BACHELOR OF PSYCHOLOGY WITH HONOURS

YEAR 2021

MPU3223_V2

ENTREPRENEURSHIP
TABLE OF CONTENTS

Introduction ………………………………………………………………………….…. 2

Malaysia Airlines Companies ……………………………..……………..………......3 -

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The Macro Environmental Factor …………..…………………………………..……4-

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The Pandemic Outbreak Affect The Airline Companies……………………………..7

Recommendations To Sustain Business ….………………………………………..…..8

Summary …………………………………………………………………………….....8-
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Reflective Report ……………………………………………………………………..…9

REFERENCES …………………………………………………………………………10

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Introduction

In the old days when we were little, as long as the “flying object” flew in the
clouds, we as a kid will get excited and even saying “Good bye” to that object known as
aeroplane. We love to see the airplane every now and then even at that time, we did not
know much about it. All we know is that the function of an airplane is a moving vehicle
in the sky that carries people flying from one destination to another. Hence, for the lucky
one they have already experience it since very young age yet some of us only able to be
the passenger when we effort.
In relation to the above, without realizing it, the aircraft was an amazing invention
and apparently has various types and services provided just like the group of land
vehicles. Its carries goods and passenger and move hundreds of kilometers overseas, hills
and jungles. Flying in the air is a pleasure and it saves time and makes the world smaller.
A little info about aero plane’s background is the history of the plane was
invented by Wright Brothers, which is Orville & Wilbur Wright in 1903. The plane
created last time doesn’t looks like today’s air plane. They started from scratch as in
starting from only one person can operate it, then create more power for two or three
people to fly the airplane. Then from flying 10 feet, Wright sibling adds the power to rise
as high as 800 feet. Day after day, experiments are conducted and experiences increase
over time improvements in the creation of airplanes. As times goes by, in this particular
field are already increasingly modern, airplanes are being improved further with more
sophisticated aviation equipment. Especially in terms of passenger additions, engine
upgrades and however safety are prioritized. (National Geographic)
Therefore, after the success of the aviation industry in this world, the first airlines
are from British and called Air Transport and Travel, Ltd. (Britannica) However, no less
for us in Malaysia. Not to mention Malaysia also created a history to have its own airport
and also has a great group of nationalities in the world of aviation. In connection with it,
in year 1947, Malayan Airways Limited (MAL) were established as well. However, in

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line with the times when many changes have occurred and in tandem with it, we also
have several airlines and types of airplanes in Malaysia. (Seatmaestro)
Thus, in this assignment I will tell you about the aviation industry in Malaysia.
The general factors of the macro environment in the aviation world, and as stated,
management in this field will change over time as such, I will share the information
related to the impacts on airlines stemming from the Covid-19 pandemic. However, every
good planning is from a good player, in lieu to that, I would like to indicate that this
assignment is included with recommendations to survive in the business, and sum up with
my reflection on this subject.

Malaysia Airlines Companies

Now the world has really grown rapidly, the economy is growing as well as
everything in the world is getting sophisticated and modern. Airplanes are no longer
something rare and even the average person is able to board a plane. Not only on work or
business, but to travel. Whether locally or overseas, airplane tickets are already
affordable for anyone. This is because more and more airplane companies provide
domestic and international aircraft such as Malaysia Airlines, AirAsia, Malindo Air and
FireFly. With the competition available, they had to offer cheap flight tickets to promote
and grabbed more passengers for their airplane services. Yet, the activities by the airlines
also increased as in they not only have the scheduled airlines, they also have the charter
airlines and also cargo airlines. This means that in the aviation industry they have various
branches of transactions using their advantages across countries where they cannot be
done with land or water vehicles. However, even though we have various airlines in the
country, they offer different services and have different targets. Whereas, the
achievements of each other's companies are also different that cause them to have their
own privileges.
As revealed by, the choice of the heart by the public on most well-known airlines
MAS and Air Asia, MAS is known as an exclusive airline, high-class and an international
flying route where Air Asia only focuses flying in Asia initially but now have the Air
Asia X for international route and objectivity to an airline that can be publicly boarded by

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offering cheap and affordable airline ticket prices. Again, as mention above, MAS
journey in Malaysia started in 1937, and year after year in line with the management
reforms and finally MAS remained until today from 1987. (Seatmaestro) As for Air Asia,
nor has Air Asia actually existed in Malaysia since 1993 but the airline was fully
optimized after Tan Sri Tony Fernandes took over in 2001. However, although these two
companies carry out similar business activities but they also offer different advantages to
their respective customers. The benefits customers receive are up to their respective
customer satisfaction. (Air Asia)

The Macro Environmental Factor

For this reason, in this management setting to make the best in the business is to
have enough knowledge to counter it. It is a process of value creation with something
new by concentrating the time and effort required, assuming finances included,
psychological, social and risky, and fulfilling personal satisfaction and freedom.
In line with the mission and vision that entrepreneurs will usually emphasize
weight on several factors to make decisions and intermediates taking on roles in the
business world are known macro environments. With this allows us to see the
opportunities or threats of an investment. It also means that this macro environment can
influence business decisions made over a long period of time. In the business world, there
are several elements of macro environment that are forced and need to be faced by all
trade i.e. economic, technological, social culture, politics and law, government, non-
government organizational, supplier and competitor. Through the macro environment,
analysis is carried out on an optional company to see the impact of the macro
environment on its organization. In addition, improvements are given as
recommendations to existing businesses. (Sindhuja S)
As an example, the economic environment plays an important role in the success
or failure of any newly explored business. The macro economic environment
encompasses the number of goods and services that manufactured, distributed, sold and
used. Entrepreneurs need to analyze this environment globally, nationally, and locally
where they do business. Entrepreneurs join shareholders to monitor, forecast and evaluate

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macroeconomic conditions. (Sindhuja S) For example MAS, they have faced many
challenges in the field of in this airline business. MAS from its emergence year has
changed its name 3 times and faced major changes as Singapore withdrew from the
collaboration. MAS does have glory days and continued increase their reputation until
MAS received more than 100 awards and was internationally recognized. But they
suffered significant losses in late 90’s caused by the standard operating costs and
mismanagement of top parties and management. As a continuation, the Government of
Malaysia, buying back MAS shares to save the organization. As for Air Asia, originally
Air Asia, which was established on 12 December 2001, the company's operations were
burdened with a debt of RM40 million. His rescuer was Tan Sri Tony Fernandez by
buying only RM1 each worth of Air Asia shares. (Air Asia)
Secondly the technology macro environmental factor, many new technologies
have been created to replace old technology. The rate of technological change is fast and
fast nowadays. Through these technological changes and innovations, more opportunities
and new markets could be created. (Sindhuja S) For example, previously when we
wanted to buy the air tickets we have to go to the airport. Everything was done
traditionally, including before boarding we have to que and checked in at the service
counter and we have the staff helping us to check in luggage as well. But now things have
change and has used a more sophisticated tools such as system than ever before. As a
result, a variety of new systems have been created and added existing services to a more
innovative and productive impact from technological development. Among them are
Information System, Yield Management System and Computer Reservation System. This
system works more effectively and efficiency.
Thirdly, the social cultural macro environment. (Sindhuja S) This environment
consists of institutions and other influences that influence the fundamentals, perceptions,
priorities and behaviour of a society. Social culture consists of two aspects, namely the
demographic aspect and cultural flow in society. Such in Malaysia has multiple races and
ethnics, therefore it has never been an issue or obstacle for the company to elute. There is
no such a favor and necessarily a work culture is carried out fairly.
Fourth, the politic and law and this part make the macro environment where each
different group will compete with the aim of gaining attention and resources.

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Entrepreneurs must accept and comply with the policies, laws and regulations in which
the business is conducted including laws in the areas of consumerism, employee
relations, the environment and competitive practices. (Sindhuja S) This environment can
influence an organization specifically affecting the objectives of the organization,
policies, decisions, legal restrictions and tax-related laws. Therefore, every airline
carrying passengers, parcels, cargo from one country to another or more countries, the
company must own Air Service License. It is a mandatory request in the Malaysian
Aviation Commission. With the availability of the license, only the company can operate.
Next, they must comply with other regulations set from time to time.
Fifth macro environment that must be consider in was the government
organization. similar to the politic and laws, the Government influence in granting the
license, formulate policies, preparing infrastructure, support services, identify businesses
operated in accordance with procedures, make licensing tax collection, business etc., and
any changes in the policy of government procedures affect the accreditation of the airline
companies. To the sixth, macro environment factor is the non-government organization.
Such as consumer associations, political organizations, business associations, welfare
organizations also influence businesses. (Sindhuja S) If they carry out protests or
campaign against a service that is not satisfactory for the passenger it may affect the sale
in the market. Person who in charge in this matter need to be sensitive to issues that are
sensitive to society such as environment, health, safety or hygiene to avoid any trust issue
between the airlines company with the customers.
Number seven of macro environment is the supplier. (Sindhuja S) To obtain
inputs such as equipment, machinery, staff etc. All this is available when entrepreneurs
interact with the external environment through the business exchange process.
Entrepreneurs will try to get good material quality - through the competitive advantage
between suppliers and also needs to gain trust from suppliers – so that the production
process is not affected in terms of the quality of goods or the time the goods are
marketed. Especially the inspection and supervision of aircraft that will fly for the safety
of the public and the safety of passengers. Beside in term of maintenance wise, MAS got
their own Maintenance Repair Organization (MRO), they have their own hangar and

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engineers to do the big and small check, they do everything within themselves for
engineering.
Last but not least number eight the factor of macro environmental is the
competitor. (Sindhuja S) The need to understand the activities of competitors and form an
effective business strategy. Just like Air Asia often look for opportunities to increase the
number of customers and expand the market. From year to year, they also actively fly to
the new countries adding up the choices of vacation destinations. The competitive
advantages for all the airlines company are the issued marketing strategies, affordable
prices, comprehensive promotion and efficient services. (Sindhuja S)

The Pandemic Outbreak Affect The Airline Companies

Each of the factors mention above plays an important role in the business world.
Enlightenment of macro environments can be further expanded in order to make good
plans for future challenges. There is something to expect but there are unforeseeable
things that will happen. Among them is like this current Covid 19 pandemic. We know
that this pandemic overnight has closed the economy as a whole. The borders are closed
immediately to prevent the spread of Covid-19 infection, therefore, airlines current
situation is like "A Bird With the Broken Wings" in 2020 and expect an economic
recovery in 2021. It is understood that the pandemic has an impact in airlines in terms of
both positive and negative. Among them was an airline that stopped flights immediately
resulting in no incoming financial flow on the business had been forced to discontinue
large numbers of employees. (Syahrul) In addition, the aircraft production company also
suffered losses when the airline canceled the contract/agreement to buy the new aircraft.
Meanwhile for Malindo, mostly Malindo aircraft are on lease causing the owner airline to
suffer high losses due to high monthly payments when Malindo stops leasing. (Emir
Zainul) Despite the significant impact given or newspapers, there are companies such as
Air Asia trying hard to sustains their staff, such as Tan Sri Tony Fernandez and his
partner decided not taking their salary during this period and some his Allstarts receive
the temporary pay reductions between 15-75%. On top of that, although passenger

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airplanes were affected but there was a wisdom on the other hand as air freight flights
profited from the decline in capacity saw increased revenue. (Air Asia)

Recommendations To Sustain Business

In the case of effect, we must focus on the solution too. There is always a way to
overcome these issues. The top management will have back up plan to sustain the
business. For an example, despite due to changes in air travel, airlines need to adjust
quickly to ensure their key performance (KPI) are met and also to retain their employees.
Just like the above stated, the businesses for cargo have increase. This is because the
pandemic has accelerated the long-term shift in structures towards ecommerce demand.
The percentage of cargo shipping has increased due to many online buyers from within
Malaysia or from other countries like China. Apart from the that, the second
recommended ideas are to expand the business. The ability to shift businesses in a crisis
is importance, especially when the pandemic hits and brings challenges to the global
economy. In this increasingly challenging situation, many Air Asia staff, known as
Allstars, have turned to new roles and learned new skills to meet current challenges. This
career shift was also facilitated by the establishment of Redbeat Academy, which was
initially set up to enhance and train their staff in the digital revolution, but now also helps
Allstars leverage their new skills in different sectors. (Air Asia) Aside from that, the third
recommendation I would like to mention here is, as an entrepreneur, money reserves are
important. Its advisable to have at least 2 years of case reserve so when emergency
happens you have the cash to back up the business. Lastly, is to focus on efficient of
operations. Your way as a business leader defends employee loyalty is a good strategy for
the long term. Employee retainment programmes will further strengthen individual
loyalty in its profession. Study the factors that can cause job turnover, even more so in

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critical tasks, where some occurred in the first year. Good relations within the
organization are necessary to guarantee the journey/operation of an uninterrupted
business organization and continue to grow. (Rachel Blakery-Gray)

Summary
Summarizing based on the system theory, a business organization cannot be
independent. A business organization is surrounded by macro environmental elements
that interact and influence its decision-making and behaviour. Before ones plan a
business strategy, they need to recognize, analyze and understand the state of the business
macro environment first. However, the business environment can be surveyed from two
perspectives, namely the macro business environment and the micro business
environment. For the most part especially on this pandemic, at least we are ready risen to
challenges following this pandemic and have upgraded own skills and ventured into new
roles created by companies to meet current demands and requirements. All things
considered, the recommendations ways to sustain in business, a problem will not be a
burden later on if you have the principle of lasting solid settlement adoption, and not to
the extent of choosing an instant solution for the short term. You need to be smart in
dealing with your business organization's problems, whether personally (person), process,
procedure, product and so on.

Reflective Report
All in all, in conclusion, I have learned and understood how the business started.
Among them are micro-environment and strategy plans to achieve business objective
goals. In this regard, the entrepreneurship subject has trained me to become a calibre of
entrepreneurs. Besides, I have also understood the financial mastery and financial
management of the business plus the various ways of businesses that I may want to
consider if I want to do one business in the future. Not forgetting too, an important topic
in this subject that I have learned is investment-linked and insurance. I observed the
assignment questions and reading in my sessions this entrepreneurial note had open my
eyes in the business world. Where I actually also make reflections and start to change my
way of work as I also run a side business while working. With the information I have,

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now I’m in line with the improvements. My suggestion in improving the quality of
learning in this subject is to hold a session of promoting their respective businesses in
line with the topic of networking. It is good to expose students while studying even so
only for lessons.

(2993 words)

ATTACHMENT
REFERENCES

Air Asia Group Berhad (n.d) About Us

About us — airasia newsroom

Encyclopaedia Britannica, Inc. (n.d) The first airlines.

https://www.britannica.com/technology/history-of-flight/The-first-airlines

Emir Zainul (February 4th, 2021) Lion Group Which Owns Malindo Air Manages
Resturcture Agreement Some Its Lessors
https://www.theedgemarkets.com/article/lion-group-which-owns-malindo-air-
manages-restructure-agreement-some-its-lessors-%E2%80%94-report

National Geographic (n.d) Taking Flight With the Wright Brothers

https://kids.nationalgeographic.com/history/article/wright-brothers

(Rachel Blakery-Gray) (Nov 13, 2018) 9 Money Management Tips To You’re your
Small
Business Afloat

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 https://www.patriotsoftware.com/blog/accounting/small-business-money-
management-tips/

Seatmaestro (n.d) History of Malaysia Airlines.

https://www.seatmaestro.com/airlines-seating-maps/malaysia-airlines/history/

Syahrul (March 11, 2020) Coronavirus Outbreak : Malaysia Airlines & Air Asia To Cut
Staff Salaries
Coronavirus Outbreak: Malaysia Airlines & AirAsia To Cut Staff Salaries
(hype.my)

Sindhuja S (n.d) Environment of Business : Micro and Macro

https://www.businessmanagementideas.com/business-environment/environment-
of-business-micro-and-macro/10135

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