Critical Success Factors in Business Operation and Its Impact on Productivity Growth

Abstract

Service sector in Malaysia continues to be the top source of employment. In the private sector, most jobs are created in sub-sectors such as trade, tourism, finance, insurance and business services. These industries operate in a competitive environment where customers are increasingly able to make choices. In a volatile business environment with rapid changes in regional and global markets, industry players need to emphasis on key success factors that enable organizations to track and measure progress toward achieving their strategic goals and meeting their mission. This study highlighted critical success factors in business operation among industry player in the services sector, which may contribute to the productivity growth. A survey was conducted with a total of 542 industry players who involve in completing the questionnaire. Descriptive and correlation analysis were used to analyze the critical factors that need to be considered in operating their businesses. Based on the result, it can be concluded that in sustaining and achieving a better performance, the companies in service sectors focus on the realization in operation management, followed by market positioning, marketing and distribution network, business diversification, cost structure, project management and raw material procurement. The finding also shows that all these factors are significantly contributing to the productivity growth in the service sector.