FACULTY OF BUSINESS & TECHNOLOGY

GLOBALISATION 4.0 (BBIB 3213)

JULY 2022
ASSIGNMENT COVER SHEET
Student Name Student ID
Kooberaan Ramm BIBM 2110-4169

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To be marked by:Dr Syed Kadir

Date submitted: Submission Due Date:31st August 2023

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 Table of Contents

1. Executive Summary……………………………………………………………..3-4

2. Introduction……………………………………………………………………5-6

3. Literature Review & Critical Analysis…………………………………………..7

-Benefits of Globalization

Diagram 1:Air Asia’s position in Asian Market………………………………..8

-Challenges and Adaptations………………………………………………………9

4. Discussion and Analysis

- 4.1 Marketing

Diagram 2:Marketing Mix/Strategies used by Air Asia…………………….…..10

- 4.2 Human Resource Management (HRM)………………………………………11

- 4.3 Operations Management

Diagram 3:indicates the number/spending on local suppliers by Air Asia………..12

- 4.4 Finance

Diagram 4:AirAsia Priorities, Goals and Skill Set Required for 2020 (AirAsia

Corporate Presentation, 2020)……………………………………………………13

5. Conclusions & Recommendations………………………………………………..14

6. References……………………………………………………………………15-16

7. Bibliography

8. Appendices…………………………………………………………………….17-20

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 Executive Summary

AirAsia, an innovative and pioneering presence in the Asia-Pacific aviation landscape,

has undergone a profound transformation fueled by the forces of globalization. This

report delves deep into the multifaceted impacts of globalization on AirAsia's

functions and operations, critically analyzing the strategies and adaptations the airline

has undertaken to thrive in an interconnected world. Through a comprehensive

examination of AirAsia's experiences, this report illuminates the symbiotic

relationship between the airline's quest for global competitiveness and the broader

currents of globalization. By dissecting AirAsia's journey and its responses to the

challenges and opportunities that globalization brings, this report offers valuable

insights for strategic alignment and future growth.

AirAsia's journey serves as a compelling case study in the evolving paradigm of

globalization, emphasizing the inextricable link between a globalizing world economy

and the strategies pursued by a trailblazing organization. As AirAsia continues to

forge its path in the international aviation arena, it exemplifies the profound

implications of globalization on business practices and international engagement. This

report presents a nuanced exploration of how AirAsia's story resonates with Hill's

(2015) conceptualization of globalization, where the intertwined flows of goods,

services, and investments transcend national boundaries, reshaping industries and

organizations alike.

Intrinsically tied to the narrative of globalization, AirAsia's journey exemplifies both

the benefits and challenges that arise from an interconnected global marketplace.

From its humble beginnings, the airline's meteoric rise has been inextricably

intertwined with its ability to harness the opportunities presented by globalization,

while also deftly navigating the complexities it introduces. By critically assessing

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these dynamics, this report aims to illuminate the interplay between globalization and

AirAsia's pursuit of excellence, demonstrating the airline's adaptability and resilience

in an ever-evolving global landscape.

Through a meticulous examination of the various dimensions of AirAsia's

globalization journey, this report seeks to provide a comprehensive understanding of

how the airline has been affected by the forces of globalization. The subsequent

sections delve into specific aspects such as marketing, human resource management,

operations management, and finance, offering an in-depth analysis of how AirAsia's

response to globalization has manifested across these critical functions. By

scrutinizing the interconnections between AirAsia's strategies and the wider impacts

of globalization, this report contributes to a nuanced perspective on the contemporary

challenges and opportunities faced by organizations in a globalized world.

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 Introduction

In an era characterized by unprecedented interconnectedness, globalization has

emerged as a driving force reshaping the trajectories of industries, economies, and

organizations. This introduction sets the stage for a comprehensive exploration of the

impact of globalization on AirAsia, a trailblazing player in the aviation sector. The

interdependence of economies, the fluid movement of goods and services, and the

convergence of cultures have together shaped a global landscape that presents both

remarkable opportunities and formidable challenges.

Against this backdrop, AirAsia's journey offers a captivating lens through which to

examine the intricate interplay between an organization and the forces of

globalization. The organization's evolution mirrors the transformation of industries in

a world where traditional borders are transcended, and the reach of businesses extends

far beyond their country of origin. As this report seeks to elucidate, globalization has

become the driving force behind AirAsia's strategic decisions, market expansion, and

operational excellence.

The subsequent sections of this report delve into the specific dimensions of AirAsia's

interaction with globalization. From marketing strategies tailored to resonate across

diverse cultures to the complexities of managing a culturally diverse workforce, from

the pursuit of operational efficiency to navigating the financial intricacies of an

interconnected world economy—each facet of AirAsia's operations has been impacted

by globalization's far-reaching effects.

As we embark on this exploration, it is essential to bear in mind Hill's (2015)

insightful definition of globalization as an integration of economies through cross-

border flows. This conceptual framework serves as the backdrop against which we

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critically assess AirAsia's endeavors. By delving into the nuances of globalization's

impact on AirAsia, this report contributes to a broader understanding of the complex,

dynamic relationship between organizations and the globalized landscape. Through

meticulous analysis, we endeavor to shed light on the strategies, adaptations, and

lessons that emerge as AirAsia navigates the currents of globalization, ultimately

providing a roadmap for organizations seeking to thrive in a world without borders.

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Literature Review & Critical Analysis

Globalization, as conceptualized by Hill (2015), signifies the transformation of

economies into an interdependent and interconnected web where the movement of

goods, services, and investments transcends national boundaries. This section delves

into the existing literature to critically analyze the impact of globalization on AirAsia,

shedding light on the benefits, challenges, and strategic adaptations the airline has

undergone to thrive in a globalized environment.

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Benefits of Globalization:

The literature highlights numerous benefits that globalization has bestowed upon

AirAsia. One of the prominent advantages is the access to new and diverse markets.

The airline's expansion into various countries has led to increased passenger demand,

presenting lucrative opportunities for growth and revenue generation. Morrison (2019)

underscores that the aviation industry has witnessed significant growth due to

globalization, enabling airlines to tap into previously untapped markets. This has

particularly been the case for AirAsia, which has leveraged globalization to become a

dominant player in the Asia-Pacific region.

Globalization has also facilitated operational efficiency improvements for AirAsia.

Lean practices, optimized aircraft utilization, and streamlined processes have enabled

the airline to reduce costs and enhance profitability. The airline's ability to adapt to

varying market conditions and consumer preferences across different countries

showcases its operational agility, a crucial trait in a rapidly changing global

environment.

Diagram 1:Air Asia’s position in Asian Market

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Challenges and Adaptations:

However, globalization has not been without its challenges. The cultural diversity

across AirAsia's operational regions has necessitated strategic adaptations to ensure

effective marketing and customer engagement. Deresky (2017) emphasizes that

cultural nuances can significantly impact consumer behavior and response to

marketing messages. AirAsia's challenge lies in maintaining a consistent brand

identity while tailoring marketing campaigns to resonate with diverse cultures. This

challenge underscores the critical importance of cultural sensitivity and intercultural

competence in global marketing efforts.

The multicultural workforce resulting from globalization has also posed challenges in

human resource management. While a diverse team brings a range of perspectives and

ideas, managing cross-cultural dynamics requires continuous effort. Conflicts and

misunderstandings can arise due to differences in communication styles, work

practices, and values. AirAsia's emphasis on cross-cultural training and inclusive

practices reflects its commitment to harnessing the strengths of a diverse workforce

while mitigating potential challenges.

In operations management, AirAsia's globalization has necessitated the management

of intricate supply chains spanning multiple countries. Geopolitical tensions,

regulatory variations, and supply disruptions can disrupt operations. The airline's

strategic response has been the establishment of partnerships and alliances with local

suppliers. This approach not only enhances supply chain resilience but also fosters

collaboration and risk-sharing in an unpredictable global landscape.

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Discussion and Analysis:

4.1 Marketing:

Globalization has significantly transformed AirAsia's marketing strategies, enabling

the airline to tap into diverse markets and customer segments. The expansion of

AirAsia's route network across multiple countries has presented the opportunity to

cater to the needs of various cultures and demographics. This expansion has allowed

the airline to effectively harness the benefits of globalization, widening its customer

base beyond its home country, Malaysia.

AirAsia's marketing initiatives have been further bolstered by its innovative use of

digital platforms. The airline has leveraged social media, mobile apps, and online

promotions to engage with customers across different regions. These strategies have

not only facilitated direct interaction with passengers but have also enabled AirAsia to

tailor its promotional messages to the preferences of specific markets.

However, the challenge lies in adapting marketing campaigns to resonate universally

while respecting cultural nuances. The diverse cultures and languages within

AirAsia's operational footprint require a thoughtful approach. To address this, AirAsia

has embarked on multilingual campaigns and localized promotions. By ensuring that

marketing materials are culturally sensitive and resonate with local values, AirAsia

aims to overcome the barriers of cross-cultural communication.

Diagram 2:Marketing Mix/Strategies used by Air Asia

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4.2 Human Resource Management (HRM):

AirAsia's globalization journey has brought about significant changes in its human

resource management practices. The airline has actively sought to diversify its

workforce by attracting talent from various countries and regions. This approach has

enriched the organization with a wide range of perspectives and skills, driving

innovation and creativity.

Managing a culturally diverse workforce, however, requires ongoing effort. AirAsia

has recognized the importance of cross-cultural awareness and inclusivity. The

organization has implemented various strategies to foster an environment where

employees from different backgrounds can collaborate effectively. Cross-cultural

training programs, workshops, and cultural exchange initiatives are designed to

facilitate better understanding among employees.

AirAsia's commitment to diversity and inclusion extends beyond its internal

workforce. The airline's customer-facing staff is also equipped with intercultural

communication skills to provide a seamless experience for passengers from different

parts of the world. By emphasizing mutual respect and understanding, AirAsia seeks

to create a harmonious and inclusive work environment that aligns with its global

operations.

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4.3 Operations Management:

Globalization has prompted AirAsia to optimize its operations management strategies

to accommodate its expanded international route network. The airline's commitment

to operational excellence has been reflected in its lean practices and efficient aircraft

utilization, which have driven cost savings and improved efficiency.

However, operating in multiple countries has introduced complexities in managing

the intricate supply chains required to support international routes. Geopolitical

tensions, regulatory variations, and supply disruptions can impact the smooth flow of

operations. To mitigate these risks, AirAsia has explored partnerships and alliances

with local suppliers and service providers. Collaborative risk assessments, joint

contingency planning, and information sharing have been key strategies to ensure

operational continuity.

AirAsia's agility in adapting its operations to the global context has allowed it to

navigate challenges effectively. The airline's commitment to innovation and resilience

positions it well to capitalize on the opportunities presented by an interconnected

world.

Diagram 3:Indicates the number/spending on local suppliers by Air Asia

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4.4 Finance:

AirAsia's globalization strategy has led to increased revenues through expanded

market reach. By connecting different countries and regions, the airline has tapped

into new sources of demand, driving its financial growth. However, this global

expansion has also exposed AirAsia to the volatility of exchange rate fluctuations,

which can impact costs and revenues.

To manage these financial risks, AirAsia has considered implementing financial

hedging instruments. Such instruments, like currency forward contracts, can help

stabilize the impact of fluctuating exchange rates on the airline's financial

performance. Collaborations with financial institutions specializing in risk

management can provide valuable insights and strategies for effective risk mitigation.

Furthermore, AirAsia's financial success in the global marketplace depends on its

ability to adapt its pricing strategies to varying economic conditions and consumer

behaviors. The airline must carefully balance competitive pricing with maintaining

profit margins while offering value to passengers.

Diagram 4:AirAsia Priorities, Goals and Skill Set Required for 2020 (AirAsia

Corporate Presentation, 2020)

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Conclusions & Recommendations

AirAsia's globalization journey has propelled it into new heights, but the path is not

devoid of challenges. To maximize benefits, the airline should invest in cross-cultural

training to bridge communication gaps, establish comprehensive supply chain risk

management strategies, and explore financial hedging instruments to safeguard

against exchange rate volatility.The critical analysis of the literature underscores the

transformative nature of globalization on AirAsia's operations and strategies. The

airline's journey reflects the symbiotic relationship between globalization and

organizational evolution, where globalization serves as a catalyst for innovation,

growth, and adaptation. AirAsia's pursuit of operational excellence, market expansion,

and cultural sensitivity is emblematic of its ability to harness the benefits of

globalization while navigating its challenges.

The literature reveals that AirAsia's journey aligns closely with Hill's (2015)

conceptualization of globalization. The airline's expansion into new markets, adoption

of lean practices, and management of cultural diversity exemplify the

interconnectedness of economies and organizations in a globalized world. The

challenges posed by diverse markets, cultural intricacies, and supply chain disruptions

underscore the complexities that come with globalization. Through strategic

adaptations, partnerships, and a commitment to intercultural understanding, AirAsia

positions itself as a dynamic player in the global aviation landscape.

This literature review and critical analysis contribute to a holistic understanding of

how globalization has influenced AirAsia's functions, strategies, and operations. The

subsequent sections will delve deeper into specific areas such as marketing, human

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resource management, operations management, and finance, offering a more granular

analysis of the airline's responses to the globalizing forces.

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References:

Hill, C. W. (2015). Global business today. McGraw-Hill Education.

Campaign Asia. (n.d.). How AirAsia manages brand partnerships through events | CEI Analysis.
[online] Available at: https://www.campaignasia.com/article/how-airasia-manages-brand-
partnerships-through-events/452417.

Bibliography:

Deresky, H. (2017). International Management: Managing Across Borders and

Cultures. Pearson.

Morrison, W. M. (2019). The Evolution of the Airline Industry. Routledge.

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Appendices:

Appendix A: Financial Performance Data

Diagram 5: Financial Statement of Profit & Loss

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Diagram 6:Financial statement of Profit & Loss

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Appendix B: Marketing Campaign Examples

Diagram 7:https://www.digitalvidya.com/blog/air-asias-friendsy-social-marketing-

campaign-went-viral-case-study/

Diagram 8:https://www.nst.com.my/business/2018/03/342316/airasia-partners-salesforce-digitise-

customer-care

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Diagram 9:https://www.campaignasia.com/article/how-airasia-manages-brand-

partnerships-through-events/452417

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