INDIVIDUAL ASSIGNMENT

Student Name : NG WEI DE

MAT No : J12009660

Programme : BMAUH

Course Code & Name : MGT4225

Business and Commercial awareness

Lecturer Name : Gilbert Raj Sundram

Session : January 2017

Section : M1

Date : 20th February 2017

Word Count : 3420 WORDS

2
TASK 1:
(FINANCE
DEPARTMENT)

3
4
Table of Content
1.0 Introduction.............................................................................................................6
2.0 Problem statement.................................................................................................6
3.0 Objectives...............................................................................................................6
4.0 SWOT.....................................................................................................................7
4.1 Strength..................................................................................................................8
4.1.1 Effective financial tools.....................................................................................8
4.1.2 Have stable market shareholders....................................................................8
4.1.3 Financial and management control strategies.................................................8
4.1.4 Positive cash flow.............................................................................................8
4.2 Weakness...............................................................................................................9
4.2.1 Poor management in Financial........................................................................9
4.2.2 Lack of proper forecasting................................................................................9
4.2.3 High cost involve in development....................................................................9
4.3 Opportunities........................................................................................................10
4.3.1 Constantly growing market.............................................................................10
4.3.2 Wireless market has experienced a rapid growth..........................................10
4.3.3 Collaboration/Partnership...............................................................................11
4.3.4 Festival...........................................................................................................11
4.4 Threat....................................................................................................................12
4.4.1 Currency Exchange........................................................................................12
4.4.2 Growing competition......................................................................................12
4.4.3 Government regulation..............................................................................13
5.0 Implement strategy...............................................................................................14
5.1 Employ talented employees..............................................................................14
5.2 Online transaction.............................................................................................14
5.3 Advertising for the new online transaction........................................................15
5.4 Budgetary control..............................................................................................16
5.5 Maximize dividend payout policy.......................................................................16
5.6 Total budget for overall departments.................................................................17
6.0 Reference.............................................................................................................19
7.0 Appendix...............................................................................................................21

5
1.0 Introduction
Maxis latest slogan will be We are Maxis. Maxis are the leading
communications and internet service provider in Malaysia. It is starting to enable
over 13 million of individuals, businesses and families to do worldwide. As the
customers are constantly increasing immerse themselves in an ever expanding
universe of connected applications, Maxis also obsessed by providing an unmatched
unlimited internet experience, it is to bring customers together, as always on
connectivity and also to have great care towards their customers. As Maxis also
have passion about what they are doing and also it drives them to have continuously
innovated and be admired by their incredible results (Maxis Annual Report, 2015).

As the finance department, our goal is to provide a new financial strategy to the
financial department and also minimize the financial cost to produce maximum
impact. We will also have to control and estimate the budget for each department
and also some further investment.

2.0 Problem statement

To minimize the financial cost and produce maximum impact to increase the profits
and revenue with a new financial plan.

3.0 Objectives
To make sure the money is to invest at the right place and produce results

Maintain a positive cash flow and maintaining a minimum closing monthly balance

Control the estimate total of financial requirement for the other entire department

Ensure and be caution about the financial decision for the company

Control the expenses in order to produce more profit yet lower the risk

6
4.0 SWOT

Strengths: Weaknesses:
1. Effective Financial tools 1. Poor management in Financial
2. Have stable market 2. Lack of proper forecasting
shareholders 3. High cost involve in
3. Financial and management development
control strategies
4. Positive cash flow
Opportunities: Threat:
1. Constantly growing market 1. Currency exchange
2. Wireless market has 2. Growing competition
experienced a rapid growth 3. Government regulation
3. Collaboration/partnership
4. Festival

7
4.1 Strength
4.1.1 Effective financial tools
Effective financial tools, it can be the technology which is constantly growing
and it will be helpful for the financial department. Maxis have ERM framework helps
lower the risk from the groups internal and external environment. It even allows it to
maximize opportunities and minimize adverse incidences. Maxis have their own
strategy to monitor the potential revenue leakage that may happen someday during
operations, such as transactions from network and IT systems to the billing systems.
MaxisPay, this helps Maxis to be enabled online payment while this cashless
transaction has helped Maxis to be more successful because of the convenient and
secured payment (Maxis Annual Report, 2015).

4.1.2 Have stable market shareholders

Maxis have very stable market shareholders since Maxis has a very strong
brand name and it is very well-known for quite a long period. Maxis also have very
strong financial background to begin with. Their shareholders contain individuals,
bank/finance companies, Investment trusts/foundations and others. The largest
shareholders will be BGSM Equity Holdings Sdn Bhd, as the shares they held are
RM 4875,000,000 and it is 64.91% of the shareholders (Maxis Annual Report, 2015).

4.1.3 Financial and management control strategies

Maxis determine the fair values of the derivative financial tools with Central
Credit Reference Information System (CCIRS) and Internal Revenue Service (IRS)
which is effective on utilize data from recognized financial information sources.
Moreover, the assumptions are based on market conditions existing in every
reporting date. Maxis also calculated the fair values of the future cash flow by using
suitable market-based yield curve (DeNisi, 2011).

4.1.4 Positive cash flow

Maxis have been not stable for the past few years yet Maxis still maintaining
to have positive cash flow. Although Maxis is not the leading company in the
telecommunications industry but it is still earn a huge amount and it is growing
slowly. It showed that during year 2014, the company earned RM 1,049,307,000 and

8
in the year 2015, the company earned RM 2,667,315,000 (Figure 1). It is proven that
Maxis is still one of the strong competitors for the telecommunications industry.
(MAXIS.MY Annual Cash Flow - Maxis Bhd - Wall Street Journal, 2017)

4.2 Weakness
4.2.1 Poor management in Financial
To be outstanding in todays business, organizations must continually deliver
a range of products and services that have high business value. Even the most
successful enterprises can experience failure without a good management for their
financial. It needs to contact some good information technology to quickly and
accurately achieve objectives (Mellahi and Wilkinson, 2004). As a result,
telecommunications companies can be successful by deliver newer technology
assets and applications to their current customers as well as attracts new customer
base through positive management of change. (Rieley and Clarkson, 2001) Maxis
needs to invest some financial to project teams they can deal with rapidly changing
business, product requirements, delivery technologies and so on.

4.2.2 Lack of proper forecasting

Almost every decision an organizer made, it must consider for the forecast. It
helps avoid troubles like sudden changes in demand levels, price of the competition,
and slump of the economy. The more they understand the general principles of
forecasting, it is easier to have a suitable strategy at the moment. Maxiss lack of
forecasting about their competition, which makes lower price with a lot of data and it
leads to a huge fall for the profits. Lowyat forums were stating that Maxis will have
more data without changing the price but Maxis didnt manage to cooperate and
claim it was fake. As this happened, customers have a lot of negative comments and
even pissed their long term loyal customers (Samadi, 2016).

4.2.3 High cost involve in development

Maxis have been trying to develop for the customers so they could always
have their loyal customers stay but the cost of the development is very high. Having
to make their own fiber-like speeds even when the area has no fiber, they are

9
planning to cover most places for customers to stream videos with no buffering. As
Maxis also address digital inclusion for the communities in rural areas through the
PI1Ms and WiFi sites in Malaysia. They are providing digital knowledge and more
advanced ICT training and are currently focusing on education and development of
new skills, as this is positive for long run but it needed a huge amount of cost to
develop (Maxis Annual Report, 2015).

4.3 Opportunities
4.3.1 Constantly growing market
Maxis has been making investment to enhance the new technologies such as
the Small Cells and 4.5G for their future to make sure the customers stay, it is also
develop for higher speed and better quality of service to meet the customers
satisfaction. Since Maxis will be the first operator to trial the LTE CA (Carrier
Aggregation), VoLTE ( Voice over LTE) and Network Function Virtualization(NFV),
with stable performance could be a great opportunities for Maxis to be ahead of all
competition ( David,F.R 2011).

4.3.2 Wireless market has experienced a rapid growth

Maxiss integrated services proposition combines well with the mobile
services to provide better internet experience at home or outdoor with a big range of
fiber broadband, wireless and other value added services. Maxis is also Malaysias
first 100Mbps unlimited home fiber broadband (Maxis Annual Report, 2015). Not only
that, customers can use the home fiber broadband to download photo album, stream
or any ultra HD movies online seamlessly and surf through the broadband.
Moreover, Maxis is also the first telecommunications to actually bring the innovative
Chrome cast, a plug and play device that can let customers to cast unlimited
entertainment from their internet device with any output for example television. It
contains lot of entertainment such as YouTube channel, movies, and games and so
on; the main advantage is that it could be carry it everywhere even when travelling. It
gives Maxis a huge rapid growth by invent these into Malaysia and let the customers
to experience something new (Iigusa and Harada 2009).

10
4.3.3 Collaboration/Partnership
A collaboration or partnership is definitely a great opportunities since it is a
win-win situation and it creates brand awareness to a large amount of customers
(Shuman and Twombly, 2010). Maxis have collaboration or partnership with a more
refreshed work environment and internal communication tools; it helps with breaking
the culture barriers. Maxis are embracing the new ways of working and are
resonating with the new open, collaborative and agile culture maxis are producing.
With these efforts, it turns out to have good results with achieved the highest
Employee Engagement score in 10 years of 80%. On the other hand, Maxis also
have the mPOS which is mobile Point-of-sale which is collaborating with Maybank. It
is a unique solution that SMEs can enjoy along with the MaxisONE business and the
benefits of wireless payment function (Maxis Annual Report, 2015). It is much more
convenient with a portable payment device that allows whole sellers to accept card
payment easily. It helps in the business by staying relevant in an increasingly digitally
driven customer landscape.

4.3.4 Festival

Maxis take festival as giving back to the community in year 2015. Maxis
celebrated some festive by engaging with community through several activities.
Christmas, Maxis celebrated the occasion with members of the Mount Kinabalu
Guides Association and victims that are impacted by earthquake that hit Ranau.
Maxis invested and buying school uniforms to the children of the guides and also
donated RM 10,000 to the Association. Not only that, Maxis also donated 20 units of
400 gallon water tanks to 10 villages which located in Kundasang due to affected by
the earthquake (Maxis Annual Report, 2015).

11
4.4 Threat
4.4.1 Currency Exchange

Currency exchange has been one of the major issues in Malaysia since
Malaysia currency is very weak. Functional and presentation currency items included
in the financial statements of each of the groups entities are measured with the
currency of the economic environment in which the entity operates. As Malaysia
presented with Ringgit Malaysia (RM), which is the companys functional and
presentation currency (Nikkei Asian Review, 2015). Furthermore, exchange
differences arising from the expenditure of foreign currency transactions and the
translation of monetary assets and liabilities denominated in foreign currencies are
very crucial in the statement of profit or loss. The exchange differences are deferred
in other income when they arise from qualifying cash flow or effect from part of the
net investment in a foreign operation.

4.4.2 Growing competition

Maxis has several strong competition which includes Digi, Celcomn Umobile
and so on due to the entry restriction that imposed by the government. The rivalry
among competitors telecommunications industry in Malaysia is based on the
oligopoly structure nowadays and the level of competition in this particular industry is
believed that to be low one (Jamison et al. 2009). Maxis used to be leading the
telecommunications industry, they did best complete on differentiate product and
services on how to improve their functions and implementing innovation for their
customers. In addition, due to Maxis have the highest pricing and dissatisfaction,
Maxis lost to takes the lead. It needs to come out a way to gain back trust and also
invest money for advertising to promote their products to attract more customers to
prove they are still the best.

12
 4.4.3 Government regulation

Taxes has been a big impact to almost every big companies, the taxation rate
is growing by the new tax in introduce by in early 2015 which is the goods and
services tax (GST). It results in regulatory and consumer uncertainties, which
impacted revenues and cost. In addition, there are income taxes as well. The tax
expenses for the period comprise current and deferred tax. The income tax expense
or credit for the period is the tax payable on the current periods taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences and to unused
tax losses (Maxis Annual Report, 2015).

13
5.0 Implement strategy
5.1 Employ talented employees

Maxis should make their first move by investing more financial to the human
resource department. This is to let the human resource department to have the
ability or opportunity to employ talented employees. By doing this, it helps the
organizational to growth since their contribution will be well known and also they
know their worth and what they need to do possible to attract and retain such talents
(Cartwright, 2003). This is also one of the effective ways of retaining such talents to
fully engage with them in every operations of the organization and appreciate their
efforts (Bechet 2008). It may cost more from the start but the training cost will be
lesser than it used to be, not only that but the results will be better. With talented
employees, the human resource department can also cut down some of the
unnecessary training for the new employees; it will be further explain by my group
member Ng Xin Lin (J13012180). During year 2015, financial department had
invested a total amount of RM 465,022,000 (Figure 2), while one of the objectives is
to cut down the cost so this year financial department may only invest an estimate
amount of RM 429,000,000 to the Human resource department in year 2017. In
addition, as the financial department must also invest some financial in operation
department to improve the customers service since it has been receiving lot of
complaints from the customers about the employee attitude, manners and the
service does not meet the customers expectation. Maxis should held a better
training for the customers service by develop a customer friendly approach because
in the customers service its not what you say; its how you say it (Vliet, 2006). For
further explain about customers service will be my group member Alson Leong Keng
Weng (J13013331). Furthermore it helps the company by minimize the cost and
produce better outcome.

5.2 Online transaction

Since the technology is much more advanced nowadays, Maxis should make
their online website to work smoothly. Instead of opening a lot of branches around
Malaysia, it could save a lot of costs by doing something new to the customers.

14
Maxis is very famous in the telecommunications industry, it even has its own apps
with personal services to change a users PIN or his profile. It could also check their
bill statements and having credit card payments with the full listed payment history.
Maxis should make something different with incredible website that can settle
everything that a store counter can. For example, a website which can change from
pre-paid to postpaid, having customers to change the data package by their choices
through online or when a new smart phone release which needs a smaller kind of
SIM cards to activate, customers could just choose it online and wait for delivery
from Maxis so customers can done everything at home. All of these help eliminating
the need to travel to a branch. It is given the choice that 54% of mothers that work
full or part time would rather stay at home and cares for their children than work
outside from home (Mnookin, 2003). But first, Maxis must have invest more financial
to operation management to make improvement to their website, for further explain I
will leave it to my group member Alson Leong Keng Weng (J13013331). In year
2015, Maxis operation has used up to RM 1,239,262,000 according to figure 3. As
Maxis should increase the estimate budget for the operation department, we believe
that this year will invest about RM 2,000,000,000. Furthermore, we believe that it will
gain more profit in the long run after the operation expand their network and make it
more stable as well as enhance their website. In the long run, if the online
transaction is very successful, Maxis could cut a lot of cost from renter and
renovation, it will be effective for long run.

5.3 Advertising for the new online transaction

In addition, if Maxis save their cost by doing more online, the marketing
department should have survey. In order to have huge impact to a company,
marketing should interact more to boost the overall business performance
(LeMeunier-FitzHugh and Piercy 2007, 207). Maxis must also invest financial for the
marketers to come out with a good way to promote this new experience to the
customers. With marketing survey it could also have clearer goals towards for the
team to actually prepare for the next step (Kompaso and Sridevi, 2010).
Furthermore, Maxis will be using the non-skipable in-stream advertisement as the
advertising tools. It doesnt not cost as much as the billboards yet it could reached a
huge amount of audience. It cost about RM 10,000 for every 230 viewer that

15
watched the advertisement. Financial department will also invested RM 100,000,000
for the making the survey happen. For further explant I will leave it to my group
member Chai Voon Jin ( J13013518).

5.4 Budgetary control

An expense budgeting technique will be very crucial for the company which is
for a clearer ways to see what a company wants to achieve or set its short-term
objectives and also measuring the performance for a better analysis on strategies
implementation (Adeniyi, 2008). With budgetary control, it helps to propose for Maxis
to measure it estimated expenses and ensure all of the expenses will be fully utilized
and it will brings benefits to the company after spending it. As the finance
department, they are responsible to set the rules on each department on developing
and recording each departments expenses budget. For example, when Maxis
launch a new operation plan which is more on the online transaction, the marketing
should have make more survey and promoting to ensure that after Maxis spend this
much more money for the new system, it must be expecting to achieving a better
results. Not only that, all the other departments is also responsible for reporting all
the financial expenditures such as their expenses when they are completing or
spending for a particular project. Furthermore, the other departments should also
have marketing director to have the responsible on developing a financial report from
the project budget and send it to the finance department for analysis for any further
approval. As with this budgetary control, it will be clear that how many Maxis has
spent and also determine is it profitable.

5.5 Maximize dividend payout policy

Maxis dividend payouts rate is actually not beneficial for the company towards the
growth in long run perspective. If this goes on, the cash reserve might start to reduce
and it will cause Maxis to face unfavorable outcomes if there are any cash flow
problems such as using much cash on purchasing large amount of stocks or huge
cost investment or any network operation (Maxis Annual Report, 2015). Maxis should
be more conservative with managing the retained earnings in order to maintain or
protect towards the issue on capital expenditure or any operational expenses to be

16
prepared if something critical happens. Not only this, by lowering down the current
rate of dividend payout policy to increase its funds for other departments with
different strategies such as operations management, marketing activities or any type
of investment planned (Kulchania, 2016).

5.6 Total budget for overall departments

Cost Amount (RM) 2017 Amount( RM) 2015

Business Department 50,000,000 -
Operation Department 2,000,000,000 1,239,262,000
Human Resource 429,000,000 465,022,000
Department
Marketing Department 100,001,000 596,603,000
Finance Department 350,000,000 468,404,000
Total 2929,001,000 2,769,291,000

The estimated budget for business department would be RM 50,000,000 and it will
be used to make any business analysis for the other departments.

The estimated budget for operation department would be RM 2,000,000,000 as it will

be the most important department for Maxis to make improvement. The estimated
budget is higher than the previous budget because Maxis has tended to have more
on online transaction and enhance their websites. Hope it brings more convenient to
the customers and meets their expectation. In the long run, It would help Maxis to
gain more profits since the websites is more functional and it saves cost from any
renter and renovation.

The estimated budget for Human resource department would be RM 429,000,000 is

because they needed to employ talented employees so it will save cost from the
unnecessary training.

The estimated marketing department is RM 100,001,000. This cost is to have proper

marketing survey to understand more about the customers and make sure that
turning from branches to online will be more effective. Next, they also use this money
to make advertising on YouTube.

17
Lastly, the estimated budget for finance department would be RM 350,000,000 as
this is to help save cost from other departments in order to provide more cost for the
operation department to make improvement.

18
6.0 Reference
Website

"Maxis Annual Report 2015". Maxis | Annual Report 2015. N.p., 2017. Web. 9 Feb.
2017.

"Maxis: Net Profit Slips 6.5% On Higher Operation Costs, Weaker Ringgit- Nikkei
Asian Review". Nikkei Asian Review. N.p., 2015. Web. 10 Feb. 2017.

Samadi, Faaez. "Thousands Of Malaysian Not Happy With Maxis As Customers Not
Treated Fairly [Comment]". MalaysianWireless. N.p., 2016. Web. 10 Feb. 2017.

Books

Adeniyi, A. A. (2008), An Insight to Management Accounting 4 th edition, Education

Lagos: E1-TODA Ventures Limited

Journal

Beechler S and IC Woodward (2009) The global war for talent. Journal of
International Management 15(3), 273285

Cartwright, R. 2003. Managing talent. United Kingdom. Capstone.pp 96

David,F.R (2011). Strategic management concepts: A competitive advantage

approach (14th ed.) Pearson Education Australia.

DeNisi, Angelo S. "Managing Performance To Change Behavior". Journal of

Organizational Behavior Management 31.4 (2011): 262-276. Web.

Iigusa, Kyoichi and Hiroshi Harada. "Antenna Composition And Technology For
Cognitive Wireless Communications". Wireless Personal Communications 51.4
(2009): 843-854. Web.

Jamison, Mark, Sanford Berg, and Liangliang Jiang. 2009. Analyzing

Telecommunications Market Competition: A Comparison of Cases. Public Utility
Research Center, University of Florida.

Kompaso, Solomon Markos and M. Sandhya Sridevi. "Employee Engagement: The

Key To Improving Performance". International Journal of Business and
Management 5.12 (2010): n. pag. Web.

19
Kulchania, M 2016, 'Cost Structure and Payout Policy', Financial Management
(Wiley-Blackwell), 45, 4, pp. 981-1009, Business Source Complete, EBSCOhost,

Le Meunier-FitzHugh, K. and Piercy, N.F. (2007): Exploring collaboration between

sales and marketing. In: European Journal of Marketing, Vol. 41, No. 7/8, pp. 939-
955.

Mellahi, Kamel and Adrian Wilkinson. "Organizational Failure: A Critique Of Recent

Research And A Proposed Integrative Framework". International Journal of
Management Reviews 5-6.1 (2004): 21-41. Web.

Mnookin, Robert. "Introduction: A Purposeful Life Well Lived". Negotiation

Journal 29.2 (2013): 129-132. Web.

Rieley, J. B. and Clarkson, I. (2001). The impact of change on performance. Journal

of Change Management, 2(2), pp. 160 172.

Shuman, Jeffrey and Janice Twombly. "Collaborative Networks Are The

Organization: An Innovation In Organization Design And Management". Vikalpa 35.1
(2010): 1-14. Web.

Van Vliet, Dennis. "Excellent Customer Service Is Not Just An Option". The Hearing
Journal 59.6 (2006): 90. Web.

20
7.0 Appendix

Figure 1: Total Earning

Figure 2: Human Resource Cost

21
Figure 3: Operation and Finance costs

Figure 4: Marketing Cost

22