Management Practice for Malaysian Palm Oil Production

A Study on Management

Discuss about the Management Practice for Malaysiaan palm Oil Production.

The study of management has tremendously evolved in the recent times due to increased and continuous advancement in the field of technologies and dealing with a more sophisticated and educated workforce. Management study primarily focuses on the human resources involved in an organisation or business. The palm oil production in Malaysia has considerably increased over the years. According to a report, there has been 16.9 million tonnes of palm oil production in 2010. The Malaysian palm oil industry is easily able to satisfy the local demands for oil and fats, whereas the excess productions are being exported[1].

The Malaysian Palm Oil Board (MPOB) is the supreme government agency that has been assigned with the responsibility of serving the industry of Malaysian palm oil. There primary focus is to develop and promote the country’s objectives, priorities and policies for the growth of the Malaysian palm oil industry. MPOB was established on 1^st May, 2000 and was integrated by an Act of Parliament (ACT 582). It was formed by merging two existing agencies, Palm Oil Research Institute of Malaysia and the Palm Oil Registration and licensing Authority[2].

Management of an organisation primarily depends on the managers who provide guidance and directions in a company, whether private and public and in businesses. Efficient managers are considered a valued resource in developed countries, whereas in developing countries they are the most needed resources[3]. Efficient managers are able to effectively co-ordinate and combine various resources available in a country, such as, human resource, capital and other natural resources. The management of an organisation helps in the economic development of a country by combining together the four factors of production, they are, people, money, machines and material. According to Peter Drucker, without an effective management the resources of a country can never be converted into product or services[4].

Managers can be defined as that individual who have the decision-making power and performs all the managerial functions. They represent only a small part of the total number of employees present in an organisation[5] . It is their responsibility to guide their subordinates and plan effective policies and procedures in order to fulfil organisational goal. According to Robert L.Kartz, effective management depends on three basic types of skills, they are[6] -

Technical Skill – refers to the managers’ expertise in the implementation of tools and procedures according to his area of specialisation.

MPOB - Planning

Human Skill – it refers to the ability to motivate and communicate with people effectively. Here people include colleagues, subordinates, supervisors and other stakeholders.

Conceptual Skill – this refers to the managers’ mental ability to conceive plans and effectively execute and implement them in order to achieve organisational goals.

Planning is the top most function in the practice of management, which is followed by organising, leading and controlling. It refers to the process of setting targets and developing strategies and means to achieve those goals[7] . Plans must have the ability to change, therefore they must be flexible enough to adapt to changing situation without any undue cost. Since circumstances are changeable, hence a plan must be able to provide for as many contingencies as possible[8].

The Malaysian Palm Oil Board aims to become the supreme organisation by producing institutions for research and development and at the same time by providing impetus and leadership for the growth of a value added, highly varied, sustainable and universally competitive palm oil industry. They also aim for the prosperity of Malaysian Palm Oil industry through development, research and excellent services. In order to fulfil their goal, they have formulated strategies that focuses on the[9] -

improvement and expansion of the current usage of palm oil product
discover innovative uses for the product
improving the production and quality of the product
maximise utilisation of land in the areas cultivating palm trees
promoting the utilization, consumption and salability of palm oil.

In order to fulfil these strategies the MPOB has laid down ceratin effective policies that would in turn determine the country’s economic growth. These policies are[10]

they adapted strong industry and market oriented development and research programmes
they aggressively undertook commercialism and transfer of technologies
to create an active partnership with public and private sectors for utilisation and growth of technology
to strengthen their research collaboration and international connection
to promote awareness on a global scale, demand and appreciation for Malaysian palm oil and products

MPOB is funded primarily from the cess that has been imposed on the organisation for the production of palm oil and palm kernel oil. Moreover, the government also allocates budget to MPOB, to fund projects for developmental purpose and approved research projects under the Intensification of Research in Priority areas (IRPA) programme[11].

Organisations are made up of people who work and communicate within the system, individuals who share a common set of interest and values and work together in order to achieve their common objective or goal. Organisations are characterized by the members or employees of the organisation, their common goal or objectives and the structure they formulate to achieve those objectives.

Organisational structure varies across different organisations. There are mainly five types of organisational structure, they are, line, line and staff, pure functional, line and functional staff, committee, task force and the matrix organisation. The MPOB follows the committee organisational structure. Committees bring together a group of individuals whose ideas provide solution to a specific or a number of problems[12]. Committee facilitates cooperation and coordination within an organisation and is thus becoming increasingly important. The success of the committee however ultimately depends on skillful leadership. The Board Members of MPOB comprises of a Chairman, representatives from the industry and the Minister of Plantation Industries and Commodities appoints government and the Director-General of MPOB. The Board plays a significant leadership role in providing guidance to the organisation. There are various committees serve the Board in the following areas[13]

The Programme Advisory Committee comprises of reputed scientists and experts from the country and abroad. They give recommendations on research activities based on annual examination for the Board’s consideration[14].

MPOB - The Organisational Structure

The task of organising mainly involves developing a structure or framework of roles for different individuals in an organisation. This means that all the task of an organisation that needs to be done in order to fulfill organisational goals must be assigned to appropriate people who have the required skills and are efficient enough perform those tasks successfully[15].

Detailing of Work - every organisation is established in order to achieve specific goals. This is considered the task of an organisation. The task of MPOB is to enhance the growth of Malaysian palm oil industry through development , research and excellent services.

Division of Work - the work must be assigned carefully depending on the qualification and the skills possessed by the staff members. There must also be a fair distribution of work among its members.

Departmentalisation - refers to the process of grouping or segmenting related activities, tasks and units of an organisation.

Co-ordination of Work - refers to the process of unifying the diversified works of the staff members and at the same time maintaining a co-ordination between various departments, which would help in the fulfillment of organisational goals.

Monitoring and Re-organizing Work - since organizing is a continuous process, therefore a manger must assess the organisational structure at regular intervals. It must be flexible so that effective and efficient operation can be attained.

This task of organizing can be very well witnessed in the structure of MPOB. The management and administration of MPOB is the responsibility of the Director-General, supported by Deputy Director-General (Services) and Deputy Director-General (Research and Development). The activities of MPOB are also divided into eight divisions, which are headed by Directors[16].

Leadership involves the process of effectively dealing with people and influencing them to achieve both individual and organisational goals. According to Richard L.Daft, the concept of leadership keeps evolving with the changing needs of the organisation. In an organisation, the leader focuses on setting the mission, vision and achieving organizational objectives and goals, where as managers focuses on efficiency and productivity. Leadership is a crucial factor of effective management system[17] . The performance of the management under the supervision of managers becomes more effective when it has the element of effective leadership added to it.

The Board of MPOB plays a leading role in providing guidance and direction to the agency. The Mininster of Plantation Industries and Commodities appoint all the members of the Board, which comprises of the Chairman, representatives from the industry and the government and the Director-General of MPOB. Several committees serve the Board in various fields.

The Task of Organising

One of the most important functions of the organisation is the power to control. Controlling involves the process of assessing the variation between the set organizational standards and performance and the steps needed to be taken to in order to avoid such future variations. It is the process through which the management determines that the actual performance confirms to the planned performance.

In order to help the managers, the control process employs various tools and techniques that have been developed over the years. One such controlling tool is the Budgetary Control, which is being adopted by the MPOB to measure the financial standing of the organisation. It monitors assets, actual expenditures, resources and others and compares them with the budget planned. In the case of MPOB, it is funded by the cess imposed on the organisation for the palm oil production. In addition to this, the government also allocates budget in order to fund the organization’s developmental project and approved research project under the Intensification of Research in Priority Areas (IRPA) programme.

Conclusion:

Thus, it can be concluded that the management of MPOB is very well planned and the policies and strategies formulated by the Board members effectively guides the management in the fulfillment of their organizational goal of globally competitive and sustainable palm oil industry. The fulfillment of this objective of MPOB would in turn help in the economic growth of the country.

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