PART A / BAHAGIAN A

QUESTION ONE / SOALAN SATU

Vision and mission statements are forms of organisational direction used in realising the
strategic management process in the organisation.Discuss the attributes that must be present in
a vision and mission statement. You need to provide ONE (1) example for each statement.

Introduction
Organizational vision and mission statements are considered critical components of the strategic
management process. It is applicable to all types of organisations, including public, private, profit
or non-profit, multinational, and small and medium-sized businesses. A well-crafted vision and
mission statement would set one organisation apart from the rest by demonstrating distinct
characteristics that set it apart from the competition.

In terms of organisational effectiveness, the importance of vision and mission statements to

strategy cannot be overstated. Vision and mission statements are seen in almost every
company. In his research, Mullane (2002) discovered that goals and objectives are critical all
day exercises. Planning process works as follows: perspective, objective, approach, and
movement.

The goal of strategy planning and management is to build outward integrity to an organization's
vision and mission, then develop a culture that defines and supports those statements. (Mullane,
2002) has detailed how mission and vision statements may be utilised to establish a clear and
shared sense of purpose, as well as serve as a channel through which the emphasis of the
organisation can be directed. All of an organization's and business's activities are guided by its
vision and mission statements. However, according to Papulova (2014), many businesses lack
vision or mission statements; some don't understand the distinction, while others are unsure how
both statements should be articulated.

The attributes that must be present in a vision and mission statement to establish the intention,
understanding of particulars and elements, and organizational culture in achieving organisational
goals, an organization's vision and mission statements are used. A clear vision and mission
statements should emphasise a distinguishing feature of the firm that sets it apart from others,
as well as all future activities planned for the organization's internal and external environments.
In terms of organisational strategy, mission and vision statements are critical.

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 a) An organization's mission and vision statements are common and essential components
of its strategy.
b) Most well-known companies create mission and vision statements, which serve as
guiding principles for establishing company goals.
c) After that, the organisation creates strategic and tactical plans to achieve its goals.

Mission Statement Components

The length, content, manner, and specificity of vision and mission statements may differ.
Essentially, The stated goal could perhaps identify interested parties, and the shared vision
should also include and yield an amount of participant values and beliefs (Johnson et.al; 2008).
Mission statements should be educational, infusing, communicative, tolerating, straightforward,
concise, and conducive to both employees and clients, in order to create an emotional bond with
the company. According to Mullane (2002), a typical mission statement should identify significant
stakeholders and emphasise the organization's commitment to meeting their needs. He went on
to recommend that the concept of "measurables" be used to put the objective into practise..
According to David, David, and David (2014), the components of vision statements are briefly
summarised below.

a) Is the firm committed to growth and financial soundness? Is the firm committed to
survival, expansion, and profitability?
b) Is the organisation up to date in terms of technology?
c) What are the main commodities and/or services offered by the organisation?
d) Markets—where does the company compete in terms of geography?
e) What are the firm's fundamental beliefs, values, objectives, and ethical priorities?
f) Concern for employees—does the company place a high value on its employees?
g) Customers- Who are the organization's customers?
h) Self-concept—what is the firm's core competency that sets it apart from the competition?
i) Concern for the firm's public image—does the company care about its neighbourhood
and the environment?

Creating a Vision Statement

Vision is an essential component of every organization's success. It's a process that propels a
company forward through the challenges it faces as it grows. It is a fundamental ‘status' of the
organization's future, indicating belief and expectations about contingencies in the intended
future. According to Papulova (2014), there are several ways to build a vision statement:

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 a) Intuition: this is how you find and develop it naturally. Vision is thought to be a dream that
miraculously and unexpectedly reaches its maker, the visionary. It happens infrequently
and inadvertently. These visionaries are frequently also the founders of organisations
(such as David Oyedepo and Aliko Dangote) that may lead the entire organisation to fulfil
the objective.
b) A team approach can also be used to generate a vision. Working with a group of people
that can suggest unique ideas, points of view, perspectives, and inspirations that will
benefit and lead to creativity and innovation is what this is all about. Every person have
the ability to think and possesses an incredibly large mental capacity.
c) Thinking reasonably and logically can help you construct your vision. Hypothesis and
deduction, as well as comparison and other empirical research approaches, are used in
this case. However, because it relies on information-based procedures and routines, it
will never bring about new transformation or a spectacular vision. Pessimistic
assumptions will not lead to rational thinking. Rational reasoning based on pessimistic
assumptions will not result in innovation.
d) Adapt another organization's vision: by comprehending the importance and value of
another organization's vision, an organisation might be inspired. In this instance, the
organisation can collaborate as partners to achieve the vision.

Creating a Mission Statement

Many decisions go into the creation of a mission statement. The mission statement's target
group of people should be the primary focus. Depending on the mission statement's goal, this
could be different (Papulova, 2014). Organizations should first define the mission statement's
target capability. The statement can be addressed to a variety of audiences, including staff,
employees, customers, clients, colleagues, partners, stockholders, patrons, and the community.

Conclusion
The vision and mission statements emphasise the firm's distinct traits that set it apart from
others, and they take into account all future actions planned both within and outside the
organization's community. The mission statement's primary function is to effectively
communicate the firm's strategic direction to stakeholders in order to influence strategic
planning. The mission statement is the second most popular tool, mostly because it is seen as a
useful substance in organisational integration, as it helps everyone focus on goals and work
together to achieve them. The development of vision and mission statements, as well as plans to

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put them into action, should not be only the job of senior management, because the
organization's success hinges on every stakeholder's understanding of where they are heading.

References
Bart, C.K., Bontis, N., & Tagger, S. (2001). A model of the impact of mission statements on firm
Performance. Management Decision. Vol. 39, No. 1, pp. 9-18.

David, M. A., David, F. A., & David, F. A. (2014). Mission Statement theory and practice: A
content analysis and new direction. International Journal of Business, Marketing, and
Decision Sciences. Vol. 7. No. 1.

Mullane, J. V. (2002). The mission statement is a strategic tool: when used properly.
Management Decision, vol. 6. pp. 257- 272.

Papulova, Z. (2014). The significance of vision and mission development for enterprises in
Slovak republic. Journal of Economics, Business and management. Vol. 2. No. 1.

QUESTION TWO / SOALAN DUA

Political management is one of the main dimensions in the Strategic Triangle to formulate
strategies and policies in the public sector. Discuss comprehensively on political management
and provide TWO (2) examples related to this topic.

Introduction
In the last two decades, the public sector has been altered by new public management and
governance. Strategic management is the governmental management's go-to tool for making a
positive contribution and helping to shape the institution. The most important principles and
theories influencing public sector strategic management

The defining of what the state should do for a society and what it should not do is a constant
legislators engage in a process of thought and consideration, compromise, and making deals as
part of political process subsequently produce policies (Moore, 1995).

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Specific Public-Sector Characteristics That Influence Strategic Management Political
Management

According to Nutt and Backoff, the authorising environment and interdependent actors might be
considered the public organization's actual market, whose interests it must try to please in the
act of strategic management. “How stakeholders perceive or understand things is more
important (to strategy) than the veracity of claims.” (Nutt & Backoff, p. 14 in Nutt & Backoff,
1992). In terms of external and transactional elements, as well as internal procedures, Nutt and
Backoff distinguish public companies from private ones. The effect of the political level, the limits
imposed on public organisations by legal mandates, and the "market forces" of major actors and
funders who want public institutions to work to achieve social goals are among the
environmental influences. Employees engage the public sector for a variety of reasons, including
exciting jobs, important roles, and ethical beliefs. Incentives are difficult to create because they
are driven by more than just financial gain. Internal processes are likewise constrained by legal
constraints.

Positioning or scope as a strategy: The more public a company gets, the more it will have to
position itself as a "market" in the authorising environment in order to produce results. Because
of the unstable nature of the authorising environment, a central unit of the state will have a
harder time determining long-term direction than a more peripheral one that delivers real
products and services. Maximizing public benefit while also obtaining the most permission and
resources is an example of strategic fit. This could lead to trade-offs between what is deemed
valuable and what is politically acceptable.

Strategy as a means of stretching competencies: The public manager must not only rely on
internal capabilities, but also enlist the help of co-producers and external actors (Osborne &
Gaebler 1992), implying that the organization's strategy must be appealing to outside actors.

The triangle of strategic importance

The author of this study recommends three primary “management dimensions” in strategic
management in the public sector based on the afore mentioned literature review:

a) Political
b) Cooperation
c) Operations

As “an axiomatic fundamental of public sector management,” the strategic position emphasizes
the importance of gaining political influence. Collaboration considers the new public

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management approach of policy making, as well as the actuality that interdependence and
connectivity among different groups are beneficial. has become increasingly important. E-Leader
Singapore 2010 (Osborne, 2006). Efficiency and effectiveness are considered in the operations
dimension. Moore's strategic triangle (1995) was adopted by the researcher:

Figure 1:The strategic triangle (adapted from Moore, 1995)

According to the researcher, if a public manager wishes to implement strategy and produce
value for society, he or she must manage the triangle's ends. Even though the model is
unfamiliar to the subject, this will occur because, these management elements are always
relevant when it comes to problem solving strategic plan in the government sector. Furthermore,
the researcher thinks that the incremental process will win out over a synoptic method due to the
typical incremental procedures associated, as well as the legislative and number of co context.

Discussion of the strategic triangle in Political management

The strategic triangle's management components are interrelated. The organization political
management can only engage new kinds of cooperation and change activities if it can persuade
the minister to extend the mandate. New collaborations imply a shift in operations and political
clout - one respondent suggested “forming strong partnerships and then approaching the
ministry with joint interests.” New business models will attract a variety of alliances, but the
legality of the new services delivered will be questioned sooner or later. Is the present mandate
still applicable to them? Will the push for innovation be seen as a beneficial trend at the political
level? One respondent stated emphatically that the organisation political management is

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required to approach the ministry with fresh ideas and that the political level cannot “show the
way forward.” However, using the strategic triangle in the coding process demonstrates that
there is a variation in the aspects that influence strategy design, implementation, and adaptation.
At the political level, the key dimensions for strategy formulation can be discovered. The themes
of "securing the future" and "internationalisation" appeared several times, indicating that the
strategy was developed in response to international political developments, particularly the
Millennium Development Goals and the Paris Declaration. “Is the value we are providing large
enough to safeguard the future in light of internationalisation of development cooperation?”
asked many respondents. The justifications made in terms of the cooperative factor impacting
strategy design were at best pro forma.

The term "anticipatory" refers to the organization's political management apparent foresight into
the future requirements and interests of existing cooperation partners. Management thought that
broadening the V-mandate EZ's to include becoming an international partner in HR development
would be beneficial to both parties. However, as events unfolded, it became clear that the
German working partners were not as enthusiastic about these new strategic goals as had been
envisaged. The importance of collaboration partners for strategy achievement is firmly
embedded in the minds of most respondents. This could be owing to the V-peculiar EZ's
relationship with its collaboration partners, which it refers to as "customers," because it serves
almost only the cooperation partners' employees. After political and cooperation aspects,
operations was viewed as the third most significant factor in planning strategy, since improved
flexibility and new, higher-quality services were believed to be sought by cooperation partners,
an assumption that proved right. The technique can be described as "pro-active" in every way.
The company is taking a "prospector" approach, looking for new markets, forming new
relationships, and developing new services (Boyne, 2004).

Activities and coordination were the elements most of which were significantly affected and
transformed strategy during integration. Operational elements influencing strategy were linked to
competences and capacity, which have resurfaced as recurring themes. Competencies were not
considered as being aligned not just with acquisition goals, but also with strategic goals. The
strategy was also adjusted to meet the needs of the collaboration partners, whether they were
foreseen or not. Political variables account for surprisingly little adaptation. This can be
interpreted in a number of ways: Since 2005, the political and environmental landscapes have
remained relatively unchanged. The majority of respondents still regard “securing the future” as
one of the most important strategic issues to address.

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When asked to predict what factors would influence the strategy's effectiveness in the future,
more respondents said "competences," "commitment," or "cooperation." When questioned about
future strategy changes, almost all respondents mentioned the impending elections and the
progress of the financial crisis. On a temporal level, although alignment to political goals and
strategy adaptation are critical to the mid-term or tactical level, strategy formulation, partnership,
and procurement level increases.

Although the V-EZ has a sophisticated apparatus of quality assurance that it employs to seek
permission from participants and comments, real users of the service have little or no role in
influencing strategy. Participants do not appear to have enough "political clout" or interest
representation to have a significant impact on strategy, and/or their organisations political
management do not act on their behalf. In terms of strategy creation or adaptation, service
providers are also little acknowledged. Respondents, on the other hand, stated that the
ministry's, cooperation partners', and participants' interests are not always aligned and must be
dealt with individually. To summarise, during planning, the management dimensions "political"
and "cooperation" were prominent, however during implementation and adaptation, the
dimensions "cooperation" and "operations" were dominating.

Political factors will continue to dominate the strategy debate in the long run. The mid-term and
short-term time horizons are dominated by cooperation and operations. However, this pattern
may differ from instance to case. Evidence reveals, however, that the organisational pyramid
inside this situation was able to confirm value creation by enlarging or actually trying to lengthen
the rectangle three sides in strategic and operational stages constant with assessment and
reporting authority

Conclusions
The key to strategic success is to form strong internal and external alliances. The political level
may be unable to provide guidance on how to develop value. This appears to be the work of the
public manager, who is increasingly called upon to provide answers for the ongoing evolution
and re-adaptation of what and how things are done. Not only the strategy, but also a modern
understanding of strategic management must be communicated throughout the organisation
political management in order to gain widespread support. This should be done in such a way
that ownership is ensured, so that not only the strategy, but also adaptation is owned by all
levels, because adaptation will generally occur on a tactical level. “It matches the ambiguity,
uncertainty, and changeability of purely public situations,” says logical incrementalism. The
strategic triangle can be used as a tool for counselling, training, and research. To validate the

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idea, more study is required. It enables incremental flexibility, reduces complexity, creates focus,
and is readily expressed and accepted, among other advantages.

References
Alford, J. (2001). "The implications of 'Publicness' for strategic management theory" in Exploring
public sector strategy, eds. G. Johnson & K. Scholes, 1st edn, Pearson Education
Limited, Essex, pp. 1-16.
Boyne, G.A. (2004). "Strategy content and public service organizations", Journal of Public
Administration Research and Theory, vol. 14, no. 2, p. 231.
Nutt, P.C. & Backoff, R.W. (1992). Strategic management of public and third sector
organizations, 1st edn, JosseyBass Inc., Publishers, San Francisco.
Osborne, S. (2006). "The new public governance? ", Public Management Review, vol. 8, no. 3,
pp. 2006-387.

PART B / BAHAGIAN B
SOALAN TIGA / QUESTION THREE (50 MARKAH/ MARKS)
This section refers to the organisational analysis: Malaysian Palm Oil Board (MPOB). Please
visit the MPOB website at https://mpob.gov.my/ before performing the assessment.
Case rationale:
The oil palm is one of the important industries in Malaysia and plays a pivotal role in feeding and
fuelling a growing global population. At the same time, the industry is facing more opportunities
and challenges in the current situation where more demand is expected due to the increasing
global population. MPOB can be considered as one of the main agencies directly involve in
maintaining the relevance of oil palm industry towards Malaysian economy.
a) Comment on the relevance of MPOB’s organisational direction with its existence.

Introduction
Strategic management in MOPB is very important to ensure the success of MPOB and
nowadays it has been widely used as a new approach to face change and improve MPOB
performance. The aspect of strategic planning emphasized in strategic management by the
organization for a long period of time. In addition, effective leadership in each organisation

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strengthens the organisation and gives it a high level of legitimacy in terms of performance., the
way the organization works, how to solve problems and make decisions.

Palm oil production is very important for the Malaysian economy, which is the second largest
commodity producer in the world after Indonesia. The Malaysian Palm Oil Board (MPOB) is a
government agency responsible for promoting and developing the palm oil sector in the country.
The oil palm plantations sector in the region generates approximately 90 million tonnes of
biodegradable polymers, which includes agricultural residues clumps, palm stems, and tree
branches, while also palm oil mill effluent (POME). MPOB can be considered as an agency
directly involved in ensuring the palm oil industry remains relevant to the Malaysian economy.
Malaysian crude palm oil (CPO) prices soared on September 21, which is one of the highest
since the Covid-19 outbreak hit the world. The price of palm oil reached RM3,111 in January,
which is the highest in 2020 so far. In May, the price dropped due to Covid-19 and has now risen
again to RM3,000.

The direction of the MOPB organization is very clear and coincides with its goals. This can be
seen when MOPB launched the ‘God’s Grace Palm Oil’ campaign by the government in 2021 by
highlighting the advantages and potential of versatile palm oil in various industries. The
contribution of the palm oil industry is undeniable in various sectors whether in the food or non
-food sector, providing benefits in terms of health and nutrition, improving the socio -economy
especially smallholders as well as advantages in reusing by -products derived from palm oil
processing.

In addition, world palm oil prices are seen to be strengthening in addition to prices for other food
production. This became a driving point to an increase in innovation and improvement creation
in this sector. The decline in palm oil production has further increased prices palm oil which is a
major oil producing commodity in the world. Raw palm oil is expected to be able to respond to
future fuel needs due to its availability renewable from time to time.

References
Sinar Harian Online. (2021).
https://www.sinarharian.com.my/article/106858/BERITA/Nasional/Sumbangan-besar-minyak-
sawit-Malaysia

I. Fertő. (1995). Methods For Stabilizing Agricultural Prices In Developing Countries.

https://www.jstor.org/stable/40729609

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b) Based on the above discussion, identify and explain FOUR (4) opportunities and FOUR
(4) threats (20 markah / marks) faced by the MPOB
Introduction
The impact of the global COVID-19 outbreak will make 2020 a difficult year for the Malaysian
palm oil business. The palm oil industry's performance was badly harmed in the first quarter of
2020 due to adverse exports and low market palm oil prices. In the second quarter of 2020,
through the gradual reopening of the world economic sector in addition to the introduction of
government incentives under the National Economic Regeneration Plan (PENJANA), it has been
able to revitalize the palm oil industry. In the third and fourth quarters of 2020, there was an
increase in palm oil prices as a result of increased exports of palm oil and other palm-based
products so that this commodity became one of the largest contributors to the national economy
at a time when other sectors were struggling due to global economic uncertainty.

Opportunities in the MPOB

Among the main factors that contributed to the increase in the price of Malaysian Palm Oil
(CPO) were the low level of palm oil stocks, strong palm oil exports especially from the second
half of 2020 and the increase in soybean oil prices in the world market.

As one of the world's leading palm oil producing countries, Malaysia still maintains its position as
a major player in the global vegetable oil and fat market. In 2020, Malaysia will still maintain
Malaysia's palm oil exports at 17.40 million tonnes or representing 18.3% of the world's total
vegetable oil and fat exports. In 2020, Malaysia will still maintain its position as the world's fourth
largest producer of vegetable oils and fats. The three main export destinations for Malaysian
palm oil in 2020 are India, China and the European Union. India is Malaysia's largest palm oil
export market in 2020 with total exports of 2.75 million tonnes, followed by China with total
exports of 2.73 million tonnes and the European Union of 1.94 million tonnes.

The contribution of exports of palm oil and other palm-based products to the country's export
earnings has increased to RM73.25 billion in 2020 compared to only RM67.55 billion in 2019.
This makes the contribution of the palm oil sector to Gross Domestic Product (GDP) in 2020
worth RM48.31 billion or representing 56.8% of the total GDP contribution of the country's
commodity sector. The price of CPO was initially traded high at RM3014.00 per tonne in January
2020 but has dropped to its lowest level of RM2074.00 per tonne in May 2020 in line with the
global economic recession as a result of the COVID-19 pandemic. However, the price of CPO
has shown an upward trend starting from RM2412.00 per tonne in June 2020 and continued to
rise to the highest level of RM3620.50 per tonne in December 2020. Overall, the average price

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of CPO has traded higher by 29.2% to RM2685.50 per tonne in 2020. compared to only
RM2079.00 per tonne in 2019.

Although many countries still practice movement control because of Covid-19 but the need for
food is always there. The main factor contributing to the price increase was the increase in palm
oil exports by up to two per cent in September compared to August. The increase in exports was
due to purchases by India, Bangladesh, South Africa, the Philippines and Turkey.

Chairman of Malaysian Palm Oil Berhad (MPOB), Datuk Ahmad Jazlan Yaakub stated that
among the factors of the increase was the high demand from buyers including China and India.
MPOB sees China, India and the European Union as the largest markets for the Malaysian
market. There are many challenges that MPOB has to face from these countries. What is
important is that consumers will always increase, the world population will increase and it is
expected that by 2043 the total population will reach nine billion.

It will affect the increased fat requirements, so the dependence on oils and fats will increase.
However, MPOB cannot rely solely on India, China and the European Union for the palm oil
market. Achievements in the first six to eight months of this year are not all from the previous
countries, but also include Turkey and the Philippines.

In fact, strengthening existing markets and adding new markets such as Africa is a priority for
Malaysia's palm oil exports. Apart from the 10 largest importers of palm oil from Malaysia such
as India, China, the European Union, Pakistan, Turkey, the Philippines, Vietnam, the United
States, Iran and Japan, markets in the Middle East, Africa and Central Asia have the potential to
become consumers of palm oil.

Another factor is the rising price of soybean oil. On December 6 last year, for the first time the
price of palm oil was US $ 3 higher than the price of soy. In the near future, China will increase
its soybean purchases and this will increase its price. The increase in soybean prices will make
palm oil products more competitive. In the early stages, palm oil was the second largest
producer and soy was the major food oil producer in the world before 2006. At that time, the
1980s and 1990s we were attacked by soy-related associations and non-governmental
organizations (NGOs) saying the country palm oil unsafe to eat due to the content of saturated
fatty acids and so on. However, in 2006 palm oil has become a major oil producer. And now
Malaysia is one of the countries that is the world's main supplier of food oil and causes the role
of soy to be lower.

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As for Malaysia's palm oil exports, it was found that soy is not a major challenge in Europe
because the country also has sunflower oil and corn oil. What is happening is that the country’s
palm oil is cheaper due to several factors.

It is produced by the third world, so the production cost is lower while the yield is eight times
higher than soy. This gives us an advantage. Competitors cannot use economic reasons
causing them to use environmental, health and so on reasons to defend their economy and
business.

As much as 30 percent of the technology produced has been commercialized by industry.

MPOB also uses drone technology to control pests such as caterpillars in oil palm plantations.
MPOB also developed 47 technologies for farm mechanization and balanced fertilizer
formulation, namely MPOB F1, F2, F3, F4, F5, and F5 to increase yield and productivity.

In the non-food downstream sector, MPOB has always been proactive in leading efforts to
strengthen and enhance the competitiveness of the country's downstream palm oil industry by
intensifying R&D activities as well as providing added value to downstream palm oil products.

The latest technology developed is the production of margarine that is suitable for room
temperature and red palm oil food technology. Through continuous R&D, MPOB successfully
produces technologies and formulations of environmentally friendly and user-friendly products.
This includes surfactants for cleaning products, cosmetic products, soaps and so on.

Challenges faced by the MPOB

The main challenge that affects the fluctuation of palm oil prices in the country is that the price of
palm oil in the local and international markets is always influenced by fundamental factors and
market sentiment. PKP and Covid-19 slowed down the activity. In addition, there are also some
countries that receive negative and inaccurate information about Malaysian palm oil. Although
many countries still practice movement control because of Covid-19 but the need for food is
always there.

The second factor is the low CPO production in October due to the effects of La Nina which
brought heavy rains thus disrupting harvesting activities and gathering fresh fruit bunches (FFB).
La Nina is two complex weather patterns caused by changes in the temperature of the Pacific
ocean at the equator. Located close to the equator of the Pacific ocean, weather patterns in
Malaysia are influenced by events known as El Nino and Southern Oscillation (ENSO). Wind
circulation due to ENSO events affects rainfall distribution in Malaysia. Extreme changes in
rainfall distribution either below or above the average level of rainfall distribution have a

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significant impact on the productivity of Malaysia's main agricultural commodity, palm oil. The
reduction in rainfall creates current pressure on the development process of oil palm fruit
bunches and thus reduces the yield of fresh fruit bunches (FFB). On the other hand, higher than
average rainfall also has a negative impact on oil palm crops and reduces oil production. In
general, rainfall distribution that is too low and too high is seen to affect the movement of crude
palm oil (CPO) prices.

Meanwhile, the big challenge is that Malaysian-produced sawit oil has been slandered and
tarnished and boycotted due to the country's success and other advantages. Low production
costs and high palm yields, and even its various uses, especially the liquid and saturated parts,
have managed to maintain the country's market for the international market. Ahmad Jazlan
Yaakub has voiced MPOB's desire and dissatisfaction to the European Union Delegation to stop
discriminating against the country's palm oil and subsequently recognize the Malaysian
Sustainable Palm Oil Certificate (MSPO)

The benefits of this palm oil become a challenge and competition to them. They will continue to
issue whatever arguments to denigrate our palm oil in order to defend their own economy and
oil.

In addition, the technology and implementation of Malaysian Sustainable Palm Oil (MSPO)
certification makes our palm oil the only one in the world that must be produced sustainably. We
require MSPO and MPOB to be directly involved in helping more than 500,000 smallholders.

References
Ahmad Ashmal Azizan Zaimah Darawi Mohd Noor Mamat. (2012). Future Scenario and
Marketing of Malaysia Palm Oil for Planning Strategies in Enhancing Competitiveness in
International Markets. Universiti Kebangsaan Malaysia

http://palmoilis.mpob.gov.my/V4/warta-sawit-bil-77-1-jan-apr-2021/

http://palmoilis.mpob.gov.my/V4/wp-content/uploads/2020/03/Warta-Sawit-Bil.-64-2016.pdf

Sinar Harian Online. (2021).

https://www.sinarharian.com.my/article/106858/BERITA/Nasional/Sumbangan-besar-minyak-
sawit-Malaysia

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c) Recommend TWO (2) strategies for MPOB in facing the future of palm oil industry.
Provide justifications for each recommended strategy.

Introduction
In proposing strategies to MPOB in facing the palm oil industry in the future, there are various
approaches that can be used such as making complete preparations with the utilization of
technology, joint ventures with foreign countries as well as factors. Other drivers are needed as
a guarantee to the country to face the challenges on the future successfully. It is recognized that
the Malaysian palm oil industry is currently facing stiff competition from the neighboring country
of Indonesia. The country is now the world's leading producer of palm oil. This is due to the
advantages that Indonesia has to drive the palm oil industry their country so fast and always
showing drastic improvement. Apart from that, the Malaysian palm oil industry also faces intense
competition from the industry other oils such as soybean oil especially the growing ones. In no
way directly affects the total demand for domestic palm oil by foreign countries. Country through
MPOB should address the challenges by proving that the Malaysian palm oil industry is not only
able to remain competitive in the global market and even be a sustainable industry and
emphasis on environmental sustainability.

Increase The Adaptive Capacity Of Smallholders

MSPO certification is based on the application of Good Agricultural Practices (GAP) Soil and
water conservation. The importance of the method (SWC) in manufacturing thus preserves the
natural quality of oil palm resources which protects resources and the environment. The level of
awareness and application of SWC among independent smallholders (ISH) is less understood
so it is suggested that, the government should help promote MSPO through smallholder
cooperatives is much needed. Another criterion from GAP is weed management in oil palm
plantations. These unwanted plants fight with oil palm for nutrients, water, light, and space. To
maximize the yield of palm oil, it is necessary to use the right fertilizer at the right time. ISH, on
the other hand, uses a lower rate of fertilizer than the recommended dose. A large number of
ISHs not only lack information on oil palm nutrient deficiencies, but also fail to perform soil
analysis prior to planting. There is a need to strengthen outreach efforts to educate ISH on
proper fertilizer use. More research is needed to fully understand the impact of ISH results on
fertilizer use. Zaki et al. (2020a) conducted a survey to better understand the purchasing

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behavior of ISH in Sabah in terms of price, distributor, and fertilizer purchase intention. Nearly
two -thirds of ISHs (61.2%) use fertilizers based on their own knowledge and experience, while
the rest of ISHs seek technical assistance from MPOB.

About 40.0 per cent of ISHs have hired labor to fertilize their oil palm, according to the report. In
addition to price, there is a positive relationship between brands and dealers when buying
fertilizer. Oil palm yields were found to be influenced by factors such as type and dose of
fertilizer, number of harvest rounds, weed control, and farm management. Also farm size,
knowledge of farm management, farm operation ability, perception of SBABB as the
implementing agency, and perception of MPOB as the implementing agency are all positively
related to production.

The easiest technique for overcoming challenges with available connectivity services is ISH
clustering. The Sustainable Oil Palm Growers Cooperative (KPSM) has the role of increasing
ISH income and also offers employment possibilities in the Malaysian oil palm industry.
According to a study by Zaki et al. (2020b), approximately 70% of KPSM Board Members have
previous company management experience and have completed cooperative-related training.

Although a large number of them understand their role in communication with other Board
Members, as well as the policy of internal control systems and rules of the cooperative, it is seen
as effective and it is recommended that Board Members be given the necessary training to
contribute new profit generating ideas to the cooperative.

Strengthen Support
While having advantages in terms of production and having a quality of production

well, the country’s palm oil industry should emphasize the commercialization aspect. Indirectly, it
is will be able to attract foreign interest and open up opportunities to strengthen the palm oil
industry Malaysia in the eyes of the world. The most important step in increasing
commercialization is by creating projects that are able to attract foreign investors by involving the
cooperation of companies as well as corresponding to the appropriate amount of resources.
Another step is to develop or diversifying high value -added palm oil products in the international
market. Downstream industries mostly produce low value -added products. In line with the
increase world population, this situation will indirectly increase the demand for food and energy
source.

Currently, there are issues raised by the independent bodies (NGOs) palm oil industry which
causes pollution to the environment as well as destroying flora and habitats fauna. Steps to

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address this are by setting up palm oil technical advisory centers in countries Malaysia's main
importer of palm oil. In addition, other relevant recommendations are by promoting the country’s
palm oil products produced through production and sustainable development. The government
can also take action by setting up shelters wildlife and involves cooperation between agencies in
the country’s palm oil industry as well The Forestry Department in each state which is the
location of the main oil palm cultivation activities.

The government should also encourage agencies involved in energy resource development
alternative. With a zero waste strategy, this means in the production of crude palm oil (CPO), no
sewage is produced and no carbon dioxide is released into the air by the oil refinery palm. The
development of biomass energy resources is important to ensure the reduction of waste as well
provide alternative energy sources such as biomass to grow. Governments and agencies
involvedsuch as MPOB also needs to increase the contribution of smallholders following 40 per
cent of the area crops are smallholder entrepreneurs. To facilitate the liberalization process,
policies, laws and regulations on censorship activities should be harmonized.

In addition, the national palm oil industry achievement targets can be categorized into two
periods which are different i.e. medium term and long term. Those goals are createdbased on
ability by taking into account the factors available in the current period. Inin the medium term, the
country's palm oil industry achievement targets include increasing new palm oil industrial areas
in the country as well as providing the environment capable of attracting investment into the
palm oil industry regardless of whether local investment or abroad. In order to achieve the target
to increase the palm oil industrial areas the new, the government is seen to place more
emphasis especially on the opening up of areas palm oil industry in the states of Sabah and
Sarawak due to land or area factors as well as the potential to be used as an oil palm cultivation
area.

References
Ahmad Ashmal Azizan Zaimah Darawi Mohd Noor Mamat. (2012). Future Scenario and
Marketing of Malaysia Palm Oil for Planning Strategies in Enhancing Competitiveness in
International Markets. Universiti Kebangsaan Malaysia
http://palmoilis.mpob.gov.my/V4/warta-sawit-bil-77-1-jan-apr-2021/

http://palmoilis.mpob.gov.my/V4/wp-content/uploads/2020/03/Warta-Sawit-Bil.-64-2016.pdf

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Sinar Harian Online. (2021).
https://www.sinarharian.com.my/article/106858/BERITA/Nasional/Sumbangan-besar-
minyak-sawit-Malaysia

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