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Factors Determining Success in Malaysian SMEs By Implementing Effective Entrepreneurship and Strategic Management Yusuf B. Abdullahi investigate the external success factors as apparent by Abstract - This study aims to explore and develop a clearer proprietors and/or managers of SMEs in Malaysia. understanding of the factors that influence success in Malaysian small and medium enterprises by implementing II. BACKGROUND entrepreneurship and strategic management, as perceived by local owner and/or managers. Using a qualitative approach, The significance of SMEs is all around perceived in fifteen in-depth face-to-face semi-structured interviews were academic and policy literature [2,3]. Both developed and conducted with selected owner-managers of SMEs, forming a developing countries have understood the significance of judgmental selection, to explore their experiences, beliefs, and SMEs in the economic and social development. In Europe, attitudes with respect to the external factors of success. The study suggested that there are three generalized factors that the yearly report of European SMEs affirmed that SMEs study suggested that there are three generalized factors that influence success and performance in SMEs based on the remain the European Union's economic spine in spite of the entrepreneur's perceptions: the "owner and manager worldwide financial crisis "The European Commission, attributes" which involves the language skills factor, financial 2011 ". Representing 99.8% percent of all enterprises, SMEs and networking partnership, and business characteristics with a add to 66% of employment in the European Union. SMEs in focus on the location factor, which was mainly associated with Malaysia plays a crucial part in the development of the nation. the selected districts in Malaysia. The importance of financial resources stemmed from the substantial challenges faced by SMEs in Malaysia. A response to these challenges often adopted the economic structure of the nation. SMEs have been at the an equity model of financial resources. Furthermore, the core of Malaysia's economic transformation since the 1990s concepts of conduct, equipment, and commitments, clearly to an upper- middle income nation and are an important explained the importance of a good infrastructure to the driver of employment and growth. appreciation of success in this type of business. The study contributes to the understanding of the impact of critical external factors on the success of SMEs in Malaysia. The three According to the regional report (2016) of the World Bank, significant factors could be considered to be ways of Malaysia is considered to be a difficult area with respect to understanding the external environment by small business the regulations affecting four stages of a business's life: owners and managers, allowing the impact of external factors to starting a business, dealing with construction permits, become part of the way that the small business owners conduct registering property, and enforcing contracts. The sector faces their business. a number of constraints especially in accessing finance, Index Terms - Strategic Management, Entrepreneurship, markets; training and technology. Although, there are many SMEs, Free Zones, Malaysia. advantages to use strategic management, there are still many SME organizations that resist using it, since some of them may think this process is only useful for larger organizations I. INTRODUCTION and due to this, they do not recognize that it's also very The imperative commitment of a vibrant and flourishing helpful for SMEs as a whole. With respect to the SME sector, small and medium enterprise (SME) sector in the national manufacturing SMEs in Malaysia account for over half of the socio-economic development of a nation has been broadly total firms in the region. Around ninety-seven percent (97%) recognized. In perspective of its expanding significance, of business establishments in Malaysia are SMEs, and these success of small and medium enterprises (SMEs) has been businesses account for nearly 36% of the country's GDP, important to a few researchers, global associations, and 65% of the country's employment, and nearly 18% of policy makers, at least, since the Bolton report (1971), and Malaysia's exports [14]. However, despite their value in the accordingly has turned into the subject of a lot of analysis. regional economy, their contribution to the industrial value added remains limited with respect to the national economy. Consideration regarding the SME sector has elevated in Recent available data from the regional report also showed view of the globalizing economy and the undeniably extreme that the contribution of the region to the industrial value rivalry that is intrinsic in this development. In the light of this, added was only 17% in 2015 compared to the 3% drop in the accompanying research study tries to understand and 2016. This does not reflect the potential of the SME sector, especially after the recent remarkable economic developments in Malaysia. Recent economic developments Yusuf B. Abdullahi, Research Scholar, Limkokwing University of in Malaysia, and particularly in the selected districts have Creative Technology, Malaysia been considerable. By virtue of these developments, as well researchers have attempted to investigate the characteristics as the strategic position of the city, its special tax status and of SMEs and characteristics of the entrepreneur as the the economic free zones, several local and international internal factors that influence SMEs performance [9]. For the investments have been attracted to the city in the last 10 years, firm characteristics, several studies have revealed that size, which have transformed the region into a competitive hub. age, and location of the firm could be related to business SMEs in Malaysia have been vulnerable to these business performance [14]. On the other hand, other researchers have environment challenges which could have an impact on their shown great interest in understanding the relationship performance. As contended by Man and Lau (2005), SMEs between characteristics of the entrepreneur and business are more probable than bigger firms to be influenced by performance [17, 21]. changes in their internal and external environment which are regularly spontaneous for. In this manner, an imperative issue As for the external factors, it is widely recognized that emerges concerning the capacity of small and medium firms successful organizations are those that best adapt to fit the to adapt in an exceptionally difficult environment. While opportunities and the constraints inherent in the environment trying to address this issue, the present study has been in which they operate [16]. According to Miller \& Dess embraced with the point of exploring the entrepreneurs' (1996), the external environment of the enterprise can be impression of the external critical success factors in classified into two dimensions, namely the general and Malaysia. competitive environments. The general environment consists of the political legal, macroeconomic, socio-cultural, III. Literature ReVIEW technological, demographic and global factors that might The performance of SMEs has been of interest to many affect the organization's activities. On the other hand, the researchers, international organizations, and policy makers, at competitive environment consists of other specific least, since the Bolton report (1971), and therefore has organizations that are likely to influence the profitability of become the subject of a great deal of analysis. This the enterprise, such as customers, suppliers and competitors. performance may have two strategic outcomes that is often Several previous studies in both developed and developing referred to in the literature as firm success or failure [2]. In a countries have identified a range of external performance management field, success and failure can be interpreted as factors that relate to the general as well as the competitive measures of good or indifferent management [5,8]but it may environment of the firm. For the general environment, data occur for other reasons such as luck [7]. Numerous terms from several sources have identified economic factors, in have been used in the literature to describe firm failure, for particular financial resources and taxation, as central for the example: bankruptcy, insolvency, liquidation, death, success of businesses [3]. deregistering, discontinuance, ceasing to trade, closure, and exit [7]. These terms overlap each other to some extent (Sten, Other studies have found that political legal factors 1998) and thus, the concept of failure is ambiguous, as it can significantly relate to business performance [18]. Much have different interpretations by different people [1]. The literature has focused on the technological factors. These many different interpretations and definitions of both success studies have highlighted the positive relationship between and failure make it very hard to compare research findings on technology, information, and infrastructure and business the performance of small firms. performance. The networking factor, which could be classified under the socio- cultural factors, has been subject to In strategic management and entrepreneurship literature, a great deal of research. Numerous studies have documented the concept of success remains a topic of debate [9]. This is a positive association between networking and various despite the evidence that the success of small firms has been aspects of firm performance [7]. On the other hand, a large subject to a great deal of research. However, there is no and growing body of literature has investigated the general agreement in the literature on what is meant by the competitive environment of the firm in relation to three success of a firm. Indeed, a myriad of perspectives, ranging stakeholders: customers, suppliers, and competitors. There is from mere survival to the achievement of certain levels of a large volume of published studies describing the role of performance, exist about such a concept in the customer relationship management as a key factor in business entrepreneurship literature. Very often, the terms 'success', performance [10]. Similarly, an increasing amount of 'survival', 'growth' are very closely linked and sometimes literature has highlighted the effect of suppliers on the used interchangeably. Besides the multi- dimensional aspect performance of businesses [9]. Other researchers have argued of success, variables that contribute to the success of SMEs that an analysis of the role of competitors and counterare not unanimously agreed upon by researchers. While some competition intelligence and actions are crucial for the analysts suggested that the dynamics of the success of survival of an SME [20]. businesses remain a black box [11,8], others argued that the success of enterprises is a function of both external and There are a number of issues with the current literature. internal factors [1]. Right off the bat, the group of three of customers, suppliers, and competitors is a typical tool for the analysis of the Literature on the performance of SMEs usually identifies external environment. This is often adopted in an several causal factors with regard to the internal and external instructional manner as a tool for the understanding of this environment of the firm. In terms of internal factors, several external environment. It can be proposed this does not reflect International Journal of New Technology and Research (IJNTR) ISSN:2454-4116, Volume-4, Issue-7, July 2018 Pages 48-55 the real concerns of the entrepreneur and there is a need to provide guidance and to ensure consistency all through the revisit this definition. Secondly, the identification of money interview process, an interview guide was developed. related resources and tax collection policies tends to be However, there is a need for an open exploratory context to viewed from an economic development approach and lends generate rich data so a flexible design was taken into account itself to the development of international correlations of the when developing such guide. This was based on the advice of business environment. While these correlations are critical, Hammersley and Atkinson (2007) that stated: "Ethnographers the reports produced barely do justice to the elements of small don't more often than not decide beforehand the exact business engagement in the economy. Entrepreneurs tend to questions they need to ask, and don't ask each interviewee center around both personal and professional criteria of precisely the same questions, however they will for the most success. part enter the interviews with a rundown of issues to be covered. Nor do they seek to establish a fixed sequence in The latter is conceived to change systemically crosswise which relevant points are covered; they embrace a more over cultures, gender, or other salient dimensions. It is flexible approach, enabling the exchange to stream in a way imperative to highlight here that unless there is congruence that seems characteristic". Therefore, it was not the between the objectives of public, policy, open approach and researcher's intention to use directional or even to make all those of business owners, government policies might be inquiries at every interview, yet rather to cover the subject misdirected or ineffective. Noting these concerns provides matter of the theme over the span of the interview. the justification for further studies in this area. The interview guide consisted of a presentation, principle questions, extra questions and clearing up questions. The IV. RESEARCH METHODOLOGY fundamental questions looked to explore how business Use This study focuses on the basic external success owners and managers of assembling SMEs in Malaysia see factors for assembling SMEs that were tested in a previous business success factors in relation to their experiences. In quantitative study, which was conducted from April 2017 to order to acquire more data on perceptions of the success August 2017, utilizing a survey questionnaire. This survey factors, a question on the advice that the members would give tested the occurrence in Malaysia of those basic success to someone who needs to begin his or her own business was factors that were identified from the literature. In spite of the included in the primary questions. Elucidating questions were fact that the results of the quantitative survey offered a used in order to elicit the greatest measure of data. The general understanding and some underlying bits of questions of the interview guide were designed in English. knowledge on the perceptions of business owners and managers with regard to the external factors that influence B. Selection of Respondents business success. However, these results remain limited and The business owners and managers who participated in the ought to be warily interpreted since the factors that previous quantitative study were the populace for the respondents were asked to evaluate were derived from the qualitative study. They were 88 owners and managers of literature in different contexts and in this way imposed on SMEs, identified from the official website of the Ministry of respondents. This did not permit sufficient understanding of International Trade and Industry responded positively to the members' personal views of the vital factors in the specific questionnaire. With regard to the selection of specific SME context of Malaysia, which may be different from other owners from this populace, then judgment was used. The contexts. Hence, the identified need for a qualitative selection criteria were: sector, area, and gender. The approach in order to begin overcoming this constraint. The judgmental selection was deemed appropriate for the study present study is exploratory since it attempts to explore the since this study has an exploratory nature. The intention of experiences, beliefs, and attitudes of SME owners and the researcher was to explore perceptions and views of managers in Malaysia with respect to the external factors of external success factors in relation to the experiences of success. Accordingly, the study embraced a qualitative business owners and managers of SMEs in Malaysia, and not approach, based on to generalize the results to a wider populace. With respect to description, beses on Geertz (1980) concept of thick the sample size, in judgmental selection, the researcher uses description, in order to explain not only the behavior yet his or her judgment to decide when enough members have additionally its context. This study used personal interviews been sampled. As suggested by Kvale (2001), new interviews to explore perceived success and its connection with the may be conducted until a state of saturation, where further external environment. A phenomenological interview interviews yield little new knowledge. approach was adopted that enabled the identification of In this qualitative study, the sample size was achieved when personal beliefs. In addition, fifteen in-depth face-to-face fifteen interviews were conducted. The cut-off point was not semi-structured interviews were conducted to collect predetermined, however emerged from the research process qualitative data. A thematic analysis was undertaken to and concurrent data analysis [10]. permit the development of cross case themes. A. Interview Design C. Interview Administration Preparation for qualitative interviewing is vital. As per The data collection for the qualitative study occurred Cornford and Smithson (2006), keeping interviews to the from September 2017 to November 2017. It was carried out subject is very critical and the researcher needs to carefully in two separate time frames due to strategic and practicable design the questions and take control. In this manner, to reasons. It was very hard to get hold of the managers of SMEs in the period of September 2017 since the larger part of them demonstrates the profile of the respondents who participated were still on vacation, and therefore just five beginning in the interviews: interviews occurred inside this month. Arrangements were made to meet up with business owners and managers in April Table 1. Respondents profile 2017 to complete more interviews. As a result, another ten interviews were conducted inside this month totaling to a number of fifteen interviews. The break between the two interview periods provided time to reflect on the preliminary analysis of the interviews. All interviews were singular, face-to face interviews and were conducted utilizing the French language. The duration of the interviews ranged from 32 to 65 minutes. With regard to the settings, the strategy was to enable all sources to choose the area so as they could feel more relaxed. The strategy resulted in nine interviews being conducted at the members' business premises, five out of a coffee shop, and one while driving an auto. Before undertaking each interview, a verbal brief about the point of the study and issues related to confidentially was given to Discoveries of the qualitative study provided rich data that members. The permission to sound record the interview by an enabled deep understanding of the critical external success advanced recorder was looked for from the interviewee. factors for SMEs in the context of Malaysia, specifically: Permission was granted and all the fifteen interviews were financial resources, access to infrastructure, and competition. sound recorded. Furthermore, ownership and copyright of transcripts were established at this stage and members were A. Financial Resources informed that transcripts will be destroyed once the research The finance theme was prominent in the brains of the study come to an end. Amid the interview, an open-ended participant and was consistently regarded one of the flexible way to deal with interviewing, which is emphatically significant factor influencing the success of SMEs in recommended by Patton (1990), Bogdan and Biklen (2007), Malaysia. Its importance stemmed from the considerable and Hammersley and Atkinson (2007), was used. challenges faced by SMEs in Malaysia. Vital bits of knowledge were therefore revealed in relation to Along these lines, open-ended questions were deliberately requirements related to the accessibility of monetary asked to encourage members to engage in the conversation. resources. The presentation of a solid dossier (business The flexible approach was useful and resulted in new design), high interest rates, and high asset collaterals were the emerging issues to be explored. Furthermore, members' key requirements that restrain the success of SMEs in responses were frequently rephrased and repeated in order to Malaysia. Discoveries revealed that getting a credit from ensure accurate understanding of the fundamental indicates money related organizations can be achieved provided that and encourage the interviewees expound their views on these the enterprise presents a solid dossier that includes the greater focuses. Toward the end of the interview, a standard frame part of the data required to request an advance. One business was given to members to fill in their personal characteristics, owner-manager indicated: for example, age, gender, and educational foundation, and in addition the firm characteristics, for example, legal status, "Yes, of course. Banks are now available to help because movement of the enterprise, years in business, and number of there is a favorable climate for investment. Yet, you need to employees. Moreover, members were thanked for partaking know that you have to present a solid dossier. The way that in the study, were reassured again about the confidentiality you present a solid dossier will encourage and persuade the issues and were alerted that they could be contacted should bank to process your application and give you the credit you the researcher need more elucidation. need." (ENTERview05) V. RESULT AND Discussion Another business manager argued this point further by The analysis of qualitative data was carried out utilizing explaining how present a solid dossier to the bank to get thematic coding techniques that match semi-structured endorsement for the credit requested. As per him, to get a interviews conducted in this study (Cornford and Smithson, bank credit, you should give fixed assets for collateral. 2009). The analysis pro by Braun and Clarke (2009) which are: acquaintance with the "To get a bank credit, you should present a solid dossier. You data; generation of introductory codes; searching for themes; should provide a certified balance sheet that is accredited by reviewing themes; definition of themes; and report creation. the assessment authorities. Following a review of your To facilitate qualitative data analysis and to make qualitative certified balance sheet (money related circumstance, your analysis more reliable and transparent [21], the software QSR turnover, your debts), the bank will make a decision based on NVivo 12 was used. To ensure an accurate identification of whether the balance sheet gives a decent picture about your data, all interviews were labeled when introduced into QSR business or not. In other words, in the event that you have Nvivo 12 software. For example, with the label fixed assets, that is great and the bank will use them as ENTERview01, the abbreviation ENTER represents the guarantees to permit a bank advance. Generally, the bank entrepreneur, view means interview, and 01 refers to the must get collateral." (ENTERview02) number of order in QSR Nvivo 12 software. Table 1 ISSN:2454-4116, Volume-4, Issue-7, July 2018 Pages 48-55 The issue of collateral and its inherent difficulties was companies in Islamic countries. It focuses greater emphasis unequivocally reinforced by another business owner who on joint subsidizing and profits rather than assets. It would argued: thus be able to be concluded that a joint subsidizing based on "Getting credit from banks isn't so easy. Enterprises should profit and misfortune sharing, and not interest charges, was at any rate provide guarantees because banks, as you know, perceived as an ingredient for not just money related, yet don't get involved in investments if no guarantees are additionally otherworldly success. Careful talks with provided. To obtain money, you should normally give members unfolded another strategy used by business owners guarantees to the bank." (ENTERview06) and managers of SMEs in Malaysia in order to tackle the laws related to monetary resources. Some managers referred to the Another issue was raised in respect to finance by a business use of trade credits as an efficient external financing source to manager expressed his concerns about perceived high interest enhance the performance of their businesses. An manager rates charged by banks and described such issue as an explained this point by showing that the vast majority of his impediment to investments. purchases of raw materials from suppliers are done on credit. "There is no fixed interest rate. There are variable rates. "Because of our solid relationship with our suppliers, we are That is the reason enterprises have to check different banks able to get a trade credit. In this manner, we purchase raw and negotiate the interest rate. I will state, here in Morocco, materials without immediate payment. This enables us to sell we have genuinely high interest rates. Indeed, this is an ourfinished items and after that compensation at a later time. impediment to investments." (ENTERview09) This is very useful for us because it helps to ease our income management by having more money inflows at a specific time From the above qualitative results, obviously perceived than money outpourings." (ENTERview07) success of SMEs is typically constrained by the perceived surprising expense of credit; not simply interest rates and The use of trade credits by SMEs in Malaysia is in line with collaterals, yet in addition the effort required to produce the the academic literature that considers trade credit as an dossier. Indeed, the limitations of collaterals and interests are external source of finance for little and medium companies in very often mentioned in the literature. In this respect, the countries with less developed money related market (Biais discoveries of this study fit in with the discoveries of The and Gollier, 1997; Bougheas et al., 2009; Bellouma, 2011). International Finance Corporation (2012) and several creators However, it can be stressed here that the use of trade credit (Schiffer and Weder, 2001; Cosh and Hughes, 2009). not just allowed businesses to discover alternative to the However, what was very interesting is the way that the banks, yet this additionally was appropriate for the Islamic presentation of a solid dossier to the banks becomes not just a way to deal with finance. There was no interest charged yet money related yet in addition an emotional influence on there was shared business development and a partnership success. The generation of the dossier presents a considerable method of being successful. Being personally responsible to measure of cooperate with the identification of assets. The others was a significant factor in the appreciation of success. need to focus on such a process was often a requirement on the perception of success. This was often seen as tedious B. Access to Infrastructure process. This may likewise be the case in other more Discoveries of the qualitative study underpinned that a developed countries, yet in the context of Malaysian decent physical infrastructure has a great positive effect on relationship based enterprise, this process was unfamiliar to the success of SMEs in Malaysia. The importance of the the standard method of working together. Most importantly, infrastructure factor evolved from the significant challenges the issue of interest rates raised another issue that was of high faced by SMEs in Malaysia. Imperative experiences were concern to most managers who were not willing to breach therefore revealed in relation to the requirements related to their religious beliefs. Uncertainty was expressed by infrastructure. Specifically, the requirements covered three respondents about the accessibility of non-Islamic banks in sub-themes that emerged from the exhaustive analysis of Malaysia, which is a Muslim nation. A business manager qualitative data: Electricity, water and sanitation, and revealed his wonder about this issue by expressing: transport. Limitations of accessing electricity and water were considered very challenging for managers of Manufacturing "Personally, I fear breaching my religious beliefs and SMEs. Findings showed that the mind-boggling expense therefore won't approach customary banks. I would prefer to charged by Tenga Nasional Berhad (TNB), for the dispersion use an Islamic bank to get access to finance on a profit and of electricity and water was a consistent finding among all loss sharing premise" (ENTERview10) members. One business manager stressfully expressed his concern in respect to the expensive electricity charges by Most banks in Malaysia operate in a comparative mold to expressing: customary European banks, offering no alternatives to entrepreneurs yet to deal with these banks. The idea of "We really have serious problems with the organization TNB Islamic keeping money is seen as a possible alternative to (The provider of utilities) because it sends us charges that far European model. This seems to hold out the prospect of a exceed our utilization. We have technicians that can tell us linkage between economic and profound success. This is the amount KWH we consume exactly because we do cost clearly appeared in the above quote which reveals the bookkeeping. In this way, we know exactly the amount we importance of profound success in the conduct of the business consumed. However, when we receive the invoice, it's always that needs to do with religious beliefs. This process likewise a surprise." (ENTERview02) has consequences for the method of financing of private The discoveries further suggested that despite the fact that arrive to the modern zone, one must experience heavy traffic" electricity and water services are reliable, this reliability (ENTERview02) weakens when catastrophic events strike the city. A decent and reliable infrastructure is vital to business success. "Because of traffic congestion, our personnel transport Bearing this in mind, it comes as no surprise to discover a arrives late. This causes delay in our creation lines which witness, located in the modern zone Kuala Lumpur, Sabah, thus delay the respect of our commitments. This really affects Pahang expressing serious concerns about the infrastructure's our business image." (ENTERview09) reliability with solid reference to the flooding events that struck Malaysia in 2017. Critically, the business manager Essentially, the factor of infrastructure was mentioned highlighted the concepts of conduct, equipment and extensively by the interviewees. It seems to indicate the commitments. As per him, the manner in which he manages importance of this factor, as detrimental to success. The his business relates to the two equipment used in the interruptions caused by poor infrastructure negatively generation (equipment) and the capacity to deliver to his affected the direct of the business in that they enforced customers (commitments): changes in the manner in which the business worked. It additionally produced damage to the creation equipment and "As you know, not long back, around 6 months prior, we had furthermore this impacted on the commitments entered into surges especially in the area where we exist today, the by the organization. These were significant factors in the mechanical zone Kuala Lumpur, so we had real problems of appreciation of the success of the business. The other issue is flooding. We have had surges that really had a negative the mastery of this area by international companies, which effect, whether on the conduct of our business, or on the embrace different methods of working than the private equipment that were damaged and furthermore on the level of ventures. These companies were often seen as remote and not profitability and the commitments we had with our committed to the success of private ventures. customers. Therefore, we had a problem of late deliveries caused by the surges. Due to power cuts, we had a stop that C. Competition endures 7 days and you can see the effect that must have such The qualitative study revealed that a competitive advantage a problem especially on the image of the business because the over the opponents is a salient factor for the success of business image is very vital for us." (ENTERview03) businesses in Malaysia. The importance of such factor emanated from the challenges of the increasing globalization It is worth to mention that some of the modern areas were and in addition the unreasonable competition in the market. based on minor terrains, which were often low lying and need Discoveries suggested that organizations located outside the poor infrastructure. This explains why that specific free zones in Malaysia claim that they are not competing on mechanical zone Kuala Lumpur and another modern zone equal and reasonable terms, compared to their counterparts Sabah were impacted heavily by the surges. With regard to established in the free zones. A possible explanation for this the vehicle infrastructure, solid reference was made to the is the generous incentives that are available to firms in the new port by respondents. It was stressed that such port, which free zones together with a higher level of infrastructure is the one of the largest in Southeast Asia, has contributed to development. A business owner of a firm located outside the the success of SMEs, specifically to the mechanical firms that free zone came up with a solid message showing that his firm are located in the free zone associated with the port. Reducing does not remain on the same balance as its competitor which the strategic cost was emphatically highlighted in the view of is located in the free zone. He further argued that the a business manager: competitor benefits from numerous favorable and advantageous conditions and incentives that could enhance "Nowadays, there is the new port that has given success to his competitiveness: the free zone of Malaysia. It normally positively affects the development of our business especially in terms of "I think we are not on the same balance compared to our coordination cost. As you know, the coordination cost is very competitor who is located in the free zone. The competitor essential. In this way, in the event that we endeavor to has severalfinancial advantages that can be used to go far in optimize them, we can be competitive with our competitors." the business and venture out in front of us." (ENTERview02) (ENTERview09) The findings further revealed that the partial competition Linked to the vehicle theme, the street infrastructure caused by the pirating of merchandise from the neighboring emerged as significant for the perceived success of SMEs in countries, which is few miles a long way from Malaysia, does Malaysia. Restricted movement on the roads and the issue of affect the mechanical creation of SMEs, specifically the movement appear to be a problem that obliges the success of agri-food industry. This was significantly related to the businesses. It was discovered that these problems affect perception of success. As proclaimed by an manager: creation and commitments which are related to business success. This was highlighted by a business owner who "Due to its closeness to Siem Reap, Cambodia, Malaysia is stated: well known for the illegal trade of smuggled merchandise, specifically nourishment items. The smuggling activities "We have another problem which is the problem of devaluate our neighborhood items which affect our agri-food transportation. Sometimes, our coaches that vehicle production" (ENTERview09) personnel may get involved in accidents, or delay in delivery due to speed limits. Another problem is the movement. To Another respondent in the food business further explained that the evasion of traditions duties on smuggled food items International Journal of New Technology and Research (IJNTR) ISSN:2454-4116, Volume-4, Issue-7, July 2018 Pages 48-55 enables smugglers to sell the items at lower prices. As indicated by him, in the current economic emergency, consumers seek to minimize their expenses by purchasing cheap items. In this way, they prefer to purchase the cheap smuggled items. "Attributable to the non-payment of traditions duties, carrying merchandise are sold with cheap prices in the market. Consumers prefer to purchase these cheap items especially in the current economic emergency. Subsequently, this affects our production." (ENTERview07) To sum things up, competition seemed to be about perceived unreasonable competition (smugglers, companies in the free zones) and area (are enabling this to happen). It Fig. 1 Factors that influence business success as perceived by was recognized that unfair competition (smugglers, financial managers in Malaysia and economic incentives in the free zones), damage the performance of the SMEs in Malaysia. This was a study of From fig. 1, it can be seen that the three factors can be manufacturing companies and this was a significant emerging considered to be methods for understanding the external issue. It can be concluded that the preponderance of environment by entrepreneur managers. This view enables grey-imports and in addition the attractive incentives the effect of external factors to become mostly that the available for firms in the free zones significantly affected the entrepreneur managers direct their business. Furthermore, it perception of success. permits a method for understanding the effect of the external environment on private ventures that relate to their adopted Business owners and managers of firms, especially the ones success criteria. that are established outside the free zones could wonder (are their firms in the correct area?) Hence, it can be assumed that This study found that the perception of success among unfair competition is an element of the area. Being in the business owners and managers of SMEs in Malaysia could be correct area meant the enjoyment of favorable conditions described using the concepts of personal conduct, equipment (exempt or reduced tax assessment, great infrastructure and being used and commitments to others. These concepts non-carrying of products). Dahlqvist et al. (2009) argued that emerged from the study and provided a useful conceptual the geographic area where firm is located, has suggestions for instrument to develop the perception of success among the its access to markets and resources, for example, finance, group of firms studied. The evidence from the qualitative skilled work, subcontractors, infrastructure, and other interviews emphasized that the SME managers liked to facilities. However, the present study has gone some path conduct their business in specific way that were influenced by towards enhancing our understanding of the competition their determination of success. This included a way to deal factor in relation to area. The unfair competition was related with business that enabled them to direct their issues in an to the area of the firm and came out very clear in the Islamic manner. This included the relationships with connection to perceived success and the capacity to achieve suppliers, technology partners, and the methods of finance. that success. In this respect, the area factor can be seen here as The equipment employed inside the business enabled the an essential budgetary and emotionally significant continuation of creation and the yields of the business. To this perspective on equity in relation to success. extent, it was related to the commitments undertaken to customers and suppliers. The arrangement with the banks VI. Conclusion allowed this equipment to be available for production. An The present study is imperative because it provides a Islamic type of finance would have allowed the owner to mechanism for seeing how perceptions of success are direct his issues through a means of social interaction. It can generated by entrepreneur managers with respect to external be concluded here that finance partnership based on profit factors. The qualitative data analysis used here has and misfortune sharing seemed to be perceived as an subsequently provided a number of critical bits of knowledge. ingredient for monetary and otherworldly success. In Sharia The three factors discussed here were the most noticeable compliance business wards, the way that there is that base for factors that arose from the thematic analysis of the interviews. partnership in the finance stimulates more unequivocally the These factors are depicted in figure 1 below: need for partnership working. The commitments entered into enabled the continuation of the business. Aspects of commitment were seen in the other two factors above, yet they were additionally manifested in the response to infrastructure difficulties. The unreliable transport network and the charges for electricity and water challenged their commitments to their customers and partners. The findings of this study could have several ramifications. The research revealed that the possibilities that Islamic finance opens up here for the success of SMEs cannot be ignored. Therefore, this could in anv event begin dialogs among policy makers on the most proficient method to improve the accessibility of finance for entrepreneurs, specifically the ones who fear breaching their religious beliefs. The development of a uniform regulatory and legal framework for the Islamic finance system in Malaysia will enable entrepreneurs to get access to finance on a profit and loss sharing (PLS) premise instead of paying interests. Another ramifications of the study relates to the different effects on SME operation through routes to development utilizing free ports and zones. The strategy of building free zones has been adopted by a number of ASEAN Countries (Cambodia, Indonesia, Myanmar, Philippines, Singapore, Thailand, and Viet Nam.). It has been discovered that this approach affects the perceived success of SMEs in Malaysia. The findings of the study could encourage the government to embrace policies that will help indigenous firms to benefit from advantages that are comparable to those that are in the free zones. Another essential ramifications for research is that terms of personal conduct, equipment being used, and commitments to others could have wider relevance in this field of research since these terms permit a better understanding of the placement of independent ventures inside their market and the perception of success