April 7, 2015 from RM133.8 billion a decade ago. At

the same period the total shareholders’ returns have grown by 12.6 per cent

per year. The report also mentioned that the GLCs have paid RM93 billion in

dividends and RM57 billion in taxes for the past ten years from financial year

4

2004 to financial year 2014. In view of these achievements, beyond 2014, the

GLCs are expected to enhance further their value creation through stronger

performance and business execution (Khazanah, 2015).

GLCs are contributing very significant impact to Malaysia’s economy as main

producers, service providers, employers and capital market constituents. GLCs

have also been the major contributors and main players in the local economy,

spending RM153.9 billion in domestic investments from financial year 2004

to financial year 2014. Besides that, GLCs also an excellent and popular

employers providing employment to more than 400,000 Malaysian.

Understanding of the development and changes that these GLCs are going

through is undeniably important and, therefore, warrants intensive research.

Thus, this study is focused on exploring whether IMC concept is being used as

a tool for transforming GLCs into successful organization, and top

management’s perspectives in adapting integrated marketing communication

or “IMC” in their marketing communication activities. At the same time the

study is also exploring whether local culture has any influence on the

implementation and practice of IMC in GLCs.

1.2 Background of the study

Many organizations in this new millennium are experiencing and encountering

the reality of competition in an open and borderless world economy. They are

facing the ever increased of global business challenges, technological

advances, as well as the influx of well informed and knowledge customers in

the marketplace. Organizations are therefore needed to be more efficient in

their marketing communication functions and at the same time to engage a

5

very strong effect on various target audiences in order to achieve their

business objectives. Hence, integration of marketing communication is seen as

the best approach to address those abovementioned and other business issues.

Effective marketing communications demand more centralized approaches in

which all marketing communications activities should be coordinated,

planned, and executed as one entity, and at the same time similar marketing

communications materials are applied throughout the marketing campaign.

‘Integrated Marketing Communications’ or “IMC” is noted as having direct

influence on some decision makings process and approaches with regards to

marketing communications functions of the organizations. According to Gould

(2000), IMC could be considered by organizations as one of the steps towards

an integrated approach for organizations’ marketing communication activities.

Gould (2000) further stresses that organizations can achieve greater efficiency

through centralized coordination and effective marketing communication

synergy. Meanwhile, according to Kitchen & Burgmann (2010), the current

IMC concept has been widely accepted as one of the most effective business

strategies, and is also seen as becoming increasingly important in the twenty-

first century business environment.

One of the ultimate aims of IMC is to achieve synergy in marketing

communication activities. This can be done through cooperation and

collaborations of different marketing elements (Madhavaram et al., 2005; Naik

& Raman, 2003) in order to meet the short-terms and long-terms business

objectives (Stewart, 1996). Many organizations see the potential of IMC and

recognized the importance of this concept and some of them have already

6

started implementing the IMC concept in their organizations. It has also been

widely reported that many international companies such as FedEx and Dell

have already adopted and practicing IMC programmes at respective

organizations. This proves that IMC is one of the main factors that contribute

to business success.

Porcu et al., (2012) on the other hand concurred that the management of

organizations’ resources such as human capital and financial wealth will be

better off if the IMC drivers are clearly identified. This can be materialized by

encouraging the practice of IMC in organizations, especially in decision

making, structures of the organizations and interdepartmental communications

activities. Porcu et al., (2012) further explained that, senior management will

be able to rectify organization’s weaknesses and develop or set goals to be

achieved once they have knowledge of the positive elements of IMC, and also

the negative elements that discourage implementation of IMC in the

organizations they are managing.

The need for IMC according to Kitchen, (2005) has been increasingly driven

by the diversion of budgets from mass media advertising, continued media

fragmentation, increased segmentation of consumer tastes and preferences,

improved access to consumer databases and information technology resources,

reinforced consumer loyalty via relationship marketing, and intensified focus

on a brand's image based equity. Such trends are giving impacts across a

multitude of businesses organizations including Malaysia government-linked

companies (GLCs). Percy et al., (2001) noted that, although prevailing trends

7

would suggest a timely need for IMC, there are ample evidences to suggest

that practicing true IMC is the exception rather than the rule.

The importance of culture and the role played in effecting management

behaviour has attracted interest among researchers especially when more and

more organizations are developing alliances and cross national borders.

Culture and subculture are important aspects in changes to management

behaviours since culture is a process that influences management by affecting

the quality of coordination, responsibilities, functions, and roles for attaining

goals. In today’s business environment, manager requires ability to understand

people from different cultural backgrounds at all levels throughout the

organization. Organization’s success or failure sometimes depends on

manager’s understanding on the cultural context and value systems of those

they lead. Understanding of the other’s cultures is often the essence of

successful management of an organization.

According to Schultz (1993b), corporate cultures and traditions, experiences,

and company’s background are some of the factors that are also contribute to

the challenges in implementing IMC programmes in an organization. Schultz

(1993b) explains that depending on the company’s culture, openness to

reorganization or welcoming new organizational structures will contribute to

the business efficiency and subsequently will open the path to the success of

IMC implementation in the organization.

Hence, researcher concurs that empirical studies related to IMC and cultural

influence is very relevant nowadays, considering the rapid development,

improvement and changes in marketing communications discipline (Porcu et

8

al., 2012). The effects of cultures towards integrated marketing

communication practice are also become interesting research topics. It is

therefore anticipated that in the near future, IMC concept will be highly

recognized and accepted as a dynamic and very strong discipline.

1.3 Statement of Problems

According to Garfield (2005), an abundance of media opportunities has

dramatically altered the existing marketing communication environment.

Business organizations are forced to redefine their marketing communication

strategies in order to counter the fierce competitions in the market place. It is

inevitable that such trends are starting to cause a fundamental shift in how

GLCs promote their organizations and business operations.

The contemporary business trends have directly showed that the importance of

IMC approach in the commercial sector is inevitable. In business operations,

IMC is used to influence the use of brands, products and services among

consumers. Kitchen & De Pelsmacker (2004), for example, consider IMC as

major marketing communications development of the last century and also as

a key competitive advantage of marketing. The authors also concurred that

based on the studies on advertising agency in the 1990’s, IMC has been

proven as a factor in increasing communication effects, makes creative ideas

more effective, provides consistent marketing communication and most

importantly increases customer return on investment.

As the marketing communication landscape continues to experience changes,

especially with the advance of information technology, IMC has emerged as

one of the strategies to gain business competitive advantage. In comparison,

9

rather than relying on a single device promotion, such as advertising to

achieve the desired results, IMC could offer more coordinated and strategic

approach in relation to the overall marketing communication functions and

future direction of the organization. This is in line with Dewhirst & Davis’s

(2005) findings that the IMC process achieves greater brand equity and

shareholders’ value.

On the other hand culture also influence IMC implementation and practice in

organization. A study by Rashid et al., (2004) on the influence of

organizational culture on attitudes toward organizational change in Malaysia

has revealed that there is an association between organizational culture and the

affective, cognitive, and behavioural tendency of attitudes toward

organizational change. Meanwhile, Zain et al., (2009) examines the influence

of corporate culture on organizational commitment. Results of the study show

that corporate cultures in those studies are important determinants in

motivating the employees to be committed to their organization. Meanwhile,

Gharibvand’s (2012) study on the relationship between two independent

variables, namely Malaysian organizational culture and participative

leadership, and employee job satisfaction as the dependent variable,

demonstrated that there is a significant relationship between organizational

culture and employee job satisfaction.

Culture is an important element that effect IMC’s practice, and it also shows

the critical role that culture plays for organizations in order to communicate

their offerings to their audiences. Regardless of whether the relationship of

culture to IMC is strong or weak, there is nonetheless an acknowledged impact

10

of an organization’s culture on the way it conducts business and on its

orientation to IMC.

According to Han, Kim & Srivasta, (1998) and Sin & Tse, ( 2000) culture is

the glue that holds employees together for an effective organization. There is

also evidence that culture influences an organization’s marketing decisions

(Armstrong, 1996). Organizations that have a strong market-oriented culture

focus more on value creation strategies. Conversely, organizations with a

lower market orientation are more internally focused on costs and standard

processes, and less aggressive with regards to value creation and

market/customer responsiveness (Dobni & Luffman, 2000).

A culture can be considered strong when the norms and values are widely

shared and intensely held; strong culture increases consistency in how

individuals act and view their participation (Sorensen, 2002). Strong cultures

also have a high level of commitment to the way in which they understand the

marketplace and the world (Sorensen, 2002). Employee behavior and attitudes

may act as obstacles to IMC’s practice and implementation. In particular, IMC

can be resisted when the initiatives or demands were believed by employees to

be unreasonable, subjugating or emasculating (Harris, 2002).

GLCs have experienced increasing pressure to develop their brand equity as a

result of various environmental forces, to include the advent of ranking

systems such as those of Bursa Malaysia Report. These and other competitive

factors in the business environment create a need for implementation of IMC.

Thus, with all these understandings, researcher is of the view that it would

seem to be the right time to examine IMCs practice in Malaysia GLCs and

11

how cultures influence its implementation. This study is conducted with the

aims to address and fill up some of the gaps in the previous empirical studies

on IMC and at the same time determining the level of IMC practices and also

to explore whether cultures have significant influence towards implementation

of IMC in Malaysia GLCs.

1.4 Purpose of the Study

The main purpose of this mixed method approach study is to explore the level

of IMC practice in GLCs, and also to determine whether the cultural

characteristics of GLCs have any influence on the implementation and practice

of IMC in GLCs. This is for the specific purpose of providing data which

could be used in the training of managers of GLCs and other organizations so

that they would be more effective in implementing IMC programs for their

organizations. The data would enable managers of different cultural

background to establish personal practices in keeping with the values of the

Malaysian employees and an effective relationship which results in greater

cooperation. Also, the study’s contribution to the understanding of IMC and

the values of Malaysian culture in management will definitely benefit several

relevant current and planned operational works of the businesses. An

understanding of IMC and cultural influences towards its practice will also

helps people adjust their communication style and behavior appropriately in

any business practices.

1.5 Significance of the Study

Based on several literatures, a number of business organizations in many

countries in many parts of the world have already implemented IMC strategies

12

in their efforts to maintain and enhance their competitiveness. Despite IMC

immense popularity, there is lacks of empirical study carried out on the IMC

practice in Malaysia GLCs especially with regards to the four stages of IMC

framework’s variables. The objectives of the study mentioned earlier are

specifically designed to identify and determine IMC practices in GLCs and

also to provide insights into the four stages of IMC framework, cultural

dimension theory, and the IMC pillars. This study contributes to positive

social change by heightening awareness of the impact of culture values on

IMC practice. This study will not only contribute to understanding and

appreciation of cultural differences, broaden and deepen worldviews that

stimulate our thinking and creativity in management functions, roles and skills

but also contribute to the broader literature on IMC, organizational culture,

and IMC theory creation. Subsequently, findings from the study and new

perspectives of IMC practices will be a small contribution to the existing body

of knowledge.

Research design and methodology applied in this study is based on the four

stages of IMC framework, the IMC pillars and, the Cultural Dimension

Theory. However, some modifications have been made by researcher in order

to suit the local customs and requirements. Future researchers may apply and

treat the research design and methodology used in this study as guidelines in

conducting study in a similar or related field in the future.

Finally, the findings in this study will be a great help especially for the

management of GLCs and practitioners to better utilize marketing

communications tools in any of their marketing programmes. Empirical

13

results of the present study will also allow researchers and management to

understand the overall concept and functions of IMC and utilise them more

effectively. Thus, this study responds, in part, to the need for more research on

IMC’s implementation and practice at domestic level.

1.6 Nature of the Study

This study was conducted on GLCs’ population in the Klang Valley, Malaysia

as the informants for an estimated period of three months. Respondents of the

study comprised of the GLCs’ senior managements, executives, and staffs

representing a purposive sampling from the population. Researcher employs

both qualitative and quantitative methods in this study. This method is chosen

due to its capability in yielding valid data descriptively and scientifically in the

context of IMC. Creswell (2003) suggested that, this method requires purpose

statement to be conveyed both in quantitative and qualitative format.

Furthermore, Creswell (2003) also stresses that by using both quantitative and

qualitative methods in the study, researcher will be able to understand the

complexity of a research problems more thoroughly as compared to the single

method.

Meanwhile, Brewer & Hunter, (1989) and Tashakkori & Teddlie, (1998)

explain that researcher may enrich their findings when the study includes both

quantitative and qualitative data, while in most cases a one form of data does

not allow. They also believed, researchers will be able to simultaneously

generalize results and gain a deeper understanding of the phenomenon when

both forms of data are used.

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Respondents’ perceptions level is based on the four stages of IMC framework

and the cultural dimensions attributes are assessed by quantitative methods in

the form of questionnaires. Quantitative methods yield data in numerical

forms, which were then analyzed by using the Statistical Package for the

Social Sciences (SPSS) software. In contrast, the qualitative methods applied

in this study are in the form of interviews in which semi-structured open-

ended questionnaires were used for gathering information on senior

management’s views and perspectives on implementation of IMCs practices in

GLCs.

1.7 Rationale of the Study

The main aim of the study is to determine the level of IMC practices as

perceived by managements, executives, and staffs of GLCs. The study also

seeks to determine relationships between cultural dimensions and IMC

practice in GLCs. Human participants are used due to the needs to identify and

determine respondents’ perception of IMC practices and also to assess the

influence of cultural dimensions in those practices. Researcher believes that

the study on IMC practices and culture dimensions’ influence will broaden our

understanding and worldviews on IMC’s functions, roles and practitioners

skills apart from contributing to broader literatures on IMC.

Besides, it is also anticipated that findings from the study will add to another

valuable knowledge on the dynamic of IMC practices that consequently could

also yield a better understanding of how IMC practice might be influenced by

cultural values. Finally, findings from the study will also be able to provide an

in-depth understanding on the IMC’s development and evolution apart from

15

management’s practices of IMC in GLCs. On another point, this research may

also be an important foundation for future research related to the

interrelationships between IMC implementation and cultural dimensions.

1.8 Research Questions (RQ)

This study is an attempt to answer the following research questions;

RQ 1: What is the level of IMC practices in GLCs in relations to the

four stages of IMC framework?

RQ 2: Does Hofstede’s cultural dimensions has any influence toward

IMC practices in GLCs?

RQ 3: What are top managements’ perspectives and initiatives on the implementation and practice of IMC in GLCs?

1.9 Researcher’s Assumptions

The aims of this study are firstly, to determine the level of IMC practices in

GLCs. Secondly, to determine relationships between cultural dimensions and

IMC practice in GLCs, and thirdly to examine top managements’ perspectives

and initiatives on implementation and practices of IMC in GLCs. While there

are many highly complex questions and issues that are related to more

philosophical discussions of IMC practice and cultural influences, it is not the

goal of this research to solve all those questions and issues. Hence, the

following assumptions were made in this study:

1. The respondents are able to accurately and honestly assess and provided

their subjective level of communications, culture values, and managerial

styles.

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2. The respondents understand the questions and the scales that are used in

the survey.

3. The respondents express different perceptions of IMC attributes and

practices due to the different management and educational background.

4. Cultural backgrounds are very much influence the perception of the

respondents toward IMC concept.

1.10 Limitations of the Study

It should be noted that this study is specifically limited in scope to

participating GLCs in the Klang Valley, Malaysia. It is a case study bounded

by the time of the surveys and interviews, the location in Kuala Lumpur, and

the particular GLCs and their managers. Hence, this study cannot be thought

to represent the experience of other GLCs in Malaysia.

The assessments are generalizable to the theoretical constructs of the ‘Four

Stages of IMC Framework’, the ‘Cultural Dimensions Theory,’ and the ‘IMC

Pillars’. Therefore, the findings may not be generalizable to broader

populations or other cultures. The reliability of the study is, therefore, limited

to the population at the time of the surveys and interviews.

Given the fact that this is a very large subject and there is a great amount of

literatures and theories about IMC and cultural characterization, there have to

be restrictions on information being used. In addition, in this study only self-

reported responses will be measured. Therefore, the possibility remains that

the research methods of this study fail to fully capture all the IMC practices

17

and the cultural influences shaping GLCs managements’ characteristics and

initiatives toward IMC.

1.11 Organization of the Dissertation

The dissertation is divided into five chapters. Chapter 1 presents an

introduction to the study and explain why understanding the level of IMC

practice in GLCs and relationship between culture and IMC practice is

important. Chapter 2 presents the pertinent literatures and provides the

theoretical context and framework for the study. Chapter 3 presents the mixed

method research design used in the study and describes the methods of data

collection and analysis. Chapter 4 presents the qualitative and quantitative

results and the analysis of the findings. Finally, Chapter 5 summarizes the

findings as well as states conclusions stemming from the results and makes

suggestions and recommendations for future research.

1.12 Chapter Summary

GLCs have been reported as contributing very important roles in improving

the country’s economy and increasing equity of “Bumiputra”. Since GLCs are

parts of “government’s agencies,” obviously the chairmen and chief executive

officers of GLCs were selected and appointed by the government, therefore,

all business activities and decisions making are executed upon ministry’s

approval and directives. Government will ensures those GLCs are profitable,

and any losses will be absorbed or bail out by the government. As such, this

study attempts to reveal how much marketing communications activities are

being carried out in those GLCs and does cultures have any influence on the

practice and implementation of IMC in GLCs. The four stages of IMC

18

framework, Cultural Dimensions theory, and IMC Pillars are used as

guidelines in measuring the level of IMC practices among GLCs and cultural

impacts on IMC practice in GLCs. Many studies have been conducted

especially on GLCs business performance; however, there is lacks of

empirical research on IMC and their relationship with local cultures. Hence,

this study is very important to fill up some of the mentioned gaps in relation to

IMC practices in Malaysia. Researcher believes that findings of this study will

broaden and enhance understanding on IMC's functions and roles in current

business practices.

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CHAPTER 2: REVIEW OF LITERATURES

2.1 Introduction

The beginning of integrated marketing communication (IMC) emerged as

early as 1980s when the concept of marketing communication was first

introduced in collegiate textbooks. It is also noted that the emergence of

marketing communication channels magnitude was outlined by Coulson-

Thomas in 1983. He was one of the earlier researchers to do so. His works had

successfully revealed that there are interdependent among different

communication elements. However, at that particular time the concept of

integration has not been widely accepted as one of the factors for effective

marketing communications campaigns.

Subsequently, it was recorded that in 1991 the faculty of the Medill School of

Journalism at North Western University organized a successful seminal

research in IMC, and the IMC concept had attracted greater attention from the

public (Schultz & Kitchen, 1997). According to Wightman (1999), when the

concept of IMC was firstly introduced, public relations and advertising

agencies were quick in adopting the idea since IMC practices have the ability

to serve them in validating their values to corporate America. Coincidently,

due to the already established marketing communication practice, in which

each specific target audience requires different strategy, the theory of IMC

became grounded. Duncan & Everett (1993) explain that this strategy was then

used by different communication channels as the basis for each of the

communications functions such as public relations, promotions, and

advertising.

20

According to Dyer (1982) and Coulson-Thomas (1983), the theory and

practice of business communication have been widely discussed by

academicians and practitioners for the past few decades. However they have

failed to consider the idea of integration of marketing communication as a

realistic approach for company towards achieving competitive advantage. In

the early 1980s however, it was recorded the beginning of academic interest in

integration concept. This can be seen when a number of articles on related

subject were written in academic literatures. IMC concept was later incepted

in 1990 and subsequently it became very popular issue in the field of

marketing communications (Miller & Rose, 1994; Kitchen & Schultz, 1997,

1998, 1999; Caywood & Ewing, 1991).

At present many companies recognize the importance of effective marketing

for the organizations. The reason could be due to the effect of budget

allocation for mass media and traditional marketing that has clearly

encouraged the practice of IMC. According to Eagle & Kitchen, (2000);

Kitchen (2003), three quarter of the total marketing budgets were previously

went to advertising, however at present scenario most companies are said to

have allocated half of their budget for trade promotions, twenty-five percent

(25%) or a quarter of the expenses for consumer promotions and less than

twenty-five percent (25%) for advertising purposes. On the other hand, the

media landscape has also dramatically changed with the advent of information

technology. Advanced technologies have also directly contributed to the

broader market deregulation and increased segmentation of consumer tastes

and preferences that consequently altered individual patterns of consumption.