Factors Leading to Malaysia Airlines Underperformance

Running head: LITERATURE EVIDENCE REVIEW
A Study of Factors Leading to Malaysia Airlines Underperformance
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1LITERATURE EVIDENCE REVIEW
Table of Contents
Component 1: Literature Evidence review......................................................................................2
1.0 Introduction.......................................................................................................................2
1.1 Background............................................................................................................................2
1.2 Purpose and problem statement.............................................................................................3
1.3 Significance of the research...................................................................................................4
2.0 Literature review....................................................................................................................5
2.1 Job security of employees..................................................................................................5
2.2 Staff motivation.................................................................................................................6
2.3 Over saturated market........................................................................................................8
2.4 Disengaged employees....................................................................................................10
3.0 Conclusion...........................................................................................................................12
3.1 Implications for further research.....................................................................................12
3.2 Research questions...........................................................................................................12
3.3 Research objectives.........................................................................................................12
3.4 Research framework........................................................................................................13
References......................................................................................................................................14

2LITERATURE EVIDENCE REVIEW
Component 1: Literature Evidence review
1.0 Introduction
Surviving in the highly competitive and fierce market is difficult business organization for
any business sectors. According to Wang, Bonilla and Banister (2016), the rise of competition
within the business industry have become evident due to increased number firms offering similar
services and products. As they have similar things to offer, being competitive provides an
opportunity to attract new customers, retain existing customers, expanding business and venture
into new business areas. Effective strategies, meeting the minimum criteria and offering
attractive deals allow business organizations to ensure effective performance. However, on the
other hand, underperformances by the business organizations are becoming evident if they are
unable to cope with the changing market trends and incorporate those within their business
strategies (Starkie 2016).
In this literature review section, the underperformance of Malaysia Airlines is studied by
reviewing the challenges the airline company faced in the past. Various factors have been
identified that has led to the underperformance of Malaysia Airlines that has questioned the
survival of the company in the aviation sector. The different factors that has been identified to be
the major factors that has resulted in the underperformance of Malaysia Airlines are job security
of the employees, tough competition, failure to conduct safety checks leading to disasters and
lack of customer considerations.
1.1 Background
Malaysia has its origin in the Malay Kingdoms whose capital is Kuala Lumpur that has
Malaysian as the official and national language. However, English is a recognized language in

3LITERATURE EVIDENCE REVIEW
the country with ethnic groups such as Indian, Chinese and Bumiputera as the majority. Malaysia
is ranked 9th in the world for tourist arrivals and according to the Travel and Tourism
Competitiveness Report, Malaysia ranks 25th out of 141 countries, that is the fifth best in Asia.
This suggests higher demand and need of having a secured aviation industry and companies.
Malaysia Airlines is one of oldest found and operating airline company in Malaysia whose
underperformance is studied by conducting this literature review (Ft.com 2019).
Malaysia Airlines was founded on the 1st May 1971 and started operating on 1st October
1972. This airline operates flights from Kuala Lumpur International Airport along with
secondary hubs in Kota Kinabalu and Kuching to destinations throughout Asia, Europe and
Oceania. Malaysia Airlines is the flag carrier of Malaysia and also a member of the one world
airline alliance and headquarter of Malaysia Airlines is located in Kuala Lumpur. The existing
workforce of Malaysia Airlines is 14,000 with a net income of 60 million MYR and profit of 18
million MYR. The different subsidiaries of Malaysia Airlines are Firefly, MASwings and
MASkargo with a fleet size of 81 operating within 64 destinations. The Malaysia Airlines has a
history of accidents and disasters that has resulted in the underperformance of the company in
the aviation industry. Previously, the aviation sector had limited companies offering flights that
have changed recently. In today’s aviation sector, competition has increased greatly, as rise in
the number of business organization in this sector has been noticed (Shahzadi et al. 2014).
Therefore, there are different factors that have led to the underperformance of the Malaysia
Airlines.
1.2 Purpose and problem statement
The purpose of the literature review is to study the factors leading to Malaysia Airlines
underperformance. Continuous and consistent issues have been identified in respect to Malaysia