Abstract:

The pressure to be competitive in the business these days has forced many companies to become lean in their operations. Lean practices are expected to eliminate wastes and consequently increase the bottom line profit of an organization. The benefits not only go to the organization, but also to the customers as well. The government-linked companies (GLCs) are always known for their big-sized establishment. Hence, managing the resources of the GLCs is very challenging. Therefore, investigating the leanness of Malaysian GLCs, and how lean practices affect the organizational performance are important. Currently, little is known concerning the extent of lean implementation in the GLCs and the influence of such lean practices to their organizational performance. In addition, quality leadership is expected to mediate the relationship. This paper would examine the relationship of lean and performance of the GLCs in Malaysia. A total of 281 managers in the GLCs was surveyed. The direct relationship and mediation effects were analyzed using the Partial Least Square (PLS) structural equation modeling. The findings showed that the level of leanness was relatively high among the GLCs, while the lean management practice was significantly related to the organizational performance. The quality leadership partially mediates the relationship between lean practices and organizational performance. The findings suggest that lean practices are critical for the GLCs performance, while quality leadership is significant in order these companies to have better performance. The findings can also be applied to other organizations as well.