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5.3 Research Methodology

The directory of SME Corporation Malaysia provides the list of all registered SMEs. This study is an exploratory study that examines export readiness among SMEs. SMEs from manufacturing sector were selected based on predetermined characteristics of the firm. The characteristics include nonexporting firm and their willingness to participate in the study. This study is not to achieve representativeness of the firms to the population but rather as a basis to understand export readiness behavior from the perspective of nonexporters. In qualitative study, sample size is not determined statistically, but it is a strategic choice of informants relevant to the study [19]. The number of samples is determined by the data. The data is collected until it reaches “point of redundancy”. This means, adding more sample does not contribute to new information but will only lead to data saturation [11]. Hence, data from eight manufacturing firms were collected and analyzed for this study.

This study used semi-structured interview as the instrument for data collection. Respondents who are the owners of the firms were asked on whether they have the intention, motivation, and commitment to become export companies through resource allocation done by the companies.

5.4 Findings and Discussion

The aim of the study is to examine export readiness from the perspective of nonexporting SMEs in Malaysia. This is to identify whether they have the motivation and readiness to export as indicated by effort done toward becoming an export firm.

A. Respondent's Profile

Table 5.1 shows the profiles of SMEs understudy. All respondents are from the manufacturing sector with five firms categorized under small firm and three firms categorized as medium firm. With regard to years of operation, majority of the firms have been in operation for more than 5 years. While in terms of sales turnover, four companies earned between RM250,000 and 10 million, and the other four firms earned between 10 and 25 million.

Table 5.2 shows SMEs' major clients at domestic market which consist of

companies from public/government and government-linked companies and also companies from the private sector project. SME 2, SME 5, and SME 6 are categorized as medium-sized firms. Others are small-sized firms with employees between 5 and 50 people.

Table 5.1 Characteristics of SMEs

Table 5.2 Major clients

SME 1

Japanese company (30 %), public sector (40 %), other private sectors (30 %)

SME 2

Energy Berhad (54 %), subcontractor (44 %), others (2 %)

SME 3

Government contracts (60 %), Petroleum Berhad (10 %), private companies (30 %)

SME 4

Government projects (30 %), ministry (40 %), public universities (25 %), government hospitals (5 %)

SME 5

Energy Berhad (59 %), Telco Berhad (28 %), dealers and wholesalers (12.8 %), state government (0.2 %)

SME 6

Energy Berhad (70 %), Telco Berhad (30 %)

SME 7

Private companies (70 %), government-linked companies (10 %), public companies (20 %)

SME 8

Private companies (40 %), government-linked companies (25 %), various private companies (35 %)

The study found that the size of the firms influences export readiness. This is evidenced in Table 5.3 which shows that SME 2, SME 5, and SME 6 are exportready. Meanwhile, the number of years in operations does not influence firm's readiness to export as indicated in Table 5.3.

 
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