THE RELATIONSHIP BETWEEN BUSINESS STRATEGY AND ORGANIZATIONAL CULTURE TO THE PERFORMANCE OF PHARMACEUTICAL RETAILERS IN PENINSULAR MALAYSIA: A PILOT STUDY

The objective of this research is to examine the validity and reliability of the instrument for measuring the business strategy and organizational culture in pharmaceutical retailers in Peninsular Malaysia context. To date, the performance of the organizations had been studied by the researchers. However, there are still a limited number of studies done in the pharmaceutical industry, particularly among small retailers in Peninsular Malaysia. Thus, the study to examine of this area is needed and to examine the validity and reliability of the instrument is considered as the first step to facilitate further studies. The survey method was adopted for this study. A pilot test data from 30 respondents were collected and tested using factor analysis, construct validity, and reliability using SPSSV19. The results show that the instrument has a certain degree of reliability and validity and it is suitable for a study in Malaysia context. Hence, future studies can extend this finding and conduct a full scale study to establish empirical relationship between the study variables.


INTRODUCTION
Small and medium enterprises (SMEs) sector forms an important part in developing the economy (Holst, 2014, Borraz, Dubra, Daniel, & Zipitria, 2014. This scenario is also the same in Malaysia as this sector plays a significant role in the national economy (Khalique, Hassan, Abdul Nasir Shaari, &Ageel, 2011, andAbdullah, Mohamad Arshad, &Abdul Latif, 2011). The contribution of this sector can be seen in various aspects such as stimulating the competition, contribution to the national economic growth, and introduction of innovation Abdul Kadir, 2017 andSabbir Rahman, 2012).
For example, it provided around 56% of the country employment and constitutes 17.6 % of the Gross Domestic Product (GDP) in 2015 (smecorp.gov.my). One of the sectors that falls in SMEs category is pharmaceutical sector. According to Malaysia External Trade Development Corporation (MATRADE), this sector is one of the important component that has a high growth potential either in the domestic or export market and well recognized by the government as a strategic industry (Matrade.gov.my). However, after the globalization and the encouragement of the collaboration between local companies with a foreign multinational company (MNCs) partner by the Malaysian government, it has given a negative effect to the small and independent pharmaceutical retailers owned by local entrepreneurs. Apart from competing among themselves, they also needed to compete with this modern pharmaceutical chain retailer owned by MNCs. The numbers of competitors and ever-changing business environment pose a threat to the survival of businesses to stay afloat (Hassali et al., 2010 andCrema, Verbano, &Venturini, 2014) .
Many studies have been conducted to identify factors that can improve performance of business entities with the aim to enhance the competitiveness and earn above average return. Among these factors are business strategy and organizational culture. There is a stream of research that shows a strong relationship between business strategy and organizational culture to the performance of the firms (Rashid, 2003, Chung, Hsu, Tsal, Huang, 2012, Akhbar Ahmadi, Salamzadeh, Daraei, & Akhbari, 2012and Monzavi, Mirabi, & Jamshidi, 2013. Therefore, it is important to investigate the validity and reliability of these construct before we conduct the actual study. Moreover, this step is important for ensuring the measures have internal consistency and content validity. Hence, this pilot test was conducted for testing the reliability and validity of the research instrument and presents the pilot test results on business strategy and organizational culture for future research.

Pharmaceutical retailers
According to Hashim, (2011), SMEs in Malaysia represent the majority of the business enterprises and they make up more than 90% of the number of businesses. It is a backbone of the Malaysian economic growth and contributes to the gross domestic product (GDP) and creating more job opportunities.
One of the sectors that falls in SMEs category is pharmaceutical sector. According to Malaysian Investment Development Authority (MIDA), Malaysia"s pharmaceutical market is currently worth more than RM52 billion and three times the size of the market in Singapore in 2015 and total health expenditure at an average of 4.36% of gross domestic product (mida.gov.my, 2015 andMalaysian Competition Commission, 2017).
It also reported that Malaysia"s national spending on health care has increased more than two and a half times and is expected to continue rising alongside the longevity and affluence of its population. Through a concerted effort by these industry players, the government hope Malaysia can be one of the significant drivers in the pharmaceutical industry (mida.gov.my, 2015). According to this agency, this opportunity gives a room for local manufacturing to expand on their market locally and oversea by forming a collaboration with foreign multinational companies (MNC). Through this partnership, they will have the opportunity to extend the market either locally or overseas. The foreign partners will have the permission to open their branches, distribution centres, and a chain of pharmaceutical retailers throughout Malaysia. These measures make it easier for consumers to buy the medicines at a more competitive and affordable price.
However, as noted by Kho, Hassali, Lim, and Saleem, (2017), this scenario gives a negative effect to the local and independent pharmaceutical retailers. According to them, the environment becomes hyper competitive due to price war activities among themselves. This phenomenon then indirectly has a negative impact on a small pharmaceutical retailer that owned by local entrepreneurs. They are also forced to sell the medicines below of their cost to attract and retain their customers. As a result, more and more independent pharmaceutical retails that are owned by local entrepreneurs are forced to close their business as they are unable to compete. For those who are surviving, it was reported that 50% of the independent pharmaceutical retailers changed the concept of their premises and operated as a mini market to keep their business afloat (Lau, 2016). If this current trend pertain, the future existence of many independent pharmaceutical retailers is threatened.

Business strategy
Many researchers believed that for distinguishing their business from other competitors, the owner-manager must have a good and sound of business strategy (Crema, Verbano, & Venturini, 2014, Wan Yusoff, Jia, Azizan, & Ramin, 2017, and Abdullah & Abdul Kadir, 2017. According to Hashim, (2008), Tan, Liyin, and Langston, (2012), strategy is a management game plan for growing the business, attract and pleasing customers, and achieving targeted objectives. Strategic planning provides a clear sense of purpose and direction to guide the owner-managers of business entity in making decisions (Cheng, Abdul Kadir, & Bohari, 2014). It outlines how a business unit competes within the industry and many studies found that the failure rate among business entities that engage in the formal strategic planning is lower than those that do not (Mazzarol, Clark, & Reboud, 2014). They contended that by developing and implementing business strategy, the owner-managers of the firm are able to position their businesses to outperform competitors.

Organizational culture
Organizational culture is the characteristic way of behaving, believe, and shared values of the group of people that developed over time. It affects employee behavior and shape the way an organization operates and performs (Cristian-Liviu, 2013, Abdul rashid, Sambasivam, & Abdul Rahman, 2004, Shein, 2004, and Prajogo & McDermott, 2011. Chow and Liu, (2009) defined an organizational culture as a symbolic, rituals, shared understanding, and social patterns that govern behavior in the organizations. Organizational culture will determine, modeling and influence the perception and action of employees on how to perform in achieving organization"s objectives (Kim & Chang, 2019). It sets the behavior of employees and motivating them to achieve the company"s strategic goals by setting up values and beliefs and it was suggested that the successful companies apparently have a strong organizational culture (Ahmadi et al., 2012).
There are a few typologies of organizational culture that were used by researchers in their studies and the most extended and frequently used in empirical studies is the competing values framework (CVF), introduced by Cameron and Queen (1999) (Monzavi et al., 2013, Ahmadi et al., 2012, and Chung, Hsu, Tsal, Huang, 2012. This typology proposed that there are four type culture: Hierarchy, clan, market, and adhocracy.
Clan culture or cooperative culture is emphasized on internally focused and it shaped between the dimensions of organizational focus and flexibility, adhocracy culture tends to build an innovative and dynamic at workplaces, hierarchy culture is emphasized in order and rules, and finally the market culture emphasizes of the effectiveness of relationship between suppliers, customers and stakeholders (Wei, Samiee, & Lee, 2013, Naranjo-Valencia, Jiménez-Jiménez, & Sanz-Valle, 2011, and Ahmadi et al., 2012.

Business strategy and organizational culture
Organizational culture and strategy are highly interrelated and many studies have tried to examine the effect of organizational culture and the implementation of strategy to the firm"s performance. Many researchers agreed that the firm that have a strategy have more chances of success compared with those without a strategy. However, they believed that the capability of the firm to apply a strategy depends on a few factors and the organizational culture is one of the factors that affect strategy implementation (Chow & Liu, 2009, Akhbar Ahmadi et al., 2012, and Monzavi et al., 2013. According to Gamage (2006), organizational culture has a major impact on the performance of the organization. It acts as an effective instrument for employees" motivation and as a "social glue" that hold an organization together. According to him, an organization must have a strong culture if they intend to maintain competitive advantage.
His view was supported by Gupta, (2011) andSokro, (2012), They point out that, there are few factors that affect the strategy implementation process in the firm such as, environment, technology, communication, and organizational structure and culture. However, he noted that among those obstacles, an organizational culture has a major impact to the managers during carry out their plan. They stated that for the managers to achieve strategic goals, it must be supported or impeded by the culture and he must align the strategy to the organizational culture for achieving a desired result.
In a recent study, Marx, (2016), Shahzad, Zahid, and Gulzar, (2013), and Slater, Olson, and Carol, (2011), also found that one of the reasons why the strategy implementation process are failing is due to unfit between organizational culture with the company"s strategy. They pointed out that any leaders who intend to improve their organization"s effectiveness should be able to diagnose the organizational culture and climate before he/she take any necessary step to change a strategy or create a positive working environment.
The above discussions emphasize that the organizational culture need to be align with specific organizational strategy.

METHODOLOGY
This study is aimed at eliminating any doubt concerning the validity and reliability of the study instruments. A mail survey questionnaire and personal approach method were used for data collection from the selected respondents of the pilot test.
According to Rascoe (1975), the appropriate sampling size for a pilot study are from 30 to 500 respondents (Md Taib, Mohd Udin, & Abdul Ghani, 2015). Therefore, 30 pharmaceutical retailers that were derived from the directory of National Pharmaceutical Regulatory Agency (NPRA), Ministry of Health Malaysia 2015 were asked for their participation in this pilot study.
Respondents were asked to choose and indicate the extent of which they agree with indicators implemented in their firm based on Likert scale 1 to7 in which 1= not emphasis and 7= most emphasis. From here, 30 usable questionnaires were analyzed using SPSS version 19 and the findings of the study are presented below.

Respondents' Characteristics
A total of 30 survey questionnaires was completed and compiled. The pharmaceutical retailers that were participated are strictly from the location in Perak, Kedah, and Kelantan. Based on the usable responses, most of the respondents were pharmaceutical retailer owner-managers and their representative. Table1, 2, and 3 shown the profile of the respondents that were participating in this pilot study.

Result of the Validity and Reliability tests
In analyzing data that involved in the testing of the assumptions, the instrument of multivariate analysis was required. For a successful multivariate analysis, meeting some of the assumption aspect is the most critical. Thus, Sekaran,( 2000), stated that the researcher must make sure the measurement of the elements he want to measured is valid (validity) and the measured results are consistent (reliability).

Validity test
To make the research questionnaire valid, two indicators in this study consist of business strategy and organizational culture were adapted from previous study. The business strategy instrument was adopted from a study done by Megicks, (2007). Meanwhile, the organizational cultural instrument was based on questionnaires that were developed by Cameron and Quinn (2000).
In addition, a group of experts with a specific specializations sought for their opinion and advice. They were asked to comment on the language, clarity and suitability of the questionnaire to ensure that the questionnaire was easily understood. The reviewed version of the questionnaire was then disseminated for the pilot test.
Finally, factor analysis was carried out to examine the validity of each construct in the questionnaire. The Principal component analysis (PCA) was used as this is the most common method used by researchers and the author was retained the items that the loading factor is greater than 0.45. Furthermore, the author also retained the items that record the KMO value is greater than 0.5. This is in-line with Kaiser, (1974), that claimed that the item wit the KMO value is bigger than 0.50 are considered firm and compact and this item must be retained in the construct. The factor loading for the retained items and KMO value are shown in the table 4 below:

Reliability Test
To assess the reliability of the measurers of the research variables, reliability analysis was carried out. Cronbach"s alpha was used to assess the reliability of the instrument. According to Hair, Black, Babin, Anderson, and Tatham (2006), the α value which greater than 0.5 are adequate , the α coefficient of 0.6 as average, and the α of 0.7 or above considered as greater reliability. Table 5 summarizes the Cronbach alpha value of the research variable.

DISCUSSION
The result of the reliability test on the business strategy and organizational culture variables was shown in the Table 5. From the results, there are three types of business strategy was adopted by the owner manager of the pharmaceutical retailers that participated in this study. The types of business strategy are, channel expansion, specialization, and low cost. The cronbach"s alpha recorded for business strategy are between 0.5 and 0.83 respectively. This result is considered acceptable. From the reliability test on the organizational culture dimensions, we can identify four dimensions of the organizational culture, namely, dominant characteristics, organizational leadership, organizational glue, and criteria of success. The cronbach"s alpha recorded for organizational culture are between 0.5 and 0.81 respectively. This result also considered acceptable.

CONCLUSION
The aim of the pilot study is to test the internal consistency and content validity of the measurers used in this study. The validity of the instrument was proven through a validity and reliability test. The validity of the instrument was proven by conducting the factor analysis that recorded the KMO value greater than 0.5 and factor loading more than 0.45.
In addition, the validity of the study items were certified using Cronbach"s alpha. From the results, all the constructs were recorded the coefficient values more than 0.5 and this can be said that the instrument that was used in this study is considered valid. This pilot study will shed light for the author to conducts a future study by adopting this piloted instrument to study the relationship between business strategy, organizational culture and the performance of pharmaceutical retailers in Malaysia.