Management- Malaysian Airlines

This report discusses the organizational purpose, structure, advantages and disadvantages of Malaysia Airlines. It also explores the reasons for its re-structuring and the lessons learned from the process. The report analyzes the kind of problems faced by the airline and the least appropriate decision-making style. It concludes by examining the leadership qualities of the CEO.

Running head: MANAGEMENT- MALAYSIAN AIRLINES
Management- Malaysian Airlines
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Table of Contents
Introduction................................................................................................................................2
Organizational Purpose..............................................................................................................2
Organizational Structure............................................................................................................3
Advantages and Disadvantages..................................................................................................3
Reasons for re-structuring Malaysia Airlines............................................................................5
Lesson Learnt.............................................................................................................................6
Kind of problem faced by Malaysia Airlines.............................................................................7
Structured Problem.....................................................................................................................7
The Least Appropriate Decision-Making Style.........................................................................8
Rational Decision Process..........................................................................................................8
Leadership Qualities of the CEO.............................................................................................10
References................................................................................................................................11

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Introduction
The given report is based on the organization named as Malaysia Airlines (Farooq et
al., 2018). To fulfil the requirements of the paper, the news article titled New Malaysia
Airlines CEO Christoph Muller is remarking the troubled carrier is taken into
consideration. The provided report stated how were the new Malaysian airlines structured and
what was the reason behind the same getting re-structured.
Organizational Purpose
Malaysia Airlines (MAS) is considered as an airline industry that was founded in the
year 1930 in the region of Singapore (Oum & Yu, 2019). The concerned airline's industry is
known to trace its history to the company of Malayan Airways Ltd. The same is recorded to
commence its first-ever flight in the year of 1947. The same however was known to
commence operation on 1st October 1972. The concerned airline industry initially operated its
fleets in the area of Kuala Lumpur International Airport and its secondary hubs of fleet work
in the region of Kota Kinabalu to the part of Kuching and the destinations that are spread
throughout the areas of Asia, Oceania and Europe. The Malaysia Airline is considered to be
re-structured in the year of 1st September 2015 (Ping et al., 2019). The industry under
discussion here in the paper is known to own two airlines of subsidiary- Firefly and
MASwings. The airline is significantly focused on working its fleet in the territorial regions.
The business consideration of Malaysia Airlines in review with its freighter flights operation
is recorded to work along with its sister company MASkargo. This company handles as well
as manages the freighter flights and the cargo holding capacity of the passenger fleets
connected to the Malaysia Airlines. The primary aim of the concerned industry since its
beginning was to furnish the citizens of Malaysia with the best and proficient air transport
synergy and also that the same would enhance the paradigm of the whole country all across

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the globe. In this connection, a considerable number of achievements have been received and
experienced by MAS as the same focuses on providing its customers with outstanding and
efficient services.
Organizational Structure
As examined by the help of the organizational structure as shown in the figure given
in Appendix B, it was analyzed that the organizational structure of Malaysia Airlines is
recognized to be a blend of functional as well as divisional structure. This kind of divisional
and functional structure is termed to be dividing the organization vertically into several
functional groups within the different employees that belong to the same specialities. They
are considered to be working together in the concern of supporting the entire organization's
goals and objectives. Along with this, the organization is divided vertically, and this division
is related to subjects that the organization working into, for example, the product line, the
projects as well as the geography that has to be planned in the organization.
Advantages and Disadvantages
As stated by Cooper & Burrell (2015), there are two sides to every form of an
organization’s structure. In this connection, the given report examines that the organizational
structure followed by Malaysia Airlines has its own advantages as well as disadvantages. The
same are specified as below.
Advantages
Segregation of work
The decision making process of the concerned airline industry is considered to be
reliable and effective as the same is divided into different divisions with different specialities
of people they are skilled for working into. This allows the firm to have a segregated team of

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qualified people into diverse structural background handling various tasks and activities.
Thus, the departments of work are separated as per the required team of work, and the work
process becomes more convenient.
Co-ordination of activities and learning
As examined above in the report that the organizational structure of Malaysia Airlines
is divided as per the specialization of skills and talents, the co-ordination between the team
members remain smooth and does not get interrupted with the work process of other working
teams and work plans. Thus, the effectiveness of the needed activities increases and the
different teams can undergo the synergy of better learning and understanding about their part
of tasks and activities they need to perform.
Disadvantages
Does not foster proper communication
Although the organizational structure followed by Malaysia Airlines allows the same
to segregate the different groups of people into their specifications of work, the same fails to
foster the productive process of communication between different groups of people working
at a different level in the organization (Rose, Awang & Yazid, 2017). Thus, the means of
effective and efficient communication is disregarded between the segregated team members
as they are not brought into a communication phase amongst each other.
Lack of integration
As examined in the above pieces of illustration, it is clearly understood that the
concerned company of Malaysia Airlines lacks the synergy of effective communication
between the different segregated groups of team members. This, in turn, also brings a lack in

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the integration for the various functions and activities of the organization as well as the
departmental functions of the firm that leads to inefficiency in the same.
Reasons for re-structuring Malaysia Airlines
Based on the examination of the given article, the significant reasons analyzed behind
the re-structuring of Malaysia Airlines are specified as below.
The financial losses suffered by the company
It was examined that the concerned airline's industry of Malaysia had been
undergoing a substantial financial loss in its business proceedings (Seow et al., 2017). In this
connection, an annual economic loss of 1.17 billion (A$380 million) was recorded in concern
with the Malaysia Airlines in the year of February 2014. The higher costs and the ineffective
pricing strategies of the airline company had been one of the primary reason is that it lied
behind its peer competitors in the concern of setting its pricing strategies been imposed on the
passengers. This led to the shift of the customers to other airline companies, and thus,
Malaysia Airlines had to bear a huge loss for the same.
The inefficiency of the employees
Study shows that the employees working in the managerial, as well as the lower level
in Malaysia Airlines, were not enthusiastic and responsible enough to take up the
responsibilities (Ilkhanizadeh & Karatepe, 2017). Not only this, but they were also recorded
to fail in working in accordance with the planned goals and structure of the organization. In
this concern, the airline industry under discussion here in the paper was recorded to recruit a
number of around 6000 to 20,000 employees, and along with this, the few capable existing
employees were re-employed in accordance with the new and non-union contracts and also
with new terms and conditions. Thus, a new management team was formed for the company.

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Lesson Learnt
Based on the re-structure efforts incurred by Malaysia Airlines, the lesson that is
learnt about the organizational structure is mentioned below.
 The business organization should not only focus on setting up the organizational
structure in a segregated manner but, also focus on employing and training its
employees to work at their best efficiency and enthusiasm. Employing the best skilled
and talented employees will help the organization to achieve its desired goals and
objectives (Craig, 2015).
 The pricing strategy of the company should be set according to the competition
prevailing in the market (Liu & Atuahene-Gima, 2018). This will help the company
remain ahead as compared with the competitors and gain a better competitive
advantage in the market.
 The customers should be provided with the best facilities, and also their demands
should be fulfilled at best possible time and the most effective manner (Hugos, 2018).
Not only did this re-structure strategy helped in learning the importance of the
organizational structure, but the same also helped in the examination of the way the re-
structure of the Malaysia Airlines helped the same in solving its problem.
 It helped the concerned organization to set its pricing strategies in a manner that
would benefit both the synergy of the customers as well as the entire organization.
 It helped the organization to segregate its efficient and inefficient employees.
 It also helped the firm to hire new and better-skilled employees.
 The changed structure of the organization helped the organization to gain a better
competitive advantage in the airline business market.

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Kind of problem faced by Malaysia Airlines
Based on the above-presented pieces of evidence, it is analyzed that the kind of
problem Malaysia Airlines was facing is termed an unstructured problem. The reason behind
the same is determined as:
 The issues occurring in Malaysia Airlines was regarding its employees. This depicts
that the problem suffered by the firm is unstructured as because the problem faced by
an organization that is related to human issues is termed to be an unstructured
problem. This is so because managing the human resources in a productive business
organization is determined to be difficult and a time-taking process.
 The second major issue faced by the organization was recognized as the issue of
financial problems. This kind of issue falls under the category of the economic
problem, and the same is also known as an unstructured organizational problem. This
is because resolving the economic issues turns out to be complex in nature and also
takes a lot of effort and strategies to make up the financial loss suffered by a firm.
Structured Problem
Along with the significant unstructured problem faced by the business firm of
Malaysia Airlines, the same was also known to suffer structured problem as well. Thus, as
examined by the help of study, an example of a structured problem faced by Malaysia
Airlines is explained as below.
Decision Making Problem
As discussed in the earlier parts of the report, it was examined that the organization of
Malaysia Airlines have failed in setting up proper decisions regarding its communication
process as well as pricing strategies. This clearly depicted that the organization was unable to
make appropriate decisions regarding its strategic plans and procedures that would help the

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same to gain the desired goals and objectives as well as profit and revenue. The decision
making process of the organization is stated to be a structured problem in the concern that the
same had a specific set of solutions that the organization could take into consideration for
resolving the same. The specific solutions included changing the pricing strategies according
to the market conditions and the nature of the customer the concerned organization deals
with.
The Least Appropriate Decision-Making Style
Based on the examination of the study, it was analyzed that the least appropriate decision-
making style for the concerned organization would be the style of directive form of decision-
making (Ibrahim, 2018). This statement can be proved relevant by stating that the
organization of Malaysia Airlines was suffering from the issues of decision making as well as
financial problem majorly. Thus, the resolving of these issues would include the
considerations of conceptual, analytical as well as the behavioural approach of decision-
making style. This is because managing them would need long-term results for the
organization, prior and proper data for the problem to be solved and analyzing a problem and
finding the best possible solution for the same, respectively. However, as stated by Johnson
(2017), the directive form of decision-making style includes the synergy of a leader taking
the decisions on one’s own perceptions, judgement and experiences. This may lead to biased,
diplomatic, ineffective as well as unclear decisions as the same would not involve the aspect
of considering the actual data and facts that have led to the issues in the organization.
Rational Decision Process
The first five steps involved in the rational decision making process in accordance
with Malaysia Airlines are determined as below.

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Define the problem
Malaysia Airlines in the first place needs to define the exact problem and issues that are to be
resolved in consider to find out a solution for the same. If an organization will not undermine
what issues the same is facing, how would the same be able to generate compelling ideas to
resolve the same.
Establish the Criteria
The second step that would be needed to handle is establishing the criteria for
resolving the issues. This states that the company needs to categorize the major and minor
issues and therefore, the essential criteria on how the same and on what priority they have to
be resolved.
Consider all the alternatives
After establishing the criteria for the issues, the organization has to look forward to
every possible alternative that would help it to solve the issue so that the organizations will
have the option to work with the matters upon and would not fail in the same.
Identify the best alternative
Considering the different alternatives available, the next step in the rational decision
making process for the company would be to choose the best amongst them. This is because
the same will help the firm to solve the issue in the best, cheap, fastest and effective way
possible.
Develop and implement a plan of action

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After determining the best possible alternative, the organization needs to decide upon
a course of action that would be required to be implemented in the concern of solving the
issue. Without implementing what has been planned for this long time would spoil the
complete decision process.
Leadership Qualities of the CEO
The CEO of Malaysia Airlines was determined to have the following two leadership
qualities.
 Controlling and Problem-Solving – The CEO of the concerned airline industry was
efficient enough to control the situation that was brought up in the firm and handle
them accordingly with the best possible solution at the earliest so that the organization
did not have to face further losses.
 Planning – The CEO was recognized to be good at, and that is why he could
effectively change the pricing strategies of the carrier and also re-structure the
existing employees of the organization and even hire new competent employees
within a short span of time.
The above-mentioned leadership qualities of being able to control and solve the
problem as well plan the required transactions to be held in the organization are vital because
every productive business firm has a high risk of facing several issues and problems that may
affect the efficiency of the same. Therefore, being able to control and solve the same helps in
maintaining the competitive advantage of the firm. When it comes to planning, everything
from the starting of a business entity to its winding-up needs the process of planning in the
same. Thus, both the qualities inherited by the CEO of Malaysia Airlines is termed to be
necessary.

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References
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An introduction. In For Robert Cooper (pp. 149-175). Routledge.
Craig, M. (2015, July). Cost effectiveness of retaining top internal talent in contrast to
recruiting top talent. In Competition Forum (Vol. 13, No. 2, p. 203). American
Society for Competitiveness.
Farooq, M. S., Salam, M., Fayolle, A., Jaafar, N., & Ayupp, K. (2018). Impact of service
quality on customer satisfaction in Malaysia airlines: A PLS-SEM
approach. Journal of Air Transport Management, 67, 169-180.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Ibrahim, F. (2018). Participation in Newsroom Decision-making: A Study in Role
Stress. Jurnal Komunikasi: Malaysian Journal of Communication, 11.
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