G1

ACT 4197

Case Study:
Tasek Corporation Berhad
LECTURER’S NAME : Dr. Ridzwana
SUBMISSION DATE : 10/11/2023

NAME : ABNER JUWENG ANAK NAPOLEAN

MATRIC ID : 207734
PROGRAM : BACHELOR OF ACCOUNTING (HONOURS)
FACULTY : SCHOOL OF BUSINESS AND ECONOMICS
SEMESTER / YEAR : SEMESTER 1 YEAR 4
 1) What is the vision, mission and value of Tasek Corporation Berhad?

Tasek Corporation Berhad has visions to become a prominent member in the cement
industry which also commits to environmentally friendly practices and consistent in
surpassing customer’s satisfactions. Their mission is to attain a competitive profit margin per
ton in the industry by focusing on cost efficiency, optimizing resource utilization, and
creating a safe, stimulating, and fulfilling workplace for all staff members. The company has
six core values in which the employees are expected to base on while carrying out their
duties which are integrity, accountability and ownership, teamwork, customer focus; and
lastly, embracing change and innovation.

2) What do you think about the corporate governance of Tasek Corporation Berhad?

Tasek Corporation Berhad has an excellent hold to principles and core values. However, the
composition of its Board of Directors does not reflect their efforts in embracing change and
innovation. It is proven as findings from several research studies suggest a robust link
between boards with women directors and the effectiveness of innovation, as measured by
R&D spending and citations, particularly in industries where innovation and creativity play a
crucial role (Chen et. al., 2018). Allowing both male and female to govern in the Board of
Directors will allow them to address concerns coming from both genders in the employee
line of the company. However, board members should not be selected solely to fulfil
diversity requirements. Their ability to monitor, analyse and represent the wellbeing of
stakeholders should also be vetted prior to selection. Selection of directors based on filling a
category to meet the composition desired without considering whether the director can fill
the need for varied perspectives reduces the opportunity for robust discussions and well-
rounded decision-making (Leszczyńska, 2018). It allows the board members to analyse
situations not only from the perspective of men but also women; thus, providing inclusivity
in the solutions made by the board. Sequentially, employees as one of the important
elements of a company’s stakeholders, will feel adequately represented with the presence
of a board member with similar backgrounds.
 3) Identify the main issues faced by Tasek Corporation Berhad.

There are 2 main issues that can be identified in this case namely the financial issues and the
corporate governance issues.

The increase in cost of raw materials, transportation and energy leads to increase in overall
production cost. It is especially concerning when the intense competition in terms of price
for the cement market in 2014 led to a reduction in profit margins. There are also mentions
that there is a decline in oil price. A study conducted in China by Qianqian (2011) states that
many economists resonate with the idea that oil price is an important element leading to an
economic depression; thus, the Malaysian Ringgit being in an unstable and weak position is
inevitable and also contributes to the financial issues. Suppliers may request for
adjustments in pricing of raw materials based on the current economic performance. The
fluctuation in pricing will lead to inconsistencies in price determination; consequently,
affecting budget planning processes within the company. In addition to that, the decline in
oil price may affect government fiscal policy; thus, reducing large infrastructure projects.
Tasek Corporation Berhad is a cement company which relies heavily on the construction
industry as a large share of clientele, it could affect the financial performance negatively.
Low demand from clients would lead to low productivity and performance in the company
as well.

Besides that the corporate governance of Tasek Corporation Berhad also poses as an issue
in terms of its lack in gender diversity. It is important to note that stakeholders are diverse
in nature, regardless of the industry. It includes employees, consumers, investors and the
community. Lack in diversity signifies the lack in representation of the stakeholders which
would negatively impact outside perspectives towards the company. It is also important to
note that different backgrounds results in different perceptions and ideas in dependant on
their upbringing. It is agreed by Stanford (2020) that misunderstanding usually arises with
the ideas and knowledge of individuals from minority group of races and ethnic as
compared to those in the majority groups. The lack in diversity in board of directors leads to
a narrow perspective when it comes to decision making which limits the option of solutions
presented.
 4) Discuss the SWOT Analysis for Tasek Corporation Berhad.

Strengths
 Functional corporate governance
 Active in CSR activities
Opportunities
 Potential to expand to foreign
market
 Advance technological development
Weaknesses
 Board members lack in gender
diversity
Threats
 Government fiscal policy cutting
down large infrastructure projects
 Increasing in production cost

5) Suggest strategies to solve main issues in (3) above.

The financial issues can be tackled in many ways since there are involvement of various
factors leading towards a negative impact in financial performance. A method that can be
applied by Tasek Corporation Berhad to tackle the increase in price in a fluctuated economy
is by engaging in forward contracts. Djenic et. al. (2012) concluded that the usage of forward
contracts results in no inclination towards the prices of commodities regardless of the
increase in volatility of foreign exchange rates. Usage of forward contracts will consider
economic fluctuations and set a reasonable price between both prices which will be fixed
throughout the agreement. This would allow Tasek Corporation Berhad management to
prepare budget easily in order to properly analyse their costs and revaluate their decisions.

Besides that, the company can also adopt in new methods of sourcing to aid in reducing the
financial issues. Since Tasek Corporation Berhad is on the verge of switching to new
technologies, they should adopt the new methods mentioned such as dry process which
reduces energy consumption; consequently, reducing cost of production as well. In addition
to that, it will prove to be environmentally friendly with its properties of waste reduction
which would also tackle the legal concern of the environmentalists.

Next, the corporate governance issue of lack in gender diversity can simply be solved by
integrating more women involvement in the board of directors. Chen et. al. (2018) states
that there is a positive connection between women involved board of directors and the
innovation efficacy of the company. This is especially crucial since the value of the company
itself is to embrace change and innovation. Involvement of different gender in the board of
directors would allow situations to be viewed from a wide array of perspectives. Decisions
made would be more inclusive as it is being made with the consideration of individuals from
multiple backgrounds. Hakovirta et. al. (2020) concluded that having a variety of
backgrounds and experiences among corporate board members, including those who
represent different segments of society, enhances the effectiveness of the board and fosters
the generation of sustained shareholder value over time.
References:

Chen, Y. C., Huang, C. J., Liu, H. Y., & Lin, T. L. (2018). Ownership structure, board gender
diversity and charitable donation. Corporate Governance: The international journal
of business in society, 18(4), 655-670.
Djenic, M., Popovcic-Avric, S., & Barjaktarovic, L. (2012). Importance of forward contracts in
the financial crisis. Journal of Central Banking Theory and Practice, 2, 75-96.
Hakovirta, M., Denuwara, N., Bharathi, S., Topping, P., & Eloranta, J. (2020). The importance
of diversity on boards of directors’ effectiveness and its impact on innovativeness in
the bioeconomy. Humanities and Social Sciences Communications, 7(1), 1-9.
Leszczyńska, M. (2018). Mandatory quotas for women on boards of directors in the
European Union: Harmful to or good for company performance?. European Business
Organization Law Review, 19, 35-61.
Qianqian, Z. (2011). The impact of international oil price fluctuation on China's economy.
Energy Procedia, 5, 1360-1364.
Stanford, F. C. (2020). The importance of diversity and inclusion in the healthcare workforce.
Journal of the National Medical Association, 112(3), 247-249.