Family Business Culture, Entrepreneurial Orientation and The New Economic Policy on Family Business Survival: A Study Between The Malays and Chinese of Micro-and Small-Sized Family Businesses in Malaysia

This thesis explores the influence of family business cultures (FBC) through three-circle model of family business by Gersick et al., (1997), entrepreneurial orientation (EO) by Covin and Slevin (1991) and the New Economic Policy (NEP) from 1971-1990 as the Malaysian government's intervention and affirmative policy on the survival of Malay (MFB) and Chinese (CFB) family businesses, specifically on micro- and small-sized family businesses. Since there was very little knowledge of the operation and survival of family business (FB) in the context of Malaysia across ethnicities, this research study takes a retrospective approach in reviewing secondary-source literature which covers the period from the era of British colonialism starting in the eighteenth century until the post-independence period, especially during the implementation of the NEP from 1971, in order to be able to gain a fair and adequate view of the socio-economic situations across the two major ethnicities i.e. the Malays and Chinese. In addition, two empirical studies were carried out in the Klang Valley as the fastest growing economic region and where the capital city of Malaysia, Kuala Lumpur, is located using the mixed-method research approach by combining both quantitative (Study 1) and qualitative (Study 2) research designs in order to derive more robust and reliable findings. The 226 MFB participants in the study completed a survey questionnaire designed to provide quantitative data, while a further ten samples, five each from MFB and CFB, undertook an in-depth interview of qualitative design. As well as entrepreneurs, the study was complemented by the inclusion of ten non-entrepreneurs, comprising two experts in the two different Malaysian ethnic businesses, two politicians from the ruling and opposition parties, two government policy makers and four bankers, including both commercial and government bankers in order to derive more conclusive understanding. The main findings revealed that the MFB and CFB were rooted differently in terms of their cultural resources, as the former were imbued with the religious beliefs of Islam while the latter practised Confucian cultural values in their businesses. Both ethnicities exhibited longer-term survival in their businesses succeeding beyond the critical first three years, but the CFB had the further advantage of strong bonding in terms of social capital networking within their ethnic group which surpassed that of the MFB, and this explained their dominance in the various businesses since the colonial period. A surprising result was the encouraging number of MFBs which had developed positive links with Chinese business networks, as well as the fact that both ethnicities exhibited similar characteristics in terms of EO. The findings on the effectiveness of the NEP’s implementation on the MFB’s and CFB’s survival were mixed in that there were both direct and indirect influences on their business survival, and that micro-sized businesses struggled more than small-sized businesses and that the more-educated owners gained an advantage in comparison with the less-educated in terms of access to micro and small financing schemes. This study advances the understanding of these issues in its theoretical, methodological and practical contributions; its limitations are acknowledged and suggestions for future research are recommended.