chapter 5 ee

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POLICIES, CHALLENGES ANDISSUES IN

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After studying this chapter you should be

ready to describe:1. The Malaysias plan and the national

industrial policy.

2. Globalization and the economic blocs(AFTA AND NAFTA).

3. Patterns and intellectual property rights.

4. Issues on merging and takeovers.

5. Issues on ergonomics andentrepreneurship.

6. Issues on laws and entrepreneurship.

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Ninth Malaysia Plan RMKe-9)

Ninth Malaysia Plan's documents encompassthe strategies, programmes and requiredallocation to realise the National Mission andmake Malaysia a country that is moreadvanced, fair and united.

RMKe 9's documents also describe the

National Mission as the framework for policyand implementation which consisted of fromfive main core to achieve the objective ofVision 2020.


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The transformation of the manufacturingsector, and sustaining its competitiveness,remains a major factor in determining the

pace of economic activity in the country. For the Ninth Malaysia Plan period (2006-

2010), in meeting a more challenging andcompetitive global environment, a crucial

goal will be to upscale the manufacturingsector towards higher value added activitiesand upgrade capacity in the provision ofrelated services.

The focus will be on transforming industrialbusinesses and complementary services,especially SMEs, into strong knowledge-intensive and value-creating entities.



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The 10th Malaysia Plan (10MP) will be based on anew economic model to ensure that all effortstowards economic recovery in the country runsmoothly.

Minister in the Prime Minister's Department Tan SriNor Mohamed Yakcop said that although 10MP willtake effect only in 2011, the government has

started early planning on the five-year economicprogramme to ensure sustainable development.

Among the areas of focus under the new model willbe to create many more industries to generate

higher income for the people and help them facefuture economic challenges as well.

Among the sectors identified to drive the neweconomy were knowledge, skills and creativity

based industries including tourism.EUW 224 ENGINEERINGENTREPRENEURSHIP 5


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There are major 4 types of Industrial Policy inMalaysia, each characterized by the differentobjectives:

1. Wealth Redistribution Industrial Policy that

is aimed at ensuring a fair distribution ofwealth amongst the different races in thecountry.

2. Export Promotion Industrial Policy that isaimed at promoting the development ofmanufacturing industries serving foreignmarkets.



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3. Import Substitution Industrial Policy that

is aimed at promoting the development ofmanufacturing industries serving domesticmarkets.

4. Response to Globalization Industrial Policy

that is aimed at coping with newcompetition from large foreign firms inthe domestic (primarily services) markets.



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Globalization(or globalisation) describes an ongoing processby which regional economies, societies and cultures havebecome integrated through globe-spanning networks ofexchange.

The term is sometimes used to refer specifically to economic

globalization: the integration of national economies into theinternational economy through trade, foreign directinvestment, capital flows, migration, and the spread oftechnology.

However, globalization is usually recognized as being driven

by a combination of economic, technological, sociocultural,political and biological factors.

The term can also refer to the transnational dissemination ofideas, languages, or popular culture.


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Globalization has various aspects which affect the world inseveral different ways such as:

Industrial- emergence of worldwide production markets andbroader access to a range of foreign products for consumersand companies. Particularly movement of material and goodsbetween and within national boundaries.

Financial- emergence of worldwide financial markets and

better access to external financing for borrowers. As theseworldwide structures grew more quickly than anytransnational regulatory regime, the instability of the globalfinancial infrastructure dramatically increased, as evidencedby the financial crises of late 2008.

Economic- realization of a global common market, based onthe freedom of exchange of goods and capital. Theinterconnectedness of these markets, however meant that aneconomic collapse in any one given country could not becontained.



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Political- some use "globalization" to mean the creation of aworld government which regulates the relationships among

governments and guarantees the rights arising from socialand economic globalization. Politically, the United States hasenjoyed a position of power among the world powers, in partbecause of its strong and wealthy economy.

Informational- increase in information flows between

geographically remote locations. Arguably this is atechnological change with the advent of fibre opticcommunications, satellites, and increased availability oftelephone and internet. Language- the most popularlanguage is English.

About 35% of the world's mail, telexes, and cables are inEnglish.

Approximately 40% of the world's radio programs are inEnglish.

About 50% of all Internet traffic uses English.EUW 224 ENGINEERING

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http://en.wikipedia.org/wiki/Languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/Language


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ompetition- Survival in the new global business marketcalls for improved productivity and increased competition.

Due to the market becoming worldwide, companies in variousindustries have to upgrade their products and use technologyskillfully in order to face increased competition.

Ecological- the advent of global environmental challengesthat might be solved with international cooperation, such as

climate changes, cross-boundary water and air pollution,over-fishing of the ocean, and the spread of invasive species.Since many factories are built in developing countries withless environmental regulation, globalism and free trade mayincrease pollution. On the other hand, economic development

historically required a "dirty" industrial stage, and it is arguedthat developing countries should not, via regulation, beprohibited from increasing their standard of living.



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ultural- growth of cross-cultural contacts; advent of newcategories of consciousness and identities which embodies

cultural diffusion, the desire to increase one's standard ofliving and enjoy foreign products and ideas, adopt newtechnology and practices, and participate in a "world culture".Some bemoan the resulting consumerism and loss oflanguages. Also see Transformation of culture. Spreading of multiculturalism, and better individual access to cultural

diversity(e.g. through the export of Hollywoodand Bollywoodmovies).Some consider such "imported" culture a danger, since it may supplant thelocal culture, causing reduction in diversity or even assimilation. Othersconsider multiculturalism to promote peace and understanding betweenpeoples.

Greater international traveland tourism. WHO estimates that up to

500,000 people are on planes at any time. Greater immigration, including illegal immigration

Spread of local consumer products (e.g., food) to other countries (oftenadapted to their culture).

Worldwide sporting events such as FIFA World Cupand the OlympicGames.

http://en.wikipedia.org/wiki/Transformation_of_culturehttp://en.wikipedia.org/wiki/Multiculturalismhttp://en.wikipedia.org/wiki/Cultural_diversityhttp://en.wikipedia.org/wiki/Cultural_diversityhttp://en.wikipedia.org/wiki/Hollywoodhttp://en.wikipedia.org/wiki/Bollywoodhttp://en.wikipedia.org/wiki/Cultural_assimilationhttp://en.wikipedia.org/wiki/Travelhttp://en.wikipedia.org/wiki/Tourismhttp://en.wikipedia.org/wiki/Immigrationhttp://en.wikipedia.org/wiki/Illegal_immigrationhttp://en.wikipedia.org/wiki/FIFA_World_Cuphttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/FIFA_World_Cuphttp://en.wikipedia.org/wiki/Illegal_immigrationhttp://en.wikipedia.org/wiki/Immigrationhttp://en.wikipedia.org/wiki/Tourismhttp://en.wikipedia.org/wiki/Travelhttp://en.wikipedia.org/wiki/Cultural_assimilationhttp://en.wikipedia.org/wiki/Bollywoodhttp://en.wikipedia.org/wiki/Hollywoodhttp://en.wikipedia.org/wiki/Cultural_diversityhttp://en.wikipedia.org/wiki/Cultural_diversityhttp://en.wikipedia.org/wiki/Multiculturalismhttp://en.wikipedia.org/wiki/Transformation_of_culture


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Social- development of the system of non-governmentalorganisations as main agents of global public policy,

including humanitarian aid and developmental efforts.Technical

Development of a global telecommunications infrastructureand greater transborder data flow, using such technologiesas the Internet, communication satellites, and wireless

telephones. Increase in the number of standards applied globally; e.g.,

copyright laws, patents, and world trade agreements.

Legal Ethical

The creation of the international criminal court and

international justice movements. Crime importation and raising awareness of global crime-

fighting efforts and cooperation.

The emergence of Global administrative law.



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ASEAN Free Trade Area(AFTA) is a trade bloc agreement bythe Association of Southeast Asian Nationssupporting localmanufacturing in all ASEAN countries.

AFTA is a collective effort by ASEAN member countries toreduce/eliminate tariffs on intra-ASEAN trade. The purposewas to develop greater trade and industrial linkages amongASEAN member countries.

The AFTA agreement was signed on 28 January 1992 inSingapore. When the AFTA agreement was originally signed,ASEAN had six members, namely, Brunei, Indonesia, Malaysia,Philippines, Singaporeand Thailand. Vietnamjoined in 1995,

Laosand Myanmarin 1997 and Cambodiain 1999. AFTA nowcomprises the ten countries of ASEAN. All the four latecomerswere required to sign the AFTA agreement in order to joinASEAN, but were given longer time frames in which to meetAFTA's tariff reduction obligations.

http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Bruneihttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Philippineshttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Vietnamhttp://en.wikipedia.org/wiki/Laoshttp://en.wikipedia.org/wiki/Myanmarhttp://en.wikipedia.org/wiki/Cambodiahttp://en.wikipedia.org/wiki/Cambodiahttp://en.wikipedia.org/wiki/Myanmarhttp://en.wikipedia.org/wiki/Laoshttp://en.wikipedia.org/wiki/Vietnamhttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Philippineshttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Bruneihttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations


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The primary goals of AFTA seek to:

Increase ASEAN's competitive edge as a production base inthe world market through the elimination, within ASEAN, oftariffs and non-tariff barriers; and

Attract more foreign direct investment to ASEAN.

What is the mechanism to realise AFTA?

AFTA has been realised through the Common EffectivePreferential Tariff (CEPT) Scheme. Under the CEPT:

Import duties among member countries will be reduced tobetween 0-5% by the full implementation of AFTA in 2010

Elimination of quantitative restrictions (import permit, quota)& other non-tariff barriers (NTBs) among ASEAN MemberCountries

Progressive transfer of products into the CEPT Scheme based

on each ASEAN member's capacity and capability.EUW 224 ENGINEERINGENTREPRENEURSHIP 15


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The North American Free Trade Agreementor

NAFTAis an agreement signed by the governmentsof the United States, Canada, and Mexicocreating atrilateral trade blocin North America.

The agreement came into force on January 1, 1994.It superseded the Canada-United States Free TradeAgreementbetween the U.S. and Canada.

The goal of NAFTA was to eliminate barriers totrade and investment between the USA, Canada andMexico.

The implementation of NAFTA on January 1, 1994,brought the immediate elimination of tariffs onmore than one half of US imports from Mexico andmore than one third of US exports to Mexico.

http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Trade_blochttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Canada-United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Canada-United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Canada-United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Canada-United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Canada-United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Canada-United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Trade_blochttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/United_States


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Intellectual Property Protection

Intellectual Property: Is any product of human intellect that is intangible

but has value in the marketplace.

It is called intellectual property because it is the

product of human imagination, creativity, andinventiveness.

Importance Traditionally, businesses have thought of their

physical assets, such as land, buildings, andequipment as the most important.

Increasingly, however, a companys intellectualassets are the most important.


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Intellectual property protection inMalaysia comprises of patents,

trademarks, industrial designs,copyright, geographical indications andlayout designs of integrated circuits.

Malaysia is a member of the WorldIntellectual Property Organization(WIPO) and a signatory to the ParisConvention and Berne Convention which

govern these intellectual propertyrights.


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In addition, Malaysia is also a signatory tothe Agreement on Trade Related Aspects ofIntellectual Property Rights (TRIPS) signedunder the auspices of the World TradeOrganization (WTO).

Malaysia provides adequate protection toboth local and foreign investors. Malaysia'sintellectual property laws are inconformance with international standards

and has been reviewed by the TRIPs Councilperiodically.


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Not properly identifying

all of their

intellectual property

Not fully recognizing

the value of their

intellectual property

Not legally protectingthe intellectual property

that needs protecting

Not using their

intellectual property as

part of their overall

plan for success


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The Patents Act 1983 and the PatentsRegulations 1986 govern patent protection

in Malaysia. An applicant may file a patent application

directly if he is domicile or resident in

Malaysia. A foreign application can only be filed

through a registered patent agent inMalaysia acting on behalf of the applicant.

A patent does not give its owner the rightto make, use, or sell an invention: rather,the right granted is only to exclude othersfrom doing so.


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Similar to legislations in other countries, aninvention is patentable if it is new, involves an

inventive step and is industrially applicable. In accordance with TRIPS, the Patents Act stipulates

a protection period of 20 years from the date offiling of an application.

Under the Act, the utility innovation certificateprovides for an initial duration of ten yearsprotection from the date of filing of the applicationand renewable for further two consecutive terms offive years each subject to use.

The owner of a patent has the right to exploit thepatented invention, to assign or transmit thepatent, and to conclude a licensed contract.


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Trademark A trademark is any word, name, symbol, or device

used to identify the source or origin of products or

services and to distinguish those products or

services from others. Trademarks also provide consumers with useful

information.

For example, consumers know what to expect

when they see an Abercrombie & Fitch store.

Think how confusing it would be if any retail

store could use the name Abercrombie & Fitch.


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Name is

trademarked

Symbol is trademarked

Slogan is trademarked


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http://www.ecommerce-awards.co.uk/images/cisco.jpg


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Trade mark protection is governed by theTrade Marks Act 1976 and the Trade Marks

Regulations 1997. The Act provides protection for registered

trade marks and service marks in Malaysia.

Once registered, no person or enterprise

other than its proprietor or authorised usersmay use them. Infringement action can beinitiated against abusers.

The period of protection is ten years,renewable for a period of every ten yearsthereafter. The proprietor of the trade markor service mark has the right to deal or assign

as well as to license its use. 25EUW 224 ENGINEERING

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Copyrights A copyright is a form of intellectual property

protection that grants to the owner of a work of

authorship the legal right to determine how the

work is used and to obtain the economic benefitsfrom the work.

A work does not have to have artistic merit to be

eligible for copyright protection. As a result, things such as operating manuals and

sales brochures are eligible for copyright

protection.


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Literary works

Computer software

Pantomimes and

choreographic works

Musical compositions

Dramatic works

Pictorial, graphic, and

sculptural works


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The Copyright Act 1987 providescomprehensive protection for copyrightable

works. The Act outlines the nature of works eligible

for copyright (which includes computerprograms), the scope of protection, and the

manner in which the protection is accorded. There is no registration of copyright works.

Copyright protection in literary, musical orartistic works is for the duration of the life ofthe author and 50 years after his death. Insound recordings, broadcasts and films,copyright protection is for 50 years after the

works are first published or made. 28EUW 224 ENGINEERING

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A unique feature of the Act is the inclusionof provisions for its enforcement. Theamendment of the Copyright Act 1987,

which was enforced on 1 October 2003confers power of arrest (including arrestwithout warrant) to enforcement officers of

the Ministry of Domestic Trade andConsumer Affairs.

This special team of officers of the MDTCAis appointed to enforce the Act and is

empowered to enter premises suspected ofhaving infringing copies and to search andseize infringing copies and contrivances.


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In businessor economicsa mergeris acombination of two companiesinto one largercompany.

Classifications of mergers

Horizontal merger- Two companies that are in direct

competition and share similar product lines andmarkets. . Vertical merger- A customer and company or a supplier

and company. Think of a cone supplier merging with anice cream maker.

Market-extension merger- Two companies that sell thesame products in different markets.

Product-extension merger- Two companies sellingdifferent but related products in the same market.

Conglomeration- Two companies that have no commonbusiness areas.


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An acquisition, also known as a takeoveror abuyout, is the buying of one company (thetarget) by another.

An acquisition may be friendlyor hostile.

The companies cooperate in negotiations

The takeover target is unwilling to bebought or the target's boardhas no priorknowledge of the offer

Friendly

Hostile


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Acquisition usually refers to a purchase of asmaller firm by a larger one.

Sometimes, however, a smaller firm willacquire management control of a larger orlonger established company and keep itsname for the combined entity. This is

known as a reverse takeover.

Achieving acquisition success has proven tobe very difficult, while various studies have

showed that 50% of acquisitions wereunsuccessful.


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The word ERGONOMICS comes for two Greekwords, "ERGON" and "NOMOS". "ERGON" meanswork and "NOMOS" means natural law or rule.So, Ergonomics is "Natural Law or Rule of

Work".

Ergonomicsis the science of designing thejob, equipment, and workplace to fit the

worker. Proper ergonomic design is necessaryto prevent repetitive strain injuries, which candevelop over time and can lead to long-termdisability.


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The International Ergonomics Association

IEA) defined ergonomics (or human factors)as "the scientific discipline concerned with

the understanding of interactions amonghumans and other elements of a system,and a profession that applies theory,principles, data and methods to design inorder to optimize human well-being andoverall system performance".

Ergonomics is employed to fullfill the two

goals of health and productivity. It isrelevant in the design of such things as safefurniture and easy-to-use interfaces tomachines.


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Ergonomics can be classified into three mainareas: Physical Ergonomics, CognitiveErgonomics and Organizational Ergonomics.

Physical ergonomics

Cognitive ergonomics

Organizational

ergonomics


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Physical ergonomics: is concerned with human anatomical,anthropometric, physiological and biomechanicalcharacteristics as they relate to physical activity. (Relevanttopics include working postures, materials handling,

repetitive movements, workplace layout, safety and health.) Cognitive ergonomics: is concerned with mental processes,

such as perception, memory, reasoning, and motor response,as they affect interactions among humans and other elementsof a system. (Relevant topics include mental workload,

decision-making, skilled performance, human-computerinteraction, human reliability, work stress and training asthese may relate to human-system design.)

Organizational ergonomics: is concerned with theoptimization of socio technical systems, including their

organizational structures, policies, and processes.(Relevanttopics include communication, work design, design ofworking times, teamwork, community ergonomics,cooperative work, new work paradigms, virtual organizations,telework, and quality management.


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Entrepreneurs must learn quickly that thereare many legal issues they must face insetting up and running a new business,

establishing a nonprofit organization,bringing a product to market, or financingthe venture.

The Malaysian business laws, rules and

regulations follow closely that of UnitedKingdom and Australia.


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The principal law that governs corporateentities is the Companies Act, 1965.

All companies whether private or public mustbe registered with the Registrar ofCompanies. Once registered, they aresubjected to the Company Laws, Rules &Regulations. As for partnerships, they areregulated by the Partnership Act.

The Contract Act governs most business

transactions and contractual agreementsbetween mutual parties. It helps to settletrade disputes, disagreements and decide ondegree of damages.

http://www.finmart.com.my/Free%20Adv/Biz%20Issues/Legal%20Adv/legal_colaw.htmhttp://www.finmart.com.my/Free%20Adv/Biz%20Issues/Legal%20Adv/legal_colaw.htmhttp://www.finmart.com.my/Free%20Adv/Biz%20Issues/Legal%20Adv/legal_colaw.htmhttp://www.finmart.com.my/Free%20Adv/Biz%20Issues/Legal%20Adv/legal_colaw.htm


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Malaysia is practicing open economy. Many of ourbiz people are exporting globally and at the sametime foreign investors are investing heavily in

Malaysia. Our government has established proper Trade

Mark lawsto protect the trade marks and brandnames of companies and products,

Patent lawsto protect the designs and inventionsof entrepreneurs and stringent

Copyright lawsto protect the intellectualproperties of the creator, designer or writer.

If an individual is not able to pay its debts, thecreditor has rights to sue him for bankruptcy. Allthe procedures of making an individual bankruptis govern by the Bankruptcy Laws andRegulations.

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