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Sakmongkol ak 47

Wednesday 26 August 2009

ABC of Corporate Corruption

Just as I am feeling lethargic to write, I received these comments. See them after the main article. They came in response to my article on corporate corruption.

It appears, that corporate corruption is concealed by our misconception that those with advanced degrees and 1st class qualifications are naturally good in whatever they are tasked to do. That seems to be an exception rather than a rule in Malaysia. In the history of business in Malaysia, no business organisations of any repute have been created by 1st class nerds and overhyped managers. They are good at only that- making great impressions of managing businesses not their own. Since the feeling of 'ownership' isn't there, the business in hand becomes a playground to test out their limited capabilities often to disastrous results.

The degrees they have are over-hyped. The curricula of their fields of expertise may be out of touch with real-world demands, and many programs they followed have a culture that turns a blind eye to cheating. Perhaps that explains the widespread white collar crime. Corporate shenanigans are cleverly disguised behind business terms- downsizing, balance sheet rationalisation, assets rearrangement and other management hocus pocus.

What data there are suggest that businesses headed by the much touted brain boxes have not been very effective. Neither possessing advanced degrees nor superlative grades earned in courses correlate with business success. Most of our managers are moulded after the image of Al 'Chainsaw' Dunlap. Remember him? You cut costs by laying off thousands of workers, selling valuable assets. If you are there and doing because you want to make more money, rather than because you're really interested in how that particular businesses functions, you'll probably mess up everything.

There's too much emphasis on management theory and too little on developing practical skills. We pretend that any bozo with excellent academic records should be a great manager right out the gate, regardless of real-world experience. While many have worked in business, many of them have never managed people and thus lack the perspective to apply the management theory that they learn. Management is just too complex a human behavior to be effectively taught in a classroom environment. You could take a class titled Managing People at Work, where you discuss different theories on behavior, motivation, etc., and do reasonably well academically. But if you don't have some significant experience working with, above, or below other people, you will not really appreciate the full extent of the material. You pluck them out from somewhere and plonk them in some cushy positions and hope they will do the magic.

Here's another punch. Those who decide where these academic mafias go have the notion that these young bucks automatically make great managers are probably people who don't have management potential themselves. They are easily led into believing these boys and girls have the ability and talents. When these people come up with such exoteric terms like KPI or KRA, they think, that's out of the world.

What's really missing is a sense of purpose. It seems that the main motivation is the ability to achieve KPI indicators which often mean nothing in the real world. Ironically, that's just not good enough to make you a good manager.

With this kind of mindset prevalent among the uninitiated policy makers, we encounter the usual corporate collateral damages such as:-

Khazanah compensation was built on the simple premise..u pay peanuts u get monkeys.
That being the basis..They brought in 1st class honors grads from the big name universities..And begin to pay huge sums/salaries to paper pushers like pardas,khalib,wahid etc..To give meat to this mantra.

But the fact is meant to be operated hands on by business savvy ppl NOT by bureaucrats.Meanwhile,they have BLOATED pay scales to ridiculous levels amongst the UPPER mgmt echelons.

Its ridiculous that a CFO earns almost a million bucks for a basic CFO job or a PR person earns 600k per annum...
And the amount of money spent on consultants is staggering...

Someone hv to take stock and rein in the greed.If goes will destroy the good values built previously.

Go back to the era of CEOs earning 25 to 40 k per month..if the current monkeys can't accept them..get new ppl in.
And lets see where and who would want to pay the current CEO that much money for doing NOTHING..just paper pushing.

Someone needs to get cracking on this ROT cos its stinking all over

25 August 2009 13:25

Anonymous said...

Direct Nego Contracts awarded>>

Gamuda/MMC Double tracking> 12.4b
Ircon --ditto-- > 3.5 b
Penang Bridge (China n UEM)> 4.5 b
Eastern Dispersal JB (MRCB) > 1.0 b
IBS..Ibuzawa n others > 1.0 b

The above plus some other 100m nego jobs means govt awarded myb Rm 25 billion of DIRECT NEGO contracts to maybe 40 companies.

Issues>> profits of 20 to 30 % instead of 10 % on competitive biddinf so country loses at least Rm 5b
>>no spin off..could hv given 1m contracts to 25,000 contractors OR 100k contracts to 250,000 contractors INSTEAD only 40 enjoyed RM 6 to 7 Billion PROFITS all his infinite wisdom..PM expects ALL contractors to compete in open tenders.But why allow the BIG people to enjoy the spoils and ask SMALL ppl incl Bumis to struggle to make living?

Its like increase bus fares by 50% and giving discounts to TOLL users,

Its no fun being poor in this 1Malaysia..rakyat di dahulukan but at expense of small guys.

25 August 2009 14:16


Are You Gonna Go My Way,  26 August 2009 at 09:19  

How many times have we been to a meetings with some GLC top management and ...during that meeting...our mind keep saying "hey I can be a better CEO than this guy..and make this glc rich"..?

it has become have that kind of thought.

Anonymous,  26 August 2009 at 09:31  

How right you are. Somehow or rather, many top management believe that by employing a guy with an MBA, their business will shoot through the roof.

I used to work for a well established public listed company that was solidly managed by "old" managers over the past 100 years or so. These are experienced and conservative but solid managers who worked their way through the rank and file over the years. Then, the company employed a new corporate personnel manager who started to employ young well educated executives to replace the "old" men. The last straw came when he employed an MBA graduate to replace the CEO. Overnight, things were turn upside down. He started to cut out "non-performing" distributors, brought his own cronies as executives and implemented his "bright" textbook ideas. Soon the company stated to lose good performancers and distributors. The market went into a tailspin and for the first time in more than 20 years, the company lose market shares and lost money. The guy was given the boot and till today, 10 years later, the company is still unable to regain it's market shares it lost during his time as the CEO.

Anonymous,  26 August 2009 at 12:11  

Sorry, didn't mean to nitpick but it is Al Dunlap not DunlOp.

Yup, most top management of the majority of our GLCs are the type that 'mengabihkan boreh'.

If GLCs are to compete freely, how many can actually survive?

TNB? Sudah dapat gas subsidi, monopoli... lagi boleh rugi. Opps! what? Forex loss? Never learn from Renong case is it? Renong? what's that?

TM? A hghly previlaged GLC. Apa lagi mau cakap. Streamyx sucks and only TM will deny that.


PRAY,IT WORKS. joe's blog 26 August 2009 at 13:00  

So where can the poor go. The stinking SH'T keeps nauseating. Hope it affects mahathir to do something or rue his long life.

Anonymous,  26 August 2009 at 14:23  


Baru2 ini ada kes yg kelihatan kecil tapi besar makna nya bagi orang2 yg ingin melihat Islam bertapak di Malaysia dan di nusantara.

Bilamana hukum ke atas seorang Islam, kita dapat lihat campur tangan org2 bukan Islam agar perlaksanaan hukum itu tidak dijalankan.

Pertama saya gusar akan kehadiran org yg bukan ahli dalam agama (maksud saya yg bukan Islam) dalam perihal perundangan Islam dan lain2yg bersangkutan. Setelah isu, seorang bukan Islam membaca ayat quran sedangkan dia sendiri tidak berakidah kepada allah yg satu boleh di politikkan, sekarang hal2 yg tidak sangkut paut dengan politik pun org2 bukan islam ingin memberi pendapat.

Pada saya ini menunjukkan Islam di negara kita semakin tidak dihormati. Ini juga menunjukkan alamat2 tak baik kepada negara, Melayu dan seluruh penduduk di Malaysia.

Kami bukanlah seorang Islam yg ekstrim seperti setengah2 negara arab dan syiahnya. Tapi kami percaya Islam itu adil dan bertimbangrasa dan segala hukuman yang ditentukan Allah ada hikmah pengajaran nya.

Manusia akhir zaman ini, semakin ramai yg jahat2 dan degil belaka. Maka patut hukuman yg setimpal dalam Islam diperkenalkan secara sedikit demi sedikit. Tapi mestilah ada musyawarah dan rumusan terperinci di buat utk implementation.

Anonymous,  26 August 2009 at 14:52  

Speaking 'basic' to clients and '1-2-3' to staff and 'ABC' to shareholders/stakeholders are not sexy for these high flying GLCs folks.

These folks are rather impressed with jargons upon jargons and are lost in the woods whilst many opportunities passed them through.

Examples abound with Khazanah being the common shareholders of both TM and Axiata, received dividends from TM on the right hand and used the left hand to subscribe the rights issue of Axiata. A case of TM being 'squeezed' by Khazanah to subscribe the rights issue of Axiata. To add insult, Khazanah was alloted RM10b for the 9th M'sian Plan. Whatever for?

M'sia is one of the few countries GLC managements are held like war heroes but we all know most of them are run by Chief Indians of the Ignorant-Arrogant tribe which abounds.


CYC,  26 August 2009 at 15:12  

20 years ago there bloated the management of NUSAJAYA and it flopped. nothing was done except few row of shopoffice near Gelang Patah village and sold few big tract of land to SP Setia ,... etc.Whe u look at the organization chart then, there were filled up with all generals (including expats) but no soldiers. Now we have IDR, it replicate the same NUSAJAYA. Only the land size become bigger, positions and personnel exploded. Vision = illusion, real estate play again without looking at sustainable business model. Will fail again like NUSAJAYA ? Ask the industry experts who are all either laughing mysteriously or mourning in sorrow.

It sounds a bit racist but may i ask why are there no a single soul of non malay heading a GLC or public university for that matter. Are they all not qualified or some hidden hand blocking their way. If yes, then what role could them play in nation building and isn't it a biggest crime to curtail an individual's potential in a democratic society.

Anonymous,  26 August 2009 at 15:31  


I know this write-up of will be termed racist, but I’m just following what u preached – Honesty in writing!

‘We pretend that any bozo with excellent academic records should be a great manager right out the gate, regardless of real-world experience.’

No, there is NO pretention! Simply because there is limited choice within the same gene pool at the current pace of development & time is short. Any MISTAKES - be they monetary, professionally or ethically - will ONLY be considered as collateral damages that the country has to bear for helping the selected few.


2 things – to quickly create a pseudo-class ‘managers’, thus the BLOATED pay scales to ridiculous levels amongst the UPPER mgmt echelons.& to quickly built up a sense of false dominancy to overcome the chronic siege & in-built self-inferiority, irrespective of the fact that these guys r just wet at the ears even with their ‘1st’ class academic background.

And because of these facts, a side effect of relying on con-sultants, mostly foreign, to look for solutions & strategies, even when the on-hand locals can identify those problems first-hand but was ignored due to the fact that they r either of the wrong colour &/or has no know-who touch!

‘That corporate corruption is concealed by our misconception that those with advanced degrees and 1st class qualifications are naturally good in whatever they are tasked to do.’

Dato, the sickness goes deeper than that. On one hand all the well-paid top posts of the GLCs r been filled with those with ‘advanced degrees and 1st class qualifications’ with the right connections in toll. Meanwhile, all the lesser & still high paying ‘gaji-buta’ posts in the govt-related depts r been taken up by hp6 & pseudo-qualified sycophants, as the head of departments & senior VPs (the unbearable likeness of over-hyped BIG titles – such as Tan Sri Dato Seri Utama Prof Dr…..).

So what’s the outcome? Can any job be done - & not just done right but the very initial step of just mobilization?

Committee, committee, con-sultants, paper-pushing round-a-merry.

More money spent means better job done! The end result? What result? This can wait while they make hays. So any wonder such phenomenon of ‘many programs they followed have a culture that turns a blind eye to cheating.’

These r the legacy of NEP coming back to haunt u, the very people whom it’s establishment suppose to pull u out from the circle of backwardness.

Instead of advancement, the pull becomes a push – to the deeper end of the quagmire. While some lucky onlookers manage to companion the upward jerk from the downward push, Many more stayed & suffered double quick. Those academic mafias & uninitiated policy makers might get temporary reprieves at the dispense of the mass of their own kindred, but do they care? Do they remember the halims, tadjudins, mohds? They might still have the millions, hidden away somewhere, but be very sure that there will be someone watching to make sure that they don’t enjoy these ill-gotten gains!

A painful thought to be reflected upon during a holy month of Ramaddan.


ajoyly 26 August 2009 at 19:33  

Agreed with Dato's observation, it is not the degree qualification of a person which will make him a good business manager. As has been proven, atitude and experience are the deciding factors. No doubt, having acquired knowledge from colleges and other learning institutions would be a plus factor for the individual.

It is not enough to make him a successful manager. Because to be familiar with the way a business is run, its philosophy and its culture, it is best to start at the bottom of the company's ladder. The grass-roots level where the actual action accurs. The heart of the company, its labour line so to speak.

This is where things get done. The production division. Knowledge of what is happening here is important as it will give a picture of the health of its physical asset, the workers. Are they happy? Are their morale high? These would be reliable indicators of what the workers are feeling? And whether necessary action is required to rectify any problematic issues.

The individual should also repeat the same process with other sections of the company like procurement,finance, human resource, etc. and finally top management. But before sitting on the apex, he must truly be tested by giving him real assigment to determine his capability or otherwise.

This would be appropriately applied on trainee managers with good academic results yet untested in discharging company's responsibilities. More like an apprentice system. However it really help newcomers to have a hands-down experience, bottom-up view of how the establishment function in its totality.

Of course the best would be, those who were involved in creating their own companies. As this will allow them to go through a similar process as noted earlier. This will enrich their actual understanding of how they should administer their respective companies. Learning the dos and don'ts as they progress.

It is through this method that they acquired a storehouse of business wisdom which they could use with their current or future ventures.

It would appear that the creator of a business establishment would eventually become a good business manager because of the expertise obtained through this practical learning process.

kuldeep 26 August 2009 at 20:18  

If you happen to drive past the MAS Training Centre in Kelana Jaya...just note the rundown look of the place>>just a few hundred thousand ringgit makeover with a fresh coat of paint will bring back the shine to that place.

Of course the premises no longer belongs to MAS but it is still the place where their staff,cabin crew are trained.If the corporate culture wants to instil a top class mindset it must surely start during the training phase.And,if the senior mgmt themselves have no respect for the little2 aspect of simple begins to wonder whether the first world mindset is another myth.

Its not about fancy,modern,sleek premises but simple,well maintained facilities.A neat,well kept single storey link house is more respectable,more of a real home than an unkempt,badly maintained Damansara bungalow.

A serious hands on businessman keeps tight control on the simple things cos thats the roots of the cultural mindset of the organisation.

Anonymous,  26 August 2009 at 20:26 with presence in many2 countries.Advertises that their broadband is the best..the fastest,the most coverage>>reality..

They can't leverage their international presence by providing cross border services for simple stuff like prepaid top up,money transfers...and they can't even provide the lowest rates.You know who can...DIGI.
If AXIATA hv the DIGI mgmt..they can leverage their fixed line,business clients,international linkages etc into an untouchable competitive position.

Now Maybank..with BNI>>can I open a BNI account at a MayBank branch in Malaysia?Similarly,do they provide seamless money transfer (like Western Union) by the MayBank/BNI tie up.Is the BNI acquisition going to open MayBank market to 200m ppl OR will Silos be at work?

U bet.

Meridien,  26 August 2009 at 20:42  

What do you think about getting "Mat Salleh" to sit at top management? And they are being paid very very well. Are we really short of local talents?
It is fine if those foreigners shown a very significant impact at the end of their tenure. But that's not always the case.

Anonymous,  26 August 2009 at 23:05  

why must any discussion descend quickly into racist lines?believe me..the misfits at the GLCs,fourth floor are very representative of 1Malaysia.

Its not about race..its about the wrong choice of talents..its about the wrong credentials..and its about leaders not having the prerequisite hands on experience within the industry.

Good managers must go thru the mill...gain the right exposure..understand the mechanics of the industry...absorb the rhythms of the network before they can lead.There is no substitute for hands on experience..

And no amount of seminars,geek speak,mgmt brouhaha can mask the ineptitude of a rookie.

Business is about risks and rewards and the chances of taking the right bets is better if u can read the scenarios better than the next guy.Khazanah's failure is their inaction..and lemmings attitude.

Anonymous,  26 August 2009 at 23:30  

Mr Fernandez was no airline expert..but he had a vision and brought in the right team and listened to them.

Some GLC bosses are too insecure to have people in their team who knows the business better than them..cos they maybe knock off their cushy perch.

Ownership with the personal risks and rewards clarifies the mind..i guess.

Anonymous,  26 August 2009 at 23:36  


Just get rid of the idiot malays like Azman Mokhtar and Black midas and replace with the right malays, the rest of the problems will fix itself .

Anonymous,  27 August 2009 at 07:44  

Just cannot resist but to agree with you 1001 percent on your writing's on the said issue. 'ABC Of Corporate Corruption'.
Look at ALL state agencies and GLC's, not a SINGLE ONE is making money. The ones making money are due to the circumstances, example, market demand and supply are there for the company/agency to survive because it being involved in the RIGHT sector. What I mean to say is most of these companies/agencies are involved in agriculture especially PALM OIL and naturally they make money. So, they survive. These companies that make good money are sold to cronies for whatever reasons known to the state CEO ie the MB of a state. A good example I can think of is in PAHANG,a state agency company Far East Holdings, belonging to Yayasan Pahang, was sold to a private company when the new MB took over the state from the previous MB in year 1999.I guess the only reason given by a politician would be the one benefiting the political reasoning as to the takeover.Some Bumiputra companies given special privileges like KOSMA, have also recently sold their palm oil mill to the same company and Sawira formely state owned, later taken over by Teras Dara Konsortium (TDK)run by Dato JJ has also disposed 70 percent of it shares recently to this company too but they still maintain the company still belongs to JJ. Any TRUE holder of MBA,PHD etc would like to comment on this. I just can't help but laugh at the political stunt created just to hood wink the general public into believing that the companies are still in Bumi hands, as they were initially meant to be by the founders.
I have attended talks and seminars organised by state agencies and I feel I can do and talk and plan better then the existing CEO's. Look at the Ahli Lembaga Pengarah setup, it's all politically based. These guys are supposed to 'screw' the failed CEO's but how could they when they next to nothing of the ABC's Of Corporate Corruption. In fact most of them, if not all are corrupted, right from the top to the bottom. God Bless Malaysia.
So, tell me who is to bear costs to all the corruption that is happening in the state agencies other the WE the TAXPAYERS. Until today there is this state owned Yayasan Pahang's company located in PEKAN Pahang getting 'grants' from the Federal to pay salaries of the employees.All this is being tolerated at the expense of the people/taxpayers for the 'good name' of UMNO/BN.Once there was a suggestion by a private company to do a takeover of this particular company from the state but was 'shotdown' because the private company owner could not or refused to succumb to corruption that was being tied to the takeover. You know issues like jhow many percent for this and that guy.
So there it goes to the drain the companies and who suffers in the end, THE PEOPLE/WORKERS lose their livelihood.Is this culture changing. NO ? Why ? It's because the UMNO leaders have no GUTS to change and the UMNO members won't allow them to...change.
At national level, we have MAS, a national airliner making losses and putting the blames on fuel increase and blah,blah blah. The CEO sold off all of MAS's properties to show to the govt that MAS was making money but recently declared disaster. It's another GLC but what happened. Some of it's earnings are eaten up by political linked companies and some by the Top management linked cronies. They taken in the wrong people to do the job that can be done by the more experienced MAS staff at cheaper salaries compare to what is being payed to these 'special'talents brought in by certain people linked to the 'higher-up's'.

Anonymous,  27 August 2009 at 13:57  

bring back halim saad

Anonymous,  27 August 2009 at 16:09  

I couldn’t agree with you MORE! For the past couple of years we have a lot of celebrated CEOs manning the stable. Most of them have accomplish nothing. They think it a reality show where popularity by votes is the KRA!

It’s annoying. These people, supposedly representing our GLCs, have no consideration what so ever in building the business (of the nation). They think it’s their divine right to be in the position. Their main idea is to rub shoulder with the power broker and imprint their claws so that they can do what they damn please. Most of the company they head are either “defunct” (no real business), or fast reaching that state. The one that still running are plain lucky due to market forces.

Their have a fervid of hiring foreigner as key management is, always citing locals lack talent and experience, a lame excuse nonetheless. And they are boasting about it! Just look at Axiata!

kuldeep 27 August 2009 at 17:39  


U aqnd your commentators have got it ALL wrong>> all obviously ignorant and can't identify between the good and lousy..


IdrisJala who lost 3.8 billion on oil hedges (and of which another 2.6 b still at risk) have been appointed MINISTER..and will be CEO of PEMANDU i.e unit to drive the KPI..

Someone needs 2020 visioning soon.

Kuantan,  30 August 2009 at 01:16  


It is nice if you could give a little insights on Khazanah, and the consultants close to Khazanah.

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