An empirical study of employee share ownership in Malaysia
Malaysia is one of a number of developing countries that have used employee share ownership schemes as part of its strategy to further economic development. There is a considerable literature on employee share ownership. However most of it has been based on schemes implemented in developed countries where their contextual environments are different from the one in Malaysia. It is expected that the different context will affect the implementation and the outcome of the schemes. This study looks at a number of issues related to the 'employee share option scheme' (ESOS), a common form of employee share ownership scheme in Malaysia. First this study identifies the nature and structure of the schemes implemented in the country. This is important as the nature of the scheme can affect its effectiveness. Furthermore, the type of scheme introduced in Malaysia has been distinctive. Second this study looks at the objectives of companies in introducing the schemes and their perception of the scheme's effectiveness. Third this study looks at the employees' understanding of the schemes and the relationship of the scheme to employees' attitudes and to organisation identification. Fourth, the relationship between the schemes and trade unions is identified. The results of this study shows that the nature and the structure of the schemes seem to be localised to suit the Malaysian context, even though the objectives of management in implementing them seem similar to the objectives of managers elsewhere. One interesting finding from this study, which does not seem to have been found elsewhere is that ESOS tends to be used by the government as part of its strategy to close the economic disparity between the ethnic groups and to educate its citizens about shares as part of its National Economic Development Policy. One of the other findings was that although on one measure (a comparison of participants and non-participants) there seems to be no significant effect on attitude towards work and company, on another measure (the employees' perception of the effect of membership of an employee share option scheme) participation seems to have a positive effect on identification with the company. Two factors that seem to differentiate Malaysia from other countries are its ethnic groups and its religion. These two variables appear to be related to the employees' view of the success of the scheme. The findings of this study also suggest that the role of trade unions does not appear to have been affected by the introduction of the employee share option scheme. On the contrary, the scheme seems to have strengthened the role of the union. Finally, this study looks at the overall relationship of the scheme to the contextual factors of the country. It is suggested that to some extent the contextual factors of the country seem to have influenced the implementation and the outcome of the scheme. This conclusion raises and strengthens the questions about the universality of implementation and the outcome of employee share ownership schemes.