Critical Success Factors for US Healthcare in Malaysian Market Project

This project investigates the critical success factors (CSFs) and business performance (BP) of US-based service providers in the Malaysian healthcare industry, focusing on the moderating role of intercultural competence (ICC). The research establishes a framework to examine the relationships between CSFs and BP, considering the potential influence of ICC. The study explores research questions regarding the most pertinent CSFs, dimensions of ICC, and business performance dimensions. It proposes hypotheses for a quantitative study, including the relationships between CSFs, BP, and ICC's moderating effect. The research employs operational definitions for BP, ICC, and CSFs specific to the healthcare industry. A quantitative moderation model, utilizing multiple regression analysis, is used to test the impact of ICC. Questionnaires are designed to measure the variables, with the ICC scale adapted from the MICE scale and the BP scale adapted from Joubert et al. (2004). The study uses a mixed methods sampling approach, involving a convenient sample of ten US-based multinational healthcare firms, with a total sample size of 70 respondents. The research aims to provide insights into the factors influencing the success of US healthcare firms in Malaysia.

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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.

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7. Embedded innovation: Innovation and change embedded in policy making and day to day
functioning.
8. Leveraging new technology: The healthcare firm has a demonstrated ability to leverage
new technology to improve patient experience.
9. Transformational leadership: The firm has a leadership, which is able to foresee the
changes in the business and organizational environment and accordingly steer and adapt
the organization to better performance through course correction.
10. Responsible and Accountable: Overall the firm exhibits a culture of responsibility and
accountability for their actions directed to the patients and the interests of the
stakeholders.
Quantitative Moderation Model
This research will test the moderation effect of Intercultural Competence (ICC) on the
relationship between the predictor variable that is the critical success factors (CSFs) and the
outcome variable that is the Business Performance (BP) of the US healthcare firms operating in
Malaysia as per the conceptual model, research hypotheses and operational definitions of the
variables. In order to achieve the same, a quantitative regression moderation model has been
employed (Fairchild & MacKinnon, 2009; Jackson, 2012). The moderation model tests whether
the prediction of a dependent variable Y, from an independent variable X, differs across the
levels of a third variable Z. The moderator variables impact the strength and/or the orientation or
direction of the relation between the predictor and outcome variables. The moderation effect is
tested with multiple regression analysis and is represented through a general multiple regression
of the form:
Y = a + β1X + β2Z + β3XZ + e

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Where, β1 is the coefficient which relates the independent variable X to the outcome Y, when Z
= 0, β2 is the coefficient relating the moderator variable Z with the outcome when X=0, a is the
intercept in the equation and e is the residual error in the equation (Fairchild & MacKinnon,
2009).
In this case,
Y= BP
X=CSFHI
Z = ICC,
Therefore, the general equation model for this study is as follows:
BP = a + β1 x CSFHI + β2 x ICC + β3 x CSFHI x ICC + e
Research Tools/Questionnaire Design
The research has been conducted through suitably designed questionnaires. The
questionnaires were designed to measure the variables of the study on the semantic/ordinal scales
as mentioned in the operational definitions of the variables. The questionnaire set (see appendix)
consists of variable scales, of which the scale for ICC has been adapted from the pre-existing
MICE scale by Messner (2015); the ICC scale has been adapted from that by Joubert et al.
(2004), whereas, the scale for CSFHI has been developed as part of the study. The questionnaires
were administered via email. The respondents were asked fill the questionnaire and return them
on the specified email ID.

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Sampling Method
The sample size was arrived at through power analysis in G*power software, which is
shown in figure 2. As per the analysis, the optimal sample size arrived at was 73, which was
approximated to 70 (Piasta & Justice, 2017).

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Figure 2: A priori power analysis for calculation of sample size
The sampling method followed in this study was mixed methods sampling. Firstly, a
convenient sample of ten US based multinational healthcare firms was selected. From these ten
firms, samples of seven managerial/supervisory employees each were randomly selected, making
an effective sample size of 70, however, we sent questionnaires to 75 respondents to take care of
possible attrition. A prior written permission from the management was received. The
respondents were given one week to fill and submit the questionnaire. 72 responses were
received out of which, two rejected due to incomplete information. Thus, finally, 70 responses
were considered for analysis (Broeck et al., 2005; McReady, 2017).
Results, Analysis & Interpretation
Results & Analysis
Descriptive Statistics
The exhibit 1 shows the descriptive statistics for the data collected for the variables of the
study. As can be seen from the exhibit, the mean, median and mode scores of business
performance (mean=3.65, median=4, mode=4) of the US healthcare firms operating in Malaysia
have reported an above average performance, especially with respect to their closest competitors.
Interestingly, these companies or firms are operating in slightly different segments of the
healthcare industry and thus, can be deemed to be performing reasonably well in their respective
segments in general, especially in Malaysia. In terms of the intercultural competence (ICC) the
respondents are by and large slightly agreeable to its presence (mean=3.73, median=4, mode=4).
In terms of the presence of the critical factors also, the sample respondents are slightly agreeable
to the same. However, the mean of the product of ICC and CSF (14.17) as compared to the

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maximum score on the dimension (36), can be deemed to be on a slightly lower side. In other
words, the combined effect of the ICC and CSF leaves much to be desired in terms of the
strength of presence in the sample firms. In order to compare the variability in each of the
variables: the coefficient of variation (CV=standard deviation/mean) is calculated. For BP, the
CVBP=.80/3.65 = 0.22, that for ICC, CVICC = 0.66/3.73 = 0.18, that for CSF is CVCSF = 0.79/3.67
=0.21 and that for ICC*CSF is CV ICC*CSF = 5/14.17 = 0.35. This shows that the ICC has the
lowest variability or highest consensus among the sample respondents in terms of its presence in
the respective firms, whereas in terms of Business performance (BP), the respondents are much
less agreeable with each other. As far as the combined presence of ICC and CSF, the variability
is much higher and shows that the firms are much variable in terms of the combined presence of
ICC and CSF. The variables are negatively skewed, which shows that the data are slightly more
concentrated on the left of the mean (Beckstead, 2013; Creswell, 2013).
Exhibit 1: Descriptive Statistics
Statistic BP ICC CSF ICC*CSF
Mean 3.657143 3.735714 3.671429 14.17143
Standard Error 0.095197 0.079934 0.094839 0.601833
Median 4 4 4 16
Mode 4 4 4 16
Standard Deviation0.796473 0.668773 0.793478 5.0353
Sample Variance 0.634369 0.447257 0.629607 25.35424
Kurtosis 1.864571 0.645525 1.183263 0.456689
Skewness -0.53612 -0.40474 -0.76733 0.134089
Range 5 3 4 23
Minimum 1 2 1 2
Maximum 6 5 5 25
Sum 256 261.5 257 992
Count 70 70 70 70

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Inferential Statistics
The exhibit 2 shows the output for the multiple regression analysis of the moderation
model equation as described in the methodology section (Bryman & Cramer, 2002; Fairchild &
MacKinnon, 2009). As the multiple R = 0.51 shows, there is an overall high linear relationship
between the dependent and independent variables in the model. This shows that the business
performance is highly correlated with the critical success factors and the intercultural
competence of the US healthcare firms operating in Malaysia. As far as the model fit or the
soundness of the model is concerned, the R squared = 0.26 value shows that the model as a
reasonably overall good fit and is a decent model in terms of predicting the effect of critical
success factors, the intercultural competence and the combined effect of the same. We can say
that the model fit is close to 30%, which can be considered a good fit, given the fact that this is a
moderation model. The F value is 2.32 which are greater than 0.05 and this shows that the
multiple variable model is not significant.
The coefficients of regression for the constant, CSF, ICC and CSF*ICC are 456.12, -
3.20, -4.51 and 0.03 respectively. This shows that a unit of change in ICC and CSF respectively
produces a negative 320% (β1=-320 %) and 451% (β2 = -451%) change in the business
performance (BP) of the US multinational healthcare firms in Malaysia respectively in individual
terms. The combined effect produced by the intercultural competence and the critical success
factors, however produces 3% (β3 = 3%) change in the business performance. A positive value of
the constant shows that large levels of changes in the variables produce positive effects in the
business performance. Statistically, the individual effects of the ICC (p >.05) and CSF (p>.05)
factors on the business performance are insignificant. In addition, there is no statistically
significant moderating effect of ICC on the relationship between CSFs of the US multinational