Critical Success Factors and Performance of Business Operations in Malaysian Healthcare Industry

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CRITICAL SUCCESS FACTORS AND PERFORMANCE OF BUSINESS OPERATIONS OF
A US BASED SERVICE PROVIDER IN THE MALAYSIAN HEALTHCARE INDUSTRY:
THE MODERATING ROLE OF INTERCULTURAL COMPETENCE
Research Methodology
Research Framework and Variables
Background
This section arrives at and presents a research framework to relate and test the relationship
between the Critical success factors (CSFs) and Business Performance of US based service
providers in the Malaysian healthcare Industry according to the review of literature. As per the
literature reviewed, the Intercultural Competence (ICC) has been found to have a possible
moderating effect on the critical success factors and business performance, which needs to be
tested. Johnson et al. (2006) observed that many international or multinational business failures
had been ascribed to a lack of cross-cultural competence. As per Lertxundi & Rodriguez
(2011), there is a significant effect of intercultural competence factors or context as a moderating
variable between the critical success factors like high performance work systems and business
performance within the context of Multinational enterprises. Intercultural competence as inverse
concept of cultural distance has also been found to be moderating the relationship between
critical success factor namely knowledge transfer and performance of the multinational company
in overseas location (Qin et al., 2017). ICC or intercultural competence is vector of constructs
which has a bundled relationship with business performance and has been measured through
different scales spanning over various research works (Messner, 2015; Washington et al., 2012).
This is indicative of the fact that intercultural competence can play a significant role in
critical success factors specific to the healthcare industry as well (Duavrin & Lorant, 2015);

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(Anand & Lahiri, 2009). Thus, the proposed research framework studies the relationship as
moderated by the Intercultural competence (ICC), within the context of the performance of US
based multinational healthcare firms in Malaysia. Boynton and Zmud (1984), in their seminal
work, defined critical success factors (CSFs) as – “those few things that must go well to ensure
success for a manager or an organization, and therefore they represent those managerial or
enterprise areas, which must be given special and continual attention to bring about high
performance. CSFs include issues vital to an organization’s current operating activities and to its
future success.” This definition is indicative of the fact that critical success factors are a set of
factors, which can be very specific to an organization or types of organizations, or in other words
to an industry. This implies that CSFs vary with the organizational context and industry and thus,
can be seen as a bundle of factors, as related to the organizational performance, rather than
individually.
Variables
As also indicated by the research framework background discussed above, the variables of
this study include Business performance (BP), which is the dependent variable in the study and
the CSF vector or set/bundle of critical success factors pertinent to Health Insurance Industry
(CSFHI), which is the independent variable affecting the business performance of multinational
firms critically. Finally, there is Inter cultural competence (ICC), which is the intercultural
competence of the individual employees in the multinational firms and is being studied as a
moderating variable affecting the relationship between MBP and CSFHI.
Research Model
Based on the review of literature and the appraisal of the relationships being studied
between the variables, the following conceptual model of the moderation effect of the

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Intercultural Competence (ICC) on the relationship between critical success factors pertinent to
healthcare industry firms (CSFsHI) and the Business Performance (BP) is presented in Figure 1
below (Fairchild & MacKinnon, 2009).
Figure 1: Conceptual model of US healthcare firms’ Business performance in Malaysia
Research Questions
Based on the research background and the conceptual model, the following research
questions for the present study are proposed herewith:
1. What are the most pertinent critical success factors for the healthcare industry as
applicable to multinational US firms operating in Malaysia?
Critical
Success
Factors –
Healthcare
Industry
Business
Performance
of Healthcare
Firms
Intercultural
competence of
the firms
US Healthcare Firms in Malaysia

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2. What are the most important dimensions of Intercultural competence (ICC) of the US
multinational healthcare firms operating in Malaysia?
3. What are the most important dimensions of business performance of US multinational
firms operating in Malaysia?
4. What is the relationship between the Critical success Factors (CSFs) and Business
Performance (BP) of multinational US firms operating in Malaysia?
5. How is the relationship between CSFs and BP of the US multinational firms operating in
Malaysia, affected by the Intercultural competence of the firms?
Hypotheses for quantitative study
Based on the research background, research questions and the conceptual model, the
following hypotheses are proposed for the quantitative study under this research:
H01: There is no statistically significant positive relationship between the Critical Success
Factors (CSFs) and Business Performance (BP) of Multinational US firms operating in Malaysia.
Ha1: There is a statistically significant positive relationship between the Critical Success Factors
(CSFs) and Business Performance (BP) of Multinational US firms operating in Malaysia.
H02: There is no statistically significant positive relationship between the Intercultural
Competence (ICC) and Business Performance (BP) of Multinational US firms operating in
Malaysia.
Ha2: There is a statistically significant positive relationship between the Intercultural
Competence (ICC) and Business Performance (BP) of Multinational US firms operating in
Malaysia.

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H03: The Intercultural Competence (ICC) of US Multinational firms operating in Malaysia does
not moderate the relationship of between their Critical Success Factors (CSFs) and Business
Performance (BP) in a statistically significant way.
Ha3: The Intercultural Competence (ICC) of US Multinational firms operating in Malaysia
moderates the relationship of between their Critical Success Factors (CSFs) and Business
Performance (BP) in a statistically significant way.
Operational Definitions of Variables
Business Performance (BP): Business Performance is the performance of a firm in business
terms. In this study, the Business Performance is being measured in a multinational or global
business context. The construct is measured on an ordinal scale of 1 to 6 through a Business
Performance questionnaire scale adapted from that developed by (Joubert et al., 2004). The
construct is measured on the four performance dimensions namely business growth, profitability,
image and customer loyalty, and product service innovativeness. The scale consists of 12 items,
wherein items BP1 through BP9 are assertive statements seeking endorsement of participants
over performance of the respective multinational firm with respect to competitors. The items
BP10 through BP12 are questions seeking the frequency of occurrence of certain events
reflective of internal processes determining the performance of the business (Harwell, 2011).
Intercultural Competence (ICC): Intercultural competence is the composite set of three
abilities of individuals to accomplish their goals or in this case the business or organizational
objectives in terms of facilitating intercultural effectiveness, namely the ability to deal with
psychological stress, the ability to effectively communicate and to establish interpersonal
relationships. Further, the ICC construct is measured through the scale adapted from the
measuring existent intercultural effectiveness (MICE) scale developed by Messner (2015). The

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scale items were measured on a Likert Scale ranging from (1) Strongly Disagree to (6) Strongly
Agree.
Critical Success Factors pertinent to Healthcare Industry (CSFHI): Critical success factors
pertinent to healthcare industry are the bundle of critical success factors, as defined above, which
are applicable to the healthcare industry. This is a vector of unique factors, which will be studied
as a single variable. A semi-structured questionnaire will be prepared to measure the variable.
The same will measured on the following ten dimensions or critical success factors pertinent to
the healthcare industry mentioned as follows (Becker's Hospital Review, 2014):
1. Indispensability: The healthcare firm has made itself indispensable in the perception of
its patients as well as other stakeholders with respect to its services and facilities as
packaged together, which is not possible to get around.
2. Reinvent patient experience: The healthcare firm is perceived to have achieved a positive
transformation in the way the patients experience the healthcare service.
3. New revenue cycle: The healthcare firm is capable and has developed a new revenue
cycle based on diversification and differentiation of its services.
4. Diversified and Integrated Specialization: The firm has a proven specialization, which is
optimized and aligned to the physicians’ capabilities as well as patient needs.
5. Mindset of well-being: The firm has demonstrated a mindset and policy of perceived
well-being of patients.
6. New horizons: The healthcare firm is expanding the patient care beyond the immediate
physician centered and acute-hospital related care and delivery of services and moving
towards advanced technology based care such as smart healthcare.