Business organizations worldwide have responded to the demands of an increasingly competitive and challenging global market. Therefore, the ever-increasing global nature of the business environment has forced corporations to develop strategies to become low cost producers and to differentiate their products and services from their competitors through continuous quality improvement (Beheshti and Lollar, 2003). Total quality management (TQM) for example is a strategy to reduce cost and achieve higher differentiation levels.
The global marketplace, domestic and international competition has made organizations around the world realize that their survival depends largely on high quality (Evans and Lindsay, 2002). According to National Productivity Corporation (NPC) of Malaysia (NPC, 2005), the Electrical and Electronics (E&E) sub-sector comprises the manufacture of office, accounting and computing machinery, the manufacture of electrical machinery and apparatus and also the manufacture of radio, television and communication equipment and apparatus. Generally the Malaysian E&E industry can be divided into two sub- sectors, namely: Electrical sector which is made up of electrical appliances, wire and cables, and electrical industrial apparatus; and Electronics sector which includes computers and peripherals, semiconductors and components, telecommunication equipment and consumer electronics (FMM-MATRADE, 2003).
The electronics industry in Malaysia has, over the past decade, developed rapidly to become a leading sub-sector within the manufacturing sector. It is also a significant contributor to Malaysia's economy in terms of employment, and export earnings (MIDA, 2005). However, these companies are facing intense competition from local and multinational companies for customers in the domestic and global markets. According to Rasiah (2003), Malaysian electronic industry is still dominated by multinational companies (MNCs) and its competitive advantage is still based on low cost labor engagements and in low value added activities. Besides, In the global value chain, although Malaysia finds itself in the same category as China and Thailand, behind the Republic of Korea, Japan, Taiwan and Singapore, the Malaysian E&E companies especially are still far from the stage achieved by the major transnational firms, who tend to concentrate on continuous quality improvement, research and development (R&D) and maintaining the global market position of their brands and subcontracting other activities. Therefore, the continuing heavy dependence of assembly is a threat to Malaysia's position, as the People's of Republic of China is a major low-cost competitor. Both Thailand and the Philippines also enjoy a cost advantage over Malaysia (Best and Rasiah, 2003). Best and Rasiah (2003) identified major weaknesses in their study of which weakness in terms of technological innovativeness, value-added activities, quality improvements is mentionable. Therefore, the industry will continue to face growing innovation and quality improvement deficits in the global market which will strongly affects it performance (Rasiah, 2003).
Most of the past studies examining relationships between training and education program and quality improvement have been conducted in the west with little knowledge coming from transitional economies such as Malaysia. Thus, questions arise--How far concern for training and education program is present in Malaysian business companies? Or, how important is the training and education program especially to Malaysian E&E industries?
The aim of this paper is to examine the association between training & education and quality improvement in 255 Electrical and Electronics (E&E) firms in Malaysia. For that purpose, this study examine: (i) The effect of training and education program on quality improvement, (ii) To what extent the training and education program explains quality improvement. …