LEADERSHIP IN PRACTICE ADS 607

FACULTY OF ADMINISTRATIVE SCIENCE AND POLICY STUDIES

MANAGING CHANGE (ADS607)

GROUP ASSIGNMENT
TOPIC:

LEADERSHIP IN PRACTICE

PREPARED BY:
Masni binti Abdul Halim(2010145373)
Siti Normila binti Md. Shairi (2012640834)
Siti Rahmah binti Sikh Paiman (2010646198)

PREPARED FOR:
En. Mohd Faiz bin Ismail
SUBMISSION DATE:
07 June 2015
CONTENTS
Pages

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ACKNOWLEDGEMENT
Chapter I : Introduction
1.1

Organizations Background

1.2

Vision and Mission

Leadership in practice

1.3

Organizations Objectives (Client Charter)

1.4

Organizations Chart

1.5

Organizations Main Activities

1.6

Organizations Award

Managers and Leadership

Leadership vision and
strategy
Leaders and situations

Chapter II : Leadership in Practice

2.1

Managers and Leadership

2.2

Leadership Vision and Strategy

2.3

Leaders and Situations

Chapter III : Analysis and Application

3.1

SWOT Analysis
3.1.1

Strength and Weaknesses

3.1.2

Opportunities and Threats

Chapter IV : Synthesis and Evaluation

Chapter V : Conclusion and Suggestion

REFERENCES

CHAPTER ONE
INTRODUCTION

Introduction
Body of Content (Based on chapter)
SWOT Analysis
Application/Analysis of data and
findings (Thoroughness, accuracy
and
depth
analysis
and
interpretation)
Conclusion and recommendations
(quality,
quantity,
logical
of

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1.1

ORGANIZATIONS BACKGROUND
Overview Of The EPF
Employees' Provident Fund (Malay : Kumpulan Wang Simpanan Pekerja)
commonly known by the acronym EPF (Malay : KWSP) is a Malaysian government
agency under the Ministry of Finance. It manages the compulsory savings plan
and retirement planning for private sector workers in Malaysia. Membership of the
EPF is mandatory for Malaysian citizens employed in the private sector, and
voluntary for non-Malaysian citizens.
The Malaysian EPF was established in 1951 pursuant to the Employees Provident
Fund Ordinance 1951, under the National Director of Posts. This law became the
EPF Act 1951 in 1982, then the EPF Act 1991 in 1991. The EPF Act 1991 requires
employees and their employers to contribute towards their retirement savings, and
allows workers to withdraw these savings at retirement or for special purposes before
then. As of 31 December 2012, EPF has 13.6 million members, of which 6.4 million
are active contributing members. At the same date, EPF had 502,863 contributing
employers.
Who Are Our Members?
Private and Non-Pensionable Public Sector employees. The EPF, as at December
2014, has a total of 14.19 million members. The total number of active and
contributing members is 6.66 million. The total number of active employers is
530,166.

Mandatory Contributions
A contribution constitutes the amount of money credited to members' individual
accounts in the EPF. The amount is calculated based on the monthly wages of an
employee. Current contribution rate is in accordance with wage/salary received. For
employees who receive wages/salary of RM5,000 and below, the portion of
employee's contribution is 11% of their monthly salary while the employer contributes
13%. For employees who receive wages/salary exceeding RM5,000 the employee's
contribution of 11% remains, while the employer's contribution is 12%.

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Investment Allocation
Your monthly contributions are invested in a number of approved financial
instruments to generate income. They include Malaysian Government Securities,
Money Market Instruments, Loans & Bonds, Equity and Property.
Dividends
The EPF ensures that your savings are secure and receive reasonable dividends. In
fact, it guarantees a minimum of 2.5 Per Cent Dividend annually. To ensure dividend
payments, the EPF invests your contribution in approved financial instruments for
optimum returns.
Dividends are paid annually into your account. The dividend rate declared by the
EPF is subject to the returns from investments made in the approved instruments.
Annual Dividends, on the one hand, are calculated based on the opening balance of
your savings as at 1 January of each year. Monthly Dividends credited into your
account, on the other hand, are based on the monthly contributions received.

1.2

VISION AND MISSION

Our Vision
To be a world-class social security organisation providing the best retirement savings
for Malaysians.
Our Mission
To provide the best Retirement Savings Scheme.

1.3

ORGANIZATIONS OBJECTIVES
Customer Charter
Our Promise
Waiting Time For Services At The Counter

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Non-peak Hours: Providing services to members/employers within 8 minutes

after obtaining queue numbers.

Peak Hours*: Providing services to members/employers within 15 minutes

after obtaining queue numbers. (*) Peak Hours: From 11.00 am to 2.30 pm.

Member And Employer Registration

Registration of complete members/employers' applications within 1 working

day from the date of receipt.

Nomination Registration

Registration of complete members' nomination applications within 1 working

day from the date of receipt.

Answering Telephone Calls

Answering your telephone calls within 10 seconds.

Answering Customers' Letters And Emails

Notification of acceptance of letters and emails within 2 working days from the
date of receipt.

Response to emails within 5 working days from the date of receipt.

Response to letters within 10 working days from the date of receipt.

Processing Members' Withdrawal Applications

Process complete applications for Age 50/55 Years Withdrawal and More
Than RM1 Million Withdrawal and make payments in not more than 5 working
days from the date of receipt.

Process complete applications for housing withdrawals and make payments

in not more than 15 working days from the date of receipt.

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Process complete applications for other types of withdrawals and make

payments in not more than 21 working days from the date of receipt.

Receipting Contribution Payments

Receipting complete contribution payments within 2 working days from the

date of receipt.

Contributions Crediting

Crediting complete contribution payments into members' accounts within 21

working days from the date of receipt.

Members' Annual Statements

Issuing Members' Annual Statements to active members within 30 days from

the date of dividend declaration. (*) Members' Annual Statements can be
obtained from the available channels, namely i-Akaun, Kiosks and counters.

1.4

ORGANIZATIONS CHART

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(Source : www.kwsp.gov.my/)

1.5

ORGANIZATIONS MAIN ACTIVITIES

The EPF is intended to help employees from the private sector save a fraction of
their salary in a lifetime banking scheme, to be used primarily as a retirement fund
but also in the event that the employee is temporarily or no longer fit to work. The
EPF also provides a framework for employers to meet legal and moral obligations to
their employees.
As of March 31, 2014, the size of the EPF asset size stood at RM597 billion.
(US$184 billion), making it the fourth largest pension fund in Asia and seventh largest
in the world.
As of 2012, the EPF functions by requiring a contribution of at least 11% of each
member's monthly salary and storing it in a savings account, while the member's
employer is obligated to additionally fund at least 12% of employee's salary to the
savings at the same time (13% if salary is below RM5,000).
While in savings, a member's EPF savings may be used as investments for
companies deemed profitable and permissible by the organization, from which
dividends are banked to respective members' accounts. Alternately, members may

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use their EPF savings in their own investments, although such activities are not
covered by the EPF and the members are to bear any losses made.

1.7

ORGANIZATIONS AWARDS
a. SIRIM Quality Award 2014.
b. SGAM ICT Award and Cyber Security Project Of The Year Cyber Security
Malaysia for project Data Loss Prevention 2014.
c. Five-Star Rating for the third time for service delivery excellence by the
Malaysian Administrative Modernisation and Management Planning Unit
(MAMPU).
d. Financial Management Excellence Award.
e. Clean Audit Certificate by the National Audit Department.
f.

Best Institutional Solutions Provider Award 2014 in the Islamic Finance News
(IFN) Islamic Investor Poll 2014.

g. The Association of Customer Experience Industry of Malaysia (ACE) awarded the

EPF two awards at its 15th National Customer Experience Industry Award 2014:

Best Contact Centre Government Ministries / Agencies (Open) 2nd Place

Social Media Programme Contact Centre (Open) 2nd Place

CHAPTER TWO
LEADERSHIP IN PRACTICE
2.1

MANAGERS AND LEADERSHIP

Managers

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Definition: A Manager is the person responsible for planning and directing the work of a
group of individuals, monitoring their work, and taking corrective action when necessary. For
many people, this is their first step into a management career.
Managers may direct workers directly or they may direct several supervisors who direct the
workers. The manager must be familiar with the work of all the groups he/she supervises,
but does not need to be the best in any or all of the areas. It is more important for the
manager to know how to manage the workers than to know how to do their work well.
A manager may have the power to hire or fire employees or to promote them. In larger
companies, a manager may only recommend such action to the next level of management.
The manager has the authority to change the work assignments of team members.
A manager's title reflects what he/she is responsible for. An Accounting Manager supervises
the Accounting function. An Operations Manager is responsible for the operations of the
company. The Manager of Design Engineering supervises engineers and support staff
engaged in design of a product or service. A Night Manager is responsible for the activities
that take place at night. There are many management functions in business and, therefore,
many manager titles. Regardless of title, the manager is responsible for planning, directing,
monitoring and controlling the people and their work.
(http://management.about.com/od/policiesandprocedures/g/manager1.htm)

Leadership
Definition: has been described as "a process of social influence in which one person can
enlist the aid and support of others in the accomplishment of a common task", although
there are alternative definitions of leadership. For example, some understand a leader
simply as somebody whom people follow or as somebody who guides or directs others,
while others define leadership as "organizing a group of people to achieve a common goal".
1. The individuals who are the leaders in an organization, regarded collectively.
2. The activity of leading a group of people or an organization or the ability to do this.
3. The act of inspiring subordinates to perform and engage in achieving a goal.
Leadership involves
establishing a clear vision,

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sharing that vision with others so that they will follow willingly,
Providing the information, knowledge and methods to realize that vision.
Coordinating and balancing the conflicting interests of all members and
stakeholders.
A leader steps up in times of crisis, and is able to think and act creatively in difficult
situations. Unlike management, leadership cannot be taught, although it may be learned and
enhanced through coaching or mentoring. Someone with great leadership skills today is Bill
Gates who, despite early failures, with continued passion and innovation has driven
Microsoft and the software industry to success.
Leadership has nothing to do with seniority or ones position in the hierarchy
of a company. Too much talk about a companys leadership referring to the senior
most executives in the organization. They are just that, senior executives. Leadership
doesnt automatically happen when you reach a certain pay grade. Hopefully you find
it there, but there are no guarantees.
Leadership has nothing to do with titles. Similar to the point above, just because
you have a C-level title, doesnt automatically make you a leader. In all of my talks I
stress the fact that you dont need a title to lead. In fact, you can be a leader in your
place of worship, your neighborhood, in your family, all without having a title.
Leadership has nothing to do with personal attributes. Say the word leader and
most people think of a domineering, take-charge charismatic individual. We often
think of icons from history like General Patton or President Lincoln. But leadership
isnt an adjective. We dont need extroverted charismatic traits to practice leadership.
And those with charisma dont automatically lead.
Leadership isnt management. This is the big one. Leadership and management
are not synonymous. You have 15 people in your down line and P&L responsibility?
Good for you, hopefully you are a good manager. Good management is needed.
Managers need to plan, measure, monitor, coordinate, solve, hire, fire, and so many
other things. Typically, managers manage things. Leaders lead people.

Working productively and developing feelings of cooperation and effectiveness are related to
having the right people doing the right jobs. There is no standard organizational structure,

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but most organizations and agencies follow the Christmas Tree: system with the star (for
example; president, minister) at the top, smaller branches at management levels, and bigger
branches at the production levels. In EPF we followed this kind of structure. Some would
claim that the lower branches support the upper branches, but as in the tree, the branches
are supported by a single trunk, which can be thought of as the organizational mission and
objectives. Each part of the tree has its specific function. When all parts work together, the
system survives functions productively, has balance and is a pleasure to see. Leadership
need to play their roles effectively and have great leadership skills.
Each manager at EPF need to have competencies. Competencies can define as skills,
knowledge and behaviors that are relevant for an individual to effectively carry out their
respective roles. Competencies in EPF comprise if 3 main types such as Corporate Values,
Professional Competencies and Functional Competencies as illustrated in the Competencies
Wheel below:-

Corporate values is a values or behavior that the organization expects all of its members to
exhibit and do not vary by job. It is important values because it will reflects the culture that is
being nurtured by the organization. In EPF, they need to wear button badge that written I <3
EPF to show and to built work team spirit.
Meanwhile, Professional competencies represent the right stuff which distinguished
superior performers from average performers. There are 3 subtypes or cluster which is
leadership effectiveness, interpersonal effectiveness and personal effectiveness.
In leadership effectiveness, it comprises the competence to plan, revise, guide, organize and
manage activities for the team and oneself. Meanwhile, interpersonal effectiveness its about
the ability to interact with other individuals and teams to maximize performance and achieve

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business goals. Personal effectiveness is more the qualities demonstrated which are in line
with the organizations strategic direction and business or functional needs.
Functional competencies is more known as the functional knowledge or know-how that
required to complete the value chain in delivering a service to internal or external customers.
It reflects the knowledge capital and skill base necessary for the organization to function and
operate. For example training courses, every employee need to attend some courses to
polish their skills. This training will give them knowledge and certain needs that they are
required in order to work productive and sufficient. For example; customer service officer
need to go for communication skill training to improve their skills and be able to
communicate with internal client effectively.
As a leader, we also need to have vision and strategy on how to manage the organization
and their workers. In EPF they provide direction for others to follow and align with EPFs
mission & vision as well as to inspires others towards the achievement of those objectives.

2.2

LEADERSHIP VISION AND STRATEGY

Creating a compelling vision and developing a strategy to achieve it, is one of leaderships
primary functions. Historically, only top leaders understood the vision well enough to
organize human and material resources to achieve it. Today, however, leaders at every level
of the organization must understand the vision. The leaders play roles in creating the
organizations future. It examines leadership vision, the underlying themes common to
effective vision, and how vision works on many levels. It will also examine how leaders
formulate vision and strategy.
2.2.1

Leadership Vision

Organizational leaders must create a compelling vision that will inspire and motivate their
employees. Vision is more than just a dream. It is an ambitious view of the future that
everyone in the organization can believe in, one that can realistically be achieved, yet offers
a future that is better in important ways than what now exists. Vision is what guides
everyone in an organization down the same path and at he same pace. When a vision is
clearly articulated and followed ... everyday decisions and actions throughout the
organization respond to current problems and challenges in ways that move the organization
toward the future rather than maintain the status quo. An organizations vision must link the

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present to the future, energize people and garner commitment, give meaning to work and
establish a standard of excellence.

Vision links the present to the future

Vision is about getting from here to there; from whats going on today to what must happen
tomorrow. The trouble with todays organizations is that managers spend most of their time
dealing with current problems and relatively little time contemplating, visualizing and
preparing for the future. Successful leaders are those who handle the daily challenge of
obtaining short-term goals and focus on the future as well.

Vision energizes people and garners commitment

A powerful vision will challenge people to give their best effort. Vision needs to transcend
the bottom line because people are willing and even eager, to commit to something truly
worthwhile, something that makes life better for others or improves their communities.

Vision gives meaning to work

Employees need to know their work has meaning. Work is more than just a pay check for
many. People love having a larger purpose for what they do and they want to feel pride in
their work. A good vision can give larger meaning to work by clarifying its purpose, its
interrelationship with other work and its impact on the organization as a whole.

Vision establishes a standard of excellence

Vision provides measures by which contributions to the organization are gauged. A good
vision brings out the best by speaking to the hearts of employees, letting them be a part of
something bigger than themselves.2 A good vision clarifies an image of an organizations
future, lets employees see how they can contribute, and enables employees to reach higherlevels of excellence. Is there a standard how to book for creating leadership vision? Not
according to Max DePree, author and chairman and CEO of Herman Miller, Inc., who writes,
Leadership is an art, something to be learned over time, not simply by reading books.
Leadership is more tribal than scientific, more a weaving of relationships than an amassing

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of information, 3 Powerful and effective visions, however, have five common themes: they
have broad, widely shared appeal; they help organizations deal with change; they encourage
faith and hope for the future; they reflect high ideals; and they define both the organizations
destination and the basic rules to get there.
(http://www.asq1001.org/papers/Leadership%20Vision%20and%20Strategic%20Direction.pdf)

2.2.2 Leadership Strategy

Excellence in organizational performance does not come about by accident. It is a conscious
choice made by organizational leaders. Top leaders know their organizations environment,
have a five- or ten-year vision for the organization, and set believable plans to achieve their
vision. However, in this complex and ever-changing world, anticipating the future can be very
difficult. The authors of Leaders: The Strategies for Taking Charge, Warren Bennis and Burt
Nanus, agree and add that the ...problems of organizations are increasingly complex.
An organizations vision must link the present to the future, energize people and garner
commitment, give meaning to work and establish a standard of excellence.

Strategy in Action
Transforming an organizations vision, mission and core competence into strategies is not
enough to achieve organizational excellence. Leaders must also ensure these strategies are
implemented. This is the most important and the most difficult part of strategic management.
Strategy implementation involves using several tools to turn strategy into action. Strong
leadership is the most important tool for strategy implementation. Leaders need to ensure
the new strategy is resourced properly, understood and implemented, and people are
motivated to adopt the new strategy.
Authors Bennis and Nanus contribute by adding, Leadership is causative, meaning that
leadership can invent and create institutions that can empower employees to satisfy their
needs. Therefore, leaders are responsible for making decisions about changes in structure,
systems and policies to support their organizations strategic direction.

The Leaders Contribution

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Leaders can make a significant difference in their organizations. One of the most critical
jobs of the leader is deciding the vision for the future and linking the future with strategic
actions. Although todays successful organizations depend on the active involvement of all
employees, leaders are still ultimately responsible for establishing organizational direction
through vision and strategy.
When leaders fail to fulfil these responsibilities, their organizations struggle. When leaders
succeed in fulfilling these responsibilities, they can make a big impact on their organizations
future. Leaders decide the direction for their organizations based on facts, rational analysis,
intuition, personal experience and imagination. Consequently, a leaders contribution and
impact can be measured by the extent to which they are able to: articulate the vision, mission and strategies
allocate the resources required for their implementation
inspire those who must embrace and achieve the organizational goals
provide rewards appropriate to those who contribute to achieving the vision
Finally, strategic leadership is about gaining control over the direction an organization is
heading. Its also about change transforming the organization from its present state to a
more meaningful future state. Tom Peters, author of Thriving on Chaos, calls this a
paradox. The core paradox, writes Peters, ...that all leaders at all levels must contend with
is fostering (creating) internal stability in order to encourage the pursuit of constant change.
A successful leadership vision will consider this paradox and establish a strategic direction
that manages the organizations transformation to achieve its vision.

2.3

LEADERS AND SITUATIONS

"The key to successful leadership today is influence, not authority."

- Kenneth Blanchard
From Martin Luther King and Indira Gandhi, to Bill Gates or Steve Jobs there seems to be as
many ways to successfully lead people as there are leaders. Choosing the right style of
leadership for a given situation will help you become a more effective leader. By
understanding a few key styles and their impact, you can develop your own approach to
effective leadership. Leadership is not a "one size fits all" thing. There are many types of

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leadership styles, so let's review some of them. Remember, the more leadership styles you
become familiar with the more tools you will be able to use to lead effectively. In the
business world, "Transformational leadership" is often the most effective approach.

Transformational leaders inspire people with a shared vision of the future. They set clear
goals and motivate people in reaching them. And, they communicate clearly with their
teams. Transformational leaders expect the best from everyone on their team as well as
from themselves leading to improved motivation and high productivity. "Autocratic
leadership" is where leaders have complete power over their staff. The benefit of autocratic
leadership is that it is incredibly efficient. Tasks are completed quickly. While this style may
not be embraced by staff members, it is often best used in crises situations and when
decisions must be made quickly. "Democratic/Participative leaders" include team
members in the decision-making process, encouraging creativity and participation. The
benefits of this leadership style are high job satisfaction and motivation to work hard by team
members. Because participation by team members takes time this approach, however, can
slow the decision making process. "Laissez-Faire leaders" allow their people to work on
their own. These leaders may give freedom to their teams to do their work and set their own
deadlines. This style can be effective if the leader monitors performance and gives feed back
regularly. This style is most effective when individual team members are experienced,
skilled, and self starters. "Task-Oriented leadership" focuses only on getting the job done
and can also be considered autocratic. These leaders define the work, roles required, plan,
organize and monitor the work being done. They also perform key tasks such as maintaining
standards of performance. The benefit of this style of leadership is that it ensures that
deadlines are met. These are only a few examples of leadership styles. Remember that no
one style of leadership fits all situations so it is helpful that you have an understanding of a
number of styles to assist you in adapting your approach to the situation at hand. Any leader
can use any style, and a good mix that is customized to the situation is generally the most
effective approach.

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CHAPTER THREE
ANALYSIS AND APPLICATION

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3.1

SWOT ANALYSIS

The SWOT analysis technique is one of the most commonly used in strategic planning
techniques in business; however it is also one of the most misunderstood techniques.
It is primarily used to provide structure to or summarize your strategic analysis. This
technique can also be used in complex decision making, to help you determine which of
several options is better.

3.1.1 STRENGTH AND WEAKNESSES

The strengths and weaknesses are internal to the organization. Your strengths are areas
where you have a strategic competitive advantage. These should be completed using the
better than our competitor test. Your strengths are where you can verify that your business
is better than your competitors.
On the other hand your weaknesses are areas where your competitors have a strategic
competitive advantage. These are areas where you can verify that your competitors are
better than your business.
Consider this scenario.
It is possible that every business in an industry has identified their customer
service as strength. It might be true that all businesses in an industry are good at
customer service. However will your customers notice the difference?
No matter how good your business is at something, if you are not better than
your competitors it is not strength.

Understanding SWOT Strengths

During your SWOT analysis you will consider a variety of strengths from within your
business. It is important to note that these strengths will all be internal to your business.

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Strength Defined: Strength is a core capability of your business where your business has
an advantage over your competitor(s), which your customers value i.e. you passed the better
than your competitors test.

Understanding SWOT Weaknesses

During your SWOT analysis you will consider a variety of weaknesses from within your
business. It is important to note that these weaknesses will all be internal to your business.
Weakness Defined: A weakness is a core capability of your business where your
competitor(s) have an advantage over your business, which your customers value i.e. you
failed the better than your competitors test.
EPF Strength
As a government agency,EPF try to compete with others agency and organization in order to
fulfill customer need and wants. EPF try to build their strength by providing old age security
to employee. For example as our standard of living improves through industrialization, our
life expentancy will also increase. Therefore the importance of the employers, the
employees as well as the EPF roles in ensuring that the EPFs scheme meets its objectives.
EPF also provide effective and efficient services according to customer need and wants. For
EPF, they has change their function from manual service to online service. This facilities was
provided by EPF to help their members to update about their account anytime without come
to EPF braches. Right now, the members can access everything in this service with blink of
eye. One of the facilities that EPF offered was i-Akaun Service. Through this services the
member or Employers EPF online account can acces their EPF saving and retirement
scheme.
EPF Weakness
Every organization has weakness. EPF also have weakness in term of dividends. For EPF,
real dividend rate was only 6.75%%. This amount is low compared to other government
controlled fund such as Tabung Haji and Permodalan Nasional Berhad (PNB). The real
dividend usually based on investment that EPF will get during that year and the dividend will
always change every year.

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3.1.2 OPPORTUNITIES AND THREATS

Opportunities and threats are external to your organization. It is possible that all businesses
in your industry will identify similar opportunities and threats.

Understanding SWOT Opportunity

During your SWOT analysis you will consider a variety of Opportunities to your business
these Opportunities will all be external to your business.
An opportunity is an environmental condition in your macro or industry environments that
can improve your organizations competitive position relative to that of your competitors.

Understanding SWOT Threats

During your SWOT analysis you will consider a variety of threats to your business these
threats will all be external to your business.
A threat is a forecast environmental condition that is out of your control and has the potential
to harm your businesses profitability.
You will find your threats when completing your industry environment analysis and your
macro environment analysis
A common example: If you import goods for resale, then a negative shift in exchange rates
will force up your costs, if you are unable to pass these costs on to your customers, your
margins will reduce. So, exchange rate volatility could be a threat.
(http://www.whatmakesagoodleader.com/swot_analysis.html)

EPF Opportunity
The Employees Provident Fund (EPF) is Malaysias premier retirement savings fund,
providing basic financial security for retirement. The Fund is committed to preserving and
growing the savings of its members in accordance with best practices in investment and
corporate governance. It will always be guided by prudence in its investment decisions.

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As a customer-focused organisation, the EPF delivers efficient and reliable services for the
convenience of its members and registered employers.
The EPF continues to play a catalytic role in the nations economic growth, consistent with
its position as a leading savings institution in Malaysia.
EPF Threats
METHODOLOGY AND PROCESS OF THE INVESTMENT RISKMANAGEMENT
MARKET RISK MANAGEMENT
Market risk is the risk of loss from changes in the value ofportfolios and financial
instruments due to the movements ininterest rates, foreign exchange and equity prices.The
primary objective of market risk management is to ensurethat losses from market risk can be
promptly mitigated, andthat risk positions are sufficiently liquid. This will enable EPF to
reduce its position without incurring potential loss that isbeyond EPFs risk appetite.
The EPF adopts the following tools to manage market risk:
Value at Risk (VaR) - an estimation of the amount of market
value that a portfolio can lose over a certain time horizonwith a given probability. The Monte
Carlo Simulation isused to compute VaR to measure the riskiness of the portfolios
Duration - a linear measure of risk for a bond to define the percentage increase (decrease)
in the bonds valuefor a 1% fall (rise) in the bonds yield
Tracking error - refers to the standard deviation of the portfolios excess returns relative to
a benchmark
Simulation analysis, including stress testing is another method of examining portfolio risk in
extreme situations.
Stress testing involves setting parameters such as correlation, volatility and returns at
different values as well as assessing how a portfolios risk may change
Beta measurement used for gauging the equitys price sensitivities against benchmark

CREDIT RISK MANAGEMENT

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Credit risk is the risk of loss due to the inability or unwillingness of a borrower/counterparty to
meet its payment obligations. Exposure to credit risk arises through lending, hedging, trading
and investing activities. The primary objective of credit risk management is to ensure that the
EPFs exposure to credit risk is always within its capability and financial capacity to
withstand potential future losses.
The EPF assessed its credit exposures through various tools such as: Credit Portfolio Modelling used to compute Credit VaR for gauging the credit risk
exposure
Corporate Rating Template provides a statisticallybased internal risk rating for corporate
borrowers and is consistent with best practice rating models of financial institutions
LIQUIDITY RISK MANAGEMENT
Liquidity risk relates to the inability to meet financial commitments and obligations when they
fall due. The EPF maintains adequate levels of liquid assets in the form of cash and
placements in financial institutions in order to meet members withdrawals and other financial
commitments and obligations.
MONITORING AND REVIEWING OF INVESTMENT RISK MANAGEMENT
The Investment Panel through the Risk Appetite Statements defines the level of risks that
the EPF is willing to tolerate. This forms the basis of investment funds allocation. The
Investment Panel Risk Committee (IPRC) provides oversight on investment risk
management activities and reviews risks in the EPFs investment portfolio.
The Management Risk Committee (MRC) in its meetings, reviews portfolio risk reports to
identify key sources of risk across all asset classes. Based on the risk reports, the MRC
monitors large risk concentrations and determines the appropriate action to be taken. The
MRC also evaluates the results of stress testing and scenario analyses.
The Investment risk framework, policy and methodology are regularly reviewed and
enhanced to ensure their continued effectiveness.
OPERATIONAL RISK MANAGEMENT FRAMEWORK
Operational risk is the risk of loss resulting from inadequate or failed internal processes,
people or systems, or from external events. The Operational Risk Management (ORM)

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framework is adopted to align strategy, organisational policy, technology and knowledge with
the process of evaluating and managing the uncertainties and adverse effects of operational
risks.
The framework explains the methodology adopted by EPF

and defines the processes

utilised to establish the context of as well as assess, treat, monitor and report significant
operational risks. The EPF has also completed benchmarking its existing ORM Framework
against the MS ISO 31000:2010 international standard and targets completing the alignment
to this standard by 2012.
CORPORATE RISK SCORECARD
The Corporate Risk Scorecard (CRS) methodology, a risk management approach consistent
with the MS ISO 31000:2010 standard on Risk Management, has been adopted in the
implementation of operational risk management. One of the key elements in the CRS
methodology is the Risk and Control Self-Assessment (RCSA) module which allows our staff
to self-assess and update their risk profile. Gross risks are assigned numerical values, using
predetermined Possibility and Impact Rating parameters. Existing controls and mitigating
strategies are identified and their effectiveness is evaluated to derive the Nett Risk Rating.
The N ett Risk Rating is analysed against the Target Risk rating to determine whether action
plans are needed to mitigate the risks.
Access to the ORM system is provided on an enterprisewide basis so that all Risk
Scorecards Owners, Risk Owners, Control Owners and Management Action (MA) Owners
can undertake RCSA activities effectively. A total of 101 risk scorecards have been
established for all departments, sections and branches within EPF.

BUSINESS CONTINUITY MANAGEMENT

The EPFs Business Continuity Management (BCM) programme is benchmarked
against sound BCM standards and guidelines as a basis for understanding, developing and
implementing business continuity. This benchmarking also enables us to measure EPFs
BCM programme capability in a consistent and recognised manner. The illustration below
shows the components of EPFs BCM Programme Framework.
The BCM programme will ensure that EPF resumes critical operations within the
required timeframes and minimizes the cost of damages and interruptions due to disasters.

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In 2011, EPF continued the BCM programme at the departmental and branch level, and
successfully conducted a flood crisis simulation

exercise in Kuala Terengganu.

Representatives from ther branches participated in this exercise.

MONITORING AND REVIEW OF OPERATIONAL RISK MANAGEMENT
The Board monitors and reviews the implementation of the risk management
framework through the Board Risk Management Committee (BRMC). The ORM is
considered part of the strategic management process and key operational risks are
managed as part of daytoday operations. All risks are reviewed in a formal process and coordinated by the Risk
Management Department.
Line managers own their risks to ensure their commitmentto providing upward
assurance as part of the accountability and transparency measures in place throughout the
EPF. Six digital assurance exercises are conducted annually to ensure the effective
implementation of the ORM methodology. A consolidated scoring analysis is conducted to
provide a consolidated view of key risks faced by the EPF. In enhancing our risk easurement
and monitoring process, relevant Key
Risk Indicators have been identified in stages. These serve as early warning signals to
detect and highlight risk events and new risk concerns as well as potential areas of
weaknesses in operational controls. An assessment of risks is also conducted on key
projects, whereby critical risks and issues are identified and assessed by the relevant
subject matter experts, independent from the project owners.

CONTINUOUS IMPROVEMENT
The risk management framework, methodologies, processes and tools with regard to the
market risk, credit risk, liquidity risk and operational risk are regularly reviewed to ensure
their continued effectiveness.

CHAPTER FOUR
SYNTHESIS AND EVALUATION
Evaluation activities which address how different communities and cultures are
progressing towards openness in their shared practice. These utilise mixed methods

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to examine social, technical, pedagogical and legal / organisational issues, and

provide a synthesis account detailing barriers and opportunities for change.

The synthesis reports include recommendations to funders and to the

stakeholders represented in the programme, and a versions of the framework tool for
use by the sector to audit progress towards more open practices around educational
resources.

CHAPTER FIVE
CONCLUSION AND SUGGESTION
CONCLUSION

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Leadership is the ability of individuals to influence, motivate and make other able to
contribute to the effectiveness and organizational success. The role of leaders in any
organization is very dominant in generating employees development. Employee
development is a key contributor to a business strategy based on developing intellectual
capital, helps develop managerial talent, and allows employee to take responsibility for their
careers. Leadership takes a very important role in determining employee development in
order to achieve organizations goal.
The leadership factors that contributed a value for EPF officers in dedicating their
professionalism through their career as a EPF officer, and factors in their leader in
developing employee professionalism.
Leaders need to give people a vision of the future. The leaders need to cope with change, so
do followers. Leaders can energize and sustain people to act, to try things out, to get on with
the job in hand. They can energize people to try. The practical side of leadership is not
depends on the grand theories but, rather, on the ability to encourage others to take actions.
It also depends on the credibility. The leaders vision needs to be credible. People need to
perceive the credible actions that they can take and that they feel they can control. Thus,
human scale or interpersonal skills is important to leaders in managing change.

SUGGESTION
Leadership factors could enhance assessment in employee development. EPF officer who
act as a leader could increase his capability in providing feedback to EPF subordinates
about their behavior, communication style or skill. The Officers, their peer, managers may
provide information, identify officers with managerial and measure current managers
strength and weaknesses. Communication and support in assessment are important
because they are keys to bounding to all employees in EPF

EPF leader should pay more attention to recognition and reward for officers in their
dedicated career in EPF. It could enhance officers working productivity. Leadership skill such
as communicative is needed because it is very useful to facilitate officers need to
management. Discipline and support is important to be more emphasized in implement

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recognition and reward therefore it will create a high working productivity and could produce
a remarkable output to EPF.

EPF leader should pay more attention in his mentoring and coaching program. Giving the
opportunity to other senior officer to be a mentor or a coach to other new officer is a good
chance to prove their ability in their work. Therefore involving all officers in this program is a
necessity and could enhance employee development, responsible, encouraging and
supportive are the essence in enhancing interpersonal relationship.

REFERENCES
1. Bennis, Warren, and Burt Nanus, Leaders: The Strategies for Taking Charge, New York:
Harper & Row, 1985.

LEADERSHIP IN PRACTICE ADS 607

2.

Daft, Richard L., Leadership: Theory and Practice, Orlando: Dryden Press, 1999.

(122-151).
3.

DePree, Max, Leadership is an Art, New York: Doubleday, 1989.

4.

Hays, Richard, Internal Service Excellence, Sarasota: Summit Executive Press,

1996.
5.

Peters, Tom, Thriving on Chaos: Handbook for a Management Revolutions, New

York: Harper & Row, 1987.

6. Visit Marilynn Allemann at www.MwaExecCoach.com

7. http://www.whatmakesagoodleader.com/swot_analysis.html
8.

EPF

Logo.

(2010).

Retrieved

on

Mei

28,

2015

from

28,

2015

http://www.kwsp.gov.my/portal/ms/web/kwsp/home
9.

Organizations

Chart.

Retrieved

on

May

http://www.kwsp.gov.my/portal/en/web/kwsp/about-epf/organisation-chart