Change Management in Malaysia Airlines: A Case Study

This case study explores the successful change management strategies used by Malaysia Airlines (MAS) in restructuring its management style and improving its public image. It discusses the reasons for change, the challenges faced, and the strategies used to overcome resistance to change. The study also examines Kotter's 8-step change model and how it was applied in MAS. The article provides insights for organizations seeking to change and adapt to the modern business environment.

Abstract
John Paul Kotter had developed a useful method to deal with changes, namely Kotter’s 8-step
change model. Via trust, transparency, and teamwork, the resistance of change will surely be
turned into receptive participants as long as the change occurs in an organization step by step.
Here are the eight steps:
1. Create a sense of urgency
2. Build a strong coalition
3. Form a strategic vision
4. Get everyone’s buy-in
5. Enable action by removing barriers
6. Generate short-term wins
7. Sustain acceleration
8. Institute change
MAS, a local organization that eager to change its current status by restructuring its management
style and improving the damaged public image. In this study, we are going to seek the changes
which had made by Malaysia Airlines (MAS) in terms of its management. So, let's look at the
changes further. Was is a successful change to MAS? Also, how MAS encourages the employees
facing uncertainty? And, what are the strategies that had been used in this restructuring process?
It is hoped that this study will encourage all of the organizations either small businesses or large-
size businesses willing to change and following the paces of technology in this age of
modernization and urbanization.

Background and nature of the organization
Malaysia Airlines (MAS) is a national airline of Malaysia. It was settled up upon 12 October
1937 and has been also rated by Skytrax five-star airlines. For your information, Malaysia
Airlines operates domestic routes in Malaysia and international routes across Asia, Europe,
Australia, and the Middle East. Next, Malaysia Airlines is also holding a strong and powerful
slogan, namely "Journey Are Made By The People You Travel With." To be frank, Malaysia
Airlines face changes frequently. To further illustrate it, Malaysia Airlines joined and left
through many countries, constantly changing its name, changing its person in charge, and facing
losses. And after the MH370 incident, customers began to lose confidence in MAS, resulting in a
reduction in the number of customers for MAS. In short, MAS is changing the whole operating
system again and again in order to regain the trust of the customers as well as achieve the
mission statement sooner or later.

Definition of Change
According to the Oxford Dictionary, change is defined as to pass or make somebody/ something
pass from one state or form into another. To make it simple, it means starting new things besides
the origin and going through a whole new process by utilizing the existing resources such as
manpower, machine, and money. However, not every change is beneficial for an organization. In
fact, a successful change should be done by designing an effective and efficient plan, making
appropriate task delegating as well as regular monitoring and guiding. Henceforth, let’s view
deeper into the change of MAS.
Why must MAS change? There are three prime factors that caused MAS making adjustments
and changing its organizational structure. The three factors include employee issues, capacity
utilization, and communication.
For starters, employee issues were getting worse in MAS. This is because the employees were
depressed during the period of company layoffs and causing low effectiveness in daily
operations in MAS. Not only that, but the customer service levels were disappointing too since
the employees don't have any roles in decision making. On the other hand, high capacity
utilization also costs low profits in MAS. Some aircraft were on standstills for a too long period
and it was soon be replaced by new models of plane. To be honest, MAS did not plan well in
using the capitals, causing the profits to become lower and lower day by day. To make MAS
better, Mas started highlighting effective communication between the employees and the
employer. This is due to the reason that poor management had affected their daily decision
making indirectly. Their effectiveness is seriously affected. Owing to the previous plans were
failed to run, the workers started losing faith in MAS. That’s why MAS must change.

Body
The first change occurred in MAS is around 6,000 termination letters were sent to the employees
due to the restructuring of the national airline. Over 20,000 employees were terminated but 2/3
of them will be rehired by a new airline on 1st July 2015. Unfortunately, the restructuring of
MAS caused the staff in low performance and unable to function properly at work. This is due to
the reason that the employees did not trust MAS at all costs since MAS did not promise them
anything to protect their future. Maslow's Hierarchy of Needs suggests "protection from threats"
is very basic in the morale of an employee. However, the management had poor communication
which impacts the decision making and delegation process. In fact, this change is good to cut
wages but the top management was lacked giving reasonable excuses to the previous employees
as well as not giving them time to digest the whole incident.
At that time, the employees were worried about themselves because they assumed that losing
jobs was a terrible thing for them. To make it simple, they felt uncertain about their future.
Uncertainty is the main factor that the employees refused to change. To be frank, if they were
responsible employees before that, they might definitely be employed again by MAS. Obviously,
the reason that they were worried about the cut off is because that they might be irresponsible
before. Maybe they used to late to work, no completing their jobs on time or even broke the rules
of the organization many times. If not, they will feel fair about this change to eliminate the
employees that contributed nothing to MAS.
The solution that MAS had used to solve the uncertainty of employees in this change is coercion.
Coercion means that managers use their formal power to force employees to change. Of course,
MAS forced employees to accept this change, or else they will face direct dismissal. Hence,
many of the employees volunteered to resign due to not effective communication in
communication. However, I beg to differ. In my two cents, this change could actually be done
successfully through proper communication and appropriate compensations. That is the reason
why I disagreed wholeheartedly.

The second change that occurred in MAS is the delayering of organization levels. What is
delayering in terms of business concept? Delayering is defined as the act of reducing the number
of levels of employees in an organization, especially by removing one or more levels of
managers from their jobs. Research showed that the prime reason that MAS decided to delayer
the organization levels is the top management hopes to flatten the management structures by
giving more span of control to the functional managers as well as reduce the chain of command.
Thus, the power (authority) can be delegated equally for the sake of fastening the decision-
making process by direct and effective communication and formal reporting structure. In other
words, the decentralization process is carried out indirectly in MAS. Moreover, the employees at
the lowest level who are closest to the customers can deliver the overall public comments to the
top management as soon as possible in a bid to sustain the public image of MAS due to the
efficient delayering process. Not only that, but the overhead cost of recruiting and training new
employees can be minimized sooner or later too. In short, if the change occurs successfully in
MAS, the workflow of the entire organization will be surely ameliorated.
However, to be frank, it is a challenging change to the functional managers. This is due to the
reason that they have never handled a large number of employees at the same time before so that
the chosen candidates must be mastered in the human skills which can maintain the group well
and also have the ability to deal with the conflicts and sudden incidents effectively. Otherwise,
the productivity of MAS will be influenced due to poor management. Owing to this reason, the
employees were fear to change because everything needs to start from zero such as specializing
the whole tasks again, having different working methods and the redistribution of responsibility
and accountability as well.

Fortunately, MAS had some strategies to eliminate this barrier. Firstly, MAS was using the vital
elements which are communication and education in ensuring the employees accept and adapt to
the change stage by stage. Communication had made the employees understand the process of
change clearly. Chances are, they could imagine the results of making the change and realize that
change is not that terrible. Therefore, the employees try dealing with the unknown as well as
uncertainty in MAS. As they take their very first step, they found out that changing can make
things go easier so that they now tend to follow the change to attain the organization’s mission.
By changing the old management style, they were confident in implementing the plans either
tactic plan or operation plan to sustain MAS in this competitive world. Next, training had been
also given to the employees instantly. In the words of a wise inventor, Steve Jobs, he urged us,
“Stay foolish. Stay hungry.” Even an experienced manager, he or she also needed to improve
management skills by attending seminars. Henceforth, by training, the managers could
eventually handle with the new management style, delayering easily. In a nutshell,
communication and education are both equally essential to manage the resistance of change.
Apart from that, MAS had also changed in the division of domestic and international
departments. This helps to improve the decisions making in MAS since everyone from the same
department could eventually speak out their own opinions within the departments for the sake of
achieving the tactic plan which had stated early in each department. Besides, they also have
chances to discuss the problems they are facing together to make a better decision. Next, this
change happened helps to reflect the local conditions and the local market to MAS from time to
time. For instance, MAS can compare the prices, products, and services with other companies
easily. This also helps the top management having closer contact with the customers. Therefore,
they can receive more customers' opinions in a bid to produce a better quality of products and
services for them. Hence, customers will become more and more. This will give the customers a
better impression and the customers will also trust the company more. As a result, the company
can create a stronger reputation locally.

All things are difficult in the beginning. It is harder for us to change a habit. Every decision to
change will meet with obstacles, so let's take a look at what obstacles MAS had encountered in
this changing. Lacking communication between international and domestic divisions is one of
the barriers. This is because all the employees do not have the same time to communicate with
each other. Worse still, they even do not meet each other although in the same organization. This
may cause misunderstanding when the problems come. Hence, they do not understand each other
thoughts and also opinions. On top of that, this may lead to conflict inside the internal
environment. Because of the not understanding, the misunderstandings become more and more
day by day. The unhealthy relationships between employees and also the employer will affect the
image of the company too. This may cause the company to decrease the incomes and profits.
Lastly, some managers may take decisions for their divisions without considering the other
departments and without thinking about other departments. This is an unfair situation. The other
departments may not be happy with this disrespect decision.
When the changing process was happening, MAS had taken some strategies to overcome these
problems. Firstly, they communicate with all the employees to make the plans work. Through
communication, they had introduced some learning programs and motivation programs to them.
In the programs, the related authorities had taught the employees some soft skills to practice their
leadership for better management when the departments were separated. Stress management was
also offered for the employees as well as opening up a counseling center for them. Next, MAS
also negotiated with them about the rewards. If the restructuring was successful, they will have
equal bonuses in that particular year. On top of that, the next strategy is coercion. MAS reminded
the employees frequently about the commitments and the risk if the restructuring fails. In other
words, if the employees did not commit well with MAS, punishment will surely be given neither
the lowest workers nor even the managers.

Conclusion
All in all, a proper strategic form is critical to keep the enhancements and adjustments made by
way of MAS. Corporate way of life is most important in altering an enterprise agency due to the
reality it can encompass the behavior of people in an organization inside and outside the
organization in a given situation. The enterprise tradition applied in MAS is to rename or rebrand
the photo of MAS; Network, alliance, strategic planning; The programmed administration and
communications workplace will be renamed the strategic planning office. It influences the high-
quality of service and the way human beings are treated, each customer and client. As a section
of the transformation, Malaysia airlines is working with AirAsia to enhance its function in the
aviation sector. The partnership with AirAsia has uncovered Malaysia Airlines' tries to trade their
function and AirAsia tries to help them make modifications in sharing knowledge, reading new
structures, rebranding and absorbing new buildings and values. Malaysia airlines had labored
difficult to constantly improve operations and has carried out very properly in three key areas,
which include company efficiency, flight operations, and price management. Manage MAS
adjustments to help them enhance productiveness and overall performance to reap organizational
goals.

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