Change Management Implementation In Malaysia Airlines: Assessment Portfolio Essay.

You have already been asked to complete a range of seminar-based research and reflections on the strategic changes undertaken by MALAYSIA AIRLINES over the last decade, and the associated change management practices/problems in different contexts.

This particular assignment takes the format of an assessment portfolio, comprising three main parts:

PART 1: A research report, with a word limit of 1,500, on one of the particular MALAYSIA AIRLINES change program implemented in the recent decades (post 2006). (40%

More specifically, you need to provide accounts in this report on the following:

• Internal and external contextual factors which influenced the introduction of that particular change programme at MALAYSIA AIRLINES
• An outline of the management strategy used by the managers and leaders concerned to execute these strategic changes.
• The actual challenges and difficulties experienced by the MALAYSIA AIRLINES management team in managing these changes.

PART 2: An academic report, of a 2000 word limit, evaluating the implementation and resistance of the change management approach implicated in Part 1, from one of the three stakeholders’ perspectives: MALAYSIA AIRLINES management team, MALAYSIA AIRLINES employees concerned, customers and the respective national government (60%) 

This report needs to clearly identify:

• Core issues relating to the change itself and associated change management strategy at MALAYSIA AIRLINES in that context. (These should be outlined against appropriate theoretical frameworks or conceptual discussions, with linkages between theoretical explanation and the practical events to be made explicit).
• Specific concerns and problems drawing from a particular stakeholder’s point of view. (You must demonstrate your awareness of the practical change management issues at MALAYSIA AIRLINES based on your chosen program).
• Advised approaches/recommendations for overcoming resistance to change, relating to your chosen stakeholder’s concerns and any other anxieties.

Overview of Malaysia Airlines

Introduction

Change management is a collective form of business approaches that change the business approach and prepare individual support from the management for the enhancement of business market. The use of resources and budget allocation is important in that case and that showcases the organizational upgradation and increasing manner. Therefore, managers need to change the dimension of business and implement some new strategies for the development of internal and external contextual factors. The growth of technology and change in business dynamics are the important aspect of the development of a business (Nordin et al., 2012). The Change foundation are surfaced on the determined need for change, prepare and plan for change, implement the change for the development of business and sustain the change for the business implementation.

In this report, Malaysia Airlines has been chosen and all the change management aspect of the company along with the problem statement decision making is the key factor in this process. The organization change is an important fact that encourages business market penetration and delivers better market penetration strategies for the organization. In this report all the service and their facility service standards are important and that enhances the business opportunities for the nation.

Overview of Malaysia Airlines

Malaysia Airline Berhad (MAB), previously known as Malaysia Airline System Berhad is the brand Malaysia Airline and the prime carrier company of Malaysia. It operated flights from Kuala Lumpur and the secondary hub is placed in Kota Kinabalu and Kuching for the destination of Asia, Europe and Oceania (Malaysiaairlines.com, 2018). The vast areas are being covered by the airline company and that is the most advantage perspective of the business. There is two subsidy airlines are also present in the Malaysia Airlines, one of them, operating over the territory cities and they have scheduled flights for their home-based and another section is from Subang international airport and it focuses on the inter-Borneoflights.

Malaysia Airline Fleet	Number of Aircrafts
Airbus A330-300	15
Airbus A380-800	6
Airbus 737-800	48

Table 1: Malaysia Airlines operation

(Source: malaysiaairlines.com 2018)

The major services that are delivered by the airlines are an in-flight meal, in-flight entertainment, and in-flight shopping. These are the innovative things that enhances the business illustration and made a major change in business acceleration. There are some free baggage allowances for the first class passenger for 50 kg (Malaysiaairlines.com, 2018). Hand luggage allowances are for upto7kg and these are the extra facilities that differentiate this airline from other airlines. This is the key concern of this process and they tap in the business opportunities for the development of a business.

Change Management Implementation

Mind Map of Malaysia Airlines

Figure 1: Mind Map planning of low-cost fare introduction in Malaysia Airline

(Source: Created by Author)

Summary problem and Challenges

Malaysia Airlines has faced many crisis situations and they have faced some of the recent challenges that threatened the entire set up of business and impacted over their professional opportunities. More than 40% routes are loss breaking and that is the reason entire cost position has threatened 10-15% loss in corresponding revenue collection (Malaysiaairlines.com, 2018). The market of aviation has the concept of a low-cost carrier and in Asian full-service section, the airline is one of the successful and experienced airlines in all times (Lozano, Ceulemans & Seatter, 2015). The product quality has fallen, stakeholder initiation abruption and the reason behind their segregation is the consequence of last few incidents that shaken the business positioning. The major outlook of the business and focus persisted on tactical sales and promotions and the company is still grateful that they have maintained their high service standard still now. The problem in between them is the uncompetitive cost structure (Malaysiaairlines.com, 2018). As global recession emanating in Europe and situation is worse, thus high jet fuel prices conspiring to create the immediate turbulence. The current business model is not so effective and that resulted in their financial cost and budget allocation problems. Employee engagement is another perspective that changes the situation of business and delivers more option in business and that will develop the situation but with the implementation of new processes or strategies (Newman, 2012).  

Application of internal and external contextual model and factors

A. SWOT analysis

Strengths	Weaknesses
Ø One of the biggest strengths of Malaysia Airlines is the non-stop flights, that roaming around different cities continuously. Ø The company is still improving instead of high dividend amounting to RM15, 400, 000; still, they are trying to improve their potentials(Malaysiaairlines.com, 2018). Ø The company focusing on the string branding and that will provide a huge strength for the company. Ø Cargo revenue has increased 34%, whereas Passengers flight revenue has increased 15% and this will be considered as the biggest strength of the company. Ø A quality distribution system is one of the major strengths of the company and that will evaluate the positional aspect of the company. Ø This is the world best cabin crew service and the most important part is that they have maintained the recognition. Ø The Air cargo logistic service is also awarded and that signifies their supply chain process in logistic.	Ø Malaysia Airlines bore as huge cost and their financial structuring results a threat; this is the most challenging weakness of the company. Ø The annuity system of the company is weak and so as the financial structure. This is a concern reason for the company and creates an obstacle in the path of profit. Ø The sensitive equity market is present in this company and for that reason low earning per share and unsatisfied stakeholders are associated with the company(Hayes, 2014). Ø Operating performance process of the company lowering day by day and the situation become more severe as the company is not putting their effort in business acceleration. Ø The financial ratio like net profit margin has seen a declining from 24 to 17 and then 16 in last year. This change is the unexpected and uncontrollable situation is the key weakness of this process. Ø The cost of Malaysia Airlines is higher than other airlines and that is another consideration of weakness that people sometimes not able to use their service for high price fares.
Opportunities	Threats
Ø Emerging new markets is the influencing aspect for the company and their foreign market business also stretches and provides the opportunity to the business. Ø Annuity growth is measured and that creates huge opportunity as well. Ø Steady growth in market and improvement of cabin crew department, that always a high aspect of the company will engage more passengers to use their quality service(Doppelt, 2017). Ø Introduction of low-cost carrier options is another aspect of business and that will encourage their business opportunities. Ø Expanding economic activity in emerging Asian countries is important in that case. In passenger traffic section in Asia-pacific region are benefitted by this operational change	Ø Estate tax regulation is one of the major threats for Malaysia Airlines. Ø The company delivers its full focus on the brand name and services. Thus some of the other sections being hampered and get threatened.   Ø Competitionin pricing is one of the common threats that Malaysia Airlines has to face as their fare price is relatively higher than other companies.

Table 2: SWOT analysis of Malaysia Airlines

(Source:Chen, 2016)

B. PESTLE analysis

Factors	Analysis
Political	The major political incident thathappened in 1997, with the US, when the open skies agreement with Malaysia Airlines was signed. The government is also stretching their hand with the organization so that business can be stretched in unprofitable routes (Grant, 2014). The government also focusing on the tourism and hospitality management and that turning in the regional air hub to improve the connecting transportation that will help the business also.
Economic	The most challenging economic aspect is the increasing fuel price and that resulted in increase of bunker cost as well. The company has already faced a global financial loss in 2008 and in some cases, the situation obsessed them. The fare of the airlines is not costing low, thus some passengers who want travel with this airline cannot move forward for this increased price rate.
Social	The economic condition the people and their efficacy to travel this airline is the concerning aspect of this process. The increase fare rate is an obstruction of their revenue generation. Passengers are looking for the fair and cheap price travel allowance and they accept to comprise the food and frills(Pollack, 2012). Most of the premium class travellers afford to travel in this airline and that is the reason number of these people is less. The people want to find the same facility, same opportunity at low cost.
Technological	The introduction of e-commerce and online ticket purchasing is the concern technological aspect of the business. Online check-in facility in service section and e-kiosks is another technical advantage that company gets. Through the social media and mobile application, the company raises their bar and expanding their business in all over the globe.
Environment	The reduction of Co2emission is the concerning aspect of the ecological matter. CSR activities are important in that case and infertile lands must be used for the runways as ecological balance should be maintained in that case(Contrafatto& Burns, 2013). The cases of oil leakage and gas leakage should be considered as environmental change an organization has to make sure this situation will not arise so that good environmental condition will sustain.
Legal	Some of the airports are tied up with the deal and that is the reason Malaysia Airline has to pay less amount of money to these airports. Bilateral air right agreement also increases the landing and navigation charges. There are several discounts also persisted for the free trade cases and government supports the airlines' company to improve their position.

Table 3: PESTEL analysis of Malaysia Airlines

(Source: Szydlowska, 2017)

C. Force Field Analysis

Figure 2:Force Field Analysis of Malaysia Airlines

(Source: Lopez?crespo et al., 2014)

The force field analysis concerns with the driving forces and restricting factor of business and that will evaluate the market position of the company. Shareholders pressuring good decision from management is the concerning aspect that drives the organization in a way of positive movements where better results can be extracted. The company needs some financial help and the only way to gain the process is an enhancement of business (Boohene& Williams, 2012). The positive aspects need to be sharpened and negative junctures need to be revised in for the positive changes. In case of restricting force, high price fare is the concerning aspect for that business and in most of the cases; this is the restricted aspect in this airline. For this high fare, only premium passengers can travel through this airline and passenger accumulation is not processed here. Sometimes a financial loss is the major concerns along with the Labour protest and indirect cost downsizing are the concern factors of restriction the impacted the business (Hayes, 2014).  

Evaluation of Change Management Approach

Change perspective of Malaysia Airline

A. Types of change

The low-cost carrier is the major change that Malaysia Airline(MA) needs to implement. The change will be effective enough to accelerate their business process and encourage the business. In that case, the major problem of revenue generation influences the matter. This is the change that MA wants to implement in their organization (Doppelt, 2017). The company also focuses on the relentless cost focusing. The maintenance part is the key issue of this process as important in lower fuel bill also important in that section and by this process, only low-cost carriers can be operated.

B. Change perspective of business

The reason behind the change is to enhance and develop the marketing aspect of Malaysia Airline. With the low-cost fare introduction, the business will develop and lots of people, those are not associated with the company due to high fare rates, can use their services for this time. The major change in man management and handling of customers are the key concern of business and this change will achieve a good position of the company (Millar, Hind &Magala, 2012). The new change in fare will make some changes in routes in the air. The launch of the regional premium airline is the key concern of this process and that is the reason short routes will be allocated for fewer fares. The performance in this competitive field will improve a bit if they accumulate all sorts of people with them. The global network will improve by that process and in that case, operational excellence and cost-efficiency process need to be done in an effective way (Contrafatto & Burns, 2013). The perception of change is to deliver the high accomplishment level and alliance a greater show of business.

Recommendations

A. Kaleidoscope model

The recommendation process needs some changes that directed the business in the right way. In case of business change management, Kaleidoscope model is the right choice to evaluate the change in the organization. The model is based in the eight changed feature and all these features are taken in the consideration like time, scope, preservation, diversity, capability, capacity, readiness and power. All these changes need to be considered for the reformation of the company and have the better commitment to the customer. The major change in case of Malaysia Airlines is the cost-cutting process or the introduction of low-cost fare rates (Pollack, 2012). This is the change that organization wants to implement in their organization. The scope of the change signifies how much change is required for the process. In case of the changing context price rate curtain will help the business to extend and also help in the change level of management as revenue generation process will definitely increase by this process. Change in parts and equipment are also needed for the manufacturing cases and routes will be evaluated in the proper manner. The time of the change is a crucial matter in that case and it will be effective enough to make some power relation in business as the decision needs to be unanimous and that will effects in business in effectively.

SWOT Analysis of Malaysia Airlines

 

Figure 3: Kaleidoscope model

(Source: Resnick et al., 2015)

The capacity in case of running the business in the proper way is the crucial matter and the main concern as well. Malaysia Airlines needs to understand own capacity and at the time of introducing regional flights. These are low distance flights so better attention is needed in that case. The diversity in the range of business will justify in that case also and that will be impacted by the loyalty and identity. Low-cost fare needs to be promoted also so that people know about the change in Malaysia Airline. The changing context comes under the section of readiness where awareness in business is the key issue. People have to know the change aspect that comes by the effective readiness in business (Bolden, 2016). The nature of preserving the process and to destroy the earlier aspect of the business is the key concern in business and role of the business has been changed in that case. A start up-point will be taken and for that same reason, target customers also need to be changed. The change in style and positives in business will showcase when the entire Malaysia Airline influences the process in the way of change path and progression.

B. Intervention Strategies –Financial (Restructure Plan) 

The entire financial planning of restructuring has been given. The structured process of business is important for the change mange management process and to build a new regional airport for regional flights also. The entire process of financial structure helps the process to understand and cover all significant places of importance.

Change management process
Buildings / Real Estate
Purchase	$                         1,000
Construction	65,000
Remodeling	1,500
Other	-
Total Buildings and R / E	$                       67,500
Leasehold Improvements
Item 1-change 1	$                         2,000
Item 2-change 2	35,000
Item 3-change 3	25,000
Item 4-change 4	65,000
Total L / H Improvements	$                     127,000
Capital Equipment List
Furniture	$                       30,000
Equipment	35,000
Fixtures	25,000
Machinery	25,000
Other	10,000
Total Capital Equipment	$                     125,000
Location and Admin Expenses
Rental	$                                  -
Utility Deposits	2,500
Legal and Accounting Fees	2,500
Prepaid Insurance	2,000
Pre-opening Salaries	2,000
Other	1,000
Total Location and Admin Expenses	$                       10,000
Opening Inventory
Category 1	$                       25,000
Category 2	6,000
Category 3	1,500
Category 4	1,000
Category 5	2,500
Total Inventory	$                       36,000
Advertising and Promotional Expenses
Advertising	$                       10,000
Signage	25,000
Printing	1,500
Travel & Entertainment	35,000
Other / Additional categories	-
Total Advertisement and Promo expenses	$                       71,500
Payroll and payroll taxes
Expense 1	$                       30,000
Expense 2	25,000
Total Payroll and payroll taxes	$                       55,000

Summary Statement
Sources of Capital
Owners' and Other Investments	$   6,027,500
Bank Loans	5,000
Other Loans	90,000
Total Source of Funds	$   6,122,500
Startup Expenses
Buildings / Real Estate	$         67,500
Leasehold Improvements	127,000
Capital Equipment	125,000
Location / Admin Expenses	10,000
Opening Inventory	-
Advertising / Promo Expenses	71,500
Other Expenses	55,000
Total Startup Expenses	$ 12,701,000

Table 4: Complete restructure planning for Malaysia Airlines

(Source: Formulated by Author)

C. Execution of the strategies

To make the proper execution of theory, possible strategies are needed to be taken for the evaluation of this change management process in Malaysia Airline. Lewin’s Change Management model is the best model to understand the situation. There are three steps in Lewin’s model and all these steps signify the change operation process. The first step is unfreezing process and in this stage organizational strategies need to change for the better situational approach (Adeniji, Osibanjo & Abiodun, 2013).The low fare change in Malaysia Airline is the concerning aspect of their business and the process will be underlined in the way of breaking the previous one. That means previous strategies have to be demolished as the new strategy has to introduce.

Analysis of Political, Economic, Social, Technological, and Environmental Factors

 

Figure 4: Lewin’s Change Management Model

(Source:Manchester et al., 2014)

There are some risks situations that need to be there and companies are developing their protection process for this change. The next stage is the change and Malaysia Airline needs to change their airport facilities and restructure the process for the domestic airlines' process. The change is persisted in that case. The next need is to be restored and the process of restoration will be judged by the effective use of the company policies. A development of new infrastructure and establishment of feedback is essential in that case. Leadership will change and that is the most interesting aspect of this policy to consolidate the next half of business with the new strategy and leadership process

D. Measurement of success 

The success can be identified by the effective use of business understanding and possible changes that needs to be made by Malaysia Airlines. The change in high-cost fare and replace this with the low cost is the concerning aspect of business and that will enhance the business opportunities and accumulate more passengers with their service (Pieterse, Caniëls& Homan, 2012). Domestic flights are allocated differently and that will enhance their revenue generation as well.

Conclusion

Therefore it can be concluded that change management in business is not the easy way to implement in the business. There are certain structural,functional and operational processes that need to be calculatedin the process of Malaysia Airlines and their low fare will improve more passengers with them. The company also takes care of their strong aspects of cabin crew management and customer management. They need to sharpen that process in low-cost fare flights. In this domestic flights if passengers find something innovative and exciting then they will use the service again and that enhances their customer engagement and allows more revenue opportunity for the company. 

References

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Szydlowska, K. (2017). International Business of the Airline Industry. Strategic Alliance and the Business Tool" PESTLE"