PRINCIPLES OF MANAGEMENT

SUBJECT CODE : BBCM1013

SUBJECT TITLE : PRINCIPLES OF MANAGEMENT

LEVEL : DEGREE

STUDENT’S NAME : ABDULLAH BIN OTHMAN

ID NO. : 202009040070

PROGRAMME : BACHELOR OF BUSINESS ADMINISTRATION

(HONS)

LECTURER : MASRI BIN ABDUL LASI

FACULTY : FACULTY OF BUSINESS

ACKNOWLEDGEMENT

I did survey on some companies in Malaysia before decide on what company

should I observe for my assignment report. Then, I finally choose Airasia Berhad in
Malaysia to study their organization management because Airasia have a great, expert,
and interesting organizations and also proven as a successful company in Malaysia.

Firstly, I would like to say thank you to my precious lecturer, Mr. Masri Abdul
Lasi for giving me this oppurtunity to write and also give a guide and encouragement
through the each process.

Next, I would want to say a big thanks to my cousin, for helping me out with
answering all my questions regarding Airasia since she has been one of the Airasia’s
staff.

Lastly, I could not express how much I appreciate my friends and my fellow
classmates for their endless support in doing this assignment. I really appreciate those
who helping me in direct and indirect ways.
TABLE OF CONTENTS

Introduction-Company Background………….………………………….. 1

Vision…………………………………………………………………….. 2

Mission…………………………………………………………………… 2

Objective…………………………………………………………………. 2

Company Structure-Organizational Chart……………………………….. 3

Culture Practice in the Company………………………………………… 3-4

Stages of Decision Making Used in the Organization…………………… 4-5

Staffing and Human Resource Management……………………………. 5-7

Management and Leader……………………………………………….… 8

Managing Organizational Change………………………………………... 9

Summary…………………………………………………………………. 10-11

References……………………………………………………………….. 12
INTRODUCTION

Company Background

A well known Malaysian low cost airline, AirAsia Berhad, is the largest airline by
fleet size and destination, where their operation headquartered at Sepang, Kuala
Lumpur International Airport (KLIA) Malaysia. In 1993, AirAsia was estabilshed and
it started the operations in 1996. It was first founded by DRB-Hicom then purchased
by its currrent Chief Executive Officer, Tony Fernandes from Tune Sdn Bhd in 2001.

AirAsia has two operating hubs which Low Cost Carrier Terminal (LCCT) is its
first main base that located at Kuala Lumpur International Airport. While secondary
hubs located at Kota Kinabalu International Airport, Penang International Airport and
Senai International Airport.

Suit its slogan ‘Now Everyone Can Fly’, AirAsia now carried around 10 millions
passengers just in a year. AirAsia X, Tune Hotel and Tune Money is a AirAsia’s
associate companies. Meanwhile Indonesia AirAsia, Thai AirAsia, AirAsia RedTix
and VietJet AirAsia is a AirAsia subsidiaries.

AirAsia proven as a succesful company which it has consistently winning the

world's best low-cost carrier award for 11 years in a row by Skytrax in international
travel and airline awards.

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Vision

AirAsia vision is to be the largest low cost airline in Asia and serving the 3 billion
people who are currently underserved with poor connectivity and high fares.

Mission

AirAsia mission are to be the best company to work for whereby employees are
treated as part of a big family, to create a globally recognized as a ASEAN brand, to
attain the lowest cost so that everyone can fly with AirAsia and to maintain the
highest quality product, embracing technology to reduce cost and enhance service
levels.

Objectives

The first objective of Airasia is to become the largest low cost airline organization
in Asia by provide services to 3 billion people. Second objective is to attain with the
lowest cost and lead to everyone can fly. The third objective is to maintain the product
quality and reduce the costs.

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Company Structure-Organizational Chart

Figure 1.1 shows the organisational chart in AirAsia Berhad structure.

Culture Practice in the Company

Business purpose of AirAsia is based on the company’s mission to be the best

company to work for whereby employees are treated as part of a big family. To better
combine the employees into the company, AirAsia offer stock options to the
employees to share with them the profit and interest brought by the fast growth of the
business which close relationship with the hard work has contribute by the employees.

The company also treats the employees as human capital through encouraging the
staffs to further develop their both hard and soft skills and do the job that they are
really interested and the company work hard at providing such opportunities. For

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example, AirAsia has provided training to employees and there are some stewardess
became pilots after the internal training.

Tony Fernandez introduced the work culture in AirAsia has made a big impact on
the growth of the organization as the employees were very happy to move forward in
the same direction. Being invested in his or her employees will show a leader as
concerned and considerate, more like a family in a business rather than just a worker
and boss relationship. Employees have been treated as family, they feel very proud to
be part of the team. Any ideas for the benefit of the organization are well accepted and
the management rewards these outstanding ideas.

Stages of Decision Making Used in the organization

In management or in the organization, decision making need to have a stage and

strategies because it is very important to make it competent and efficient in order to
build the effective solution. The first step that Airasia used in its decision identifying
the problem. For example, AirAsia has to make decision either to make it low fares or
not, or Air Asia wants to make two plans such upgrading its facility first or training its
worker first. So, the first step that AirAsia do is identifying the problem and find ways
on how to make a better decision.

The second stages that used by AirAsia is identifying decision criteria. To resolve
the problem that occured, this is the important factor to find a solution. For example,
AirAsia wants to be a globally recognized as a ASEAN brand. So, the second stages
AirAsia used is identifying the decision criteria in the aspect of time, location,
distance, price, and customer. This makes AirAsia dealing with long term plans that is
important for its growth and organization’s survival. For example, AirAsia have to
make a long term plan in order to attain its objectives based on economic instability
period.

The third stages of decision is developing the alternatives. For example,

AirAsia’s managers have to dealing with its operational activities issues in its
company such as the environment issues, system failure,and many more then AirAsia
would developing the best alternatives on how to clear these issues.

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 The forth stage of AirAsia’s decision making process is analyzing alternatives.
For example, AirAsia would list down all of its competitors companies such as
Malaysian Airlines, Malindo Air then they would evaluate and analyzing every
alternatives and would find out its advantages and disadvantages.

The fifth stage is selecting an alternatives. AiraAsia would choose which is the
best alternatives with the most advantages & less disadvantages. For example, with
the lowest fare, or with the location not far than 600km, or with the short times for
only 2-3 hours, it could make a more clients come to buy.

The seven stage of AirAsia decision making process is implementing the

decision. For example, Air Asia has decide on choosing to lower the fares. So, they
will make the chosen alternatives into the real action.

The last but not least, the eight stage of AirAsia decision making process is
evaluating the decision effectiveness. For example, Air Asia has lower its fares to
make more customer come to buy and purchase, in order to increase its profit. So, this
would monitor and provide a feedback on how well and how far the decision made
has been completed, either it is succesful or is there any corrective and adjustment
needed.

Staffing and Human Resource Management

In every organizations or company, staffing and human resources management

are the most important department especially when it comes to hiring, evaluating,
training, and compensating their employees. Furthermore, this department providing a
training and development programmes for all the employees in order to upgrade their
ability and skills in businesses purposes. This department also would attract newly
graduates from any universities and colleges to apply and join their management.

Besides, staffing and human resources management would handle a lot of the
things such as recruiting and benefits of mangement in the organizations. This
department work together with the management and assist them to developing a long-

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term strategies especially in the aspect of the growth and development for the
company. In addition, as everyone knows, human resources departments are usually
being a middleman which is between the employees and management in the
organizations.

Recruiting is one of the Human Resource Management Information System

(HRMIS) function. It is a process of identifying and hiring the best quality candidate
in organizations. Usually, big company such AirAsia would approve the challenge
about improving IS function in every year. The improvement purpose is to ensure the
company would be efficient at any rate. Choose with strictly way on the candidates
that has a type on fulfilling the requirement of the job refer to the candidates
certificate and previous experience. This IS would assist on choosing the candidate
that has a better experience and certificate. After get the chosen candidates, analysis
report would generated it to Human Resource Departmentfor the purpose of a better
decision making while choosing an employee.

For Air Asia staffing and human resources management, they used HRMIS
system. IS’s objective is to spot the talent resources in the organisation and also use to
maximize its effectiveness. A computer simulation involve in IS’s work force model,
so it would be the technique of simulation that use to evaluate the alternative of
human resource plans. In example for its new recruitment, transferring, project
feasibility, retraining and others. Besides, it would guarantee that AirAsia’s policies of
salary policies are applied in proper way so that the cost of the salariest are within a
limit of its budget.

There are four functions of AirAsia’s HRMIS system which is first is work
evaluation. With this function, once in a year, AirAsia would guide a formal
evaluations to each of its employees. AirAsia top management would reviewing and
discussing the job performance of each employess to ensure they did a good
performance. Its top management also naturally would preparing and presenting a
written evaluation to all of its employees and would make a copy of that evaluation to
keep and make records inthe personnal file of ots employees.

The evaluation objective is to distributes to the employees and supervisors about

the important purposes for them. For example, AirAsia’s employees can give a
feedback to their leaders about their performance quality, work behavior and others.

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While, the leaders can give a feedback to their employees based on their work
performance, opportunity, critique employees and others.

Second function is performance analysis. AirAsia iclude the formal and informal
data to assist the clients and the sponsors to determine and achieve their goals. The
components of a performance analysis are reading the annual report, interviewing the
sponsor, chatting about businesses in a group of customer service and others.

The third AirAsia’s HRMIS function is to build the quality of all the employees.
Human Resource Management in AirAsia has a big responsibility in recruiting and
employing talented employees. Whenver get employed and entering AirAsia, human
resource department in charge to all things from signing contract until paying the
salaries.

Lastly, the forth HRMIS function is work design. AirAsia used work design to
optimize the employees productivity. This company would reward their employees
personal achievement with the satisfaction from a greater sense of health, safety and
ergonomics. Work design is also known as Job design which define as a set of tasks.
To prioritize the jobs responsibilities, a well design integrates with goals and values,
that need to be clearly understood in organizations. The design required feedback
about the employees expected performance. Training requirements also provided in
AirAsia so that their employees recognize the tasks well and how to complete it in a
proper way.

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Management and Leader

Leadership is important in every organization that has a big scale of

responsibilities especially in leading the direction and building a good organisational
culture in the aspects of behaviors, values critical and rulesin order to achieve
organization’s objective, goals and strategies..

For AirAsia company, Tony Fernandes is a Chief of Executive Officer. He is a

very good leader that many individu has set him as an icon and example for
theirselves. His styles of being a leadership is not very clear sometimes as the
researchers has see him as an autocratic leader. In example, Tony Fernandes wants to
install the mechanism for the handicap people at zero cost. He did not make any
discussion with anyone. Thus, he adopts a ‘walk around’ management style.

Tony Fernandez’s foresight and vision has turned AirAsia to become one popular
airline brands in the world. Many researchers believes that the the strong leadership of
Tony Fernandez is a key to the successful of AirAsia. The leadership role brought him
to create a good culture in organizational. As the leader in his company, he is very
easy to approach especially to all his staff. The studies has noted that Tony Fernandez
believes in the current business scenario which is business has become more
competitive than before that having too much bureaucracy can slowing down the
business growth.

In addition, Tony Fernandez leadership maintains a non-hierarchy in his office in

order to optimize the importance of good relationship with all the staff. The
researchers said that he not believe in hierarchical structure but believe in talents in
the organization. He also inspired his employees to aim their dreams because he
believes that everyone have their own dreams. He strongly believes in teamwork and
he like to use a more transformational approach which optimize the importance of
having a good relationship with his employees.

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Managing Organizational Change

Organizations response to changes in different ways. Some company do the

diversity awareness, reengineering, quality and globalization. While the others
implement on productivity programs, acquisitions and mergers and complex alliances.
However, usually, all organizations dealing with the changes everytime when the
changes increasingly become more visible.

AirAsia view changes as their transformations. So they treat changes as a

determinant of inbuilt capacity to change. Besides, this company define the new
management style as the role played by the change leaders. The organizatins bring the
energy and commitment to the company as well as manage resistance, go beyond the
limits and question the system of their job details.

For AirAsia, tasks and evaluation is very important for any type of changes or
any type of actions to implement in an organization. It is because, it would assist to
make sure the program planning outcome is achieve the result at the same time. In
change processes, Air Asia used eight stage of process which is first establishing a
sense of urgency where it is important to overcome issues which can be done by
creating a strong reason why change is needed. Second, creating the guide of coalition
where it is common to build a team with the level of trust, the same power and shared
objectives in order to lead the change.

Third, develope a vision and strategy in the aspect of motivating people,

direction and helping coordination. Forth is communicate in the change vision where
understanding in any changing in the management, because it could give impact to the
overall change of implementation. Fifth, empowering their employees for broad based
action where this stage of process will focus on eliminating barriers and time
constraints.

Sixth, generate a short terms wins where it is important to stay focus on the
course as a major change would take long time. Seventh, consolidating a gaining and
produce more changes where using a short term wins. And lastly, anchor the new
culture where it is important to innovate and changing continuous manner.

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SUMMARY

I choose Airasia Berhad in Malaysia to study their organization management

because Airasia have a great, expert, and interesting organizations and also proven as
a successful company in Malaysia.

A well known Malaysian low cost airline, AirAsia Berhad, is the largest airline by
fleet size and destination, where their operation headquartered at Sepang, Kuala
Lumpur International Airport (KLIA) Malaysia. In 1993, AirAsia was estabilshed and
it started the operations in 1996. It was first founded by DRB-Hicom then purchased
by its currrent Chief Executive Officer, Tony Fernandes from Tune Sdn Bhd in 2001.

AirAsia vision is to be the largest low cost airline in Asia and serving the 3 billion
people who are currently underserved with poor connectivity and high fares. While
AirAsia mission are to be the best company to work for whereby employees are treated
as part of a big family, to create a globally recognized as a ASEAN brand, to attain
the lowest cost so that everyone can fly with AirAsia and to maintain the highest
quality product, embracing technology to reduce cost and enhance service levels.

The main objective of Airasia is to become the largest low cost airline
organization in Asia by provide services to 3 billion people. Second objective is to
attain with the lowest cost and lead to everyone can fly. The third objective is
to maintain the product quality and reduce the costs.

In management or in the organization, decision making need to have a stage and

strategies because it is very important to make it competent and efficient in order to
build the effective solution. The first step that Airasia used in its decision identifying
the problem. For example, AirAsia has to make decision either to make it low fares or
not, or Air Asia wants to make two plans such upgrading its facility first or training its
worker first.

10
 Staffing and human resources management are the most important department
especially when it comes to hiring, evaluating, training, and compensating their
employees. Furthermore, this department providing a training and development
programmes for all the employees in order to upgrade their ability and skills in
businesses purposes. This department also would attract newly graduates from any
universities and colleges to apply and join their management.

For AirAsia company, Tony Fernandes is a Chief of Executive Officer. He is a

very good leader that many individu has set him as an icon and example for
theirselves. His styles of being a leadership is not very clear sometimes as the
researchers has see him as an autocratic leader. In example, Tony Fernandes wants to
install the mechanism for the handicap people at zero cost. He did not make any
discussion with anyone. Thus, he adopts a ‘walk around’ management style.

AirAsia view changes as their transformations. So they treat changes as a

determinant of inbuilt capacity to change. Besides, this company define the new
management style as the role played by the change leaders. The organizatins bring the
energy and commitment to the company as well as manage resistance, go beyond the
limits and question the system of their job details.

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REFERENCES

1. https://airasiainformationsystem.weebly.com/company-background.html

2. https://artscolumbia.org/the-vision-and-mission-of-airasia-business-essay-6253-
59140/

3. https://ir.airasia.com/misc/corporate-structure-31oct2020.pdf

4. https://graduateway.com/airasia-organizational-culture/

5. https://www.essaysauce.com/leadership-essays/leadership-example-tony-
fernandes-ceo-of-airasia/

6. https://www.ukessays.com/essays/commerce/the-introduction-of-airasia-
commerce-essay.php

7. https://mivianstrategies.typepad.com/blog/2014/05/change-management-in-air-
asia.html

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