Leadership and Motivation Theories Assignment 2022

Running Head: ITM- DIPLOMA
ITM- Diploma
Student’s Name
University Name
Author’s Note

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Table of Contents
Introduction......................................................................................................................................3
SWOT analysis of Air Asia.............................................................................................................3
Strengths.......................................................................................................................................3
Weakness.....................................................................................................................................4
Opportunities................................................................................................................................4
Threats..........................................................................................................................................4
Ethical challenge and decision making............................................................................................5
CSR approach and its effectiveness in employee management.......................................................5
Four key elements of CSR...............................................................................................................6
Important aspect of company culture of Air Asia...........................................................................7
Appropriate organisational structure...............................................................................................8
Leadership and Motivation Theories...............................................................................................9
Recommendation and Conclusion.................................................................................................10
Reference List................................................................................................................................12

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Introduction
AirAsia is a multinational group of airlines whose headquarters are situated in Kuala Lumpur,
Malaysia. Initially founded in the year 1993, this group now operates with a network of of low
cost carrier Airlines which includes Air Asia, Philippines Air Asia, Thai Air Asia and so on. The
Asia group maintains significant oversight as well as equity Holdings with their franchises, since
they operate over the wide area of entire Asia. The member Airlines of Air Asia employees
identical Business models of low cost customer service and this is achieved by operating the
single type of air fleet, which is the Airbus A 320 aircraft.
SWOT analysis of Air Asia
Strengths
Asia has achieved significant growth in a small time under the the significant management of
Tony Fernandes. The company is adding new destination routes each year. They also have the
reputation of being media friendly and thereby utilize the media advertising advantages. This
strategy helps them in getting new passengers every year. Designation also enjoys business
collaboration with major commercial hotels, travel services, banks as well as current
organisations including Citibank (Adler et al.2017).
The strong market reputation of Air Asia is built on the basis of the unique imaging introduced
by the Air Asia Citibank card in almost all countries of Asia. Brand populate is also developed
through the introduction of the GDS system that allows people all over the world to check
schedule of flights and other related information with their Air Asia digital platforms (Gumanti
et al. 2018).

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As highlighted earlier, the company has from management. For evidence, the Shin Corporation
which is the biggest telecommunication company of Thailand has 50% shares in the company,
Thai Asia which gives maximum business volume to Air Asia brand (Reddick, Chatfield &
Brajawidagda, 2016). Lastly, one of the biggest strengths of the organization is their reputation
as a low cost airline leader. The reputation as a low cost air carrier enhances number of travelers
with Air Asia every year.
Weakness
Although they have the reputation of being the most cost efficient low cost air carrier, recently
there have been many complaints registered against unstable flight schedules, delay of lights,
lack of expertise in ticketing services as well as improper flight attending services also. There are
strong Complaints against four performances in flight scheduling throughout the entire day flight
schedule. Customers feel and report that these hassles in services are because of the low airfare
charged by Air Asia. These issues has impacted the the Global image of Air Asia as a reputed
low cost air carrier brand. The overall poor service of their staff was to be blamed on account of
the net loss of RM 465.5 million Malaysian Ringgit in the year 2008 (Adapa & Roy, 2017).
Opportunities
The ASEAN open skies have provided the permit of unlimited flights within the regional
Airlines of of the ASEAN region. This is a big opportunity for the organisation as they are still
the lowest charging air carrier among the Asian Airlines (Ahmed, 2017). Despite some issues in
services, they still have the biggest workforce in Asia Pacific which can enable them to fly the
maximum number of flights among all the air lines in Asian countries.
Threats

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Fluctuation in rate like the airport departure rate, landing charges as well as Airport Security
charges is always a big threat for low cost air carrier brands. Another big threat to the brand
reputation is the no disable policy of the company. They do not have any privilege or services for
the disabled people who therefore feel segregated as well as discriminated by the company.
Ethical challenge and decision making
One of the biggest ethical claims brought against Air Asia was that the official flight booking
websites of Air Asia did not display the prices including the taxes, fees, other charges as well as
the duties. In this context, a normative decision making approach can be highlighted. In the first
place, Air Asia spokesperson highlighted that it was no descriptive management decision
making, which caused this ethical breach to happen (Brajawidagda, Chatfield & Reddick, 2015).
However, it is evident that this is an ethical breach from the end of Air Asia. They Air Asia
management also confirmed that they are going to undertake corrective actions.
The organisation has confirmed that they are going to undertake a normative decision making
approach in for the instances of posting airfares on the official flight booking websites, in future.
The international fare regulator agencies would be informed henceforth regarding the air fare
prices inclusive of all charges so that any further confusion regarding the final fares do not arise.
Nevertheless, this ethical breach has been considered as a decision making failure from the end
of the management. In fact, there are allegation against the management that they have
deliberately cited low air fare by highlighting only the basic charges.The intention was to
highlight the competitively lower prices of the flight bookings compared to other low budget air
Ferrier companies (Asrah et al. 2018).
CSR approach and its effectiveness in employee management

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The organisation achieved the company of the Year award in the year 2017 because of their
championing efforts in raising cancer awareness. The organization has touched lives of several
underprivileged communities, especially the elderly as well the children. Developing small
groups involving the employees of the organisation, Air Asia initiated several campaigns to bring
happiness into the lives of the cancer affected people in those communities during their festivals.
This awareness campaigning was involving the participation of the employees of the
organization also. As such, the cancer awareness initiatives and strategies to healthy living that
well communicated to people also affected the lives of the employees (Steven & Purwanegara,
2015). The employees could understand the secrets to healthy living and strategies to
maintaining healthy work life balance. In the longer Run, this campaigning and the values gained
through the campaign could impact their work life balance and make them more productive and
resourceful.
Four key elements of CSR
The first element in this context is economic social responsibility. In order to be chronically
responsible, AirAsia needed to be sustainable in the business activities. They have ensured this
by making stable and reasonable profit towards the shareholders, ensuring industry specific
payments to employees along with appropriate compensation, proper payment of business taxes
and mitigation of other financial obligations. The biggest strength in terms of Economics social
responsibility of Air Asia is that they are transparent with all the stakeholders concerning the
financial status in business.
Next in importance is the legal social responsibility. The adherence of business laws is evident in
the absence of any major scandal against the organisation in the last 20 years of their operations

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(Abu Bakar et al. 2017). In spite of charging bare minimum prices from the customers,
contrasting the industry standards, it can be concluded that the organisation is still able to fulfill
all tax requirements, adhere to labour laws of all the functioning areas and thereby maintain
reputation required for their success.
The next most important responsibility is the ethical responsibility. In this context, the
organization has strong reputation in paying employees living wages. However the organization
should also look for reducing the environmental impact of their business activities and
emphasize more on clean energy operations.
The last element is discretionary social responsibility. In this context, it has already been
specified before that Air Asia works towards making significant contribution towards the
extended communities they impact through their work. They also provide their employees to
volunteer such discretionary work teaming up with charitable organizations. Park (2019) states
that in fact organizations which are prompt in social responsibility, attracts more customers and
leaves lasting and positive impact.
Important aspect of company culture of Air Asia
The organisation has achieved the award and is recognized as the most popular employer in
airlines of Asia. The organisation considers that in order to replicate their success year after year
they need the support of their employees, who constituted the biggest resources in the
organisation. The company believes that the attitude, fashion, great as well as determination of
the employees help them to retain their market reputation. This is why they emphasize high
standards regarding employee safety, their performance and make sure that the celebrate the

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success of the employees also. This is how they live an example of being an ideal of participative
employer.
This aspect of the company culture will lead to the development of strong reputation as
employers. They will be able to attract deserving and capable candidates since they are giving
the impression that they are an organization for the employees, to grow with (Lee & Dy, 2015).
As an outcome this also ensure that in the future this would lead to maximum content of the
employees and in turn, the performance delivery rate of the employees would also improve,
thereby ensuring a rise in the rate of happy customers.
Appropriate organisational structure
The organisation has developed and integrated web based reservation as well as inventory
system. This system includes internet operations, Call Centre operations, airport departure
control operations and much more with a direct sales engineer which is effective in elimination
of all middle men and sales commissions. This helps the organisation to achieve unity of ,nd.
The newly implemented enterprise resource planning system by Air Asia also helps the
organisation to ensure centralization of ,nd. By means of this year which software they can
successfully maintain process integrity, reduce the financial month end closing processing time
as well as increase the speed of reporting and data retrieval procedures (Nugraha, 2016).
A Centralizationof business process is also ensured by deploying Maybank for handling IT and
IS.
The organization also ensure span of control by incorporating several factors in their
organization structure.In the first place Air Asia has their active regulators in almost all

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international airports of the routes that they cover. The regulators are directly communicating
with the control room of the organization which is aligned with the headquarters. Besides, they
are also maintaining formal control of the flights by employing separately a maintenance
provider who ensures that the flights of Air Asia are always in perfect condition (Gumanti et al.
2018). Thereby, they are providing maximum importance towards the safety of their customers.
Hence the streamlined operations of the organization are essential for the success of the
organization. The simplification of internal operations along with the implementation of the lean
distribution system helps to ensure that Air Asia has point to point network connection on all
fronts.
Establishment of front to front network also helps to ensure that the company is keeping
operations simpler, keeping costs down, and also ensuring that they are enduring lowest
operating costs which is necessary for maximizing profit specially keeping an eye on the low air
fares charged by the organization. Again, in order to reduce complications and ambiguities in
service, Air Asia generally emphasises on the short haul air services.
In order to ensure that they have the leanest cost structure the company emphasizes on
establishment of efficient as well as simple point to point operations. They also ensure that they
are able to attract as well as written the most hardworking as well as smart candidates and also
ensure that the passion for continuous cost reduction is present in the the employees as well as
executive of the company (Adapa & Roy, 2017). Formalization of organisation is also insured by
maximization of shareholders value which is brought about by resilient profit growth by
implementation of a lower cost base and expansion of their their service network in a prudent as
well as disciplined manner.
Leadership and Motivation Theories

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It is evident from the analysis of the operations of the company, that they are following the
transformational as well as participative leadership in the organisation. Transformational
leadership is insured by emphasising on the development of employee capabilities. Participative
leadership is also observed in the way the employees are supervised and provided for in their
operations (Gumanti et al. 2018). For evidence they have headquartered support team for the
regulators who are maintaining the individual operations in the international as well as domestic
airports.
The Herzberg two factor motivation theories can also be applied here. Along with financial
incentives , the employees also enjoy non-cash benefits which are the two most important factors
according to this theory for employee motivation.
Recommendation and Conclusion
AirAsia needs to empower there employees in the developing Nations where procedures are
complicated because of lack of technological follow through. They need to involve Their
employees in decision making process. Responsibility of communicating each and every small
aspect of functions with headquarters slows down process in many areas.
The organisation also needs improvement in their overhead cost since their labour is more
effective. They can utilise the resources saved here in other areas and thereby also emphasize on
providing more training courses for the employees so that they can enhance the quality of
workforce in all corners of the world. They should communicate with employees in a friendlier
manner and involved in decision making. Finally, it is evident that their advertising process is
not appropriate and that needs to involve more online as well as offline advertisings to attract
more customers.

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Reference List
Abu Bakar, F. A., Zulkafly, N. Z., Rashad, M., Hanafie, M., & Melan, M. (2017). Customer
satisfaction towards AirAsia services among UUM student.
Adapa, S., & Roy, S. K. (2017). Case Study 6: Malaysian Airlines Versus AirAsia: Customer
Satisfaction, Service Quality and Service Branding. In Services Marketing Cases in
Emerging Markets (pp. 67-75). Springer, Cham.
Adler, R., Stringer, C., Shantripriyan, P., Birch, M. G., & Tohmatsu, D. T. (2017). AirAsia:
Towards a ‘new world’carrier strategy and implications for performance management
system design. In The Routledge Companion to Performance Management and Control
(pp. 319-333). Routledge.
Ahmed, S. (2017). Strategic sales management of AirAsia in Bangladesh.
Asrah, N. M., Nor, M. E., Rahim, S. N. A., & Leng, W. K. (2018, April). Time Series
Forecasting of the Number of Malaysia Airlines and AirAsia Passengers. In Journal of
Physics: Conference Series (Vol. 995, No. 1, p. 012006). IOP Publishing.
Brajawidagda, U., Chatfield, A. T., & Reddick, C. G. (2015, May). The imperative of
government transparency in crisis communication: the case of AirAsia QZ8501 crash. In
Proceedings of the 16th Annual International Conference on Digital Government
Research (pp. 51-60). ACM.
Gumanti, T. A. G. A., Savitri, E., Nisa, N. W., & Utami, E. S. (2018). Event Study on the Crash
of Airasia Plane: A Study on Travel and Leisure Companies Listed at Malaysian Stock
Market. Jurnal Akuntansi dan Keuangan, 20(1), 20-26.

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Lee, J. W., & Dy, M. (2015). Mitigating ‘Effective Control’Restriction on Joint Venture Airlines
in Asia: Philippine AirAsia Case. Air and Space Law, 40(3), 231-253.
Nugraha, R. A. (2016). AirAsia: Flying Cabotage Under Cloak in Indonesia and ASEAN. Jurnal
Hukum & Pembangunan, 45(2), 163-183.
Park, D. (2019). Courageous Office Workers Who Become Entrpreneurs, Ryanair, And Airasia.
World Scientific Book Chapters, 62-65.
Reddick, C. G., Chatfield, A. T., & Brajawidagda, U. (2016). Open government process and
government transparency in crisis communication: The case of AirAsia QZ8501 crash.
Information Polity, 21(3), 255-271.
Steven, A., & Purwanegara, M. S. (2015). Is There Any Possibility for Famous Local Bakery in
Indonesia to make Brand Alliance with AirAsia. Procedia-Social and Behavioral
Sciences, 169, 170-177.