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  • MBA Managerial Economics Discussion Forum

  • Asia Metropolitan University

    October 22, 2021 at 11:37 am

    Students, you are required to use this forum to discuss the programme. Feel free to raise your questions, thoughts and comment on your classmate posts

  • Siti Nur Zahara

    November 3, 2021 at 11:55 am

    Dear students,

    As we move into new topics this week, I would like you to read the article here https://theconversation.com/microeconomics-explains-why-people-can-never-have-enough-of-what-they-want-and-how-that-influences-policies-166129

    Discuss your opinion on government intervention and how understanding consumer behaviors shape your business strategies?

    • Leonard Robinson Chin

      November 4, 2021 at 3:45 pm

      Government intervention would refer to government policies that are imposed on organizations that organizations would need comply with. One example of such government policy is the No Plastic Bag Initiative which is introduced by the government of Malaysia not too long ago.
      Looking at the consumer of Malaysia behavior prior to the implementation of the No Plastic Bag policy we can draw the conclusion that Malaysian really love their plastic bags by looking at the scenes of trolleys full of plastic bags being pushed to the cars after an hour of grocery shopping. However, when the No Plastic Bag policy was imposed there is a charge for the plastic bag of 20 cents and in some states no plastic bags at all. (the policy is governed by local state legislature).

      Understanding the consumer behavior when the policy was first implemented the supermarket began selling their recyclable / reusable bags placed at the check out aisle. This bag go for a couple of ringgit to tens of ringgits for fancy branded ones. In the initial months of the implementation of the No Plastic Bag policy, supermarkets made a killing selling such reusable bags as it was evident many consumers are not bringing back the reusable bags and needing to purchase new bags each time they shop.

      But over time, this practice of being your own reusable bag was slowly catching on and the sale of reusable bags would fall. Understanding this behavior change, supermarket then focus on other ways instead of just selling the reusable bag. They introduce reward system like points to their loyalty program (i.e. Tesco – Green Points, Village Grocer – Bites Points) on the number of reusable bags you use. The more bags you bring the more points you get. It is my opinion here this is done in a way to encourage more purchases to fill up the many reusable bags that is brought to the store.
      Understanding the consumer behavior in response to the No Plastic Bag policy in my opinion would provide opportunities for the supermarket to gain extra revenue streams and provide a continual revenue stream in conjunction with their existing market strategies.

      • Siti Nur Zahara

        November 8, 2021 at 3:30 pm

        This is a good one Leonard!

        Understanding business strategies to earn profit from government policies and seeing the pattern of behaviour changes.

        Do you think there is any role of business to ensure we can move to a successfully ‘zero plastic use’ country in the near future?

        • Leonard Robinson Chin

          November 8, 2021 at 8:43 pm

          Yes the business definitely have a critical role in the success of the No Plastic Bag policy in Malaysia. The business will act as the gatekeeper for the policy and the business is the one that is interacting with the consumer. However in Malaysia there is a particular behavior that if the authorities are not looking out, nobody will follow the rules. The business would need to be responsible to ensure that this policy is strictly enforce and at the same time create the awareness to the public with regards to the importance of reducing plastic bags and it’s impact on the environment. The business would need to do this regardless if the authorities is looking out or not.

      • Ida Farisha Binti Meor Alim Shah Shah

        November 20, 2021 at 4:26 am

        Definitely a good insight Leonard. My takeaway from your input is sometimes government policies can encourage innovations. If we keep an eye on any upcoming government policies and shift in consumer behaviours, probably we too can capitalize on that (eg the mask mandate)

    • Pavala Malar Nadan A/L Mariappan .

      November 4, 2021 at 10:11 pm

      A consumer is the individual or business who purchases the products or services for his/her/their own consumption and not for manufacturing or resale. They are the end-users of the produced goods/services.

      Consumer behavior is the study of knowing how the individual or business choose, purchase, utilize and dispose goods/services to satisfy their needs and desire. It refers to the actions of the consumers in the marketplace and the causal motives for the behavior.

      After reading the article, I can summarize that understanding consumer behavior is all about satisfying needs and desire of the consumer. The consumer always attempt to maximize their utility. It is a fundamental marketing concept that need to be understood by business owner to succeed. By understanding how consumers think, feels, and decide, we will be able to plan our business strategies and stay ahead of our competitors by consistently providing better value to consumers.

      In terms of government intervention, we could strategies our business plans to take advantage of the situation by anticipating consumers demands on goods/services.

      For instance, recently Malaysian government launched an incentive program to encourage consumers to purchase energy savings electrical appliances. Ref 1: “The Sustainability Achieved Via Energy Efficiency (SAVE) 2.0 is a program which grants a RM200 e-Rebate to domestic households that purchase energy efficient air-conditioning units or refrigerators with 4 star or 5 star energy efficiency labels from the Energy Commission (ST) in 2021.”

      With the government providing financial incentives, consumers are encouraged to decide and purchase these electrical appliances and as a business owner, we can take advantage by investing in this field or produce more energy saving air conditioning units or refrigerator as the demand for these appliances will increase. Ref 2: “About 150,000 households are expected to benefit from the government’s latest scheme to spur efficient use of electricity.”

      In other instance, Malaysian governments also intervene in markets to promote general economic fairness among people by providing tax relief on electronic gadgets such as personal computers, smartphone, and tablet. Besides that, government also encouraging people to opt for healthy lifestyle by providing tax relief on purchases of sports equipment, magazines, journals and printed newspapers. [Ref 3] “Tax Relief for Resident Individual.”

      As a business owner, to gain competitive advantage, we need to be agile and focus to supply goods/services to cater the consumers demands that rises from these government incentives.

      Ref 1: http://www.seda.gov.my/saveprogram/

      Ref 2: https://www.thestar.com.my/news/nation/2021/01/08/150000-households-to-benefit-from-save-20

      Ref 3: https://www.hasil.gov.my/bt_goindex.php?bt_kump=5&bt_skum=1&bt_posi=3&bt_unit=1&bt_sequ=1

      • Siti Nur Zahara

        November 8, 2021 at 3:34 pm

        Hi Pavala Malar,

        Do you think the energy-saving electrical appliances program is a success? Did Malaysia create awareness among the consumer on that program?

        • Pavala Malar Nadan A/L Mariappan .

          November 8, 2021 at 5:49 pm

          Hi Miss Zahra, main objectives of SAVE 2.0 Program are as follows:

          1. To increase the total number of 4 and 5 star energy efficient electrical appliances in the market.

          2. To increase public awareness to encourage them to purchase energy efficient appliances that will save consumers’ electricity consumption.

          3. Implementation of this program will be for 1 year (January 2021 till December 2021)

          Popular e-commerce platform in Malaysia such as Lazada and Shopee supports this program and promote it among its customers.

          Ref 1: https://www.lazada.com.my/program-save

          Ref 2: https://shopee.com.my/m/program-save

          Possible reason for this SAVE 2.0 program might not be popular among Malaysian consumers because the program currently limited to locally-made refrigerators and air conditioners that have a four or five-star energy rating. So only those consumers who are looking to purchase refrigerator and air conditioner will be interested and eligible to enroll in this program.

          Based on the article in NST dated 19th April 2021, some 40,000 households have benefitted from this program, so we can conclude this program is a successful attempt by Government to encourage consumer to purchase energy savings appliances.

          Ref 3: ” So far, some RM8 million, out of the RM30 million allocation under the Save 2.0 programme, has been spent, benefitting some 40,000 households.

          In my opinion, SAVE 2.0 energy saving electrical appliance program will be popular among Malaysian consumer if more appliances such as electrical oven, microwave oven, television, washing machine etc are included. Besides that, government should consider extending the duration of this program because 1 year duration is very short for consumer to support this program.

          Ref 3: https://www.nst.com.my/news/nation/2021/04/683642/seda-proposes-more-electrical-appliances-included-save-20-rm200-rebate

          • Siti Nur Zahara

            November 12, 2021 at 3:11 pm

            Thank you so much for the well-researched respond Pavala Malar

    • Qairul Muzzammil Kamaruzaman

      November 4, 2021 at 10:52 pm

      Government may exercise its fiscal measures to stimulate or regulate market at large (Macroeconomics) as well as on household level (Microeconomics).

      On macro level, goverment may set up initiatives for companies to take part in special schemes in order to boost market fluidity and regenerate domestic consumptions. Another examples is goverment creating initiative for foreign investors to open a business or plant in Malaysia, as what we’ve seen in 1980s. Since Covid-19 Pandemic hitting the world in a sudden since early 2020, global economic including domestic has been hit badly. Business activities have to be temporarily halted by Movement Control Orders; which was gazetted by government as one of the strategy to reduce the spreading of the virus thru social activities. Although large companies were hit by these MCOs, the Small and Medium Enterpreneurs as well as daily earners have been impacted the biggest.

      As a measure to rejuvenate domestic business, during Special Budget for Covid-19 tabled by then Government, an initiative was set to give tax exemptions up to RM 1000 to tax payers to go for domestic holidays. Furthemore, government has given tax payers as well as companies for tax exemptions on laptops, in order to help companies to be able to operate remotely from home during MCOs.

      Companies should proactively participate in government led market intervention, to be abreast of consumer behaviour. In simple terms consumer and households will always reacted according to market movement, and a good company should be able to anticipate these situation.

      If we look back at the situation during pandemic, during MCO being implimented, physical shopping activities have halted, and most of the shop that continue operate business as usual were essential business such as grocery shops, hardware shops, restaurants catering take away shops, courier provider and others. The remaining business have to think on how to continue making revenue while not be able to operate as normal.

      During these situation I have personally experienced seeing a personal quran recital teacher utilizing online platform to conduct classes, same method was taken by small artists, using online platform to reach to bigger audience, while normal business approach was not possible to be done.

      Another examples of business that understands consumer behaviours can be seen from emergence of online influencers, where these influencers are being hired by certain company to review or place their products in their online postings, since these influencers have many followers. These situation, on the otherhand create demands of influencers for companies to collaborate with. Although not all influencers are able to get bigger cake from revenues, better market reach is a good reason for companies to use this method.

      The recent increase in popularity of Choco Jar also can be seen as one of the examples of understanding of consumer behaviour. When Choco Jar became viral and popular through online platforms, company after company started to tap in the demand by consumer by creating a similar products. Then they created sales and marketing structure by hiring agents and dropshippers.

      • Siti Nur Zahara

        November 8, 2021 at 3:39 pm

        Is there any business that will lose the battle as more businesses move to a digital platform in your opinion? Any ideas on how they can stay afloat?

    • Jessy Ng

      November 4, 2021 at 11:05 pm

      Government intervention is when government intervenes in the market and takes action to help improve economic efficiency. This is very relatable especially when covid-19 pandemic hits the country and brought along health, socioeconomic and financial crisis. Started with the first MCO, where Malaysian economy has been adversely affected, leading to the devaluation of the Malaysian Ringgit and decline in the country’s GDP.

      This pandemic situation has brought intensifying negative impacts on jobs, incomes and livelihoods, and disrupting supply chains, causing hardships especially among the most vulnerable. Therefore it prompted the government to come out with interventions to sustain the people’s welfare and to support the businesses, and stimulate the economy (E.g. PRIHATIN stimulus package, PENJANA National Economic Recovery Plan). These economic initiatives were helpful for consumer spending, in order to keep the country’s economy moving.

      Businesses need to plan for customer strategy in order to sustain, survive, and recover from the pandemic. Not being able to keep up with the consumer behavioral change will risk businesses being left behind, and eventually kicked out of the game. One obvious point to note is that with higher percentage of people remote working, e-commerce trend have been accelerated, so businesses need to quickly strategize towards digital transformation. Local business starting to sell products online; large companies starting to use data and technology for dynamic optimization. We can already see virtual selling platforms that showcase both products and services; we even have makeup product companies using augmented reality to sell lipsticks.
      With that change, unlike before the pandemic, now consumers want to always be connected and hold options in reduced spending. Businesses need most importantly to earn customers’ trust by building rapport and providing consistent level of service. Businesses need to strategize and identify the priorities of the customers in order to maintain customer engagement while attracting new customers.

      • Siti Nur Zahara

        November 8, 2021 at 3:43 pm

        What are the challenges, Jessy? To transform to a digital platform and online business. What do you think are difficult to transform business in this era of the online world.

        • Jessy Ng

          November 21, 2021 at 10:42 pm

          Yes there are definitely challenges on the road to digital transformation. For example on small business owners, although having e-commerce platforms such as Shopee and Lazada are extremely convenient, but everyone started using it, the platforms eventually became a competitive space for them, where everyone face tough competitions among themselves.

          As for SMEs, the hurdle for digital transformation would exist if they lack IT skills and budget. SMEs would less likely use those ready-made platforms available for them, and they may have to create their own online platform such as website or social media marketing page. Creation and maintenance of these marketing tools would require certain amount of IT skills and budget, depending on how sophisticated the business owners wants it to be for them.

          However I feel regardless of the challenges businesses have to face in moving over to digital platform, the effort would definitely be worthwhile, especially when you look at the long term sustainability of the business.

    • [email protected]

      November 5, 2021 at 10:08 pm

      Company will lose if they fail to analyze consumer behavior. Understanding consumer behavior will help the organization to convert more customers. An organization should design best product and service based on the current needs and demands of the consumers at affordable price. Thus help in shaping the company’s business strategy. For Example, marketing using consumer behavior insight is how Apple succeeds. Once a consumer purchases a product or downloads iTunes Apple has access to data the company leverages. Apple uses this information to gain significant insight into the consumer and what drives purchase behavior.

      Sometimes there are situations where market does not work well. When one person’s behavior imposes cost on somebody else so it’s a type of market failure. In this case government can intervene to improve the market and the outcome. For example, to tax cigarettes and use this money to finance rural development.


      • Siti Nur Zahara

        November 12, 2021 at 3:15 pm

        Hi Pavithra!

        Any idea on the government intervention and business response?

        • [email protected]

          November 21, 2021 at 12:13 am

          Microsoft was considered a monopoly in 1990 by the government. This can be negative for consumers since it allows companies to charge prices that shoppers must pay or go without. After the European Union threatened to penalise the company in 2003 for its monopolistic practises, the company agreed to change its ways. As a result, Microsoft was fined billions of dollars for not permitting competition amongst rival applications.

    • [email protected]

      November 7, 2021 at 10:10 am

      Government intervention into economics can be in forms of regulations, taxes, subsidies, to monetary and fiscal policy that leads to many advantages to consumers or people. Few of the example advance will be improvement of people income and wealth, regulating fair competition among companies , sustainability of environment and many more[1]. The most recent Malaysia government intervention is implementing full tax exemptions for zero-emission cars[2]. This explains government takes serious on the sustainability of environmental that on same time change consumer behaviour to shift interest to EV vehicles. This is because the tax incentives helps reduce the vehicle price to more affordable.

      Car manufacturers should take this government incentive as opportunity to improve production of EV vehicles that can boost the company revenue. According to UMW Toyota Motor Sdn Bhd, EV cars sold about 32 cars in 2019 which seen some improvement compare with 2018 with only 2 cars sold in total year but number is still a far cry from the volume in advanced markets[3]. The reason due to the EV vehicle prices that way too high and may categories EV cars as luxury cars. Also since government give tax rebate for charging station, car manufacturer can start producing the charging station devices to consumer that can contribute to their revenue[4].

      [1] https://penpoin.com/government-intervention/
      [2] https://www.freemalaysiatoday.com/category/opinion/2021/11/01/electric-vehicles-get-a-tax-free-boost/
      [3] https://themalaysianreserve.com/2020/02/19/ev-market-slows-on-low-awareness-limited-charging-stations/
      [4] https://www.wapcar.my/news/budget-2022-zero-tax-for-bevs-zero-road-tax-too-with-rm-25k-income-tax-rebates-35812

    • Darmathan Francis Xavier

      November 7, 2021 at 4:55 pm

      a) Discuss your opinion on government intervention?<div><div>

      Governments intervene in markets to address inefficiency. In an optimally efficient market, resources are perfectly allocated to those that need them in the amounts they need. In inefficient markets that is not the case; some may have too much of a resource while others do not have enough. Inefficiency can take many different forms. The government tries to combat these inequities through regulation, taxation, and subsidies. Most governments have any combination of four different objectives when they intervene in the market.

      i) Maximizing Social Welfare

      In an unregulated inefficient market, cartels and other types of organizations can wield monopolistic power, raising entry costs and limiting the development of infrastructure. Without regulation, businesses can produce negative externalities without consequence. This all leads to diminished resources, stifled innovation, and minimized trade and its corresponding benefits. Government intervention through regulation can directly address these issues.

      Another example of intervention to promote social welfare involves public goods. Certain depletable goods, like public parks, aren’t owned by an individual. This means that no price is assigned to the use of that good and everyone can use it. As a result, it is very easy for these assets to be depleted. Governments intervene to ensure those resources are not depleted.

      ii) Macro-Economic Factors

      Governments also intervene to minimize the damage caused by naturally occurring economic events. Recessions and inflation are part of the natural business cycle but can have a devastating effect on citizens. In these cases, governments intervene through subsidies and manipulation of the money supply to minimize the harsh impact of economic forces on its constituents.

      iii) Socio-Economic Factors

      Governments may also intervene in markets to promote general economic fairness. Government often try, through taxation and welfare programs, to reallocate financial resources from the wealthy to those that are most in need. Other examples of market intervention for socio-economic reasons include employment laws to protect certain segments of the population and the regulation of the manufacture of certain products to ensure the health and well-being of consumers.

      iv) Other Objectives

      Governments can sometimes intervene in markets to promote other goals, such as national unity and advancement. Most people agree that governments should provide a military for the protection of its citizens, and this can be seen as a type of intervention. Growing a large and impressive military not only increases a country’s security, but may also be a source of pride. Intervening in a way that promotes national unity and pride can be an extremely valuable goal for government officials.


      b) How understanding consumer behaviors shape your business strategies?

      i)Reinforce positive new beliefs

      According to behavioral science, the set of beliefs that a consumer holds about the world is a key influencer of consumer behavior. Beliefs are psychological—so deeply rooted that they prevent consumers from logically evaluating alternatives and thus perpetuate existing habits and routines. Companies that attempt to motivate behavioral change by ignoring or challenging consumers’ beliefs are fighting an uphill battle.

      ii) Shape emerging habits with new products.

      Companies can nudge consumers toward new habits through product innovation. For instance, the COVID-19 crisis has spurred consumers to become more health oriented and increase their intake of vitamins and minerals. Unilever reported a sales spike in beverages that contain zinc and vitamin C, such as Lipton Immune Support tea. The company is therefore rolling out such products globally. It’s also aligning its innovation priorities with consumers’ emerging health-and-wellness concerns.

      Similarly, packaged-food companies can encourage the habit of cooking at home. Spice manufacturer McCormick’s sales in China have sustained double-digit increases compared with 2019, even as the Chinese economy has reopened and people go back to their workplaces. The same pattern could play out in other countries. Kraft Heinz’s innovation agenda for its international markets now prioritizes products that make home cooking pleasurable, fast, and easy products such as sauces, dressings, and side dishes. These will be targeted at “light” and “medium” users of Kraft Heinz products.

      iii) Sustain new habits, using contextual cues

      Habits can form when a consumer begins to associate a certain behavior with a particular context; eventually, that behavior can become automatic. To help turn behaviors into habits, companies should identify the contextual cues that drive the behaviors. A contextual cue can be a particular task, time of day, or object placement. For example, more consumers are keeping hand sanitizer and disinfecting wipes near entryways for easy access and as a reminder to keep hands and surfaces clean. Product packaging and marketing that reinforces the put-it-by-the-door behavior can help consumers sustain the habit.

      iv) Align messages to consumer mindsets

      People across the country have felt an intensified mix of anxiety, anger, and fear because of recent events, making marketing a tricky terrain to navigate. The heightened emotions and increased polarization of the past few months could drive lasting changes in consumers’ behavior and shape their long-term preferences. Companies should therefore ensure that all their brand communications are attuned to consumer sentiment. The quality of a company’s communication
      and its ability to strike the right tone will increasingly become a competitive advantage.

      v) Analyze consumer beliefs and behaviors at a granular level

      Using qualitative methodologies, consumer beliefs, habits, occasions, and emotional-need states will continue to evolve rapidly over the next year or two as the world awaits a COVID-19 vaccine. For consumer companies to stay abreast of those changes, monitoring product sales alone won’t be sufficient. Companies must also conduct primary consumer-insights work, with a focus on identifying changed behaviors and associated changed beliefs and motivators to get a comprehensive picture of the changing consumer decision journey.

      Qualitative, exploratory research will have a particular role to play as a precursor to (and, in some cases, a substitute for) quantitative research. Digital data-gathering and monitoring techniques such as mobile diaries, social-media “listening,” and artificial-intelligence-driven message boards will be vital tools to help companies understand emerging behaviors and contextual cues. When structured well, those insights generate new thinking within an organization that can be validated through larger-scale surveys and in-market testing. Companies can then refine their product offerings and marketing messages accordingly.


      • Siti Nur Zahara

        November 12, 2021 at 3:13 pm

        Try to apply the concept to a real-world scenario Darmathan. Use your own words and opinion from the concept discussed above.

    • Maizatulziah Modin

      November 8, 2021 at 12:32 pm

      Microeconomics analyzes the behavior of individuals, companies, and households. Macroeconomics analyzes entire industries and economies, the structure, performance, behavior, and decision-making processes of an economy.

      Government intervention in the market is the economic authority at the national level. It is including tax, subsidization, and price control.

      For example, in Malaysia, federal budgets are presented annually by the Government of Malaysia. It is to identify proposed government revenues, spending, and forecast economic conditions and its fiscal policy for the upcoming year.

      Pervious Budget 2021, the government intervention was to save lives and livelihood. At that time, the pandemic was hitting the economies badly. People lost their job, the businessman went bankrupt, and the economics has been closed.

      Recently, in the Budget 2022, the Government intervention is to strengthen Malaysia’s economic resilience and rebuild market confidence. This is due to the re-open the industry after Malaysia has successfully implemented vaccination on their 80% population.

      Understanding consumer behaviors shape your business strategies.

      The principle to understand consumer behaviors is the key to grow the business. It is an advantage if the business can understand, influence, and persuade consumer behavior.
      “Persuasion is no longer just an art; it’s an out-and-out science” – Prof. Robert Cialdini (Psychology and Marketing at Arizona State University).
      Marketing can be highly effective in influencing consumer behavior when you know consumer trends.

      For example during the Covid-19. With the movement restriction control, the consumer could not be in the physical store. The physical store also cannot be operated as normal due to the restriction and only essential products can be sold.
      So, this goes to the strategy of the business. The Covid-19 Pandemics lead to an increase in online shopping. The e-commerce site that offers goods and services has developed strategies to influence customer behavior of spending online.

      Nowadays, even with restrictions lifted, the trend is likely to continue. Why? Because the online site/e-commerce successfully builds trust. The trend for online shopping is not just because of the Covid-19 but indirectly matching human behavior. People tend to like something easy and convenient. Online shopping helps people to save costs for parking, to save time and it is open 24hours.

      CNBC reported that during November 11, 2020 sales, Lazada had $100 million of sales in the first hour of the shopping event while the CEO of Shopee said they sold $200 million items.

      In conclusion, understanding the causes of the consumer to purchase certain products and support certain brands are all back to social factors, physiological factors, and personal factors. The buying behavior affects how these three factors fall on them. The marketing strategy should continue to align with consumer-level of group, age, income, interest, geographical and location, and the current trend.

      • Siti Nur Zahara

        November 8, 2021 at 3:48 pm

        Can you identify any challenges for businesses to move into a digital platform Maizatulziah?

        • Maizatulziah Modin

          November 9, 2021 at 10:18 pm

          I believe system infrastructure is one of the challenges to moving from physical to digital platforms. Business owners have to understand the technology behind the online shop. Besides the knowledge, maintenance costs also will be another challenge. Web maintenance, database, and inventory are costly to small businesses.
          When we talk about a digital platform, logistics is also important. The challenge to business owners is to have the worldwide logistics to make their product available and reach the consumer from all over the world. Luckily, some logistics companies like UPS Malaysia with ePantos South Korea do have partnership programs that allow a business owner to outsource their delivery process.
          The last challenge would be the price. Based on the article, I understand that one of the customer theories is to examine prices to get goods and services up to their satisfaction which means the lowest possible price. In the digital platform, we know that consumers can compare the price in just a minute. Some business owners especially the new start-up may have difficulty giving lower prices due to their e-commerce maintenance cost and logistics cost.

          • Siti Nur Zahara

            November 12, 2021 at 3:12 pm

            Agreed! Good input there Maizatul

    • Bachevinder Singh A/L Param Singh @ Bob

      November 8, 2021 at 7:40 pm

      Government can affect markets either through direct participation (as a market maker or as a buyer or supplier of goods and services), or through indirect participation in private markets (for example, through regulation, taxation, subsidy, or other influence).

      Government frequently has a choice. I could say they can change anything at any time. There are pros and cons associated with all types of Government intervention. Many, if not most, intervention can have unforeseen consequences. Failure to address indirect costs and possible spillovers can result in a less effective policy and impose unnecessary economic costs.

      Government intervention can also benefit regulated industry rather than the wider public, promote inefficiency because of restricted competition or underplay the role of consumers by concentrating purely on the supply-side of the market. In general, measures that directly limit competition in the market will not be the best instruments. Regulation of, for example, price, entry, and exit, or allowing anti-competitive mergers and agreements between firms, are generally rather blunt measures and can be less transparent than other measures such as setting product standards or introducing taxes or subsidies. While these may also have effects on competition, they can typically be designed in a more focused and transparent way.

      Just my 2 cents view 😊

      • Siti Nur Zahara

        November 12, 2021 at 3:18 pm

        It feels so good to read the well-structured information on the effect of government intervention. Have you experienced this Bachevinder? Maybe in your own work environment or from your experience how government policies shape business ideas/strategies?

    • Wee Sern Low

      November 8, 2021 at 7:55 pm

      “Discuss your opinion on government intervention and how understanding consumer behaviors shape your business strategies?”

      Economics is the study of economy and is defined as ‘The study of the production, distribution and consumption of wealth in human society’ (The Economist), as we look into the main issue on scarcity of resources and the demand and supply of any product to the determination on price. Government intervention is defined as a ‘regulatory action taken by government that seek to change the decisions made by individuals, groups and organisations about social and economic matters.

      Government intervention is any action carried out by the government that affects the market with the objective of changing the free market equilibrium / outcome.’ (Tutor2u, 2018).

      As such, government intervenes on public goods (eg. roads n street lamps), common known as public goods, a basic needs in the layman terms for the society. It is by general that organisations do not provide public goods, but only private goods as they are setup with the common view in making profits. Henceforth, the supply of public goods will be omitted based on this concept and therefore government intervention takes place. In general, price will be set based on the theory of invisible hands by Adam Smith through the demand and supply curve, but, government will intervention also on basic goods (eg. necessities like rice, sugar) and will set a ceiling price on such private goods. This happens so that organisations producing and selling these products cannot exploit onto the people as these are basic needs with high demand and people are willing to pay higher in order to obtain these goods. As such, government will intervene these goods so that organisations will be unable to make extraordinary profits from such basic needs, allowing citizens to be able to benefit from the usage of these goods. I do believe that government intervention on these area are beneficial for the good of the public.

      But however, in my opinion, govt intervention shouldn’t be on non-necessity private goods with the example on the recent cases of Libresse issue and Timah issue as these are private goods and they are non-necessity. Government intervention on such, in my opinion will be a waste of resources and would become non-beneficial on economical terms.

      As mentioned on the definition of Economics, that is the study of economy and prices are set mainly on demand and supply, we understand that the higher the demand and the lesser the supply, shall result in a higher price set on a particular good. Henceforth, by the understanding of consumer behavior, we shall we able to know the demand of such goods and considering and determining the supply as a manufacturer or seller, we shall be able to forecast our profits and margin. Also, at the same time, as we understand that demand will affect the pricing set, we are also able to draw up our business strategies by educating and marketing the people on the knowledge of the good, and creating higher demand on the good.

      – Low Wee Sern, Sheng

      • Wee Sern Low

        November 8, 2021 at 10:15 pm

        With reference to my statement in the last paragraph on higher demand on educating and creating greater need on the good for higher price, I would like to highlight after today’s class, that I meant it to be a shift in demand curve, shifting it upwards, and not an increase in demand along the curve.

        • Siti Nur Zahara

          November 12, 2021 at 3:23 pm

          The best part of your answer is the application to the lectures discussed in class, toast to that!

          Issues on Timah or Libresse is a political response from the government. When we discuss government intervention in business strategies, we look at the policy implemented to protect business/consumer or policies to improve the market.

          You can think of your own experience. Any policies that change the landscape of your company’s business?

    • Nur Aina Azizan

      November 8, 2021 at 9:48 pm

      Pandemic has disrupted nearly routine in a day-to-day life . This might be one of good example that I can give especially to study on customer behaviour. Covid-19 crisis has caused the change of consumer behavior. Based on the article which has explained that macroeconomics is concentrating on the behavior as whole and microeconomics analysing the behavior.
      One of the example is, during this pandemic digital commerce is a need for consumer. They have migrate online for grocery shopping. This crisis has change the consumer behavior. And also a new virtual workforce also give a big impact since the purchasing power is lesser. During this pandemic, with government intervention they are helping seller by providing an aid for example GKP , Penjana (income support package) . This aid is actually help seller to maintain their price and also maintain their stock. On consumer side, they actually able to buy the goods at the same price. This price control will benefit both party for producer and consumer. By this price control and crisis, it will help seller to set their business strategies based on customer demand .

      • Siti Nur Zahara

        November 12, 2021 at 3:29 pm

        Thank you for the response Aina

        How do you think businesses should respond to change in consumer behaviour during pandemics?

    • Subatra Krishnasamy

      November 11, 2021 at 8:42 am

      1.Government intervention wholesomely shapes most smes business strategies in my opinion,policy makers through central bank imposes many policies to assist sme whether by requiring banks’ to lower funding rates or by introducing products to cater to sme businesses. One such plan is skim cakna where the government would be playing two roles as the buyer/customer and guarantor, banks are in a way forced to participate in this scheme whereby sme can have up to 90% of funding for certain projects by selling their invoices to the bank without recourse, sme would have enough cash flow upfront to provide the required services. this allows businesses to continue to flourish especially during the pandemic where businesses struggle to stay afloat.

      2.Consumer behaviour is the key to devising any market strategy. understanding what attracts consumers allows business to gauge how potential customers will react to new products or service. When businesses understand how a decision is made to buy certain product it allows them to devise strategies to draw consumers to purchase their products and services, one such example would be padini, back in the days padini catered to upper middle class consumers however, due to fierce competition especially ecommerce, they were making a loss until they came up with the strategy to target a wider range of consumers including low income base consumers especially students, young working adults who just joined the workforce with less spending power, fast fashion is not something that the upper class consumers are drawn to, they would rather put in extra bucks and get exclusive items, fast fashion such as hnm , padini are more attractive to consumers who just wants to look good by spending as little as possible, ultimately consumers are emotional beings, business should strategize to offer products and services upon understanding what drives the consumers emotions.

      • Siti Nur Zahara

        November 12, 2021 at 3:31 pm

        Nice Subatra!

        Especially on the Skim Cakna. I wanted to do some research on the efficiency of scheme cakna towards helping our SMEs.

        Good one

    • Hareeraja Thechina Murthy

      November 11, 2021 at 3:01 pm

      Summarizing the main point of the article, human behaviour collectively affects the economic pattern and government policies. In the article, it is mentioned that “the consumers want the most they can afford”, which I partially disagree. Probably I could agree to this during the pandemic period but in a normal environment or pre covid era, it could be debatable.

      Most of us as the consumer has the attitude of “Purchase what we want and justify with logic” and this attitude has been the majority attitude of consumers. Another attitude is “Purchase what you need rather than what you want”. This concept is for those who have a tight budget and someone who has the ability to manage the finance well, which the tight budget consumers can lift up their status and move to the first attitude mentioned above and the person who manage the finance well will remain in that attitude, which fills the minority in the consumer group.
      For example, we need transportation to work and for a safe ride, we want to buy a car. A fresh graduate who just got employed for 6 months might consider buying a proton saga which is affordable for him/his at that moment. After 4 to 5 years down the employment, him/his salary increases and now he may look to change his car. At this stage, he will be considering the car based on his “status” and his/her salary volume. Probably he/she will be looking for a car at the range of Honda City or Toyota Vios for an example. In reality, he could afford to buy a new proton saga which could give him a safe ride and will be able to give his/her some financial stability but his/her justification will be a better brand, country of origin, better breaking systems, airbags and etc, which Proton Saga also has but the brand value and his current status and affordability changes will contribute to his / her decision making. Based on this, the higher number of consumers behaviour determine the economic cycle and government policies. Just like in the scenario, government policies for vehicles will revolve under the category of middle-range cars which is for M40 category of consumers who is the larger number of consumers in Malaysia.

      Although the article mentioned about government initiative at the microeconomic level with consumer behaviour, the real role of the government initiative should be at the macroeconomics level. Microeconomics will have an economic cycle with scarce resources. In order to increase the economic cycle in microeconomics, macroeconomics has to play a vital role. Government should create platforms of opportunities to inject the microeconomic values. For example, bringing in foreign direct investment or empowering local companies with new technology market which creates more job opportunities, more business opportunities and bring more market values. With this new investment, many employees want to upgrade their skills and competency to meet the new technology companies’ requirements. Therefore, the training and development companies have a new area to venture which increase job opportunities with the technology company and also with the training provider. The new sectors will bring more value to our microeconomics sector. Other initiatives such as tax exemption, grants, expansion opportunities for these kinds of companies will help them grow and able to witness economic growth. Strategically, new areas or sectors which will conquer the economics for the next 30 years shall be focused on more economic stability.

      In conclusion, macroeconomics and microeconomics need to complement each other to create values and cycles. The government’s roles shall be more on macroeconomics and play the role of enforcement and facilitator in microeconomics.

      • Siti Nur Zahara

        November 12, 2021 at 3:38 pm

        Hi Haree, your explanation on budget, attitude, and purchasing decision is what Economists categorize as “values”. Consume want the most they can afford refers to their purchasing power, budget, taste/preferences, income level, etc. That is what you explain.

        To assist the gap difference between rich and poor, the government intervenes with policies. The question asks about how business can change their strategies based on different government policies.

        • Hareeraja Thechina Murthy

          November 13, 2021 at 12:00 pm

          Firstly, my apologies for not answering the exact question, and thank you for highlighting the shortfall, Ms. Siti.
          The Covid-19 pandemic changes the consumer behaviour in purchasing and preferring online purchase. Although online purchases are already in practice before Covid-19 presence but it has become more active after Covid-19 presence. Products such as groceries items and clothes which consumers normally prefer to purchase directly from the outlets are now being purchased through online platforms. Even Work from Home has become a new norm that requires lots of software to coordinate remote working styles.

          Businesses should strategies themselves to Business Digitalization transformation. Most of the Malaysian companies has been using a lot of manual operation method which is their biggest challenge during the pandemic period for their respective operation. It has caused panic among these companies. Peer to Peer or Business to consumer (B2C) business shall migrate their businesses to online sales platforms where they can use the digital marketing concept to carry out their marketing strategies. Business to Business (B2B) is subjective when it comes to online sales or digitalized marketing migration because certain businesses still required face to face approach. However, the other platforms such as performance monitoring, payroll, meeting platforms, follow up and many other operation related matters can be digitalized. Generally, this reduces the cost of operation and is still able to sustain or grow the business which is essential in the current business situation.

          On the other hand, the government is now giving full grants and matching grants for such business digitalization through MDEC. Under MDEC there are many programs that could help the Business Digitalization strategies, such as Global Acceleration and Innovation Network (GAIN), Digital Transformation Acceleration Program (DTAP), and many more which can help the businesses to implement their business digitalization strategies.
          I hope this answers the question. Thank you, Ms. Siti.

    • Lik Wai Toh

      November 13, 2021 at 8:58 pm

      The government policy can be affect microeconomic. The effects whenever the policy implement, it will have its effects in changing the inputs and incentives for individual economic decisions. For example, if the governement remove the import tax for electronic car and in the same time increase petrol ceiling price for RON95. People will shift from petrol car to electronic car. It’s because people can enjoy the cheaper price on electronic car and in the same time, they can spend less on higher petrol price. Sometime the government policy is intentional. For example is the government gives a subsidy to farmers so that it can let their businesses more profitable and help farm production. On the other hand, the government can impose a tax on cigarettes and alcohol to discourage the purchasing behaviour.

      Businesses have to always stay close and aware the govrnment policy. As the government policy will directly or indirectly impact the operation of the businesses. For example, if the government increase the minimum wages, this will directly impact the operating expenses. If the cost cannot be transferred to the end consumers, the businesses have to absorb the cost and make less profit.

    • Pub Hon Low

      November 15, 2021 at 9:04 am

      Government intervention refer to the policies that they applied and the state aid or subsidies which they provided to the organization.
      For example, many countries are encouraging the automotive company to produce Electrical vehicles for environmental care. In order for this goal, the government provided subsidies such as tax reduction/exemption for the company to reduce the product pricing. Also, the government also need to come out with strategies such as complete the infrastructure such as charging point, electricity consumption rate, etc; within the nation wide so that the buyers can utilize the product without further concern.
      For the consumers, their interest usually focus on cost saving and the user experiences. It need to be considered when they change from a Fueled vehicles to an electrical vehicle, which cost they can save such as fuel consumption, the maintenance fee, the cost of the product itself. Also, when come to charging the car, it need to be convenience for the owners, sushi as self-charging equipment, public charging point.
      As for the companies, they have concern as well which is the cost of development for the new technology in their electrical product, and their company strategy in balancing the non-electrical vehicles and electrical vehicles.
      Overall, we can see the Malaysia government has also implemented the same policies like other nations in the world. However, it is not quite successful where we still can see the lack of infrastructure built to support the consumer to purchase this kind of product. Also, even the price of the car reduces, the maintenance fee and the sub-equipment needed for the car still consider high-price compare to the transitional vehicles. And I think this is the main point the the government should focus on.

    • Ida Farisha Binti Meor Alim Shah Shah

      November 20, 2021 at 4:48 am

      I think throughout my lifetime, I have never seen our government interventions that impacts almost every aspect of our daily lives as much as I am witnessing during this COVID-19 pandemic. From our utility bills to groceries/commodities price ceiling to mask mandate to social distancing to border restriction to EPF withdrawal; just to name a few.

      And I think we all can agree on how much the above have impacting consumer behaviors. First, customers have to stay indoors which leads to two, customers have to shop online and three, with all the subsidies given, it gives each households a little extra disposable income. These 3 factors drive a lot of physical businesses to have or increase their online presence whereby internet-based businesses that already existed pre-Covid sees an increase in revenues and demands (Eg, Amazon, FoodPanda, Netflix, fintech).

      Sadly, we can still see even when few physical businesses made the shift to digital platform; either late or not; still unable to survive and had to close down shop. Seeing this trend, government once again intervene with SME grants for digitalization.

      So relating back all this to my business strategies; me and my family is starting a business soon where we will come to the customers’ whereabout to perform the services. This is due to the fact that customers seldom go out anymore. And yes we did try to apply for that SME Digitalization Grant – but we are not eligible since we have not yet operated for more than 6 months. What I noticed is most of government’s support towards SMEs are largely focusing on formal SMEs, not new startups. But we do realize the importance of online presence; hence we have allocated some budget to build up our online booking system; not only because of Covid has changed customer’s behaviour; but also because it is the future and very important for our business continuity.

      In a nutshell, I now see how big of importance it is for government interventions either in microeconomics or macroeconomics. While government imposing restrictions to curb down Covid-19 cases, our government’s intervention on our daily lives and towards Malaysia’s SMEs are very crucial for our socio-economic growth and sustainability.

      Just my 2 cents,

      Ida F Shah

    • Shasha Kummar

      November 22, 2021 at 8:37 pm

      Discuss your opinion on government intervention and how understanding consumer behaviors shape your business strategies?

      Economy can generally divided into macroeconomics and microeconomics. Macro-economic is a theory which covers behaviour of a national economy as a general and/or whole. Government intervenes by policy management for stronger national economy growth and macroeconomic stability. i. e government policies to develop the economy of the nation, the collection of taxes and government revenue helps the government to provide public services and create development to the society. For an example, in Malaysia, the government focuses on the exchange rate and product price stability, also providing market access to foreign businesses and investors.

      Micro-economic is a theory which covers consumer behaviour (individual) and businesses to understand the buyers behaviour. Consumer behaviour is how people react or think before they make a decision to buy a product. Consumer behaviour changes time to time according to their need and preferences at the time of their purchase. A company in a particular region or location should understand the particular locations’ social ,psychological, economics ,personal and cultural factors in order to succeed in their business. For an example if company A starts their business in a small town where the people have the attitude to only eat local food (psychological factor) company A must come with an idea how to bring in local food or to emerge habits with new offerings which is near/close to local food for a start. It is very significant to consider the age factor , the culture and of course economic level of the majority of the particular location before starting selling a product or providing a service. If the majority has income less than RM 2,000 then there is no point in selling luxury products which may cost minimum RM 20,000. The company may emphasize positive new beliefs. For an example selling affordable new products which may give new experiences to the consumer and if they are happy , consumers will repeat the behaviour. Furthermore, during the lockdown last year consumers were frightened to go out for grocery shopping and majority expected for delivery services. Many stores offered delivery services after identifying consumers’ behaviour at the time of pandemic Every company must analyse consumers behaviours and also align with the consumers behaviour. All these factors are important to shape one’s business strategy in order to gain profit.

    • Ishwinder Singh

      November 27, 2021 at 4:06 pm

      Government intervention is any action carried out by the government or public entity that affects the market economy with the direct objective of having an impact in the economy. Government intervention advocates defend the use of different economic policies in order to compensate the flaws of the economic system that give way to large economic imbalances.

      The Chinese government has imposed various restrictions on the industry for years, and they are known as some of the harshest in the world.

      The latest restrictions, announced at the end of August, limit gamers under the age of 18 to playing only between the hours of 8pm and 9pm on Fridays, Saturdays, Sundays and statutory holidays. This change was an update to a 2019 rule that limited minors to 90 hours of gameplay per day and three hours on holidays.

      Due to this, Shares of Tencent and Netease lost more the $60billion of value amid growing investor fears. Tencent shares closed down 8.48% in Hong Kong, while Netease fell 11%.

      As we see from above, the effect of government intervention on the regulation spectrum as it tries to control the video games industry for the younger generation as this will have a long-term benefit for the population as a whole. If children are not addicted to gaming or their mobile phone, they will be able to pursue a worthwhile goal (opportunity cost) i.e education, better mental health – as social media and gaming is a raising contributor to mental health.
      Tobacco taxation has many advantages to the economy, health and nation.

      Tobacco taxation can reduce smoking through change in smoking behaviour. Increasing prices of cigarettes would reduce consumption of cigarettes, if cigarettes consumption is low, government expenditure for smoking related diseases will reduce, as reported Malaysia has spend RM 15 billion( 1.7% of the GDP) on tobacco related healthcare cost – if tobacco related diseases are lower government can allocate the funds for better usage ( infrastructure, subsidies and etc.)

      Apart from that, due to increase in taxation (prices of cigarettes) and health related issues due to cigarettes. This has cost an opportunity for consumers to choose a healthier alternative which is vaping. The Malaysian Vape Chamber of Commerce said that Malaysian vaping industry is valued at RM 2.27 billion.

    • Arivalagan Mathyvanan

      November 28, 2021 at 2:38 am

      Discuss your opinion on government intervention and how understanding consumer behaviors shape your business strategies?

      My take from the article was this line ”
      Microeconomics looks at how consumers and companies behave so that they can understand why society needs economic policies to regulate and shape their behavior.”.

      In reference to that, with the recent pandemic Covid-19 – everyone s life were affected in one way or another. Consumers in Malaysia were in confused state on how they will get basic needs, commute to work or even work, access for medical needs and other basic needs during the first movement control order (MCO) implementation. Hence during the MCO lockdown, the shopping behaviors of locals shifted tremendously as multiple surveys indicate people were more cautious on shopping due to the limitations. Stocking up on food and essential items more than before is a common response to the crisis. Almost half of them are stocking up for two weeks or more.
      Shopper were siding on more shelf time food like canned food, rice and more on cleaning items and toiletries. Also the luxury spending on flowers and chocolates were reduced and this to me would be from the governments intervention on implementing the lockdown. Yes of course, soon after the relaxation of the movement control order, shoppers behaviors will gradually be back to the pre Covid-19 lockdown era, however this explains a simple example of how policy makers are important decision makers in managing microeconomics.


  • Yaamini Renganathan

    November 12, 2021 at 12:49 pm

    Microeconomics studies individuals and business decisions, while macroeconomics analyzes the decisions made by countries and governments.

    In my opinion government intervention plays an important role in shaping consumer’s business strategies.

    In the articles it has mentioned that People struggle to get as much as possible while spending as little as possible. The economist Thomas Sowell has said there is never enough of anything to fully satisfy all those who want it. This clearly shows that consumer always attempt to get the best for what they are “paying” for.

    Online shopping becomes famous in past years and it becomes as “essential shopping platform” for most of us during the pandemic. Since Malaysian government policy allow the consumers to purchase goods from various countries, it allows the consumer to get the BEST within their budget and its moving towards board less market. Some policy by government also let the producer to reach the consumer or end user directly without middle person. Current technology era supports this direction very well and help to boost countries economy.

    For example, we can import / buy anything from China from Toaboa with cheaper price. Some business owners tied an agreement with our local online shopping platforms like Shoppe and Lazada to sell their products. With this its allow a win- win situation for both consumers and sellers at an agreed price. This also help the consumer to do comparison and market survey before purposing anything and sometimes we receive products from China faster than local products. All these are not possible without government intervention.

    • Siti Nur Zahara

      November 12, 2021 at 3:57 pm

      Good Yamini!
      Business deals with online platforms are one of the business strategies to attract more consumers.

  • [email protected]

    November 15, 2021 at 10:20 am

    Discuss your opinion on government intervention and how understanding consumer behaviors shape your business strategies?

    Governments have the capacity to make broad changes to monetary and fiscal policy, including raising or lowering interest rates, which has a huge impact on business.
    They can boost the currency, which temporarily lifts corporate profits and share prices, but ultimately lowers values and spikes interest rates.

    Governments can intervene when companies or entire segments of the economy are failing, or threatening to undermine the whole economic system, by providing bailouts.

    Governments can create subsidies, taxing the public and giving the money to an industry, or tariffs, adding taxes to foreign products to lift prices and make domestic products more appealing.

    Subsidies and Tariffs
    Subsidies and tariffs are essentially the same things from the perspective of the taxpayer. In the case of a subsidy, the government taxes the general public and gives the money to a chosen industry to make it more profitable. In the case of a tariff, the government applies taxes to foreign products to make them more expensive, allowing the domestic suppliers to charge more for their products. Both of these actions have a direct impact on the market.

    Government support of an industry is a powerful incentive for banks and other financial institutions to give those industries favorable terms. This preferential treatment from the government and financing means more capital and resources will be spent in that industry, even if the only comparative advantage it has is government support. This resource drain affects other, more globally competitive industries that now have to work harder to gain access to capital. This effect can be more pronounced when the government acts as the main client for certain industries, leading to well-known examples of over-charging contractors and chronically delayed projects.

    Regulations and Corporate Tax:
    The business world rarely complains about bailouts to certain industries, perhaps because of the knowledge that their industry may one day need help as well. But Wall Street does object when it comes to regulations and taxes. That’s because while subsidies and tariffs can give an industry a comparative advantage, regulations and taxes can negatively impact profits.

    High taxes on corporate profits have a different effect in that they may discourage companies from coming into the country.

    Just as states with low taxes can lure away companies from their neighbors, countries that tax less will tend to attract any mobile corporations. Worse yet, the companies that can’t move end up paying the higher tax and are at a competitive disadvantage in business as well as for attracting investor capital.

    Governments play a substantial role in the financial world. Regulations, subsidies, and taxes can have an immediate, and long-lasting impact on companies and whole industries. For this reason, Fisher, Price, and some other famous investors considered legislative risk as a notable factor when evaluating stocks. A great investment can turn out to be not that great if it’s at risk of seeing its competitive advantage and profits dwindle as a result of certain government actions.

  • Siti Nur Zahara

    November 19, 2021 at 10:00 am

    As we discuss the labor market, what do you think about the current industrial revolution 4.0? What are the challenges and how we should prepare ourselves to be adaptable to the new wave?

    • Leonard Robinson Chin

      November 19, 2021 at 3:47 pm

      To understand the challenges of Industrial Revolution 4.0 (IR 4.0), let us take a step back to understand the origins of the Industrial Revolution. The Industrial Revolution mainly involved the manufacturing / production sector. It began in 1784 with the 1st IR which saw the mechanization of the sector to use steam powered machineries. The second 2nd IR saw the electrification of the assembly line. The 3rd IR saw the emerging of automation such as robots in the manufacturing sector. Currently we are in the 4th Industrial Revolution which sees the digitization of not only the manufacturing sector but the entire economy.

      Digitization or often referred to digital transformation involves the usage of technologies in every aspect of the business. These technologies offer us opportunities to improve efficiency, effectiveness, quality and reduce errors. Technologies supporting the IR 4.0 include cloud technology, Internet of Things (IoT), blockchain and cybersecurity. These technologies come together to provide an end-to-end optimization of the entire chain of activities in our economy.

      While many have the impression that the adoption of technology is crucial in successfully embracing the IR 4.0, many failed to understand that the large part of the digital transformation is changing the way we work or our work culture. Digital transformation also involves the adoption of the new ways of working as well. The culture of working the Agile way is essential for us to remain nimble and fast to adapt to the ever-changing requirements in our ecosystem. As the saying goes, the only constant in life is change, we now live in a world that is changing rapidly. We need to think and work in an Agile manner for us to cater to the ever-changing requirement. Working in an Agile manner also includes a continual feedback mechanism into our work to ensure that we are checking on the requirements as we progress along.

      With the IR 4.0 we are experiencing now, there has never been a point inf our lives where technology has become so ubiquitous and affordable to the masses. The mindset that technologies will drive the adoption and sales of our products and services is no longer relevant. Due to the available of these technologies what really matters is the customer experiences / user experience when customer use our products and services. We need to focus on how the customer feels when they use our products and services. That has become fundamental in differentiating from the competition. Equipping with skills such as Design Thinking will have to analyze customer experience issues and really focus on where it matters.

      In embracing the IR 4.0 economy with need to equip ourselves with not only the latest technologies such as cloud, IoT and blockchain but also the ways of working and thinking that will propel us to be successful in the digital transformation of our economy.

      • Lik Wai Toh

        November 25, 2021 at 5:22 am

        Hi Leonard,

        Do you think Industry 4.0 can help organizations to improve the costs of production? The organization that can invest and adapt to change will benefit from the competitive advantage. For example, using AI and BIG data to manage the inventory allows the supply chain planner to plan the demand and supply more efficiently. Thus, reduce the cost and maximizing the profit.

        The challenge is whether the end to end processes have been fully upgraded to the latest technology so that each value chain can fully utilize the technology. Otherwise, we may see slack or inefficient outcomes.

        I think to move to industry 4.0, planning and training are very important. Upskill the current employees to the next level and introduce the new tools and systems to learn. Furthermore, moving and implementing the industry 4.0 by stages so that everyone in the organization can adapt to change. However, the Covid-19, supply chain disruption, and labour issues have accelerated industry 4.0.


        • This reply was modified 6 days, 16 hours ago by  Lik Wai Toh.
    • Ida Farisha Binti Meor Alim Shah Shah

      November 20, 2021 at 5:44 pm

      IR 4.0 or Industry 4.0 aims to boost productivity and scalability of traditional industrial and manufacturing process by combining IoT to create interconnected systems that analyze, communicate and use relevant information to drive actions intelligently [1]. Everyone or every business reacts to change differently, but either way, if you do not embrace the upcoming change; sooner or later your business might be obsolete.

      But I have to say with the limited readings that I’ve done – I am impressed by how prepared and eager Malaysia government is towards Industry 4.0. If you open MITI website [2], you’ll see the ministry has launched Industry4WRD: National Policy on October 2018. And going through the info-graphics, you will see how comprehensive the program is. This program will help eligible organizations with readiness assessment, guidance, financial aids and implementations. If I own a business, I would definitely take advantage of this government program to ensure that my business is Industry 4.0 ready and most importantly, by being in this program I will get the best advice and help with some of the challenges that comes with it. Some of those challenges are [1]:

      1. Lack of confidence to implement a modern digitization plan
      2. Lack of in-house talent and skillset to take Industry 4.0 deployment and development initiatives
      3. Limited knowledge on the latest technologies
      4. Unclear on data security and legal issues
      5. IT-related vulnerabilities

      Of course organization will face more challenges then what’s listed above but I am sure Industry4WRD program will inform you on the challenges and prepare you for it. For employees in these organizations – be ready. A lot of standard works will be automated which will replace the need for human workers. It is the organization’s responsibility to take proactive actions in assessing each workers’ skillset and see whether or not it is align with Industry 4.0. If it is not, upskill trainings need to be made available to every employees. But to employees, I’d say this – do not resist; the change is inevitable, just like any organization that refuse to change and became obsolete; we can be obsolete too. So employees have to embrace the change and participate. If all levels in an organization focused towards Industry 4.0, in every organizations in Malaysia; and we attack this new wave fast and head strong; just imagine where we’d be in 10 years from now. Malaysia could be the Industry 4.0 role model for all developing countries. How cool is that?

      Just my humble opinion,

      Ida F Shah


      [1] https://axxis-consulting.com/what-is-industry-4-0/

      [2] https://www.miti.gov.my/index.php/pages/view/4832

    • [email protected]

      November 21, 2021 at 12:52 am

      Technology is transforming society. Not only do we use technology more and more in our daily life. Our workplaces are likewise evolving digitally, with more and more tasks being automated. This change is known as the fourth Industrial Revolution or Industry 4.0. Production can be efficient according to customer needs with the collection and analysis of real time data and Artificial Intelligence. With increased automation, our time will be freed up for concentrating on more complex tasks. We will need a workforce who are capable of building, programming and developing these technologies. But also making sure we are applying them to our lives in an ethical way.

      There are coarse skills that we, human, can offer that technology cannot replace. Human touch is important to ensuring effective communication, problem solving and supporting change management in this digital environment. There will also be a greater need for joint working across disciplines, creating new innovations. The future job market will be looking for graduates with open mind to explore the unknown future possibilities. We will all need to develop our skills in order to embrace, adapt, to this very changing environment.

    • Qairul Muzzammil Kamaruzaman

      November 22, 2021 at 12:20 am

      Industrial Revolution 4.0 (IR 4.0) is a big shift on how industrial operates itself. With the advancement of Internet, networking, digitization of data storage and processing, it has become easier for a large amount of data to be stored without the need of physical storage by individual/organization, where a third party storage service provider, either public or private provide this storage services for these data.

      As the data itself is an important source of information, which can be reused back to organization’s process in order to improve its performance and output. As this process can be programmed to run automatically, this whole process has become self-taught, or in more popular terms, artificially intelligence.

      Automation not only focus on car manufacturing plants running with TIG welding robots dancing in tandem while assembling cars up parts by parts themselves, it is also occurs in cleric jobs and on the pc jobs.

      Such examples are a ticket being created automatically when we sent an email to internet service provider (ISP), asking about service outage in our residential area. As the ticket being processed, there’s automatic email sent to us mentioning that our email was well received, and in their queue for support.
      On ISP side, as the ticket generated, the senders information, home address, contact number etc. are automatically updated in the ticketing system, for faster assistance by service agents.

      Service agents themselves may not have full knowledge of the whole network design/requirement/knowledge, only provide support and assistance by a set of information that can be found in their knowledge bank, and their roles does not require in depth skill on network.

      This jobs, what we can see becoming more and more currently, from customer support for banks, telcos, credit cards, satellite tv providers, all are using the same format, a Generalist.

      There may come a time where the generalists role will become redundant and ended, as earlier mentioned artificial intelligence has coupe up with human’s progress, where it can perform what current Service Agents are capable off. You can see this happening right in front of your eyes from the chat support in some of the brands websites (albeit in its early stages).

      With IR 4.0 accelerating business and economy, although the monetary benefit will come to the businesses, the actual job available for workers will shrink, which means that not only the cake become smaller, only a few will be able to enjoy it.

      Supporting Link : The Rise of the Machines – Why Automation is Different this Time

    • Jessy Ng

      November 22, 2021 at 2:51 pm

      The current industrial revolution 4.0 in Malaysia’s context, refers to the current trends of process automation and data exchange using advanced manufacturing technologies, changing from mass-scale production to use of robotics (smart technologies throughout the production lines and supply chains) for enhance efficiency. Which also mean work and processes would already be automated and replaced by machines, and the need for human labor would gradually decrease.

      Moreover, compared to other developed countries, we are experiencing shortage of skills, knowledge, and talent, in the effort of adapting to the new wave. If the workers’ skills are not being upgraded, they will face serious unemployment issue in the near future. The group of workers with the highest risk of being replaced are those unskilled worker doing high volume routine jobs like data management, storage, sales transaction, etc., that could be easily automated. On the other hand, highly-skilled positions are less threatened by automation, such as tasks that cannot be transformed into coding and algorithms, and tasks that requires critical thinking and social intelligence. E.g. Musicians, doctors, etc. The gap between high and low skilled workers are gradually widen due to lack of proper training and education to upgrade skills. Those without the relevant skills moving forward will be left behind with low salary jobs or even unemployment, whereas the highly skilled ones will be highly advantaged in the labor market, some even with extra bonuses such as language allowance or skill allowance. These would eventually bring the people into deeper issues of income inequality and even poverty.

      Another visible challenge that is interdependent to the above would be the lack of awareness and proper understanding of how important getting on the train of 4IR is, therefore the effort and chances of exploring the opportunities related to the transformation is reduced. Without the investments and stakeholders bringing in “smart” technologies and job opportunities, it is difficult for Malaysia to advance along with the new wave.

      To prepare ourselves in adapting to the new wave, the government needs to first raise awareness to the local businesses, and at the same time work on relevant investments into the country, to help with job creation. Then, both government and organizations need to invest in education and training for the people, giving knowledge and exposure towards new technologies and digitization, through job-related re-skilling and up-skilling programs. The idea of future jobs and education needs to be spread nationwide, so that people can work on adapting.

      One example I’ve come by in my company is, now we are collaborating with CyberSecurity Malaysia, to hire resources (mainly fresh graduates) that took cybersecurity courses sponsored by the government into the job opportunities we have. So here we have both training program, job opportunities, and eventually up-skilling training. Soon enough the batch of resources would grow to be the competitive bunch in the labor market.

    • Yaamini Renganathan

      November 22, 2021 at 9:14 pm

      A fourth industrial revolution is now underway. Across many industries, the Fourth Industrial Revolution is bringing technologies that blur the borders between the physical, digital, and biological worlds. Artificial intelligence (AI), nanotechnology, quantum computing, synthetic biology, and robotics will all vastly outperform any digital advances made in the previous 60 years, allowing humans to experience worlds previously unimaginable. Such significant facts will disrupt and modify every industry’s business strategy.
      There are four important effect areas to consider:

      1. Technological: For most global industries will require companies to have a solid understanding of the way these technologies impact their industries and how they can ensure organizational agility to adapt to these changes. Increased global competitiveness will accelerate cost pressure.

      2. Economic: There are four factors of production that fuel economic growth: land, labor, capital, and enterprise. Today, the world is attaining only 52% of its entrepreneurial capacity, and this number is declining year over year. Large, established enterprises have a significant advantage in the future of work than smaller companies due to their ability to adapt to technological changes. However, this is not a recipe for long-term, sustainable economic success. The world must focus on supporting independent entrepreneurs, as small and midsize businesses are the fuel of most economies of the world today.

      3. Social: Technology has enabled people to work anytime, anywhere.

      4. Education and training: Part-and-parcel with economic development is one’s ability to access training for employment. Naturally, tectonic shifts are happening in the education space. Students are less interested in stale curriculums and keener to take shorter, skills-based training that is more relevant to today’s workplace. Employers are focusing on the skills required to achieve their business objectives and remain competitive and agile, which requires them to ensure their employees the necessary training to fill these skills gaps. Workers, naturally, need to acquire skills “on demand” to adapt to their changing roles and responsibilities.

      Despite the issues we face, we have a once-in-a-lifetime opportunity to use an abundance attitude to solve them. The Fourth Industrial Revolution will allow us to learn and teach new talents, develop new occupations that require unique skill combinations that don’t exist today, discover talent we didn’t know about, and grow our businesses and produce a new generation of highly skilled workers in a wider range of fields.
      Let us approach this next transition with an abundance mindset, so that we can create a successful future of work for all.

      Source : How The Fourth Industrial Revolution Is Impacting The Future of Work (forbes.com)

    • Shasha Kummar

      November 22, 2021 at 10:52 pm

      The Industrial Revolution 4.0 is a technological transformation which may bring changes to our lifestyle and industrial development. It consists of Industrial internet , big Data analytics, advanced robotics, artificial intelligence and/or machine learning, cloud computing and addictive manufacturing and many others. The changes may lead to high productivity and quality products, better working environment and easy access to consumers. However, there are challenges that we may have to face such as inequality and it may give impact on workforce. There will be a technical gap in skills .Only those companies/businesses/ workers that can adopt with the new technologies will survive. Those without proper technical knowledge on the fast developing technology will be left behind. The major transformation will be very difficult for people from rural and those from agricultural background to adapt to the fast phase developing industry. Most of industries will face the negative impact particularly in manufacturing sectors, those low income labors will be replaced with machineries. Next will be data security. There are sensitivity issues on the security of data as digitalized industry requires companies to share their privacy and management data to a third –party which may lead to fraud cases as well. Learning and educating ourselves with the latest technology and digitalized industrial skills will be helpful to adapt to the changes.

      Ref: https://iap.unido.org/articles/what-fourth-industrial-revolution

    • Hareeraja Thechina Murthy

      November 23, 2021 at 11:53 pm

      Technology has been related to labour for a way long and it has been continuously evolving from industrial revolution 1.0 till the current industrial revolution 4.0 (IR 4.0). All the technology development are introduced to enhance labour productivity, which results in economic growth and new job creation at the macro level. This revolution did not only create new job opportunities but also destroyed other job sectors.

      IR 4.0 effects can be witnessed with the businesses, manufacturing and other industries are going through digital transformation. For example, the internet of things (IoT) is making most of the devices connected with the internet, where many manually monitored, worked and other processes are being done automatically with just data input and can be carried out any part of the world with the help of big data analytics and cloud storage capability. These kinds of technologies help businesses to for more predictive approaches with data, help them to make decision-making processes, new business models etc. In the manufacturing sector, these kinds of technologies will transform them into smart manufacturing where they are able to reduce wastage, manage the risk better, organize supply chain, inventory and many more. All said scope of work requires many works force to carry out the work traditionally but with the help of technologies, the number of workforces can be reduced, yet the work can be done much faster with fewer errors or risks.

      All these technological changes do not only help but also brings challenges. Challenges in government policy, generation behaviour etc will face challenges but the bigger impact is the supply and demand of skilled workers to handle the technology.

      We have to break this into a few sections of labours such as hard labours/ground labours, technical, middle management, top management / white collars.

      Hard labours/ground labours are not yet to be impacted into IR4.0. In fact, it may reduce the effort and increase productivity at the ground level. The real challenge starts above this level/section. The IR 4.0 requires certain skills on top of your professional skills. The demand for these IR 4.0 compatible skills is highly demanding currently but there is a lack of supply in such labour. Therefore, the gap is still huge to fill.

      Like I said above, IR 4.0 shall create new job scope, industries etc and shall destroy certain job scope, industries etc.

      In order to overcome this gap and revive the destroyed or destructing industries or job scopes by giving proper training for these labours to fill the gap on the supply-demand. Training and development are crucial in overcoming the challenges. The continuous development program is also crucial for labours to update themselves to be competitive in the labour market.

      Having skill, competent and contently labour, not only will help the particular industry but also help the economy of the country. Evolving ourselves in every revolution is a must to stay relevant.


      Kergroach, S. (2017). Industry 4.0: New Challenges and Opportunities for the Labour Market. Foresight and STI Governance, 11(4), 6–8. https://doi.org/10.17323/2500-2597.2017.4.6.8

      Szabó-Szentgróti, G., Végvári, B., & Varga, J. (2021). Impact of Industry 4.0 and Digitization on Labor Market for 2030-Verification of Keynes’ Prediction. Sustainability, 13(14), 7703. https://doi.org/10.3390/su13147703

    • Maizatulziah Modin

      November 24, 2021 at 10:42 pm

      Industry 4.0 is here, and it’s already influencing how we live and work in the future. Although the industry is always changing, our technology and attitudes are continually evolving. Manufacturing, smart factories, and smarter work are all part of Industry 4.0. We must adopt these technologies within our organizations, whether on a small or large scale, to get to a smarter, more digital sector.

      I believe the challenge may differ among countries. As for the first-world countries, they might have fewer challenges than a third-world or developing country like Malaysia. So yes, we do have a challenge especially to our very own SME (small and medium enterprise).

      Some challenges are the lack of skills among labor, knowledge barrier on the technology/system in the local industry. No budget or funds are also a challenge for a business owner to move forward especially the SME. Knowledge to go into automation and beyond require high cost for the training, upskill, and implementation of the new technology.

      To overcome the challenge, we have seen that the government addresses these issues by providing incentives and funding, as well as coaching, mentoring, and support services to the SME.

    • Ishwinder Singh

      November 27, 2021 at 4:41 pm

      Industry 4.0 refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. Industry 4.0, also sometimes referred to as IIoT or smart manufacturing, marries physical production and operations with smart digital technology, machine learning, and big data to create a more holistic and better connected ecosystem for companies that focus on manufacturing and supply chain management. While every company and organization operating today is different, they all face a common challenge—the need for connectedness and access to real-time insights across processes, partners, products, and people.

      The farming industry is a good example of how Industry 4.0 can be beneficial. According to the UN Food and Agriculture Organization, the world would need to produce 70% more food in 2050. Shrinking agricultural lands and depletion of finite natural resource has got the farming industry evolving.

      As a result of the declining agricultural workforce, adoption of internet connectivity solutions in farming practices has been triggered, to reduce the need for manual labour.
      Internet of things solutions are focused on helping farmers close the supply demand gap, by ensuring high yields, profitability, and protection of the environment. The approach of using IoT technology to ensure optimum application of resources to achieve high crop yields and reduce operational costs is called precision agriculture. IoT in agriculture technologies comprise specialized equipment, wireless connectivity, software and IT services.
      As a result of the modernization of the farming industry. New generation of workers will needed and old farmers will require training.

    • Arivalagan Mathyvanan

      November 28, 2021 at 3:11 am

      As we discuss the labor market, what do you think about the current industrial revolution 4.0? What are the challenges and how we should prepare ourselves to be adaptable to the new wave?

      There were three industrial revolutions before this to begin with, all of them had challenges and with time lapsing among them – that determines the strength and foundation of a country s policy and vision/objective. However the first three revolution compared to the current one probably developed in linear pace compared to the current Fourth revolution will evolve in exponentially.

      There are many challenges predicted by economists that will be faced by us, taking one as example will be the disruption in labor markers – with the introduction of automation there will a gap between capital gain and returns to labor, with that said history suggests that the outcome will be more likely a combination between labor and machine in order to ensure optimization of production. We are certain in future everyone has to be basic qualified to under the technology to be expose to the current working scenario.

      Malaysian government after sharing the National IR4.0 policy ,cited some potential risks and challenges involving in getting the people up-to-date with the current revolution, however government are putting in many changes in order to optimize the usages of evolution.

      Taking the transportation and logistics sector, which were equipped with workforce with 4IR skill sets, enhanced the digitalized logistics systems by adopting 4IR technologies. Other efforts by them were to amplify mobility through development and adoption of centralized and open transport-related database, including traffic management.

      All of these were displayed in our courier s efficient in tracking and getting parcels and etc. delivered within given time frame even in Covid-19 pandemic era. In other word, we should get ourselves updated with the current change by attending trainings and ensuring we are upskilled.



    • Subatra Krishnasamy

      November 29, 2021 at 8:33 pm

      IR 4.0 is an extension of the 3rd revolution which used electronics and information technology to automate production. This 4th revolution is no longer can be seen as a prolonged 3rd revolution but it is a new wave that is known as a digital revolution, it is a fusion of technologies and it is moving at pace unlike any other revolution which is not on a linear pace but rather exponentially and it has disrupted every industry globally thus bringing about unprecedented change to how production, management and governance work. The opportunity for thousands to connect globally and to have access to processing power, storage capacity, and access to knowledge, are unlimited and nd these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence and robotics. With such advancement there are bound to be some challenges, one such challenge is the shift in the labour market, where talent will be highly sought, hence the job market will be segregated to low skill / low pay and high skill / high pay which could displace the middle class laborer and they will also face a stagnated income, in addition business would need to cope with the technological advancement by investing more in the same, even if business capacity is small to medium, consumers would expect the same technological advancement as provided by larger businesses. Thus, we should be prepared to face these challenges by upskilling ourselves to cater to the new advancement, being complacent is no longer an option. Companies would need to include technological advancement costs as one of the major cost in their business plan to be able to compete with the big players in their respective industries.

    • Pavala Malar Nadan A/L Mariappan .

      November 30, 2021 at 2:24 am

      Just like previous industry revolutions, industry revolution 4.0 will free up our time, energy and effort and allow us to accomplish things that are more important and crucial.

      New technology makes it easier for organization to automate routine tasks such as monitoring factories/machines’ performance, clerical filing processing, customer service etc. This translates into increased productivity, prevent downtime, equipment effectiveness optimization and maintenance. By embracing digital technology, organization will be able to lower their operating costs, improve product quality, become more innovative and gain competitive advantage.

      Impact of Industry Revolution 4.0 on workforce.

      Emerging technologies such as the Big Data and Analytics, Internet of Things (IoT), Automation and Robotics, have been incorporated into company’s daily operations, from product manufacturing to serving clients.

      According to a recent study by McKinsey Global Institute, AI and automation will affect around one-fifth of the global workforce, with the greatest influence in industrialized countries such as the United Kingdom, Germany, and the United States. By 2022, 50% employers expect automation to reduce their full-time workforce, and by 2030, robots will have replaced 800 million humans around the world. (Change Recruitment, n.d.)

      How should we prepare ourselves to be adaptable to the new wave?

      As what founder and executive chairman of the World Economic Forum Schwab said, “In the new world, it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish” (2020).

      People tend to resist changes but often change brings in new opportunities, enable us to learn new thing, new skills, to optimize existing process and to revamp how we work.

      New technologies will make old job obsolete, so people must equip themselves with the skills needed to grab the opportunity that the technology offers. Technology advancement will and already creating more or new jobs like social media marketers, application developers, cybersecurity analysts, and data scientists. For instance, when everything is connected to everything else, serious privacy and security issue going to arise. Organizations will be facing more cyber security attacks or data sabotage and there will be surge for cyber security related jobs to protect, audit and safeguard organization’s data.

      Moreover, Covid-19 pandemic accelerated digital transformation and technology to fulfill the employees’ needs. For example in Malaysia, 69% of survey respondent prefer to work from home. There is an obvious interest on employee’s expectation to adopt hybrid working environment or remote work options. As a result, it is vital for leaders to begin rethinking the future of work, which will emphasize necessity for new work policies, digital investments, and modified office designs to support hybrid work arrangements and increased productivity. (Aman, 2021)

      However, there are jobs that are less likely to be impacted by IR 4.0 which requires cognitive and social skills. Roles that require complex reasoning, manipulation, artistic talents and sports skills such as teacher, healthcare worker, singers, football players etc. can be rest assured they will not be impacted in near future.


      Aman, A. S. (2021, August 16). Most Malaysians prefer WFH, highest among regional countries: Randstad survey. NST Online. https://www.nst.com.my/business/2021/08/718281/most-malaysians-prefer-wfh-highest-among-regional-countries-randstad-survey

      Change Recruitment. (n.d.). How Will the Fourth Industrial Revolution Impact the Future of Work? https://www.changerecruitmentgroup.com/knowledge-centre/how-will-the-fourth-industrial-revolution-impact-the-future-of-work

      Schwab, K. (2020, February 5). Are you ready for the technological revolution? World Economic Forum. https://www.weforum.org/agenda/2015/02/are-you-ready-for-the-technological-revolution/

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