High Impact Entrepreneurship Educational Practices (HIEEPS) and Entrepreneurial Intention among Business School Students in Malaysia

STRICTLY BIZ MAGAZINE APRIL/JUNE 2020

High Impact Entrepreneurship Educational Practices (HIEEPS) and Entrepreneurial Intention among Business School Students in Malaysia

It is reported in a survey conducted by PwC in 2018 that perpetrators committed 69 % of the most impactful fraud suffered by organizations in Malaysia among their staff. 32% of these perpetrators were senior management, as fraudsters operating within the organization have a strong understanding of the business. Previously, a survey by PwC conducted in the second half of 2017 shows that Malaysian companies seem to rely more on a compliance culture rather than controls. It is also reported that in 2018, 55% of respondents reported a decline in employee morale as categorized under non-financial impact following an instance of fraud. Further, 42% of respondents believed corporate culture to be the most effective strategy in detecting economic crime. The survey also indicates that Malaysian business leaders appear to be unaware of the potential prevalence of fraud or economic crime in their organization. 85% of respondents believe that opportunity is the main driver behind the fraud, followed by incentive or pressure to perform and the ability to rationalize the crime.

Researchers found that employees’ values tend to be congruent with the values that are upheld in their work environment. Further, employees’ ethical behavior is influenced by organizations’ ethical culture and formal systems. As one of the major stakeholders of a firm, employees view an organization’s ethical systems as having an impact on their perception of the organization’s social responsibility and their motivation. An organization’s ethical context comprised of its institutionalized philosophies, moral of its employees, and its code of ethics. This context also shapes the employees’ behavior towards morally questionable or unethical situations. Corporate ethical values are integral to sustainable business growth.

As a well-recognized self-regulatory organization (“SRO”) for the unit trust and private retirement scheme industry, Federation of Investment Managers Malaysia (FIMM) has done their part on making sure ethical values are engraved as part of their culture. Mandated by the Securities Commission under section 323 (1) of the Capital Markets & Services Act 2009 (“CMSA”) on 20 January 2011, FIMM is tasked with regulating its members in the areas of distribution and marketing of unit trust fund and private retirement scheme. FIMM conducted employees’ ethics survey to assess the effectiveness of the ethics program and ethics motivation. It aimed to recommend ethics improvement and integration within FIMM to ensure its sustainability via CSR and improved moral reasoning.

Institutions broadly are those beliefs, rules, roles, and symbolic elements capable of affecting organizational forms independent of resource flows and technical requirements. The development of mutual awareness among participants in a set of organizations that are involved in a joint enterprise is among the processes of institutionalization. The institutional theory highlights cultural influences on decision making and formal structures. Institutions are defined as shared rules and standardization that identify categories of social actors and their appropriate activities or relationships. The degree of institutionalization can vary in their normative power and their effect on behavior.

The structure of FIMM’s institutionalization is attributed to the new institutionalization that diffused departments and operating procedures to inter-organizational influences and conformity. FIMM was declared as a recognized Self-Regulatory Organization via Gazette dated 20 January 2011. As an SRO, FIMM’s statutory obligation is consistent with subsection 323 of CMSA, operationalizes within its core practices, and performs added value services in investor education and awareness, after which the performance is evaluated based on Balance Scorecard.

A robust governance framework plays a pivotal role in facilitating the proper functioning of an organization through its various systems and methods. The framework, as well as the adequacy and proper allocation of resources, are essential to ensure FIMM discharges its delegated regulatory duties efficiently and effectively without compromising the protection of investors. This is demonstrated via FIMM’s governance framework, reporting structure, policies, and procedures governing the activities of the Board and Board Committees and Board and Board Committee Terms of Reference in ensuring appropriate and effective oversight of the delegated authorities.

Apart from performing mandatory boundaries and core practices in the dual capacity, FIMM as an industry representative is also advocating the development and growth of the Unit Trust Scheme (UTS) and Private Retirement Scheme (PRS) industry. Additionally, FIMM is responsible for enhancing the professional standards of UTS Consultants and PRS Consultants to safeguard the increasingly sophisticated needs and interest of investors as well as maintain public confidence.

Hence, in promoting the highest standard of integrity, openness and accountability in the conduct of its business and operations, rule-based deontology ethics are further evident when FIMM Whistleblowing Policy is in place to provide an avenue for all stakeholders to disclose any improper conduct involving the resources of FIMM in writing to the Chairman of Audit & Risk Committee. The Policy also provides protection for stakeholders who report such allegations. According to Immanuel Kant, the reason and outcome are essential rather than the consequences of the action in Kantian Ethics. Thus, the Policy facilitates the reason for whistleblowing and the outcome of the disclosure to the whistleblower. However, the survey’s finding reported that the probable reason for not reporting the misconduct was due to whistleblower’s concerns on implication should such misconduct is reported