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Malaysia Airlines A case study Solved

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Introduction:

In this paper, the case of the Malaysia Airlines is being considered. The current condition of an organization has been analyzed in the light of the recent mishaps that the airline company had to experience and the re-engineering process that is being imposed on it as a consequence of the mishaps.

  Case Study:

·        Supporting a new leader and a new strategy:

The Malaysia Airlines, popularly known as the MAS is considered as the flag carrier of Malaysia: it has been a government entrepreneurship of the country as was considered as the national airline of the country. However, in the last financial year, the airline had met with disastrous situations that have ultimately led to the loss of as many as 537 people. In the very first incident, one of the airline buses of the Malaysia Airlines, the Flight MH17 was shot down by a militant group in Ukraine in July 2014. The Airbus was hit by one of their missiles: an accident that for which the airline was in no way responsible. The second incident that the airlines had to experience was even more disastrous: yet another Airbus, the flight MH370 disappeared in March 2015, with all the crew and the passengers on board. The airlines might be accountable for this accident, but the airline’s reputation was highly tainted by both of the incidents (Bachmann, 2015.).

 The Malaysia Airlines has experienced huge financial losses due to these incidents, as a result of which, the government has taken decisions that would facilitate its privatization. Since the entire organization is being structurally redesigned and re-engineered, it is the right time to incorporate new business ideas and strategies in this organization. In order to recover the reputation of the organization and turn back from the disastrous financial conditions of the organization, a new business strategy has to be incorporated very urgently. A change in the leadership style and an efficient leader who has been experienced in such situations is the primary requirement of the organization at this point in time in order to regain its reputation and position in the aviation industry (O’Connell and Williams, 2005).

Although there exists high chances that the new CEO of the organization might have to implement various strategic decisions that will not be acceptable to the employees of the organization, as for example the decisions of downsizing, yet it can be expected that Mr. Christoph Mueller, who had been successful in managing similar situations in the past, would be able to overcome the difficulties that he might face. However a political reaction has already been stirred by the announcement of his appointment, as many of the political leaders of the country are of the opinion that any Malaysia born person should have been suitable for the position (Smith and Marks, 2014).

As of now, it can only be said the organization has taken the right decision regarding the appointment of a new leader and incorporation of a new leadership style and business strategies in their functional operations.  However, the extent to which the organization is able to incorporate all the steps that their new leaders suggests in order to turn around will only be evaluated in the future (Tiwari and Kainth, 2014).

 

 

·        Stakeholder analysis of the Malaysia Airlines (MAS):

The following section depicts the stake holder analysis of the Malaysia Airlines.

As the Malaysia Airlines was initially a government enterprise and is considered as the national flagship carrier of the nation, the Government of Malaysia is the primary stakeholder of the organization. Being a service providing organization, the customers of this industry form yet another stakeholder group (Mallikarjun, 2015).

The management of the organization, along with the worker unions the various other companies with whom the Malaysia Airlines has business partnerships are perhaps the most important stakeholders of the organization. Each and every strategic decision incorporated by the organization directly affects these stakeholders of the organization (Oyewole, Sankaran and Choudhury, 2007).

The following section depicts the stakeholders of the Malaysia Airlines as analyzed using a power interest grid or plot. The following section depicts the stakeholders of the Malaysia Airlines as analyzed using a power interest grid or plot.

 

Management

Power

 

 of the organization

 

 

Government of Malaysia

Business Partners

 

 

Customers

 

Worker Union

Interest

 

 

·        Managing the stakeholders:

The most important stakeholder of the Malaysia Airlines has been the Government of Malaysia themselves. However, since the decision for privatization of the flagship airlines and the appointment of the new CEO of the organization had been finalized by the government, management of this particular stakeholder would be comparatively easier.

Since the strategic decisions taken by the new CEO would mostly incorporate the various business policies that would be financially beneficial for the company, it can be assumed that the business partners of the company would be would be satisfied with the decisions being taken (Flights of fancy Flights of fancy Strategic partnerships bring success for Etihad Airlines, 2015).

However, in order to gain back the financial stability of the company, the new CEO might have to cut about 6,000 job opportunities at the organization: a process that has already been started. Such a large amount of downsizing would indeed be not accepted by the worker unions of the organization: this might be the main problem that the new CEO would have to face.

As the Malaysia Airlines at present faces challenges from various other airline companies that offer both high-quality services and low airfares,  the new business policies adopted by  the organization would surely incorporate some similar facilities: the availability of such services would no doubt be beneficial towards the customers of   the airline organization.

However, since Malaysia Airlines is considered as the national flagship carrier of the country, the failure of any newly adopted strategic decision will be highly criticised and even might generate strong social and political reactions in the country.

 

 

 

·        SWOT analysis:

SWOT matrix, which is alternatively known as SWOT analysis, is actually a planning method having a specific structure, which is   used to evaluate a business organization or a product based on the weaknesses, strengths, threats and opportunities associated with the entity in concern. A SWOT matrix can be constructed for any person, product, industry or place. The process involves evaluating the objectives of any project or business venture, along with the identification of those internal and/ or external factors which might favour the operational process of achieving the organizational objective or might resist the process.

The SWOT analysis of the Malaysia Airlines has been provided in the following section:

 

Strengths

 

Weakness

Personnel (Cabin Crews of the  MAS)

 Management of MAS

Fleet of MAS

A revenue stream  which is diversified

Poor  Brand image after the loss of the airbuses

Financial condition of the Malaysia Airlines

Decrement in yield after the mishaps.

Low profit margins

 

Opportunities

Threats

Low Cost Opportunity

Launch of Firefly

Expanding passenger traffic in Asia Pacific

Improved Fleets

Increasing cargo traffic

Medical Tourism

Economy

Competitors

Intense competition

Terrorism and Political Unrest

Technology

Increasing jet fuel prices

Foreign currency fluctuation

The Malaysia Airlines is the national airlines of the country and has been funded by the government of the country until very recently. The airline group has as many as 100 aircrafts and has scheduled flights to as many as 144 destinations of the world. The cabin crew and the ground level staff of this organization are trained professionals and at this point of time are the primary strength of the company (Chen et al., 2015).

The brand value of the organization has decreased to a great extent after the two disastrous mishaps experienced by the organization. The company had to bear huge financial losses, along with a steady decline in the amount of revenue generated after the two accidents. The company had to pay huge amount of compensation to those families who lost their near and dear ones: adding to the poor financial condition of the company.  At this point of time, these are the primary weaknesses of the organization (Clarke, 2004).

However, since the aviation industry is expanding at a very high speed, the Malaysia Airlines can grab some of the opportunities that the industry itself provides to the company.

The company also faces certain threats due to political and social unrests in the country,  the introduction of other  airlines organization that are using improved technologies and various other factors (Elder, 2015).

·        Facing the future:

At this point of time, the company is indeed not in a good shape: it is financially broken, the brand value or image has decreased considerably and the government has decided to privatize it instead of funding it any more. However, the organization has taken a very responsible step by appointing Christoph Mueller as their next CEO. Mr. Muller had had an extraordinary career in managing such dire situations at many organizations and had been able to turn around many of them using his leadership qualities, managerial skills, and strategic business decisions. It can only be expected that Mr. Christoph Mueller will be able to turn around the fortunes of the Malaysia Airlines using efficient and effective business and operational strategies and that the employees of the organization will be able to walk on the path shown by their CEO.

Conclusion:

In this paper, the current condition of the Malaysia Airlines has been considered. A discussion has been made on the incorporation of a new leadership style and business strategies in the organization, along with an analysis of the stakeholders of the organization and the analysis of the strength, opportunities, weakness and threats being experienced by the organization.

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