Masters Executive Program in Malaysia - Research Proposal Example

Masters Executive Program in Malaysia Executive Summary With the increasing demand of training needs among working professionals, many universities are introducing executive programmes worldwide. Various business opportunities have been identified in this area especially in the Asian economies. Therefore, we have presented a business plan of starting a Masters executive program in Malaysia. The distinction of this executive program will be that it will provide an opportunity to the working professionals of Malaysia to get the international level training within their national boundaries. The executive program will be developed in collaboration with a UK university, Queen Margret University. The programme will be expected to start from August 2010 however; the operations will start from 2011. The management team of eight people will be responsible to make important decisions however; an open culture and participative approach will be promoted. In the beginning we will only offer the executive masters in business administration and management. Moreover, short courses will be also offered to the internal and external candidates for duration of a few days to few weeks. It is expected that our programme will start generating the revenues right from the first year of operations as the companies will surely find this programme a good career development opportunity for their workers. The initial share capital of $1.5m will be invested along with $0.5m which will be taken from a local financial institution or bank. Since this programme aims to provide great training opportunities to adults therefore, it is expected that it will surely benefit the society. Company Description The company, we are planning to launch is aimed to provide Executive Education in Malaysia. The name of the company will be Queen Margret University Malaysia (QMUM). The idea to launch this organisation is to empower the people in Malaysia to perform at their best and to raise their living standards. Our educational institute will target the business people by offering them a way to enhance their business performance. In order to provide the people world class faculty insight and global classroom perspective, we will affiliate our institute with one of the best universities of UK, Queen Margaret University. Mission Statement “At QMUM, we aim to offer learning and training opportunities to students and professionals through our highly competent and experienced people in an exceedingly intellectual and advanced tech environment.” Vision Statement Queen Margaret University Malaysia University aims to be a regional centre of excellence in education Current Education System in Malaysia The education system of Malaysia can be categorised into two segments; first, Pre-tertiary education which is under the jurisdiction of Malaysian Ministry of Education; second, the higher or tertiary education system which comes under Ministry of Higher Education (ETAWAU, 2009). The pre-tertiary education is from pre-school to secondary school whereas, the higher education is above secondary to university level. The education system of Malaysia has been passing through the phases of development and restructuring. The National Education Policy of Malaysia states that the citizens of the country and knowledgeable, thereby, they are capable of raising their personal well being and the development of Smart Schools in Malaysia is an evidence of great focus towards of people and state towards National Education Policy (MMU, n.d.). Different kinds of educational institutions are operating in Malaysia including the Government funded institutions and private funded institutions. The vision of Malaysian government is to introduce excellent education throughout the country by 2020. Nowadays, all diversified ways of delivery of education are available in Malaysia including e-learning, traditional learning, distant learning, mixed learning, flexible learning and open learning. Interestingly, government provides funds to more than 95% primary or secondary schools and around 60% government funds are provided to the institutions offering tertiary education (Ministry of Higher Education, 2010). On the other hand, private funded institutions are dealing in both levels of education. According to the statistics of 2007, there are 18 private universities in Malaysia and total 323,787 students were enrolled in these private universities (ETAWAU, 2007). On other hand, there are 21 public universities in Malaysia (Expat, n.d.). Executive Programmes Since we are planning to enter into Malaysian market with an aim to achieve success therefore, we believe that being recognised as an international university will surely add benefit. Therefore, affiliation or collaboration with a UK university will be really beneficial. It has been analysed that collaboration with a UK university, which is also seeking to extend to Asian countries will be actually worthwhile therefore, we have selected Queen Margret University UK. Queen Margaret University is already seeking strong international links and it is evident from the fact that the university has already make collaborations with the universities in Gulf States, Singapore and Greece. According to the official website of Queen Margaret University, it has developed collaborative partnerships in Singapore with EASB Institute of Management, in Mumbai with Institute for Technology and Management, in Jeddah with Al-Riyada College, in Egypt with British University (QMU, 2010). This university is offering the same courses throughout the world, which are being taught at Scotland. Queen Margaret University has been also recognised as the first UK University which has started its campus as a joint venture with East Asia Institute of Management (EASB) in Singapore in 2008 (QMU, 2010). It is expected that the university will agree to collaborate with us as it aims to utilise its potential for the betterment and benefit of society. Executive Programme Details QMUM will offer two kinds of executive programmes including full array of open enrolment programme and the custom learning solutions. The aim of this program will be to enhance the management skills, business skills and competencies of professional people. In the start, EMBA or executive masters in business administration will be offered. Specialisations The candidates seeking to pursue EMBA will have the options to select from three specialisations including Finance, Marketing and Human Resource. Core Courses Fourteen core courses will be offered, which will cover the 42 credit hours:  Electives In addition to the core courses, the elective courses will be also offered with a wide selection of courses from the three areas of core specialisations. The elective courses will cover 18 credit hours of EMBA.   Industry Research Report Since the aim of this study is not only limited to theoretical knowledge, therefore, the participants will be also required to conduct a research related to the area of their specialisation. Mode of Study The part time, full time and flexible mode programmes will be offered, so that most working people may get full benefits from this programme. In the full time programme, the combination of lectures and tutorials will be conducted on the campus. In the part time programme, the candidates will be able to take a study load of two units. In the flexible mode of study the off campus courses will be also offered. Assessment of Course The assessment methods will be course specific depending on the type of appropriate method. The courses where the numeric and objective assessment will be required, the quantitative method will be selected, whereas, the courses in which thinking will be involved, qualitative assessment methods will be required. Since both the group and individual activities will be performed, therefore, in the team projects, the assessment tools will assess both the individual and collective group performance. An assessment process has been designed however; the percentages may vary depending on the requirements of the course. The four assessment methods used in any course are as follows: 1. Assignments: The assignments will cover the 20% marks of the course. The quality of content, formatting, referencing, research depth, originality and deadline will be the major determinants to assess the assignments. 2. Examination: The examinations will make up 30% of the course and there will be two examinations in one semester including the mid terms and the final term. 3. Group Presentations: The group presentation will cover the 40% of the course and the project will be related to the industry and area of specialisation. 4. Peer Evaluation: In each course, 10% marks will be assigned for peer evaluation and the aim of peer evaluation is to grade the other colleagues based on their contribution. Market Research and Analysis Competitors Analysis All the universities offering master programs can be considered as the direct competitors of Queen Margaret University Malaysia. For analysis purpose, the top five identified universities are those which have been ranked as top most universities according to the statistics of 2010 (4ICU, 2010). University of Malaya It is considered as best University of Malaysia and its major strengths include its image since 1962, the number of local and international students (from 78 countries), its huge campus of 428 blocks and highly qualified local and international faculty (UM, 2010). University of Putra Malaysia It is recognised as one of the best universities in Malaysia and it is also ranked as one of the best business programme offering universities in Asia. The major strength of this university is its ranking as a top website by Webometrics ranking and 4ICU ranking organisation. Moreover, its bachelor of Environmental and Occupational Health is accredited by Royal Chartered Institute of Environmental Health (CIEH) London and its Institute of Bioscience is recognised as Higher Education Centre of Excellence (UPM, 2010). The major weakness of this institute is that it is not offering executive programs. International Islamic University Malaysia IIUM was established in 1993 and it’s Masters of Business and Masters of Management are considered as best programmes of the university. The identified strengths of the university are its facilities, academic staff, in-house training and consultancy services to corporations in executive programmes. University Malaysia Perlis University Malaysia Perlis is also attracting significant strength of students for its undergraduate and graduate programmes and the excellence of its education is the major strength of the university, however, the institute is lacking the advantage because it is not catering to executive programmes and it is only offering masters and PHD programmes. University Teknologi Malaysia The e-learning programme of the university is well renowned throughout the world. The institute offers postgraduate and undergraduate programmes however, like other various top Malaysian institutes UTM is not offering executive programmes. Porter Five Forces Analysis In order to analyse the attractiveness of education sector in Malaysia, Porter five forces analysis has been conducted. Bargaining Power of Suppliers Bargaining power of suppliers is high because of the high ability of the universities to influence the prices. The education sector of Malaysia is not very competitive because of less number of universities, switching costs are very high, ability of substitution is also less and differentiation of education services provided by various universities is also high, thereby, increasing the overall bargaining power of suppliers. Bargaining Power of Customers The bargaining power of customers is low in this case because the total population of Malaysia in 2008 was 27,014,337 (World Bank, 2008) and seeking education has become a necessity. Since the number of universities is less as compared to the number of customers and competition to get admission in the best institutions is very high therefore, bargaining power of customers is low. Threat of New Entrants The threats of new entrants are less because of the high barriers to entry. The factors like high cost of setting up an institution, high knowledge requirement and high investments in technology are the major barriers. Threat of Substitute Products The substitute services are very high for example, a student seeking admission in a master program, will have various options to select from, however, as the switching costs are very high and students are getting very career oriented therefore, the threat of substitute products is not very high. Competitive Rivalry within an Industry The competitive rivalry within education sector is not very high because of the less number of universities, high barriers to entry and exit, high differentiation, high switching costs and less industry concentration. Therefore, the Porter five forces analysis highlight that education sector of Malaysia faces less competitive rivalry, high barraging power of suppliers, less bargaining power of customers, less threat of substitution and high barriers to entry and exit. Business Model Before proposing a business model for QMUM, the business models of various universities were examined. Veronica Go in 1997 evaluated the business models of world top universities and presented the summary of business models of institutions (Appendix – Table I). It is evident from the table that most of UK universities are public and less are private universities and their focus is to increase student population with an aim to adapt lifelong learning philosophy. The research also showed that major bulk of funds come from UK government and some from student fees and the universities have increased IT but overall made less investments in infrastructure (Veronica, 1997). Since our educational institute is going to be a private institute therefore, we do not expect government funding and our reliance will be on tuition fees, therefore, following is the proposed model for QMUM. Attracting Students The aim of QMUM is to introduce international study standards in Malaysia and the major focus of our institute will be directed towards bringing excellence in research and education. Since we are going to start an entirely new set up in Malaysia therefore, at the growing stage we will focus on increasing student strength whilst maintaining the standards and quality of students. However, we aim to encourage merit system and elimination of discrimination. In the beginning we will not be able to offer any financial aid to students however; we will seek to provide scholarships to the talented students at some later stages. Structure of Organisation It will be an entrepreneurial organisation with less bureaucratic structure so that faculty and students may get a chance to explore their own interests. However, on major decisions a top-down approach will be applied however, opinions and feedback of faculty and students will be always encouraged. Moreover, we aim to get recognition as an organisation offering benefits to society and people. Kind of Faculty We will maintain highly qualified professionals and practitioners in our institute and to reduce the faculty turnover rate, we will offer 60 percent full employment and 40 percent part time employment. The majority of the faculty will be hired locally. To retain faculty we will offer them a compatible culture and career development opportunities such as international recognition through Queen Margret University. Furthermore, stringent recruiting procedures will be used to hire the faculty so that the faculty may be compatible with our culture. Programmes Offered Because of the limited availability of funds, we will be only able to step in Malaysian market by introducing master of business executive programme however, in future; we will surely seek to explore other areas. Moreover, as the trend in society is changing from one-life time study approach to lifelong learning therefore, in executive programs the demand of work focused and short courses is increasing. Therefore, we will also introduce short courses programmes. We agree that flexible modes of study are being preferred by people however, as we are solely targeting the Malaysian market, therefore, we will not be seeking to provide distant learning. Sources of Funds 90 percent of our funding will come from student tuition fees however, 10 percent is expected from research sponsors and industry sponsors. Infrastructure & Innovation We aim to lead in innovation and it will be evident when we will make significant investments in research facilities. However, less expense will be made in construction and infrastructure development. Summary of Business Model for QMUM School Private Institution Focus Our focus will be: Research and Education Increase the population of students to reach economies of scale Students Although our focus will be to increase student strength but our initial student capacity will be around 1500-2000 graduates Faculty 60 percent full time and 40 percent part time working professionals and practitioners Funding Student Fees Research Sponsors Industrial Sponsors Infrastructure & Technology investment Less infrastructure investments Strong technological investments High IT investments Marketing strategy Target Market Our target market will be the working professionals with at least three years of experience. In addition, the professionals will be also asked to clear GAT test to get admission into the university. Promotion Different marketing strategy tools will be used to attract the students such as publications, attending events, participation in school activities, public relations and advertising. As the message distortion is one of the major problems when it comes to promote through different channels therefore, to avoid this problem, we will keep a consistency in all of our promotional messages. We will ensure that all messages may promote the high quality of education, our strong investments in technology and IT, our skilled and highly qualified professionals, international recognition and aim of introducing executive programme. Direct communication with Audience In the direct communication with audience, we will approach to our targeted segments. We will design our teams which will visit the companies and they will convince the companies to sponsor their employees to get admission at QMUM. Most of the companies offer education funded programmes to their employees therefore, it is expected that we will surely end up attracting a significant number of participants for our programmes. Visiting colleges will be another good option to promote the image and aim of our university among the young kids. Recruitment CD We also aim to develop a recruitment CD which will provide our potential audience to learn the taste of life at QMUM. For this, we will take maximum help from QMU and will develop a file in which students will be informed about their daily tasks, course content, classroom atmosphere, workshops etc. The CDs will be distributed along with the brochures only. Company Website The website of the company will be developed and the number of pages of the website will be around 5 pages with all details about the campus and courses. The yearly cost of website development will be $789 or RM3000 (VinaPlex, 2010). Published Advertising The advertisements will be also given in the newspapers of Malaysia and the estimated one time cost in a newspaper is $2367 or RM8000 (VinaPlex, 2010). Management Team The management team will consist of eight individuals and following is the proposed management team. 1. On the top of the management will be the Principal and Vice Chancellor 2. Below the vice Chancellor, Vice Principal and University Secretary will come and he/she will be also responsible 3. To look after the academics, Vice Principal will be recruited 4. Directors will be responsible to look after different functions and four directors will be recruited including Director of Finance, Director of Human Resource, Director of Campus Services and Director of Registry & Secretariat 5. The head of the business programme will be Dean of School of Business, Enterprise and Management Overall schedule Short Courses The short courses for a few days and weeks will be also offered to fulfil the training and learning needs of the young professionals. The courses will be related to General Management Education, Strategic Marking Education, Finance education, Leadership Education, Human Resource Education and Business Strategy trainings. Designing the Contents The contents of full time and part time courses will include the core courses and elective courses. Core Courses Corporate Law and Business Environment Marketing Theories and Practices Contemporary Management Principles and Practices HRM Financial Management Business Accounting Quantitative Analysis for Decision Making Change Management and Organisational Reconfiguration Management Accounting Strategic Management Corporate Governance Customer Relationship Management Business Economics Management Information System Source: The core courses has been developed in consideration to the courses offered by NUST (An Asian University) Campus We will start our campus in Selangor, based on the availability of a suitable commercial property there. Since the cost of construction in Malaysia is not very high therefore, our budget will surely permit us to establish a beautiful campus. Set Up the Programme In order to start the programme, following steps will be taken (Doing Business, 2010): 1. First, the form 13A will be submitted to Companies Commission of Malaysia (CCM) and the name of the School will be proposed. The collaboration letter of University of Queen Margret will be also attached to fulfil copyright issues. 2. The company documents will be stamped 3. After the name approval, the necessary documents will be submitted at CCM 4. A company seal will be made and statutory books will be purchased and certified books will be shared 5. The school will be registered with income tax department, employment provident fund and social security organisation 6. Finally the director general of the Inland Revenue Board will be informed regarding the employment of workforce The Financial Plan Income Statement   2011 $m 2012 $m 2013 $m Income Funding body grants 0 1.2 1.8 Tuition fees 10 15 20 Research grants and contracts 0 3.5 4 Other operating income 0 2 2.5 Endowment and investment income Total income 10 17 24   Expenditure Staff costs 5 8 10 Other operating expenses 1.7 2 2.2 Depreciation 0.16 0.17 0.18 Interest & finance costs 0.11 0.11 0.11 Total expenses 5 10 10   Surplus for the year 5 7 14 Balance Sheet   2010 $m 2011 $m 2012 $m 2013 $m Noncurrent assets         Fixed assets 0.8 0.3 0.4 0.5 Tangible assets 0.3 5.31 5.81 14.91 Investments 0.8 0.6 0.5 0.5 Total Noncurrent assets 1.9 6.21 6.71 15.91           Current assets         Accounts receivables 0 0.4 0.5 0.5 Short term investments 0 1.5 1.8 2 Cash 0.1 0.2 0.3 0.4 Total current assets 0.1 1.1 2.6 1.1 TOTAL ASSETS 2 7.31 9.31 16.41           Current liabilities         Loan from bank payable in one year 0 0.11 0.11 0.11 Accounts payable 0 0.3 0.4 0.6           Noncurrent liabilities         Long term loan 0.5 0.4 0.3 0.2           Reserves         Share capital 1.5 1.5 1.5 1.5 Retained earnings 0 5 7 14           TOTAL OWNERS EQUITY 2 7.31 9.31 16.41 Cash Flow Statement Cash from operating activities 2011 $m 2012 $m 2013 $m         Surplus for the year 5 7 14 Depreciation 0.16 0.17 0.18 Profit or loss on assets disposal (0.2) (0.3) (0.3) Operating income from short term investments 0 -2 (2.5) Interest Payable 0.01 0.01 0.01 Increase payable 0.3 0.1 0.2 Increase in debtors (0.4) (0.1) 0         Net cash flow from operating activities 5.31 4.88 11.59         Cash from investing activities               Income from investing activities 1.5 1.8 2 Other interest received 0 0 0 Interest Paid (0.01) (0.01) (0.01)         Net cash outflow from returns on investments 1.49 1.79 1.99         Cash flow from Financing Activities               Payments to purchase tangible assets (0.3) (0.4) (0.5) Payments to acquire fixed assets (5.31) (5.81) (14.91) Payment to acquire technology (0.6) (0.5) (0.5)         Cash flow from financing activities (6.21) (6.71) (15.91) Assumptions 1. It is assumed in the income statement that in the next coming years we will be able to obtain funds from other sources 2. It is assumed that tuition fees include the full time programme fees, part time fees and short courses 3. It is assumed that from year 2012, we will be able to obtain research grants from research councils, local authorities and enterprises and companies. 4. It is assumed that from year 2012 we will be conducting workshops to increase our operating income 5. It is assumed that other operating expenses include purchase, hiring and repairing of equipment, laboratory expenses, and utility bills expenses, advertising, scholarships etc. 6. It is assumed that loans will be wholly repayable within 5 years and the loan rate will be 10% on the whole payment, so if loan is 0.5 million dollar then interest will be 50,000 dollar and the yearly payment will be 110,000 dollars 7. Straight line method will be used to calculate depreciation 8. Since in 2011, our projected income is $5m therefore, we will make short term investments 9. It has assumed that loan is available at 10% rate Proposal of Funding Proposed Amount The funds required for this proposed business are $0.5m and we will apply for this loan from a local financial institution. Usage of Funds The projected funds will be used to purchase machinery and equipment as the total amount required for noncurrent assets is around $1.9m and the amount proposed for technological investment is $0.8m. Repayment of Loan The total term of the loan will be five years and the simple loan will be taken. Each year a portion of principal amount of loan and the interest on loan will be repaid. At the end of fifth year, the total principal amount and the interest amount will be equivalent to $0.55m. Year 1 Year 2 Year 3 Year 4 Year 5 Last payment + interest $0.1m + $10000 Fourth payment + interest $0.1m + $10000 Third payment + interest $0.1m + $10000 Second payment + interest $0.1m + $10000 First payment + interest $0.1m + $10000 $0.5m @ 10% Note: The total interest calculated is $50,000 and the simple loan method will be used in which a portion of principal payment and interest will be paid. Bibliography 4ICU. (2010) Universities in Malaysia by 2010 University Web Ranking. [Online] Available on: http://www.4icu.org/my/ [Accessed on 8 July 2010] Doing Business. (2010) Starting a Business in Malaysia. [Online] Available on: http://www.doingbusiness.org/exploretopics/startingbusiness/details.aspx?economyid=119 [Accessed on 9 July 2010] ETAWAU. (2007) Private Universities in Malaysia. [Online] Available on: http://www.etawau.com/edu/IndexUniversityPrivate.htm [Accessed on 8 July 2010] ETAWAU. (2009) Education System in Malaysia. [Online] Available on: http://www.etawau.com/edu/Department/EducationSystem.htm [Accessed on 7 July 2010] Expat. (n.d.) List of Public Universities in Malaysia. [Online] Available on: http://www.expat.com.my/Expatriate%20Malaysia%20Info%20-%20Universities%20and%20Colleges%20in%20Malaysia%20.htm [Accessed on 7 July 2010] Ministry of Higher Education (2010) Education System of Malaysia. [Online] Available on: http://www.mohe.gov.my/educationmsia/education.php?article=system [Accessed on 7 July 2010] MMU. (n.d.) The Education System of Malaysia. [Online] Available on: http://www1.mmu.edu.my/~husni/chap6.doc [Accessed on 7 July 2010] NUST. (2010) Executive Programme. [Online] Available on: http://www.fbr.gov.pk/hrm/.../The%20eMBA%20programme%20.pdf.NBS.pdf [Accessed on 7 July 2010] QMU. (2010) Collaborative Partnerships. [Online] Available on: http://www.qmu.ac.uk/the_university/partnerships.htm [Accessed on 7 July 2010] UM. (2010) UM Fact Sheet. [Online] Available on: http://www.um.edu.my/mainpage.php?um=bW9kdWxlPU1ha2x1bWF0JmthdGVnb3JpPTUxJmlkPTI1NSZwYXBhcj0x [Accessed on 8 July 2010] UPM. (2010) Achievement and Recognition. [Online] Available on: http://www.upm.edu.my/?akt=fakta [Accessed on 8 July 2010] Vinaplex. (2010) Advertising Cost Comparison. [Online] Available on: http://www.vinaplex.com/vina/comparison.asp [Accessed on 7 July 2010] World Bank. (2008) World Bank Indicators. [Online] Available on: http://www.google.com/publicdata [Accessed on 8 July 2010] Appendix Table I: Summary of Business Models Read More