CHAPTER 1

INTRODUCTION

1.1 Research Background

Developed between 1980 and 1990, Resource-based view (RBV) is interpreted as a

business model that evaluate one company resource in order to gauge their competitive

advantage (Mazzei, 2020) in respective industry sector. Under the similar literature, the

term for RBV and competitive advantage are clearly defined in order to lead scholar

research into the subject matter even more precisely. First, RBV as business model

looks into various attributes of the resources made available under the roof of the

company. To name a few, the attributes include whether resource is in form of tangible

or intangible. Secondly, competitive advantage is defined as additional capability over

its competitor, which is anyway unable to be imitated by the competitor or being

overtaken in the similar field sector. The philosophy of the subject model tells that

whenever a company wants to enhance its competitive advantage, the company shall

look into its internal core function instead of putting efforts into investigation to the

opponent side. The objective of such motive is to maximize and unlock the full potential

of its own internal resource to gain competitive edge.

The research background for this paper of RBV is taking a currently practicing

local engineering consultant firm as study subject, which specializing in construction

field work in Sabah.

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 The current operating conditions are being modelled and investigated to implied

onto this research paper subject. As the subject consultant firm is an established firm

organization in local industry, the situational research parameters are approximate

precisely representative to the ideal research model. The firm autonomy and

performance indicative level are taken for consideration and contribute to the further

study in the research of this paper. In addition to that, interaction of such consultant firm

with the peer group is also contribute to further research into the subject field issue.

1.2 Problem Statement

The main problem to the equivalent related researches in the topic of RBV is lack of

research study into firm heterogeneity which enable that the RBV to be successfully

modelled as theory (Lockett, Thompson, & Morgenstern, 2009), and to be implemented

to test its effectiveness and relationship in between, although RBV for firm

organizational management has been critically reviewed dated since more than 20 years

ago. Many researches have been conducted to investigate RBV in its directive strategies

and its effectiveness toward a firm productivity. Generally, RBV is critically examined

by theory, methodology, empirical evidence as well as practicality in real business

model for a firm. As emphasized by the same literature, RBV is only being focused on

its theory and superficial method by the research paper that conducted but the solid

evidence together with the real life insight is not tabulated logically.

Second to that, current literature has emphasis on the frequently ignored theory

of resource functionality in a firm. The obvious relationship of cognitive psychology

and decision-making pattern to RBV is unavailable thus far and this is regarded as main

2
weakness for RBV research literature to date (Lockett, Thompson, & Morgenstern,

2009).

Thirdly, literature critically commented that current scholars put on more effort

and shall research RBV from the aspect of its permeable, eclectic nature so that a new

insight can be investigated from a firm behavior (Lockett, Thompson, & Morgenstern,

2009).

The issue of RBV of firm in Sabah is that, such philosophy is not widely

adapted in practice, while undisputedly only minority of the firms do make RBV as

their backbone in organization structure. In Sabah, majority of the engineering

consultant firms are traditionally involved in construction industry line. When Sabah is

a state in the Federation of Malaysia, a developing country as view on scale of

economic status in the world today, the main economic activities are construction

industry. Therefore, engineering consultancy practice started from this industry as

mainstream in this kind of delivery output professional services. As such the traditional

culture was inherited to these days among the consultancy players in the market.

As the name goes, consultant firm is operated by professional personnel, an

engineer in this context. This kind of professional engineer has been accredited with

title 'Ir.' by their association Institution of Engineer Malaysia (IEM) and Board of

Engineer Malaysia (BEM). The IEM and BEM mandates that any consultancy firm

must be headed and operated by these accredited professional as per their Registration

of Engineer Regulation 1990 (refer to Appendix A). Such accreditation of social status

enables the professionally trained personnel to carry out professional services including

consultation in term of engineering work to the public. Therefore, the professional

engineer holds ultimate decision-making and authority onto the operation of

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organization firm and this is free from external influence that will pinpoint the wrong-

doing event by the individual firm.

These professionals are treated as reliable source for technical advice for an

agreeable fee charged upon. From layman point of view, most seeing the consultant

firm or professional engineer as trustfully and reliable professional ensuring the public

safety and health in the society, also known to safeguard the public interest in the

whole. Engineers are assumed as the catalyst to civilization development toward

betterment in society.

In addition to that, this research paper will reveal the weakness of such current

existing practice in industry which contributes to the unproductive working atmosphere

within the industry players in Sabah. There are always engineering mishaps happening

as a result of engineering negligence, which indirectly introduce unfortunate

consequences to the public safety and interest. Due to this, there always an argument

about the professionality of this professional community. This research paper is focused

to identify this situation and clarify to welcome further investigation into the subject

matter. Consultant firm is a professional engineering firm which based on technical

expert knowhow and experience to deliver the advisory services. As engineering

mishaps occurred are undoubtedly as a result of incompetency by the firm, the root of

cause is automatically directed to the firm’s resource e.g. whether the firm has sufficient

resources, experience as their only intellectual asset to carry out the task. This paper will

also contribute the root of causes for such unhealthy problem within the engineering

community.

Directly, the reason of non-availability of RBV implanted, or immature and

improper development of RBV in consultant firm is revealed with the show cause of the

identified roots. All of which has presented as challenge to the implementation of RBV

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within consultant firms in Sabah. Overall, and also as a root of cause that RBV is not

prevalently implemented in consultant firm in construction industry especially Sabah is

because the awareness to the importance of RBV philosophy, which is currently

perceive as rather weak and not being emphasized by the local professional. The

practicing professional currently in the market who, own consultant firm is seeing not

having appropriate professional view and direction for improvement in their business.

These are hypothesized related to the personal altitude to the professional personal and

it is not fair, if such incident is to be related to the total number of registered

professional engineers under the umbrella of the IEM Sabah constitution.

Such phenomenon occurs may due to the fact that previous admission system to

the professional association board was not through an appropriate filtering system, in

that time period ago. As such, the then candidates were not professionally evaluated to

their capability and with sufficient professional experience before they are being

recognized and being honored with the professionalship. Subsequently, this situational

mishap-ly create a group of incompetent professional who conduct and carry

professional services within the society in a wrongful, unprofessional manner, at which

to the extend of layman term of general understanding this is a misconduct of

professional. It has been seen that most professional engineers in the field by Sabah are

not competent to the required level to discharge their works and professionalism

appropriately. Much of the problematic issue pertaining to engineering works are the

sign of incompetency by the consultant firm, which in turn reflected to the principal

professional engineer. It is seen that such problematic firm is not implementing RBV

philosophy in their working place. This is the prove of that RBV philosophy has not

been revealed in its precise nature as mentioned by literature for this research paper

(Mazzei, 2020).

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 Therefore, this research is to initiate further research and conduct investigation

into such unprofound root causes of incompetent professional engineer in consultant

firm. This domain of research will contribute into the overall picture of the development

and challenge of RBV for consultant firm in Sabah.

1.3 Research Objective

This research objective is to identify and address the problem issue of development and

challenge of RBV in consultant firm in Sabah. To be precise, the research is targeted to

identify and confirm the roots of cause for such phenomenon whereby the

implementation of RBV in consultant firm has failed in Sabah. Research literatures

from relevant field are taken for research and explore the evidence for such RBV

implementation in consultant firm, beside to prove that incompetent professional

engineer is the root of cause to the problem matter. First and foremost, the research is to

identify the status of such RBV management strategy in Sabah firm. The status of non-

proactive will reveals the challenge for implementing such strategy in local consultant

firm in the market. As a concluding of the research effort, some suggestions will be

proposed for public opinion to further investigate into improvement for such occasion.

1.4 Research Questions / Hypotheses

The research will be implemented via form of questionnaire in order to get up to date

industry market info for the subject field. The hypotheses for this research writing is

that, RBV is unable to be exercised as mean to improve organisation operation status

because the practising professional engineer is not competent and therefore not aware of

the importance of RBV.

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 The question proposed to be included into the questionnaire is a series of

chronological questions that is designed to lead the interviewee going through the

stages, to better illustrate the objective of events and as well as to create awareness of

the RBV. The following questions are proposed as such;

i. Is consultant firm you are working on is satisfactory performing to your

opinion?

ii. If not, which is the cause of such phenomenon?

iii. In your opinion, how is the performance of the professional engineer in your

current work place?

iv. Are you aware of RBV (Resource-Based View) philosophy to be implemented

in consultant firm in Sabah?

v. Is your consultant firm implementing RBV equivalent methodology

management, by the Professional Engineer?

vi. Do you agree such RBV management is crucial to your work place?

1.5 Significance of the Research

This research is meant to reveal the phenomenon of why firm in Sabah is not practicing

RBV method in their operation within the organization. This research will pinpoint and

identify the root of causes for such phenomenon and will propose several improvements

that will contribute to the local industry firm, taking into account of current market

survey opinion at the time. This research is significant in the way that the focus is onto

Sabah consultant firm industry, which are very much behind the normal progression

pace as their counterpart in Peninsular Malaysia or any part of the world. In addition to

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that, this research will surface the incompetency among the professionals which

otherwise never be looked into it. This research provides an eye opening for scholars to

look into the matter in which deteriorating the construction industry in Sabah.

1.6 Definition of Terms

The following are the terms that used extensively throughout the research and it is made

global interpretation in this paper so as to achieve common understanding to all the

researchers while assessing this literature;

“The Resource Based View emphasizes the importance of enhancing each firm’s

specific resources associated with path dependency.” stated Hiroko Nagano (2019,

p.101).

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 CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

In a research literature by Lockett, Thompson and Morgenstern (2009), RBV has long

been a hot debateable subject extensively way back to 20 years ago. It is very well

confident that all of the researches conducted in this domain has initiated the intellectual

foundation for the thought into the relationship between opportunity for a firm, strategic

behaviour to be aligned with the outcome by competitive, performance advantage.

According to this research literature, it is identified that many scholars define

RBV in a different manner, respectively (Lockett, Thompson, & Morgenstern, 2009).

Under the ideal interpretation of RBV scope, a firm has historical accumulation of

assets and resources which are adhered partially but not permanently (Wernerfelt,

1984). Teece et.al (1997) seeing that RBV is resource type fully adaptable to a firm like

physical capital, brand names rather than the less tangible assets such as competency

capability (Teece, Pisano, & Shuen, 1997).

This literature reveals that resources can be segregated into static resources and

dynamic resources. Static resources are defined as those stock of assets to be utilised

conveniently over a finite period (Barney, 1991). On the other hand, dynamic resource

is interpretated as the capability of the firm which potentially attract opportunities

(Collis, 1994).

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It is determined that the relevant resources in this research by RBV definitions are

specifically subject to a firm and impossible to be plagiarised by competitors (Barney,

1991). This is competitive advantage to a firm and guarantee a substantial advantage

over a period because of its uniqueness. Such conditions are the result of a firm past

operational experience, either from managerial decisions or subsequent experiences

accumulated from the incurred lost trial and error along the course of work.

Empirical evidence from past scholar research had confirmed that RBV can acts

as solid framework in evaluating performance between different firms in the market

(McGrahan & Porter, 1997). RBV as core theory in the research of management study

until present day suggests it is time to review its development in society (Lockett,

Thompson, & Morgenstern, 2009). The topic of RBV rose to prominence due to ever

extensive scholar research into this subject and particularly new to local Sabah firm

industry.

This research literature can be summarized into key chapters to allow scholar

quick adaption into the subject and to identify the room for improvement.

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 Introduction
~Background of RBV

Theory
~Theories Chronologies

Methodological and Practical Difficulties

~Issue Problem

Empirical Evidence
~Supporting Evidence

Practical Insight
~Scholar Insight

Future Prediction
~Scholar Prediction

Figure 2.1: Overall Chapter guides for review literature.

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2.2 Theory of Resource Based View (RBV)

RBV is regarded as theory about the nature of the firm interacting with market socio-

economic (Lockett, Thompson, & Morgenstern, 2009). It is said that RBV is not bound

by limiting variables such as strategic behaviour nature. RBV guides the operational

directive for the firm to behave. As explained above those resources by RBV is unique,

the firm's performance will be different form one to the other.

2.2.1 Resource and Performance : Sustainable Competitive Advantage

Sustainable competitive advantage (SCA) is a solution approach on par with RBV

which was coined in respective literature work by Barney (1986, 1991) and Peteraf

(1993) in which this approach explains the sustainability of a firm competitive

advantage in time aspect. Barney (1991) iterated that SCA is subject to overall

ownership of firm's specific resources termed as VRIN which are valuable, rare,

inimitable and must be non-substitutable. According to Barney, VRIN is elaborated as

following;

i. Valuable resource is utilized to discover opportunity and neutralise harmful

threat within a firm environment.

ii. Rare resources are of limited and not evenly allocated to the tasks belongs to

the firm.

iii. Inimitability is situation whereby the resources are almost impossible to be

learnt and plagiarised by their competitor in the industry.

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 iv. Non-substitutable refers that the resource is unable to be replaced

equivalently in order to achieve the similar objective.

Peteraf (1993) had also emphasised how importance is similar limit to

competition resource market industry as a crucial condition for SCA. Amit and

Schoemaker (1993) had even illustrated RBV as a theory of rents due to the

imperfections in resource market. By this theory and a mathematical formula devised,

they proved that SCA is a rent that granted by the imperfections in the market industry

which effectively prevent a specific advantageous tool being made available to the

firm's competitors.

Resource market imperfection may be exogeneous or endogenous according to

the relevant scholar findings (Lockett, Thompson, & Morgenstern, 2009). Exogeneous

situation being observed within the resource market due to the phenomenon that certain

firms have extraordinary physical, organisational or intangible resource developed from

those firms' unique historical growth. Whereas endogenous phenomenon is due to

strategic and perfect learnt decision by the firm's decision maker.

Such situation can be seen in a firm's move to acquire certain resources for

exclusive utilisation is an effective move to secure their advantage over the competitors.

Firm conduct is therefore an endogenous type result of the management decision taking

in order to secure their sustainability advantage in the market. As such, the manager or

anyone who regarded as decision maker for as firm is seeing capable to venture into the

market imperfections in term of resources and products for devising a plan for SCA.

2.2.2 Resources and the Role of Managers

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RBV considers that managerial responsibilities is to include the repositioning of the

firm amid the opportunities and resource set changes. Manager acts as decision maker,

supposed to be adaptive and proactive in the response while fulfilling industrial

organization economics expectation, according to Lado and Wilson (1994). In contrast

to the traditional organisational role about the role of a manager, the management

decision or conducts by himself is capable to influence or even alter the nature of

competition in the industry market. This point as supported by Penrose (1959) that

manager decision and action is aliened to their perceptions consent about their own

managed firms as well as the external competitive market environment. Within RBV,

the three elements tied with managerial perception are resource functionality, resource

recombination and resource creation.

2.2.2.1 Resource Functionality

Literature suggested that it is the firm's productive opportunity encountered that limit

the growth of the firm (Penrose, 1959). According to her explanation on the theory,

managerial perceptions in consideration with available resources in hand determine

productive opportunities at their disposal. The uses of existing resources can grow the

firm's opportunity and even to the incomplete ultilisation of resources in a firm

environment, there will still be room for growth in operation. Penrose (1959) had

emphasis the issue of practical functionality of a resource in this context.

Wernerfelt (1984) pointed out that a firm is either the product or service or a

resources. Resource is capable of diverse functionality and may not need be only

applicable to a specific market only. It is the matter of wise decision by the manager to

maximise the usage of resources, in order to gain highest return at their disposal. The

15
main point is that the subjective perception of the manager influences the outcome

pattern for resource usage and this this phenomenon determines the competition rule of

the game. All the points supported to the understanding that the manager must

understand the functionality of readily available resources in hand and to comprehend

the capacity of usage whenever the resource permits (Lockett, Thompson, &

Morgenstern, 2009). Knowledge in the form of intangible resource has no real limit as

far as the extend for ultilisation in the field.

2.2.2.2 Resource Recombination

Penrose (1959) proposed that it is more fruitful to combining the resources in within a

strategy. Value will be added as result of resource combination and this is the

fundamental to the further discussed concept of capability (Lockett, Thompson, &

Morgenstern, 2009). Scholar defined capability as firm's ability to accomplish a

productive activity which is created through the simultaneous deployment of resources

and factors of production (Teece, Pisano, & Shuen, 1997). Penrose (1959) had pointed

that opportunity is what manager has effectively combining the resources to create

productive services, or capability in this context. Thus, there is no doubt that the

opportunities for firm's expansion and growth are only limited to the manager's

perception about availability of opportunities, willing to act upon and proactively

capitalize it with the resource on hand.

According to Sirmon (2007), resource recombination can be conceptualized as

stabilizing, enriching and pioneering. Stabilizing means to creating minor amendments

to the current capability in order to improve the skills gradually. Enriching is done

through extending the current skills by means of learning activities and injecting more

16
complementary resource for improvement. Pioneering involves creativity exploratory

type learning process so as to create a new dimension in term of capability of a firm.

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2.2.2.3 Resource Creation and Decay

Penrose (1959) iterated that a firm create or develop resources through productive

activities and excess capacity is created to the resource base. The resource base is

developed over the time as a result of the firm's activities in the market. In a most

notable scholar remarkable on resource creation, when intangible resource are

incomplete, firm will always accumulate the crucial resources rather than trying to

acquire them in a strategic factor market (Dierickx & Cool, 1989).

2.3 Methodological and Practical Difficulties

Many scholars tried to propose, under the domain of RBV, a relationship link as of how

to related the performance of an organization to the resources that belong to an

organization (Lockett, Thompson, & Morgenstern, 2009). However as what Newbert

(2007) argued, RBV has yet to define a clear defined hypothesis which enable a more

refined study into firm behaviour and transaction cost economic (TCE), whereby TCE is

frequently made comparison with RBV.

Tautology is seen as most fundamental issue to RBV (Lockett, Thompson, &

Morgenstern, 2009). As mentioned by Priem and Butler (2001) that only valuable and

rare resources can be a source of competitive advantage. The reason RBV is practically

challenging because the empirical assessment requiring identification and measurement

of relevant resources which have been proven problematic (Godfrey & Hill, 1995).

Such challenges due to identification when researchers make use of varies set of proxies

key capabilities and resources, which render systematic comparisons across the

empirical literature become more challenging (Lockett, Thompson, & Morgenstern,

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2009). Moreover, heterogenicity nature for any typical firm has created a even more

challenging or nearly impossible situation for researcher to develop a RBV hypothesis

among the homogeneous sample test firms (Lockett, Thompson, & Morgenstern, 2009).

Thus far, in order to overcome such complication due to heterogenicity, researchers

from similar field would have sampled a single-industry studies, which sometimes

being coined as natural experiment of exogenous changes in the industry environment

(Ingham & Thompson, 1995). This situation is supported by a fact about the difficulties

to segregate the performance effects by any specific resource in a large-scale

organization (Lockett, Thompson, & Morgenstern, 2009).

So called "competitive advantage" is controversial by its definition (Foss &

Knudsen, 2003). Due to this, the empirical tests for such research is more towards the

comparison of respective firms' identifiable resource endowments (Lockett, Thompson,

& Morgenstern, 2009). A scholar even argued that comparing the performance and

competitive advantage around the RBV research onto a firm in such a manner validated

the joint hypothesis that only resources (Ray, Barney, & Muhanna, 2003) will generate

competitive advantage.

RBV philosophy cannot exactly formulate a universal relationship between a

firm performance and any endowed resources (Lockett, Thompson, & Morgenstern,

2009). But a resource value is heavily relying on the specific application that make use

of it. For the last observed practicality difficulties from RBV itself, as mentioned by

Swann (2006) is the noise-signal ratio. In short, RBV presents fixed effects that

discarded in differencing which contain majority of interest during empirical work. Due

to reason that most empirical works in field are still favouring the single equation,

cross-sectional design, thus create inevitable issue phenomenon of causality. Such

deficiency in estimation is coined as the noise-signal ratio.

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2.4 Empirical Evidence

The resource and firm performance relationship has been proven evidently with the

research by Newbert (2007). He found that only 53% of the overall dedicated research

literatures had indicated clear positive support for the relationship link between

resources and the firm performance. He suggested that this finding is generally tally

with other relevant theories of strategic management such as the transaction cost

economics by David and Han (2004). The evidence supports that resource

combinations, capabilities, competencies are verifying the performance variations but

not a single resource in isolation.

In the aspect of resources and firm development, even pioneer research work by

Penrose (1959) had path a way understanding any typical firm's current resources bank

is capable of determining the future directional development growth. By this, under any

competitive environment, manager will always fully utilise available resources in order

to achieve growing objective to a firm.

Lemelin (1982) in a research paper of economy shown that diversification via

new market, is not driven by uneducated management decision but tailgating a

consistent approach from utilisation of known resources within a firm. He affirmed that

such diversification had consistently appeared within the industry group with the similar

resources. Caves (1996) and Grubaugh (1987) have collectively shown that proprietary

assets, relative Research and Development capability would contribute to the possibility

to expand firm's operation into international level. A good pick example would be the

Internet Service Providers (ISP) case study. It is evident that despite the emergence of

ISP sector in the market is unprecedented, but their own resourceful experience,

20
commercial background as well as the local market characteristics have shaped the next

direction of development and specialization (Greenstein, 2000).

There are evidence to support RBV in the aspect of market entry by a firm,

whereby any firm without comprehensive resources will have to attain relevant useful

resources via collaboration with the experienced firm (Lockett, Thompson, &

Morgenstern, 2009). Whenever a firm wishes to extend their operation arm in a new

market, this firm have to obtain additional assets to complement current resource base.

Refocusing event, also known as market exit in the industry is also seeing as

evidence that RBV anticipates the subsequent development of a firm (Lockett,

Thompson, & Morgenstern, 2009). In a research paper defining that a corporate

refocusing an act disposing low-level side activities and refresh strategic concentration

on the core business activities (Lockett, Thompson, & Morgenstern, 2009). Markides

(1992) had shown the prove that those firm undergoing refocusing phase were those

highly diversified firms previously, and now suffering from poor performance in the

market industry. There are hypothesis supported by literature that firm actions to divest

those unnecessary yet not worthy operations, so that more effort can be put onto those

performing operation activities within the business (Lockett, Thompson, &

Morgenstern, 2009).

Whereby Penrose (1959) has proposed that costs of management to be raised

with size and complexity, which being iterated as performance of a firm shall be

improved by decoupling (Lockett, Thompson, & Morgenstern, 2009). Research

conducted specifically onto firm profitability via a dynamic panel study, had affirmed

that positive tremendous improvement can be revealed as aftermath of divestment

decision within four years period (Haynes, Thompson, & Wright, 2002). Markides

(1995) proved that he found consistent statistic data indicating the increase in firm

21
profitability after the reduction in diversification of organization operations. All the

evidence concluded that the benefit brought about after divestment in a complex firm is

undisputable and it has shown the importance for a healthy firm growth (Lockett,

Thompson, & Morgenstern, 2009).

2.5 Practical Insights from RBV

RBV is viewed as a theory that tackles the confusion within the domain of behaviour

where decision making by manager is taken place (Lockett, Thompson, & Morgenstern,

2009). Conclusively, there are five insight phenomena offered by the literature to

illustrate the decision making behaviour pattern of a manager.

The first insight has emphasised that the manager really need to keep in view of

the firm's strength and weakness. With supporting finding by Wernerfelt (1984), that

any firm has exclusively distinctive internal characteristics which form an independent

basic for strategy formulation. By this statement, it iterates that a decided strategy move

should have incorporated the best quality available by the firm while rectifying the

potential weakness in the process.

Secondly, the literature argued that the resource base for a firm is path

dependent subject to history experience (Lockett, Thompson, & Morgenstern, 2009).

The resource bank is shaped upon the firm participation in market industries,

subsequently the market of today is going to determine the ultimate firm's resource base

for future to come. Current learning pattern of the firm is very much close proximity to

current existing operations.

Under the third practical insight of RBV, a manager ought to fully well verse of

the functionality to those available resources within a firm resource base. And the

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resources are defined by the application usage (Lockett, Thompson, & Morgenstern,

2009). From demand point of view, client is not interested pursuing the resources from

a firm, but rather on how the resource being make use to satisfy wants and needs request

(Levitt, 1960). Although the market boundaries have becoming blurring due to high

technological changes within the field of information and communication technology,

competing companies from similar field are racing vigorously with historical different

backgrounds.

For the fourth practical insight as proposed, the developed resource base to a

firm is always undergoing resource creation and decay (Lockett, Thompson, &

Morgenstern, 2009). It is normal that resource base will change over time in conjunction

with the evolving industry market. Any key value for competitive edge position will

become noncritical component in resource base, therefore the resource base shall be

managed wisely in term of decay and seek for replacement in term of creation.

Last, any anticipated positioning in regard from competitive advantage aspect is

to be developed internally of a firm (Barney, 1986). This is simply due to the challenge

of acquiring the competitive advantage within the realm of resource market when the

asymmetric information augmentation with new resource is unavailable (Denrell, Fang,

& Winter, 2003).

2.6 Future of RBV

Reason that most RBV research focuses on the theory and method only because many

scholars agreed that empirical evidence and practical insights will surface in timely

manner along the course of business (Lockett, Thompson, & Morgenstern, 2009).

23
Therefore scholars suggest the following subjective view for the future focal point of

further research into RBV.

First and foremost, it is suggested that more research should devoted into finding

out the theoretical cause of firm heterogeneity because heterogeneity is recognised

explicit and implicitly related to the start of RBV (Lockett, Thompson, & Morgenstern,

2009).

Apart from that, the theoretical for resource functionality should not be forgotten

and this represents the fundamental weakness for RBV literature works thus far

(Lockett, Thompson, & Morgenstern, 2009). Evidence to such weakness on dynamic

capabilities had been proven by other literature (Ambrosini & Bowman, 2009) but had

not addressed the issue of resource functionality. Understanding resource functionality

will enable a relationship study onto the potential of service boundary within the

industry at which any firm is to be competing.

In third future forecast for RBV, RBV theory can be researched in conjunction

with the other relevant theories in order to formulate and explaining the firm strategic

behaviour (Lockett, Thompson, & Morgenstern, 2009). Such unique phenomenon of

RBV research is considered a huge advantage by scholars when complex relationship is

hardly made understood via a singular theory equation (Gray & Wood, 1991). There are

more expansion space to develop RBV theory into dimension of permeable, eclectic and

permissive nature so that a revolutionary insight can be created explaining the firm

behaviour (Lockett, Thompson, & Morgenstern, 2009).

Lastly, meaningful and solid insightful case-study work of those real-life firm

shall contribute more into the quantitative investigation and research in RBV (Lockett,

Thompson, & Morgenstern, 2009). This initiative shall be implemented as new

methodological approaches for the empirical research onto RBV. Current literature

24
papers have typically shown the sign of multicollinearity and endogeneity issue from

the hypothesis test in the same firm-level data. Therefore more effort and focus shall be

diverted into the data collection and gathering from business unit level, plus with the

samples of small operated firms with less complicated resource set base.

2.7 Pursuing Performance within Consultancy Sector

The purpose to initiate such research is due to the fact that the performance of

consultancy sectors in Sabah is not encouraging, therefore this subtopic is dedicated to

elaborate literature research onto such phenomenon and trying to seek for suggestion in

order to improve in this similar sense. According to a research literature of similar field,

the chief executive officer (CEO), which also known as the principal of the firm in this

research paper domain, the sustainable leadership styles and the human resource

management policy dictate the consultant job satisfactory level (Cahyadi, Poór, &

Szabó, 2022). The acceptable criteria for a good management system for a firm, has

become a determining factor ensuring a conductive working environment within the

consultant firm. This research had confirmed that the consultant job satisfaction will

positively improve the firm performance where leadership style and human resource

practices are the independent variables while job satisfaction is the mediating type.

Sustainable leadership includes long-term vision, corporate and community

relations, ethical behavior etc. where these construct collaboration link among the

stakeholders and create long-term advantages for the firm. This behavior provides a

supporting recognition platform to those performing individuals, employees in

particular for a firm with an attraction to current and future generations. Sustainable

leadership shows the crucial reason as of why productive output is important and

25
correlates its relationship to employee’s need. This literature had emphasized the

importance of Sustainable Human Resource Management to the fact that this

management procedures unifies and reinforces the firm’s objective, inputs, processes

and subsequently the outputs, without the scarification on employees’ welfare. Reiterate

again, Sustainable Human Resource Management aims to foster the trust, collaboration

and engagement among the employee group in a firm. Such dependance relationship

cultivated among the teamwork will ensure that all employees are contributing the

maximum potential for the success of the firm’s goal and business objective. Thus, job

satisfaction is a consequence of leadership styles and human resource management as it

acts mediator in employee performance with human resource management (Cahyadi,

Poór, & Szabó, 2022). This strengthen that firm’s decision maker is capable to alter the

operational status of a firm, as well as being responsible for the misconduct or low

quality performance by the firm as targeted in this research paper.

Consultancy firm is viewed as similar to management consultation firm where

the basic of operation is based on competencies in a person professional, who improves

the effects of business strategies, operational processes and the outcome performance

(Cahyadi, Poór, & Szabó, 2022). The competent person is then considered an external

third party attached to client in assisting to retrieve benefits from the firm goals in a

particular work or project. Due to the transition shift of industry-based economy into a

knowledge-based economy in a country, the drive has made people to highly value

those highly skilled and individualized services as well as self-employment. Singularity

in leadership style is unable to be practiced in companies anymore. Consulting process

is determined undergo the same process from the initial stage which is known as pre-

project, mid stage which is the project and the post project stages. The literature has

identified that all consultancy work concerns with the emergence, existence and

26
recognition of a problem issue. This has emphasized the importance of improving

consultant quality in order to lead a betterment civilization. The above has again shown

that the Chief Executive Officer, owner, decision maker or the competent person who

runs the consultant firm is the main actor ensuring the quality of service renders by the

consultant firm.

Leadership styles and human resource management have linked in shaping the

firm’s employees motivation and productivity output by the firm. The leadership has

direct interaction to human resource behavior in manipulating the employee task

performance. By empowering the leadership and human resource management in a firm,

the firm will have control over the knowledge-intensive teamwork, such as engineering

consultant firm. Researchers have confirmed that in order to create sustainability in a

firm or organization, company leaders need to apply ethics, transformation, inclusivity

and responsibility on various aspects with the organization culture (Cahyadi, Poór, &

Szabó, 2022). Business ethics is evident to the success of organization sustainability in

term of economy, social and environmental aspects (Cahyadi, Poór, & Szabó, 2022). On

this, scholars agreed that ethical leaders will enhance organization or firm sustainability

by improving the profitability. Strategic and appropriate human resource management is

key to commit a long term investment in employees and a relationship correlation

within working relationship. Job satisfaction expectation by the employee is a sequence

of psychology where the job satisfaction level is subjective to their job being assigned

in the organization. It is justified that job satisfaction is a psychological evaluation

material in way of intrinsically and extrincisally. Intrinsically, is a parameter of

performed job and tasks output by the employee. Extrinsically where job satisfaction in

term of desired recognition, compensation and all other rewarding tools to acknowledge

employee’s performance. This paper have made clear statement that those employee job

27
satisfaction focus on the needs, motives and goals. Again, employee job satisfaction will

improve employee performance positively (Cahyadi, Poór, & Szabó, 2022).

The result of the scholar research reveals that the high motivation, productivity,

and output performance by consultant firm shown proportional relationship to high

performance individually. The firm with good teamworking atmosphere, the knowledge

and the great team collaboration contribution that produce such performance in the firm.

The result also shown that the consultant firm’s performance is positively affected by

the management’s sustainable leadership style apart from consultant job satisfaction.

Employee job satisfaction is on the other hand, positively affected by the management’s

sustainable leadership style with sustainable human resource management policy

(Cahyadi, Poór, & Szabó, 2022). The paper concluded that sustainable leadership style

and sustainable human resource management policy are the crucial aspects for the job

satisfaction and performance for the working consultant professionals within the

organization.

In conclusion, leaders for consultant firms is seen to be able to promote the

sustainability in human resource and leadership management through ethics, high

involvement and commitment etc. These parameters will positively affect the within job

satisfaction in firm.

2.8 Conclusion

The main research literature used for this study is comprehensively enough inclusive all

up-to-date fundamental research points by other scholars in the same subject. It covers

the defining of the whole RBV domain applicable to industry market, until providing

latest future insight for RBV.

28
2.9 Literature Review : Indian Software Success Story: A Resource-Based View of

Competitive Advantages

This research paper is trying to identify and reveal that consultant firm in Sabah has no

relevant resource based view while operating the organisation as well as delivering their

service to the industry. The objective is to prove that RBV is utmost critical to curb the

situation as in engineering consultant firm in Sabah. As such, this chapter will illustrate

a success example of implementing RBV in similar service industry which is the Indian

software sector by utilising RBV as the wining competitive advantages (Madhani,

2008).

According to the literature, the Indian Information Technology (IT) industry has

evolved and expanded greatly over the years since 1994 (Madhani, 2008). It is

confidently assured that the annual revenue gain in this industry will achieve US$ 80

billions by 2010. Due to this, Indian software industry will employ four million workers

professional and it is accounted for 8 percent of the country Gross Domestic Product

(GDP). All these success lie on the Indian firms capability to gather the teams of

talented engineers, professional prgrammers in order to deliver technical yet cost

effective outsourced service to cater for overseas customers around the world. All these

credited also to the Indian firm initiative of leveraging firm’s capability for maximum

economic value via the process of adaption and perfection of a new business model.

Outsourced software exported from India is distinctive where it sustained the

competitive edge of Indian software firm, which contribute to the expansive growth of

the industry. Abundant and cheap labour market is the contributing factor to establish

the foundation of India’s early exports. Then the growth in software exports is based on

29
the ever improved productivity and quality overtime in the industry. The success of

Indian software firm is due to many advantage available at the time, such as dynamic

capabilities and cost advantage of cheaper engineering talent pool. Dynamic capabilities

is enabling the Indian firm to use varying economic opportunities to establish a

proprietary market line for the export of outsourced services, with pool of talents

contributing efforts to make success at a cost effective rate. It is prevails that the ability

to deliver a dedicated working force comprised with relevant professional, who capable

to undertaking difficulties tasks are the basic value proposition and capability.

Innovative solutions being constantly proposed, in order to overcome any obstacle to

achieve task objective. E.g. exporters registers with their regional STP (Software

Technology Park) for satellite links and web operability, decreasing the cost of

telecommunication access while increasing the coverage, making possible for offshore

operations came within the reach even of smaller firm. Large-scaled outsourced

business model requires the firm to scale-up soonest to response the growth in

demanding market, human resource management capability etc.

In RBV perspective, lesser necessary resources are presented within the firm, the

firm will seek to overcome this deficiency by outsourcing the external expertise. In

contrary, if the firm has more necessary resources presented in within, the more the firm

will seek to uplift and exploit this expertise to gain the valuable competitive advantage

(Madhani, 2008). The Indian software industry sees no wise to invest time and the

scarce resources to acquire competencies which are only to be applied in a non-core

task/project.

RBV model from the remarkable success of exporting model of Indian software

industry is now serves as framework for prescriptive policies and strategies for other to

improve. The factors (Madhani, 2008) are as follows;

30
 i. Human capital which include quantity, composition and technical skills etc.

ii. Wages/ Cost advantages

iii. Government policy, support and vision

iv. Strong quality focus

v. Industry characteristics

vi. Capital

vii. Project/Technological infrastructure

viii. Time-zone linkages etc.

2.9.1 Human Capital

Human capital comprises of the collective characteristics and capability of the

professionals. Quantity of professional from a pool of talents is the strength for nation

human capital contributing to the success of Indian Software Industry. In India, to date

current strong nation in software sector has root dated back to at least one or two

generations of strong university, polytechnics and vocational colleges (Madhani, 2008).

The literature also suggested that such competitive human capital emerges only after

many years of the national continuous investment in the people education. India has

become one of the largest pools of technical professional personal in software and IT, in

addition to the fact that these pools of talents are English speaking fluently and

technically sound at competitive cost. All these has factored in as of why India software

industry can achieve tremendous steadily growth compared to any other nations around

the world. Due to the government investment onto education industry, India now houses

world class technical education institutions apart from the vast quantity of state and

31
private universities, which in turn produce even more skilled talent to be fed into the

market.

32
2.9.2 Composition

India has a considerable good diversity composition of younger population which 50

percent of the nation population is below 25 years of age (Madhani, 2008). The

software human capital is non-uniform across the spectrum as highly talented and

capable at higher end, and the trained skilled workforce at the lower end.

2.9.3 Language Skills

As stated previously that the raise of India software industry has been due to the large

English speaking community in India. The English medium as communication skill will

always become the most sought after criteria in outsourcers’s checklist to determine the

capabilities of software firms. Therefore, India enjoys this English language factor in

establishing the software industry.

2.9.4 Management and Technical Skills

Undoubtedly technical and management skills are crucial when operating a successful

firms. For IT firms, the resources available within the organization is in form of

technical skills related. Such skill is important to portray a firm’s capability to integrate

and embrace latest technologies in line with the firm strategic objectives. Whereas for

management skills, software firm make use of such ability to connect with the user

community, in order to develop an effective product to meet the need from the user

community. To this, India has good management with process skills and this is backed

with a strong business school network. From the success story of Indian software

33
industry, flexibility and capability to adapt to new emerging technology is a major

strength to software firm. The low training costs in india software industry provide a

good platform for professional to be updated constantly all the time.

2.9.5 Wages / Cost Advantages

Cost developing software is mainly driven by the wages of the junior code programmers

to the experienced project managers. The phenomenon is defined as financial terms as

“sourcing labor and capital where it is cheapest, and seling it where it is most profitable.

National borders do not matter.” (Madhani, 2008). Biggest advantages of outsourcing

processes to India is its cost savings factor, in turn provides a beneficial competitive

edge.

2.9.6 Government Policy, Support and Vision

The Indian software industry praised the success from their government who took

initiative and active steps to encouraging those high-tech sector growth that crucial for

future economic growth within the nation. Such moves are seen as the industrial policy,

science and technology policy and innovation policy as initiated by the government

(Madhani, 2008). India government has initiated a sustaining strategy which enabling

the national economic elevating on the value chain, developing the diversification,

innovation and differentiation, shifting from the scale to the scope of economy. All of

these domestic and global factor favourable to software industry regardless of size scale

industry in India and increasing the succeed rate. India government plays a proactive

and facilitating role to influence the growth of software industry. For example, India

34
government via Ministry of Information Technology initiated the Software Technology

Parks of India (STPI) in vision of encouraging the exports (Madhani, 2008).

2.9.7 Strong Quality Focus

Indian IT software and services consider quality as the hallmark within the industry

practise. Most of the India software company started to restructure their operation

objective to adhere to the international standards such as the ISO 9000 etc. as such India

software industry value proposition is due to the high quality knowledge profesisonals

and attractive price performance offered by the nation.

2.9.8 Industrial Characteristics

The industrial characteristics such as clusters effects, association, vision and standards

are the catalyst that push for the succeed of Indian software industry and its export to

offshore. Cluster effects as shown in Silicon Valley in the United States is the critical

mass of firms in geographic proximity, where technology related clusters are often

being deliberated government policy initiatives. Such effects offer a positive benefit

onto individual firm within the cluster, independently from other firms. Cluster effects

also created a conductive platform for healthy competition and cooperation among the

firms, while establishing stronger professional networks in within.

In addition to that, the success of India software industry is partly credited to the

software firms’ ability to gather mass resources into relevant association which serve to

promote the service locally and globally. The literature also praised the prominent

Indian NASSCOM (National Association of Software and Services Companies) that

35
had helped to strengthen the brand of Indian software industry (Madhani, 2008). Last

but not least, a clear vision and standard when defining the industry’s focus are

important ensuring the success of software firms. Vision to focus on the projected

development growth and the standard is the crucial component to the business growth

focus ahead. By attaining the internationally recognized standards of quality in a firm,

allow a firm to address the outsourcing software problem and services requirement issue

from a distant and exotic foreign firm.

2.9.9 Capital

Capital is a fundamental financial tool for any business to operate in the sector.

Software industry is too requiring sufficient capital in order to expand and grow. The

Indian software industry has been supported in growth and expansion with the internally

funded turn-over capital. The collateral funds source for these software industry are

either combination of domestic source which are the government funds or equity

offerings or foreign equity offerings etc.

2.9.10 Project / Technology Infrastructure

Technology Infrastructure is defined as the sophistication and reliability of the

communication system technology (Madhani, 2008). Software developing processes

require abundant, reliable, and cheap telephone and broadband data communication link

connection in order to operate and performance as intended. For the case of successful

Indian software industry, the software firms had skipped the unreliable terrestrial

infrastructure but ultilising the satellite technology for communication purpose with the

36
clients offshore. On the other hand, cluster-centred infrastructure which is also known

as technology park is the solution replacement for the unavailability of satellite

technology domestically. Software firms are able to make use of clustering to improvise

other infrastructural needs such as ultilisation of alternative power generation to

compensate to the unreliable power source in the country.

2.9.11 Time Zone Linkage

Zonal time difference between India and US is about 12 hours which enable advantage

in term of communication facility with the US customers. In layman’s term, when US is

in sleeping timezone, India is on the day time working time frame. India in this sense

has 24-hour working environment (Madhani, 2008). This advantage contribute

significantly in Information Technology (IT) sector in India. As such, the IT projects

which comprise of onsite teams and offsite teams will works around the clocks in

everyday. Onsite teams works by the daytime at end user site and to submit the delivery

before night, while the offsite will continue works on the same task at India base site

during the daytime on the other side of globe. This phenomenon is seeing as saving the

project execution turnaround time (Madhani, 2008).

2.9.12 Resource-Based Analysis : Emerging Strategies for the Indian Software Industry

In the case of Indian software industry, the success of the industry is due to the

phenomenon of abundant low cost resource which enable cost advantages in the

delivery of final services. The low cost resources advantages were much available ever

since the start, where low wages, large pool of workforces who can speak English and

37
highly educated and skilled, in a low infrastructural cost of India. As India continues to

offer cheap products into the world market, India economy improves by means of

increase earning to the nation. Such situation enables the wages for the workforces to be

improved as well in line with the input costs. But the continual phenomenon will lead to

the fact that the used to be cheap product becoming more expensive, thus the business

will be then relocated to another low-cost nation and the country’s global business will

turned down again. As per the literature had analysed that when Chinese economy have

improved tremendously, the wages and the production cost will raise up (Madhani,

2008). None of any nation has ever achieved sustainable competitive advantages by

delivering cheap commodities to offer to the world market. The low-cost resource

advantages in conjunction to economy in scales offer cost competitiveness though not

consider sustainable in long run.

The Indian IT firms are started from the lower end of the global software market

and targeting onto low-cost outsourcing job. The software industry in India shall make

move to rebranding themselves as supplier of value skills in the eye of global market

place, as such the software firms will have to change their role instead of providers to

commoditized contract labor services, to emerging as branded solutions consultants.

Indian software firms are required to suit themselves into some domain, possibly niche

areas for any specific services due to the fact that those who do not are less likely to

sustain for the long run while fading away the competitive advantages.

38
2.9.13 Conclusion

Conclusively, India has become synonym for IT outsourcing while maintaining her

status as most preferred outsourcing destination despite the fact that various challenging

competition falls hard onto Indian IT firms (Madhani, 2008). Those challenging factors

are the emerging IT-savvy countries, high raw wages overtime in conjunction with

appreciating rupee in India that cause narrower margins to the Indian IT firms. India

must not continue guarding the low-wages jobs but to transform to becoming providers

of high-value, high-margin services in the global market. Nations that can foresee the

future of growth direction and be able to prepare themselves for the challenges ahead,

are those who can survive throughout the era of competitive business and globalization.

The example of Indian software industry portrays the advantages that result from

good management of resources in within the industry sector. More deeply into the

environment for the uprising of Indian software industry in the country, the situation

was initially not encouraging despite the fact that India has lots of good quality

workforce such as the under development of the nation as whole and lacks of updated

technology etc. But all these obstacles were being converted into positive impacts for

the growth of the industry. Those negative obstacles being converted into positive

catalyst to the movement are the prove of the wise utilisation of available resources, to

be utilised in the direction of achieving the objective to realise the growth of software

industry in India. For the purpose of this research, the India country can be synonym to

a firm, where both will always a goal for improvement. Likewise, such improvement

requires that the country leader to be able to maximise and utilise the resources as tools

to achieve the objective of growth. Therefore, a firm is critically in need of resource-

39
based view philosophy mindset by the top management, to manage and control for the

betterment of a firm’s operation toward achieving the greatness.

2.10 Literature Review Case : Aligning Business Strategies and IS Resources in

Japanese SMEs: A Resource-Based View

The above literature about the success story on India software industry is a good

example of the importance for good management of available resources will contribute

to the advantageous growth achievement. To proper manage the resources within a firm,

the head of the firm, or the management must have the basic and reasonable Resource-

Based View knowhow for its implementation in an organization. Thus, a literature

which is more specific onto the firm operations based on RBV is elaborated as follow to

further enhance the advantages due to RBV implementation in this research paper.

First and foremost, the conceptualisation of alignment of business strategies and

Information System (IS) is generally agreed that such will improve a firm performance

(Griffy-Brown, Charla; Chun, Mark, 2007). In this context, the manager who runs the

operation as well as act as decision maker will have to learn to manipulate his internal

organization’s resources to match, and to create change in the competitive market place.

The key for sustaining the competitive advantage for the organization is the ability to

learn as fast as possible to alter the resource configuration by adapting to market

change. The literature focuses on the use of Information System (IS) in business

practise in small and medium capacity enterprises (SMEs) in Japan due to reason that

the firm resources such as IS contributes significantly in the development and growth of

dynamic capabilities in those SME. Today business world is being intruded with factors

such as deregulation, new technologies, economic pressures as well as globalisation and

40
competition, at which strategic planning and brain-storming are no longer stranger to

the firms that seek for survival (Griffy-Brown, Charla; Chun, Mark, 2007). To solve and

overcome all these challenges require distinct strategic solutions while establishing the

key internal capabilities which can be sustained. Competitive advantage shall be rooted

in an organization’s capability to innovate, learn, leverage relationships and implement

the vision. To this, the success rate of the strategy is dependant to the development of its

core and distinctive capabilities which result not only enhancing operational efficiency

but as well create sustainable strategic advantage.

IS technology contributes significantly shaping the champion organization or

firm with condition that such technology is effectively utilised in professional manner

(Griffy-Brown, Charla; Chun, Mark, 2007). It is the proper management of information

resources thus strategic application produce the positive result in operational

efficiencies for an organization. This literature focuses on SMEs in Japan’s economy

where these sectors critically make up of 99.7% of the overall trades industry in Japan

(Griffy-Brown, Charla; Chun, Mark, 2007).

2.10.1 Alignment of Strategy and Utilization of Firm Resources

According to the literature, firms’ performance are greatly influenced by the alignment

of designing and business strategies planning via IS resources (Griffy-Brown, Charla;

Chun, Mark, 2007). In term of operational condition of the firm, it is often that each

operational unit is being lowered its performance in order to optimize the collaboration

link across units simply due to varying management and product focuses onto those

autonomous business divisions. Each division unit utilizes variety and combinations of

resources, sometimes depends on special capabilities to stay competitive in their

41
respective market environments. As such, development of the subject resources and

capabilities need to be made aligned in a productive form where all relevant employees

can access to the IS resources and to perform the tasks and functions towards firm’s

goal.

Firm’s resource-based view (RBV) positions the organization to operate under

the exclusively available of valuable, rare, non-imitate as well as non-substitutable

resources by the competitor in the industry (Griffy-Brown, Charla; Chun, Mark, 2007).

By other meaning, such resources are the assets, capabilities, organizational processes

etc. which under the possession of the firm exclusively, to be utilised for strategies

planning aimed to improve efficiency and productivity. Therefore, RBV is considered to

be either tangible (e.g. assets) or intangible e.g. staff loyalty. RBV explains that the

resources have to be developed, selected and the strategies being executed at which the

existing resources are being exploited to create value generating better returns. With

these exclusively owned resources by a firm, it will achieve advantageous that cannot be

duplicated by the competitor in the market.

Dynamic capabilities are specific, identifiable as well as detailed analytical

processes available in a firm which creates market change. Dynamic capabilities are

such as strategic and organizational processes that utilise resources into value-creating

phenomenon. Dynamic capabilities are meant to do creation and initiate change in

similar industry sector while developing competitive advantage. In a firm, steps such as

uniquely integrating, recombination and replacement of resources for value-creating

strategies are milestone for dynamic capabilities development. Generally, RBV research

targets on investigation the resources and the inherited capabilities of one firm which

enable the firm to gain above average profits and indirectly a competitive advantage.

Latest research focuses on unique method approach by any firm in order to establish

42
strategies which stand out from the pool of competitors, as well as to respond swiftly

according to the business environment (Griffy-Brown, Charla; Chun, Mark, 2007). Such

phenomenon enables the firm to manipulate competitive disruption in the business

market when firm starts to assemble resources in its unique way to produce specific

organizational capabilities. Real-time information, cross-functional relationships and

intensive communication among the stakeholders with the external market are the key

factors to the dynamic capabilities. In order to improve the limited existing knowledge

in a firm, new knowledges will be produced rapidly in reference to the current situation.

All these are possible via actions that create rapid and repetitive learning from minor

losses and immediate feedback (Griffy-Brown, Charla; Chun, Mark, 2007).

2.10.2 History and Evolution of Japanese SMEs

In this literature where Japanese SMEs is the study subject, these industry sectors are

the basis for the need to apply resources in order to establish the dynamic capabilities.

Such research investigates the key relevant institutional innovation and change in Japan

over the past 50 to 60 years (Griffy-Brown, Charla; Chun, Mark, 2007). “Old” tonya

system, which is also known as residue of traditional and inefficient system of

production networks in SMEs in Japan before the World War II. After the World War I,

the ‘new’ tonya system started to emerged among the industry players who quite often

own operational manufacturing and factories that would embrace more high-level

production processes to assemble the final product. Such government initiative

intervention to merge small firm was seeing as the first example of Japan so called

“industrial policy”. However due to the fact that these small firms were very unstable in

its production system, the Japan government intended to reduce the number of these

43
firms in the industry market. Yet, the policy was unsuccessful but established the future

necessary environment for the creation of the complex networks for production which is

typical to today manufacturing sector in Japan.

SMEs in Japan faced advantages and disadvantages due to Japan’s political and

fiscal environment following the World War II. Although SMEs had greater political

influences because of its huge pool of members, but the steep interest rates had

restricted SMEs’ finances in the sectors. The government set up similar organizations to

assist the SMEs financially, in addition that series of laws was passed to help small

businesses during the 1950s. Such laws were passed to create special financing

institutions, to protect small firms from competition and included the permission to tax

discounts, and other means to avoid too aggressive competition. Researchers agreed that

those complex regulations, government affiliated financial institutions of SME support

organizations had enable the SMEs to expand and growth significantly (Griffy-Brown,

Charla; Chun, Mark, 2007). The Japan government resumed as the key role by

providing the shared database resources to aid the businesses in making effective

foreign direct investment decisions. Therefore, Japanese SMEs had gained access to

best practices from overseas management, control, financial management skills and

partnerships know-how for the business in the close proximity business.

The subcontracting systems is structured in descending tiers of subcontractors,

where the system consists of increasing quantity of firms along each tier relating in

longitudinally and horizontally within the structure of subcontracting. The

subcontracting structure is partly interrelated and partly independent as its development

in system increases proportionate with the increase percentage use of outsourcing

(Griffy-Brown, Charla; Chun, Mark, 2007). Due to this nature behavior, Japan

economic is extensively dependent to globally and domestically on SMEs. Currency

44
pressure and extensive economic recession onto Japan by the 1990’s had saw significant

transfer of production to overseas, where such major change indicates major transitions

by SME sector in Japan industry. Due to the transition, the public and private sectors

started to seek for alternative solution to enhance operational efficiencies, reducing

costs along with improving relationships by leveraging information technologies with

the aim to address those challenges faced by companies in Japan. Typically the large

organizations bared the cost while these companies used information technologies in a

higher level stage. Though, smaller firms were gradually beginning to use information

resources as well in par with the large counterpart. Consequently, the Japanese SMEs

started to invest in the external network development due to pressure influences

incurred by the similar investments initiated by the larger organizations.

2.10.3 The Utilization of IT Resources in Japan’s SMEs.

A research surveys conducted by scholar deduced that successful investments are the

strategic investments based on specific objectives, e.g. restructuring services (Griffy-

Brown, Charla; Chun, Mark, 2007). The research indicated that over 70 percent of

Japanese SMEs which had invested in IS are showing sign of dissatisfied with the

application systems currently. Result from analyzing the data revealed that most of the

problems involve human resources, or in other word, it is difficult to engaging right

candidate to apply the technology or the specialist to maintain the system once installed.

Beside, another problem would be the security concerns, prospecting the returns from

investment and the lack of pre-knowledge regarding effective investment to begin with.

The data from research shown that 15 percent of the SMEs had made unconscious

investment in IS and without a strategic planning. Certain SMEs in Japan are leveraging

45
IS to improve the product sales and it is shown by research data that some firms are

improving the customer base via the internet technology available to date at the time

(Griffy-Brown, Charla; Chun, Mark, 2007).

As a result, from the research literature, it is found that the Japanese SMEs had

connected to their customer bases in a strategically manner. It is also shown that

Japanese SMEs made link connecting to suppliers in B2B (Business to Business)

network, where the products can be put on market more effectively over the time. The

literature is proven to be in accordance with the recent research literature which the

development and implementation of business strategy involves main key internal

capabilities to innovate, learn, and leverage relationships (Griffy-Brown, Charla; Chun,

Mark, 2007). As such, the literature segregates the findings into three phases at which

within each phase, the industry factors which influenced SMEs development, firm

strategies forming, IS resource utilization and the dynamic capabilities are identified

and elaborated as following.

In the phase I which is taken as the historical phase prior to 1970, the Japanese

government had foreseen the opportunity for the SMEs to contribute in the production

processes and assembling the final goods and products. The strategy by the Japanese

business sectors was to gain numerous government agencies supports and initiatives to

encourage and develop the conductive platform environment for the SMEs. Indirectly,

this phenomenon enabled the SMEs to improve respective manufacturing, production

and operations activity in the market. The IS technology during this phase was only the

telephone. Yet, Japanese SMEs during this period did not depends heavily on IS

resources but mainly relies on the government’s lead. From this historical phase, it saw

the focus efforts in establishing respective role of the Japanese SMEs firm and the value

to the marketplace. SMEs existed during this period of time lack of leadership and

46
depend heavily on the government’s leadership when creating the business

environment. It was the government’s effort that align the firms’ IS resources and

enhancing firms’ capabilities (Griffy-Brown, Charla; Chun, Mark, 2007). Japan

government had identified and set up long term view plans prior to the 1970’s by

initiated strategy of leveraging Japan’s technological advance in infrastructure, for

enabling the SMEs to expand and improve its competencies in within the sector. Apart

of that, Japanese government passed laws which can protect the SME community which

sometimes being seen as hostage by large organization that were consistently late in

payments in the attempt to put the cost burden onto SMEs. By this mean, SMEs were

more relief in operation when they can rely on a unified vision, establishing a fair

standard to the business environment development.

Phase 2 is taken between 1970’s until 1990’s time frame where Japanese

business environment targeted to enhance operational efficiencies and to establish

competitive advantage for the organization. For this phenomenon to happen, most firms

were concentrating their resources and focus on building up the organization internal

technological architecture and business to business relationship. Yet, previous research

data shown that certain SMEs were investing in IS without forming a strategic objective

and lacked of effective IS investment vision (Griffy-Brown, Charla; Chun, Mark, 2007).

The IS resources application for the period were information technology and

complementary infrastructure. Organizations applied their wisdom planning for the

investments that create uniqueness in skills that improve the firm’s overall

effectiveness. Japanese SMEs fulfill the ability to connect seamlessly with existing

applications in the infrastructure, accommodate the changes without causing high cost

of time and the ability to interact with multiple platforms. Data survey from equivalent

researches shown that Japanese SMEs made use of homepages, email and other internet

47
technologies to support the organization’s goal (Griffy-Brown, Charla; Chun, Mark,

2007). On the other hand, secondary data shown that Japanese SMEs were investing in

external network development when facing pressure from the larger counterpart in the

marketplace. Certain network infrastructures were shared basic and partially supported

by the government, directly caused the phenomenon of share, combine, export and

exploit assets and capabilities produced new opportunities in the industry. Initially,

Japanese SMEs did not depend heavily on IS a compared to the larger enterprise

counterparts due to the reason that SMEs had not much access to financial resources

and the experts to apply the technologies. Instead, Japanese SMEs invested in

complementary infrastructures like the Business to Business networks and web-based

resources. During this Phase 2 period, five key capabilities were observed from the

Japanese SMEs which are integrating resources into the core activities, uplifting the

social networks of the firms, experimenting and to learn from past experiences. Overall,

all these capabilities created and embedded the competencies in Japanese SMEs which

will extensively building the IS infrastructure from the prior period. In addition to that,

these capabilities aligned the Japanese SMEs into continual development and growth

when the market environment kept offering changes and opportunities. Also, SMEs

started to experiment with the use of information technologies for office automation and

transaction works processing. Knowledge gained from one firm’s history is instrumental

to achieve next step successes. Data survey indicated that Japanese SMEs during this

period had mutually learned within the pool of industry players which primarily through

the government or industry related meeting etc.

Lastly was the Phase 3 which fell on the time frame of 1991 until 2005 where

majority of the Japanese SMEs started to look into the existing IS infrastructure and

improving work in progress. This was done to better manage the firms’ customer bases

48
and the supply chain partners community in marketplace. In short, the main objective to

such strategy was to enable the sharing, information and knowledge controlling become

more effective. Literature shown that most of the Japanese SMEs utilize IS as tool to

connect with their customers, suppliers and to market the product or service in a much

productive way. Therefore, the traditional perceptions that Japanese SMEs tied in

clusters to larger enterprises are being overturned as these SMEs were becoming more

independent and adapting to environmental and economic circumstances in the

unprecedented way (Griffy-Brown, Charla; Chun, Mark, 2007). During this Phase 3

period, Japanese SMEs had three key resources for the organization transformation

processes which are the organizational culture, information technology and the

complementary infrastructures. The organization transformation processes are such that

extending the firm capabilities internally to the external sector where it was seen to

develop rigid relationships with the customers via the IS technology. It is found that

organizational culture is an important influence in the process of developing capabilities

where traditionally Japanese SMEs relied heavily on personal relationships for business

activities, emergence and selection of information technology would enhance and

extend these relationships. Firms maximized the investments potential in return creating

a unique resources and skills that promised overall effectiveness. Literature reveals that

the Japanese SMEs had utilized email more than those larger enterprises for data

communication purposes and information interaction etc. among the firms in the sector.

Conclusively, the Japanese SMEs were applying IS in a strategically way to build the

relationship. Key capabilities developed in Phase 3 were enhanced version of the

capabilities that established from prior phases. In Phase 3, Japanese SMEs started to

incorporate and coordinated new resources into the organization strategy when the

resources became available. Government database resources were shared among the

49
Japanese SMEs beside partly being provided by the SMEs, SMEs were able to make

effective foreign direct investment decisions along with the best practices from overseas

management were learnt and shared to the SMEs pool. Literature had proven that

Japanese SMEs were focused on strengthening their social networks (Griffy-Brown,

Charla; Chun, Mark, 2007). The SMEs actively participate in events either externally or

internally via email and web applications on top of enhancing the existing customer

databases. Although Japanese SMEs were not excelled in the aspect of online sales, but

the SMEs were utilizing information resources to strengthen the current customers and

improving the customer bases by other means. It is empirically proven that an

organization’s ability to sustain its innovativeness is influenced by its ability to manage

appropriately the social networks over the period and the capability to manage the social

networks is key to the improvement to the competitive position in the marketplace.

Again, it is proven that knowledge from past experiences is taken as instrumental

toward the success’s accomplishment. For Japanese SMEs, they continued to learn

quickly from role model in the industry and tried to learn the capabilities which might

be necessary to compete in the competitive market. Japanese SMEs were focusing the

business operations into narrower and manageable areas for their overseas investments.

Japanese SMEs kept expanding the e-commerce model from Business-to-Business to

Business-to-Customer models. Thus, Japanese SMEs were able to align the strategy

with IS resource application via the dedicated effort onto eternal networking and

relationship development. Research data also shown that the application of the mobile

and web-based applications for the logistics and other business functions are

experimental, but growth is definite among the SMEs in Japan (Griffy-Brown, Charla;

Chun, Mark, 2007). The positive side on Japanese SMEs is that they are willing to

spend experimenting in technologies where asset and competencies development are

50
influenced by one organization ability to improve task performance through trial-and-

error process.

In summary, Japanese SMEs executed their firm strategy by focusing on the

development of internal technology infrastructure. Then, SMEs dedicated the strategy

onto organization resources in order to assist the development of external infrastructure

with the customers and supply chain partners. Research literature reveals that Japanese

SMEs applied IS resources to strengthen the relationship with other SMEs, customers

and supply chain partners and creating a productive networks of business connections in

relation with the available industry opportunities. All of the above capabilities and

social network connections had strategically aided the Japanese SMEs to leverage

relationship and become advantageous over the competitors.

2.10.4 Conclusion

The research literature provided the insight that the Japanese SMEs had learned to align

the firm strategy with IS resources application and the beneficial dynamic capabilities

development for improving the firm productivity while uplifting the relationship level

with the business partners in the marketplace. The analysis proved that government

policy and network aspects had resume as important role for the institutional

development of Japanese SMEs. Japanese SMEs had leveraged IS for all beneficial

strategic purposes.

However, there are shortcomings that need further investigation by scholars to

the literature research of IS resources in Japanese SMEs. The research is yet to be

considered comprehensive when analyzing the use of IS in Japan simply due to the fact

that Japanese SMEs had evolved in the aspect of IS application when economic growth,

51
poverty status interaction with the SME sector are taken consideration (Griffy-Brown,

Charla; Chun, Mark, 2007).

The research study shown that the application of IS (Information System) had

evolved from total dependent onto external social networks into endogenous use. SMEs

are leveraging the information system on the effort of better strategic planning. Such

phenomenon is encouraging as the process were accomplished in relatively short term

in Japan’s techno-economic development. In addition, investigation onto alignment of

business strategies and IS resources in SME sector is important as SMEs are not

exclusively for Japan economic but equally important economic elements throughout

the world. Therefore, research proposes that more insights should be investigated and

studied in the use of IS in this aspect of SMEs as well as the SMEs sector in other

national contexts. More researches shall be conducted more comprehensively on the

critical success factors involved in the deployment of IS in Japanese SMEs. Apart than

that, research can be concentrated on studying SMEs in relation to international

business bodies to investigate the align strategies efforts in connection with IS resources

utilization and capabilities development. Then, statistical data comparison can be

produced for better understanding on the complex process of strategies alignment with

capabilities development in SMEs from the world perspective (Griffy-Brown, Charla;

Chun, Mark, 2007).

52
 CHAPTER 3

METHODOLOGY

3.1 Research Design

From Chapter 2 of literature review exercise, it has been revealed the background of

RBV in today academic realm, and to reflect onto today business management world

activity by those scholar works. Interpretation of RBV in term of real firm business

activities have present the gap to identify the source of such issue in Sabah firms.

Following proposition is proposed to address the gap and open up a new chapter for the

RBV;

Research proposition : Incompetent Professional is the source of hinderance

towards RBV implementation in a firm.

In this chapter, a suitable research direction is selected and formulated to address

the issue which including designing suitable data collection tools and data analysis

techniques (Blessing & Chakrabarti, 2009). According to Noor (2018), a suitable tools

and techniques are utmost to be selected appropriately to engage on the target

characteristic for the research problem.

53
3.2 Research Paradigm

According to Morgan (2007), paradigm is defined as shared beliefs, understanding that

act as guidance for scholars' research work. Then, we shall explore respective

component within the domain of research paradigm with the aid of the following

diagram from education researcher (O'Brien, 2019). The following will elaborate

briefly and fundamentally of each component, in order to be guided throughout research

approaches selection for the whole research paper.

Figure 3.1 : Typical Component for Research Paradigm.

(Source : My Turakawaewae : A Review of Learning, 2019)

54
 According to O'Brien (2019), epistemology is about the fundamental knowledge

and justifiable belief for a subject matter. It is seeing as an interaction process of

thinking, supported by experience from a person perspective.

Ontology is one's assumption made to convince ourself believing in its

authenticity (O'Brien, 2019). This statement is supported by Neuman (2014) that

ontology is a claim from social reality which developed by our perceptions and

everyone believe the existence of the issue matter.

Axiology can be interpreted as element related to value (O'Brien, 2019).

Axiology provides value consideration which will influence decision and action of a

person such as ethical and aesthetical decision sub-elements.

Methodology is regards as approaches towards research design, methods,

approaches and procedures taken during the investigation process (O'Brien, 2019).

Brown (2006) explained that methodology is a platform for framework to the research

activity. In this research paper, a latest research literature by scholar is taken for review

and thus methodology is mainly expanded to three main approaches which are

qualitative, quantitative and the mixed methods paradigm (Law Kheen, 2017).

3.2.1 Qualitative Paradigm

Based on the literature researched from other, qualitative paradigm is a research

investigation into understanding the social and human issue (Creswell, 2009). All these

can be done via constructing complex yet holistic description with wording elaboration

reporting. It is considered as interpretive approach method to illustrate social reality and

trying to descript life experiences is a form of qualitative research. The works involve

are not limited to self-indulge into the culture, observe the interaction, activities, talking

55
to relevant stakeholders, which enable researcher to devise the case study to collect

qualitative information data to postulate the hypothesis.

Quality output of qualitative research is dependent to the level of researcher's

spiritual immersion and dedication into the drafting of the case study (Atieno, 2009).

This qualitative paradigms is credited for capability to make simple when handling the

data information without altering its original complexity and context. Therefore, this

nature of data collection has render qualitative paradigm to be exclusively for particular

study group subject only due to the limited sampling size that hinder the generalisation

by academic. Unlike quantitative method, qualitative research allows some degree of

flexibility when conducting study that assist investigation of difficult or sensitive issues

since involvement of researcher developed trust within the research topic (Griffin, 2004).

3.2.2 Quantitative Paradigm

Quantitative paradigm is understood as research activity that collects numerical data

information for scientific methodology verification. Then this confirmed empirical data

will be used to test against the hypothesis in the research work (Antwi & Hamza, 2015).

Due to its positivism, the empirical research acts as the basic of truth and becoming the

sole truth according to ontological definition.

Quality output of quantitative paradigm is heavily depend on the accuracy when

generating as much precise as possible data information available from the research

sampling activity. Result of quantitative paradigm is capable to be shared and extended

for continuality in research. A general distinguishing aspect between qualitative and

quantitative is as shown in Table 3.1 below.

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 Table 3.1: Typical Comparison of Qualitative and Quantitative Research.

Factor Quantitative Qualitative

Data Collected Hard data Soft Data
Sample Population Large Population Small Population
Research Variables Small Number Large Number
Data Collection Before and After Training On-going Observation and
or Experiment Interview
Research Context Controlled Uncontrolled
Data Analysis Statistical Analysis Thematic, Interapretive
Analysis Through Themes,
Patterns, Narrative
Synthesis etc.
Research Findings Deductive Inductive
Interpretation of Objective Subjective
Information
Nature of Inquiry Interpretivism Positivism
Research Tradition Descriptive, Correlational, Ethnography,
Experimental, Causal- Hermeneutics,
comparative etc. Phenomenography, Case
Study etc.
Source : Sogunro, 2002.

3.2.3 Mixed Method Paradigm

Mixed method paradigm is utilising both qualitative data and quantitative data, being

analysed in order to produce a single work, thus being called mixed method. It is agreed

by researcher that such method of analysing data will improve information gathering

without the risk of over-step the paradigms boundary (YeoJin Im, 2021). Therefore such

method is most prefer by most research papers as it is generalised by incorporating best

available features from respective paradigm.

57
3.3 Choice of Research Design

In order to determine suitable research method for this research, a thoroughly analyse is

required before the data collection is initiated. The Table 3.1 is taken for reference for

the research method selection exercise. This research result requires few variables of

statistical data number collection from a large scale group of study subject professional

working adults. Due to the research proposition and objective is clearly stated for the

research work, the research content is controlled for the adoption in the data analysis.

All of the above are complying to the quantitative method criteria.

Whereas under qualitative research method criteria, the data collection type is

via interview to the study subject group professional. The interpretation of information

is subjective nature from the participant of interview.

From the above qualitative and quantitative method aspect analyse, it is clear

that the features from both methods are interchangeably apply in order to meet the

objective of this research data collection. Therefore, mixed method paradigm has meet

the criteria being the most suitable research method to be applied due to its flexibility to

accept research analysis from both ends in this aspect. Thus, it is concluded that mixed

method paradigm is apply for this research for The Development and Challenges of the

Resource-Based View of the Consultant Firm in Sabah.

3.4 Data Collection Method

Data collection method for this research is by mean of online questionnaire. Online

questionnaire is selected as the best tool for the research because this method is accurate

provided the question subjects are formulated in objective manner. This research is

58
collecting data of participants' objective opinions based on a list of available conditions,

where participants are to choose from predetermined answer and select best

approximate answer. Further to that, online questionnaire is the best data collection tool

to date amid the pandemic crisis where social distancing is mandatory to avoid spread

of COVID-19 by human interaction. In addition to the above all, the data required in

this research is designed for collection in a sufficient manner to prove against the

research proposition for the study.

3.4.1 The Questionnaire

Questionnaire is a tool to retrieve individual opinion or thought, which are objective in

nature comprising knowledge, beliefs, attitudes and behaviour via a simple to answer

series of questions (Boynton & Greenhalgh, 2004). While a tool is serving its purpose

to communicate, the tool such as the questionnaire shall be constructed as simple as

possible in order to reduce the misinterpretation and to ensure messages are conveyed

effectively and successfully. The success of information transfer between the parties

will ensure a good quality data being collected in the research.

To achieve the objective for this research exercise, this research will only apply

and allow very straight forward answer as respond from participant. The simplicity

answering method will enable the participants to stay focus answering the situational

question, as well as to get appropriate answer that is acceptable for the data analysis

requirement. The respond will only consist of Yes, Maybe, No. As for the questions that

are targeted to the study subject under the domain of research, a list of choice of answer

is prepared for participants' selection. Again, such availability of answer choices are

meant to meet the objective of reducing off-topic opinion respond from the participants.

59
Overall, the questionnaire is formulated in such a way to collect useful data for the

further analysis work on the topic. The questionnaire sheet tabulation as per Appendix

B.

3.5 Data Analysis Method

As the questionnaire interview research is by nature of mixed method paradigm, a

comprehensive analysis will be conducted onto the responses collected from Google

Form system. The result data collected from every individual will be assessed and

treated in segregate manner to ensure each respond is treated fair and objectively.

There are two section in the questionnaire; a section is targeted to the public

opinion about engineering consultant service quality in Sabah, and second section

targeted for the working engineers in similar field in Sabah. Therefore, the frequency of

selected approximate behaviour from different section will be tabulated to test against

the research proposition.

Each question is designed to target on a specific behaviour reflects to the issue

of lack of awareness to establish RBV for consultant firm. As the questionnaire is

designed to only allow interviewee answering in a firm decision, either yes or no, the

reply response is to be make use to determine the probability of survey opinion to a

certain behaviour pattern. The proposition in this research is "Incompetent Professional

is the source of hinderance towards RBV implementation in a firm", thus every

response reply collected from participated public and engineers will formulate the

opinion either support or against a specific behaviour contribute to the research

proposition in term of percentage.

Thus, an analysis onto the behaviours, as the result of supportive response from

questionnaire will be conducted to correlate with the research objective. This will

60
produce a final conclusion for the research paper themed The Development and

Challenges of the Resource-Based View of the Consultant Firm in Sabah.

61
 CHAPTER 4

DATA ANALYSIS AND RESULTS

4.1 Introduction

Chapter 3 guides the method for conducting and collecting data for purpose of research.

Chapter 3 provides a structure for subsequent data coordination and formation for

analysis purpose in order to result an organised outputs in the result. The data response

from each questionnaire is taken count to formulate a percentage output. Every question

from the questionnaire form is treated separately due to the reason that each question is

designed to reveal a particular behaviour that contributes to the final outcome of this

research paper. The result of response to each question from the questionnaire is being

analysed as following sub-chapter.

4.2 Data Analysis

4.2.1 Question 1 : Are you an engineer?

This question was asked to ensure that only the right subject candidate is responding to

the survey data collection exercise. As the research proposition is determining the

challenges that hinders the establishment of RBV in the engineering firm, which the

study is target onto the professional group of engineers. Therefore this question plays an

important role to confirm that the data is collected from the right subject group of

professional.

62
 From the collected result, it is shown that 85% of 20 participants have identified

themselves as engineer while 15% are not engineer. Out of 20 participants, only 17

persons who are engineer profession had participate and contribute for the survey. From

this research questionnaire design point of view, the remaining 3 persons who are not

engineer profession are those public working adults and related to engineering field.

The reason is because the survey questionnaire was distributed among the engineering

community by creator via google form. Further to that, the small number of participants

of 20 persons indicated that the survey was not distributed randomly to public of non-

related profession.

In conclusion, this question response reveals that 85% of engineers

comparatively had identify and agreed towards the survey made onto the research study

on their profession.

4.2.2 Question 2 : Based on your interaction or working experience in this field, do you

satisfy with the level for engineering consultancy services in Sabah?

This question asks and determine the satisfaction level and opinion from the engineers

and public, onto the engineering service quality as provided by current consultant firm

in Sabah. This question is objective as to collect general overview opinion from anyone

about the quality of service from the local consultant firm.

From the data collected on this question survey, it is found that 60% of

participants agree and satisfy with the current service quality rendered by local

consultant firm. On the other hand, 40% of participants are not satisfy with the services

received from local engineering consultant firm. The phenomenon for the response is

considered reasonable onto the data collected that indicate the opinion of the

63
participants are subjective to case by case basis. It shown that not all of the engineering

consultant firms in Sabah are deteriorating their services quality and majority of the

service provided still gain public acceptance. However, quality opinion is subjective,

and it may happen in certain case where certain participants might had misinterpreted

the definition of quality, it is therefore to produce false opinion in this question survey.

Moreover, consultant might had treated the customer subjectively which will also

contribute to the false opinion of the same kind.

In conclusion, apart of the subjective quality definition understanding by every

individual, slight more than half of the participants had agreed that the quality of

engineering consultant firm in Sabah is on par with satisfaction level.

4.2.3 Question 3 : If you are satisfy with the services, do you think current level of

services provided must be uplift further?

In this question, the objective for such investigation is to further identify the true of the

responses which had chosen to have agreed on the acceptable service quality from local

consultant firm in Sabah. The question asked for further opinion whether the current

acceptable service quality must be enhanced further on top of the satisfactory level.

Surprisingly, it is recorded that 88% of participants responded that the services

quality of current consultant firm in Sabah are in need of further improvement. Only

11% had maintained and satisfy that the services quality by local consultant firm do not

require improvement at the moment. The collected data is contradicting with the

previous questionnaire survey in basic nature. Conclusively, the Question 2 is now

being counter defeated by Question 3, where the satisfaction level on local consultant

64
firm is false and this situation must then be improved further, as proven by data

responses collected in this question.

Therefore, the result from this questionnaire has suggested that quality service

from local consultant firm is still in need of further improvement, despite all

respondents are satisfy with the current quality level.

4.2.4 Question 4 : If you are not satisfy with the services, do you think the professional

engineer can be improved to better serve the society?

Similar to the above question, this question is intended to verify and test for authenticity

if the respondents who have chosen not satisfy with the current quality level by local

consultant firm. This is to confirm again if the respondent is expressing their opinion

thoroughly with their opinion.

The result for this question shown that majority of the respondent had chose to

agreed that the quality of service should be improved which stand at 94% of the 17

respondents. This strengthen the basic idea that most of the respondents are desirous to

have opt to improve the quality service level by local consultant firm. It is seen that the

respondents to this question are more than the actual respondents who have responded

'no' in Question 2, it shown that respondents are basically have the intention to seek for

improvement despite whatever top notch quality level existing in current market.

Conclusion, this question is again revealed that respondents are desirous to have

improvement over service quality of the existing professional consultant firm in Sabah.

65
4.2.5 Question 5 : Do you think that currently there are incompetent Professional

engineer (Ir.) who is providing services by the role as consultant engineer in Sabah?

This question is intended to verify and seek for market respond on the availability of

incompetent professional engineer practising in the service market. The revelation will

provide an insight into the current situation of professional engineering service in Sabah

and attract more attention of scholars to investigate such phenomenon.

It turns out that 65% of the 20 respondents had admitted that there are

incompetent engineers who are in practise in the market now. 35% of respondents had

made the stand that they do not think there are incompetent practicing professional

engineer in the industry. The data has provided an informative idea that currently, there

are substantial number of incompetent professional engineers being practising in local

consultant firm. The phenomenon for such incident is because that the competency level

shown and portrayed by the professional engineers are not reasonable acceptable by the

majority community. It is therefore respondents reveal as such that they do not agree to

certain extend on the competency level from the practising professional engineer.

In conclusion, more than half of the respondents agreed that there are

incompetent professional engineers who are still practising their engineering

consultancy service in the industry.

4.2.6 Question 6 : Do you agree that engineering consultancy firm must equipped with

Professional Engineer (Ir.) who is highly knowledgeable in par with relevant

experience?

This question seek to respondent opinion in regard whether the engineering consultant

firm is to be run by knowledgeable professional engineer. Result of collected

66
questionnaire data shown that all of the respondents agrees that the engineering

consultant firm must be operated by the knowledgeable professional engineer. 100% of

supportive result towards the agreement on the statement emphasis that such

professional service firm must be organised, operated by the competent professional

engineer. It is clear indicative that everyone looks heavy on such high reliable

professional services to provide trustfully advise into the public society. There might be

some occasion where in business point of view, certain firm is operated by certain

number of non-technical personnel. But this question has provide a firm stand that the

public is in the view that the professional firms must be run by qualified,

knowledgeable professional, who is eligible to provide technical advise and

safeguarding the public interest.

In conclusion, the survey proofs that all respondents have given positive

direction that the professional engineering consultant firm must be operated by

experiences and knowledgeable professional engineer to keep up with the service

quality output.

4.2.7 Question 7 : Do you think that the Board of Engineer Malaysia (BEM) and

Institution of Engineer Malaysia (IEM) is taking regulatory / discipline action towards

the non-competent Professional Engineer (Ir.)?

This question investigates the respondents' awareness about the BEM and IEM role and

social responsibilities to their registered members in the name of Board. Essentially, this

research is intended to stress on the importance of the professional Board into regulating

the professional conducts of its members, as well as to protect the wellbeing of public in

society.

67
 The result of respond from questionnaire shown that the public is in neutral

opinion about whether that Board can take disciplinary action towards the members. It

is a sign that many are not aware of the disciplinary action can be imposed on the

registered professional engineer by the Board. Such phenomenon reveals that the basic

knowledge is not established among the engineer communities about such regulatory

conduct onto the practice engineers. As such, a concluding statement can be drawn that

due to low awareness of such regulation among the professional engineers, this has

allow a grey area of room for professional misconduct in addition that the engineering

Board has been working under radar in society.

Conclusion, the public awareness onto the disciplinary action by the Board is not

fully established which hinder the full functional authority regulation on the misconduct

professional engineer within the society.

4.2.8 Question 8 : With latest surfaced Sabah Water Gate Scandal (money heist

involving engineers as directors in Jabatan Air Sabah), do you aware if this issue has

been taken action by the BEM or IEM?

This question is designed to verify if the above question objective has been met. The

core of this question is similar as to investigate if the engineer respondents are aware on

a real case scenario in Sabah, but reflected in a well-known case so that the respondent

will give a good thinking before answer. By answer on this question, and to re-evaluate

the previous similar question, it can be analysed determine for a firm condition for a

specific behaviour on the research proposition.

As collected from the result, it has shown that 90% out of 20 respondents has

admitted not knowing if the money heist crime as happened in Sabah were taken action

68
by the engineering Board. As such, 90% answer denotes that the public awareness on

the regulatory discipline action by the Board is very low. This has again prove that the

above question is uncertain; respondents were not clear when selecting the answer to the

matter issue if the Board is authorised to take disciplinary action against the

professional engineer in society. Therefore the respond result to the above question is

equally undecided.

Effectively, this question has concluded that the public and the engineering

community are not aware on any action taken by the Board and this may due to the

undisclosed procedure within the Board. This means that the proper update informative

events are not conveyed to the public in a transparent manner. This phenomenon is seen

as the cause of encouraging the professional engineers to take things for granted.

4.2.9 Question 9 : If you answer no, do you think that the engineering regulatory

association or equivalent is not making a clear stand publicly against such misconduct

in Sabah?

This question purposely designed to verify the public opinion on the performance of the

Board towards the society where the Board is mandated with the regulatory right

towards the miscarriage of conduct by its registered members. The subject issue of

misconduct spelled out in this question is the Question 8 Sabah Water Gate Scandal

(Money Heist). This following up question is to further enhance the evidence and

supportive statement towards the research proposition.

As result, a 100% of the public has chosen to agree that the Board is not making

a clear stand publicly against such misconduct in Sabah. Such result indicates that none

of the transparent disciplinary action had been made and shown to the professional

community. The Board has no publicly declare its professional stand on the issue and

69
declare the ethical decision standpoint to avoid misleading. It gives a false impression

that the misconduct can be bypassed and not being monitored, taken action against such

unethical conduct by the disrespect professional practices. It may seems that another

arguments might raised about this questionnaire exercise was only targeted to minority

professionals and not speeded out to reach those conscious professional engineers. To

counter such situation, the result of respond for this question still stand because

minority group of professional engineers are inevitable form a part of public society and

their existence can not be ignored at all, thus their responds are valuable to be taken into

consideration to meet the objective of the questionnaire exercise.

In conclusion, the public has expressed their opinion that the Board is not taken

any action and making a clear standpoint on the issue of the latest Sabah Water Gate

Scandal issue.

4.2.10 Question 10 : Do you think that the regulatory association such as BEM and IEM

must make public statement with their action in order to set a good example for the

future engineers?

This question is trying to analyse public perception on the role of the Board in social

responsibility within the public community. After investigation on public awareness on

the latest action by the Board as whole, this question is trying to collect public opinion

as on how the professional association should acts and behave in order to create a better

environment for the professional.

95% of the respondents have expressed their agreement that the Board must

make public statement about their disciplinary action onto the misconduct, in order to

set a responsible guideline for the professionals in society. The percentage of 95% also

70
indicates that public is now very aware and be able to justify by their own, about what is

right or wrong for the sake of betterment of the public.

In conclusion, nearly all of the respondents are in the opinion that the Board

shall make public statement about their stand transparently to the public in order to set a

good example as well as an ethical guideline for the professional community.

4.2.11 Question 11 : Are you a member (graduate member, professional membership

etc.) of IEM Sabah Branch?

This question is to investigate the role of the participating respondents in order to

formulate a better data analysis to this questionnaire exercise.

As the research proposition involved stakeholders from engineering professional

and industry players, where most are engineers ideally. It is therefore important to know

each tier level of professional are participating in answering the questionnaire with

different point of view. Such diversity in role will contribute to higher content

enrichment to the data analysis in research. This information has to be proven with

validity data to support the research by scientific means.

Therefore, result reveals that 60% of 20 respondents are not registered with the

Board as member, 40% of 20 respondents are registered membership with the Board.

4.2.12 Question 12 : Do you think IEM Sabah Branch is operating with its full course as

an engineering regulatory association?

This question is intended to gather public opinion about the existing Board practise in

society. This is to expose the reality of current situation about how the Board is

exercising its authority in the industry.

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 By the result, it is seen that the answer is not exclusively convincing. The

collected data shown that the public opinion is either agree or not agree that the Board

currently is operating in full force as a regulatory body to the professional in the market.

Each side decision takes 50-50 out of the total respondents.

Again, such condition still persistently support the phenomenon that Board is

not producing sufficient transparency action in the industry activities and thus the

exposure of the Board authority is very low within the professional community.

4.2.13 Question 13 : If you are not an member to IEM Sabah Branch, do you still not

have interest to register with IEM?

This question is meant to investigate on those who are not currently a member to the

Board, to register as member under the Board if given opportunity. This question is

trying to further elaborate the current status of confident by the public to the current

Board.

It is shown in the result data that 75% of the respondents feedback are positive

that they are intended to register with the Board if given opportunity. 25% of

respondents are not interested to be registered as member despite given the chance to do

so. The number of respondents in this question are low with recorded only 16 out of 20

participants. It is assumed and anticipated that the 4 persons who did not given feedback

on this question are not an engineer by profession.

Conclusion, despite imperfect number of participants in this questionnaire, it is

acceptable that those engineers who are yet to register with the Board, are intended and

wish to register with the Board whenever they are given the opportunity.

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4.2.14 Question 14 : Do you think that Senior Professional Engineer must be honest,

integrity and competent to guide the young graduate engineer in the field?

This is the question to confirm public acceptance to a professional engineer's behaviour

practicing in the field.

Generally, professional is bound by the Code of Ethics as set by the Board. The

code of ethics enlisted and set a guideline on how professional shall carry out their

services in the public society. Such code is also used to safeguard the public from any

harm abuse by the professional. As engineering profession is a learned profession, the

practise shall be guided and inherited appropriately to the young generations of

professional, where the ethical culture can be continued and improved.

As a result, full respondents have given same agreement that the senior

professional engineer must be honest, integrity and competent in order to be able to

provide guidance for the juniors engineer in the field. All respondents believe that

honest, integrity as well as competent are the core characteristics for an ethical

professional engineers and this argument supports to this research proposition.

4.2.15 Question 15 : Do you think a regulation must be mandated to dispose of

incompetent professional engineer who is failed to discharge his/her duty?

This question investigates the public acceptance on the solution to rectify the current

situation whereby incompetent professional engineer is failing to serve the industry with

acceptable standard. As solution is proposed to utilise the Board authority to dispose the

incompetent professional engineer who is registered with the Board. As the Board is the

registering body to the professional engineers, the Board reserved the right to regulate

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the act by the practising professional in the field. In fact, the Board shall has unbiased

and neutral stand in its operation ensuring transparency and justice sound procedure.

90% of 20 respondents are positive that the regulation to act and impose on the

incompetent professional engineers are crucial while only 10% are decline to such

action proposal. Nevertheless, full participation of 20 respondents are achieved and 90%

of them had declared positive toward such solution.

In conclusion, the solution to exercise a regulatory act to dispose the

incompetent professional engineers are supported and the Board shall resume the role to

impose such disciplinary action on its registered members.

4.2.16 Question 16 : Do you think that by refreshing, uplifting the competency level of

professional engineer, particularly Sabah consultant firm will improve Sabah social

wellbeing and community of engineers as whole?

This is a question that will further strengthen the support statement to the research

proposition. It investigates whether or not the effort of reviewing, then subsequently

take action to refresh the role of professional engineers in the consultant firm will

further improve the quality of productivity by engineer in a organization.

Result collected from respondents reveals that 85% out of 20 respondents have

agreed to such initiative action to further improve quality status for a consultant firm in

Sabah. This has shown that such direction is positive and it adheres to current working

norms by the engineer community. As engineering is a learned profession, improving

the competency will definitely uplift the quality of the working environment, where it

will produce a conductive works as well as a productive output by the professional firm.

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 In conclusion, the questionnaire proven that the most of the local engineers are

preferring the step to refresh, uplifting the competency level of professional engineers in

their organization will enhance the work environment quality and bring about

betterment to the community.

4.2.17 Question 17 : Do you know / heard about Resource-Based View (RBV)

methodology before?

This question is a starting point to immerse the RBV philosophy to the respondents

understanding. The question is intended to investigate if such terminology is being

applied in respondent working organization.

Result from questionnaire reveals that approximately 95% of the respondents are

not aware of such methodology in their work place. It proves that the RBV is rare and

may not be available in current working professional community. From this result data,

as suggested by the research proposition, beside incompetency of professional engineer

in a firm, lack of understanding to good management practise such as RBV is a

hinderance to the development of RBV in a consultant firm in Sabah. All of these

contribute to the slow pace growth for a competitive engineering firm in today market

trend.

In conclusion, most of the respondents are not aware about RBV methodology

that should be applied in consultant firm for productivity efficiency upgrade.

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4.2.18 Question 18 : Is consultant firm you are working currently is performing

satisfactory in your opinion?

This question investigates the satisfaction level of the working engineers toward their

respective organization firm in Sabah. This serves to research the performance of

consultant firm in Sabah by the respond of the engineers participants. Result of

questionnaire shown that 66% of the respondents are happy with the current state

operation. 33% of the respondents are neither satisfy nor dissatisfy with their current

organization firm. In the result from respondent, none of the respondent has expressed

dissatisfaction on their organization firm. This behaviour trend will be discussed in later

chapter to analyse such phenomenon.

In conclusion, respondents has provided a valuable data that majority of the

public are satisfy to their organization performance to date in Sabah.

4.2.19 Question 19 : Does the Professional Engineer is conducting the consultancy

service based on his/her personal past experience in the firm?

This question tries to investigate if the local consultant firms are making full use of the

professional engineers' past experience when providing consultation service to the

industry. This question is important in a way that it relates to the thesis proposition

about RBV. As discussed in previous chapter, RBV is a methodology whereby a firm

operates with the resource availability in an organisation and to gain advantage in the

competitive market. In a professional consultant firm, experience and knowledge are the

key resources from the owner and the key technical personal. The base foundation for a

consultant firm is its bank of information and technical know-how in the field.

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 The result data shown that more than 79% of the respondents agreed that their

workplace is utilising past experience in performing their job, with guidance of the

professional engineer.

4.2.20 Question 20 : If not, what do you think is the problem for such phenomenon?

The question is the continuation from previous question, that if respondent had admitted

that their firms are not utilising past experience in performing and they are to select a

phenomenon to represent the reason. As this result is multiple choice with different case

scenario, the analysis shall be discussed in the next chapter. In short, issue of project

task is the main factor as selected by respondent which leads to firm's deficiency in

performance. Other than that, firm management issue, incompetent principal issue and

issue of doubt factor share the same percentage in the result contribute to the question.

4.2.21 Question 21 : In your opinion, how is the performance of the professional

engineer (Ir.) in your current work place?

The question is similar to previous question that asks about satisfaction level towards

the organization firm. Instead, this question is special tailored to target on engineers and

the subject on their professional engineer who acts to lead the organization firm. Result

data shown that 53% of engineers have agreed that their professional engineer are

performing fine in their opinion. The result is tally with the respond on previous

question on the organization firm quality issue. Yet, the question is subjective but it is

served to investigate the current workforce market into the condition of engineers in

Sabah. However, the result data shown that there are approximately half of the

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respondents are not agree to the fact that their professional engineer in firm is practising

to the optimum level in general.

4.2.22 Question 22 : Are you aware of RBV (Resource-Based View) philosophy to be

implemented in consultant firm in Sabah?

The question verified if engineers are aware about RBV is to be incorporated into

current working culture of consultant firm in Sabah as means to improve productivity

output. This is to investigate if the engineer community is having a head-up to this RBV

method or not in the local market. In response to this paper research objective which is

to identify the challenge to the RBV of the consultant firm in Sabah, this question will

reveal as of how many engineer is understand of such RBV in the picture.

Approximately 79% of respondents are not aware to such move followed by, large

percentage of engineers who are in doubt about the implementation of such philosophy.

Conclusively, the statically data shown that the RBV is not fully adapted in consultant

firm in Sabah. The RBV is seeing as very new to the engineer community in Sabah.

4.2.23 Question 23 : Is your consultant firm implementing RBV equivalent

methodology management, by the Professional Engineer?

This question is to collect current market feedback data if the consultant firm in Sabah

has establish RBV methodology in organization management as mean of effective

operation system. Interestingly, 41% of respondents have admitted that their

organization firm do not implement RBV and similar percentage too have responded

that they are unsure if RBV is implemented in their firm. Only slightly more than 16%

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of respondents have confirmed that their firms have implemented RBV methodology

management or equivalent.

In conclusion, this question returns the result that majority of Sabah consultant

firms have not implemented RBV in their organization firm. This has strengthen the

above question argument that RBV is not fully aware by the engineer community in

Sabah.

4.2.24 Question 24 : If no, do you agree such RBV management is crucial to your work

place?

This question is designed to further investigate the opinion from the current working

engineers, whether they still prefer an alternative efficient systematic organization

management similar to RBV. The questionnaire result indicated that majority of the

respondent is undecided whether RBV as firm management is crucial in their work

place which stands at 54% overall. Only 45% of the respondents agreed that RBV is

important and will help to improve operation in organization firm. No respondent has

disagree on the application of RBV into organization firm management as way to

improve operational efficiency.

In conclusion, this question has provided an insight that the public is now

transiting into any new proven method that will bring about change and improvement to

the workplace. This is proven in the questionnaire exercise that none of the respondent

has refuse to the stranger RBV terminology to be applied in workplace.

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 CHAPTER 5

DISCUSSION AND CONCLUSION

5.1 Summary of Main Findings

Reviewing back on the research proposition that incompetent professional is the source

of hinderance towards RBV implementation in a firm as mentioned in this paper, the

resultant data collected from questionnaire is positive and encouraging in support to the

objective of the research. The points are summarised as follow with justification to

elaborate the supporting nature towards the research preposition.

This questionnaire was completed by more than 80% engineer respondents

mainly who have pointed out the consultant firm in Sabah is in satisfactory level.

However, respondents are still eager to seek for improvement and change to uplift the

operational efficiency in their organization firm. Respondents are admitting that there

are incompetent professional engineers who practice and serve the society in the

industry and the collected data has shown that most respondents are suggesting that the

industry must be operated by experience competent professional engineer to serve the

mark.

By taking a case study as reference in the questionnaire, such as the Sabah

Water Gate Scandal, one of the biggest money heists in Malaysia, the reaction of the

respondents towards the issue is encouraging in line with this research proposition.

Most of the respondents do not aware of the further action by the Board in this

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misconduct. Respondents have declared that the Board is not producing a transparent an

action stand

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in respond to the misconduct by its members. The collective results indicated that Board

is not operating in a way to portray a role to regulate the conducts of the members. As

such, public is in opinion that the Board should make a strong presence and express

their role in regulatory domain. Perhaps due to this, the phenomenon reduces the

confidence of the engineers to be registered under the Board and this is proven from the

survey where 60% of respondents admitted that non-register status to the Board.

Survey found out that all of the respondents agree that the professional engineer

must have integrity to set a good example for the newcomers. 90% collected responds

are positive in view that a mandatory disciplinary action must be imposed to the

registered members to dispose those who are failed to discharge professional duty

appropriately. In addition, most are looking forward that a refresh and competency

review check on the professional engineer’s community will improve the output quality

and provide better service in Sabah.

As anticipated, the Resource Based-View methodology is not well established

within Sabah industry. Still, most respondents felt satisfy to their current firm operation

status. This condition may due to the fact that most local consultant firms are utilising

their past experience in conducting their services as responded in the questionnaire. In

overall perspective from public opinion, most agreed that their seniors, who are

professional engineers are thus far satisfying in term of performance in the firm.

However, most are not aware of RBV philosophy and as a result, this RBV is not

implemented thoroughly in all firms in Sabah. Respondents are still open to accept RBV

in an effort to improve workplace productivity with astonishing respond that none of

them vote to reject such initiative.

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 Overall, the respondent in general still understand the importance of quality

service delivery despite the fact that new philosophy is not fully made known among

the industry players in the market. As shown in the survey, RBV is not fully aware by

respondent in general but they have confirmed that the consultant firm at which they are

working at is utilizing the past experience to conduct their practise.

5.2 Discussion and Implications

Result collected from the questionnaire survey is encouraging and in line with the

research proposition. The development and challenges of the Resource Based View in

the consultant firm in Sabah is the main subject for this research paper. This research

paper is to investigate the implementation status of RBV and, it is not fully developed

among the firm in Sabah, what are hindering its growth? In order to focus the study for

this domain, research proposition is initiated as a direction for the subsequent research

exercise. Thus, it is proposed that incompetent professional is the source of hinderance

towards RBV implementation in a firm. Survey questionnaire was designed in this

direction of behaviour study to accurately determine the issue problems that hinder the

development of RBV in consultant firm in Sabah.

Questionnaire was attended by majority with engineering background person,

and this will ensure that the relevant specific group of professional opinions are taken

into account appropriately. Most of respondents are satisfy to their current workplace

though mostly are not aware of RBV management philosophy and its benefits for an

organisation firm. This phenomenon may due to the fact that without the presence of

RBV, respondents are expressing their opinion based on current workplace quality and

this status quo is comfortable and satisfactory for their prospection. However, most are

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still favour the improvement to be made despite the satisfactory condition. Through this

observation, it is noticeable that most are assuming and expecting a bigger room for

improvement, which translate that the real feedback gathered form public opinions are

still subject to further justification. Satisfactory opinion is subjective and this

contributes to contradiction of why respondents had satisfy with the current firm quality

and yet still eager for improvement in workplace.

The survey further identifies the reason for those professional engineers who are

not making use of past experience in their current practice, and it reveals that the most

probably due to the project task issue that leads to operational deficiency in firm. The

public opinion has pinpointed that in the state where project management were

improper, the aftermath is the uncoordinated work schedule onto the consultant team. In

construction project especially, complication coordination for huge quantity of work

task requires skilled planning of the project team. This survey research has proven that

an ineffective project management will inevitably caused ineffective consultant firm

performance overall.

Most are not refuse to the new introduced RBV but rather choose to consider

implementing this RBV in their work place as way to improve the operational

efficiency. As suggested by the research proposition, the professional engineer is not

utilising any revolutionary management system in their firm as responded by most. Due

to this phenomenon, RBV will not be made known among the organization firm when

the leaders in the firm such as the professional engineers have no intention about

practicing the RBV.

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5.3 Limitations of the study

Limitation to this research is that only the specific subject group of professional is

involved for the study such as the engineering community within Sabah. In line with the

research proposition, this research is focus on the professional engineer who is regarded

as not competent in the consultancy industry which become the roots of hinderance of

RBV implementation in consultant firm in Sabah. Therefore, all works are dedicated

into the direction identifying the issue problems of incompetent professional engineers

and its associate matters in this consultancy practice industry.

In addition to that, limitation is observed to be the other external factors that

contributes to the RBV development in consultant firm in Sabah. External factors such

as market demand etc. are not being evaluated in this research. The development and

challenges of RBV in consultant firm in Sabah is only limited to the study of root cause

due to the operator, also known as the professional engineers who own the operation of

the firm. Firm heterogeneity that been suggested from previous research (Lockett,

Thompson, & Morgenstern, 2009) is not been truly portray in this research paper due to

the limited participation of people from different background to contribute higher

varsity of opinion to the result.

Again, as a continuation of previous research on the similar domain subject, this

research paper is again limited in term of methodological approaches to the empirical

research which has been inherited from previous research of the same topic (Lockett,

Thompson, & Morgenstern, 2009).

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5.4 Directions for Future Research

This research is conducting a study on the development and challenges of RBV in

consultant firm in Sabah with a research proposition suggested on the matter issue of

incompetency among the professional engineers community. The research proposition

is constructed in such a way to properly address the direction of investigation research

towards the objective to the main research study. Development of RBV has vast

potential in all sort of organizations around the world since RBV is not fully

implemented in anyway. The future research for RBV is therefore will focus more onto

practical insight and empirical evidences to further enhance the research in this domain.

This research paper can foresee that future research shall put more effort into the

cause of firm heterogeneity that contributes to the development of RBV in Sabah. Such

proposal has been started since previous research by scholar (Lockett, Thompson, &

Morgenstern, 2009) where RBV begins with explicit and implicit expectation by firm

heterogeneity. As discussed in the topic of limitation for this research, focussing on

incompetency of professional engineers are not sufficient to cover the big picture of

what is challenging the development of RBV in consultant firm in Sabah. More aspect

of players shall be put into the picture for a run-through analysis.

Apart of that, it is agreeable that scholar shall continue to further the

investigation onto the theoretical issues of resource functionality for any organization.

Previous research had not properly addressing the issue of resource functionality

although much have been done on role of resource creation or decay, and resource

combination (Lockett, Thompson, & Morgenstern, 2009). In future, it is hope that more

scholar will invest more effort into understanding the resource functionality and its

relationship to the output delivery of an organization in a competing market.

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 RBV is concerned with the identity of firm in operational status, academically

being determined not requiring any host for limiting assumption which can be defined

with other theories on its strategic behaviour (Lockett, Thompson, & Morgenstern,

2009). Such advantage of RBV shall be captured by future researchers in order to

generate a new dimension insight in regard of firm behaviour. In light of such future

direction, it is hope that the scholars reflect again on the methodological approaches to

the empirical research on the subject of RBV. This is crucial as mean to improvement

and further upgrade the level of research quality.

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