LEADERSHIP AND THE MANAGEMENT OF CHANGE AIRASIA BHD MGT 6444 ASSIGNMENT SARAH KAMINI A/P KUPPUSAMY 0315504
LEADERSHIP AND THE MANAGEMENT OF CHANGE MASTER IN MANAGEMENT MR CHIN TUCK PIEW
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TABLE OF CONTENT 1. INTRODUCTION
page: 3
1.1 ORGANIZATIONAL PHILOSOPHY
page: 4
1.2 LEADERSHIP STYLE & MOTIVATION
page: 5
1.2 NEXT LINE LEADERS
page: 6
1.3 CULTURES & VALUES
page: 6
1.4 MOTIVATION
page: 7
1.5 IMPACT ON LEADERSHIP
page: 9
1.6 SELECTION & RECRUITMENT
page: 10
1.7 MANAGEMENT OF CHANGE
page: 11
CONCLUSION
page: 12
REFERENCES
page: 13 2
INTRODUCTION AirAsia Berhad is a well-established organization in Malaysia. It is a listed on the main Board of Bursa Malaysia Securities Berhad since 2004. AirAsia Berhad is part of the AirAsia Group, a world-famous low cost airline that operates extensive networks both domestically and internationally. AirAsia pioneered low cost airfares in Asia and is now currently the largest low fare, no-frills airline in Asia. It is also one of the largest airlines in all of Asia in terms of passengers carried. AirAsia has also been voted the World‟s Best Low Cost Airline in 2009 and 2010. The airline was established by a Malaysian conglomerate in 1993 and commenced operations in 1996. Under the leadership of Tony Fernandes, the airline is flying high, and their vision is to be the largest low cost airline in Asia so that they can provide a low cost service that will allow the three billion people to fly to more destinations across the region. Hence, their mission is to be the top company to work in, where employees are treated like family. In this study, the leadership style is studied in order to see how the organization is operation in today’s era. This will cover organizational philosophy, leadership style, next line leaders, culture and values, motivation, impact on leadership, selection and recruitment and finally management of change.
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1.1 ORGANIZATIONAL PHILOSOPHY Every organization believes in building its own organizational philosophy or better known as the organization’s values and beliefs in the organization. Organizational philosophy is broken up into two parts that is the organizations vision and mission statement. This is important because a vision is a picture or view of the future. Something not real yet, but imaged. What the organization could and should look like. Part analytical and part emotional (Hashim, 2008). A vision is important to organizations because it deals with fundamental and major strategic issues that affect the future of organizations. For instance, it serves as an important guide and provides direction to the organization Meanwhile, mission statement important for an organizational by briefly describing why it exists and what it does to achieve its vision. This structure is important in defining the organization’s framework and in planning and guiding the organization’s work. In AirAsia Berhad, they use a philosophy that tells us “Now Everyone Can Fly”. This philosophy of low fares is aimed at making flying affordable for everyone. This clearly explains AirAsia Berhad aims to make travel easy, convenient and fun for its guest. However their vision statement 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”. For example AirAsia Berhad have shown statistically that Air Asia was named the World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax for five consecutive years in 2009, 2010, 2011, 2012 and 2013 and has been ranked Top 5 among the most recognized and admired airlines in the Asia Pacific Top 1000 Brands 2008 (AirAsia). Meanwhile, one of their mission statements is to be the best company to work for whereby employees are treated as part of a big family. This mission statement is practiced widely in the organization whereby all staffs until the baggage staffs has the CEO’s mobile number and is treated fairly.
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1.2 LEADERSHIP STYLE & MOTIVATION It is believed that there are some leadership styles without which an organization cannot survive. Every organization be it a church, college, university, hospital or business needs a visionary leader who can communicate a clear vision in a compelling way. Organizations that aren’t sustained by a captivating vision will eventually die (Hybels, 2002). Besides that, according to Kurt Lewin (1939), has identified different styles of leadership through research. There are various styles of leadership and the collective leadership styles include autocratic leadership, bureaucratic leadership, charismatic leadership, democratic/participative leadership, laissez-faire leadership, people/relations-oriented leadership, servant leadership, task-oriented leadership, transactional leadership and transformational leadership.
In the early study of
leadership, Barnard (1938) defined leadership as the ability of a superior to influence the behavior of subordinates and persuade them to follow a particular course of action (Kamisan & King, 2013). In AirAsia Berhad, the leadership style practiced by Tony Fernandes as the CEO of AirAsia is charismatic leadership. Despite having received various international awards and accolades for AirAsia and himself, Tony Fernandes remains a very down-to-earth and approachable boss who has a quick smile for everyone. For example, all the employees in AirAsia have Tony’s mobile number. Tony Fernandes was named FORBES ASIA’s 2010 Businessman of the Year and Forbes named him as a “single, charismatic pioneer”. He is undoubtedly a charismatic speaker as he speaks at a level that the layman can understand. In fact, from his dressing; a universal cap and ordinary shirt, he does not take himself too seriously despite being the CEO of a multi-billion-airline carrier. One of the leadership traits Tony Fernandes has adopted is ‘walk the talk’. This means that he tries he level best to mix around with his employees, whereby he has worked on the ground or in the cabin crew. This has made him to learned a lot from working on the airline himself. He makes business decisions based on his own experiences, observations and feedback from his crews. In the hospitality industry, a great leader must walk the talk. It is critical that he is seen with his employees and learned from ground experience. Staffs will then be appreciative of their leader and be motivated to do their best.
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1.3 NEXT LINE LEADERS Leaders are a person who influences individuals and groups within an organization as well as motivates them to achieve their goals (Kamisan & King, 2013). In AirAsia this is believed to be the biggest challenge because the organization’ s division is huge. In choosing the next line leaders in the organization is always an opportunity. AirAsia Berhad makes it very clear that any individual would like to join AirAsia you do not have to stay where you are, ten years down the road. There is always an opportunity awaiting for an individual to climb up the ladder. For an example that was shared during the interview was that when AirAsiaThailand started there was this woman who was hired as a flight attendant. A year into it she came and asked, “Tony, I would like to be a pilot. Is that possible?’ his response was, go sit through the classes. If you qualify I will hire you as a pilot.’ She passed. She became a first officer and subsequently she is now a full-time captain and flying the plane” This is how AirAsia chooses its next line leaders, as long you have the dreams and the passion to be the next leaders. This is a very different kind of practice adopted in this organization.
1.4 CULTURES & VALUES Culture is conceptual word; Culture is a set of values, beliefs, common understanding, thinking and norms for behavior that are shared by all members of a society. You cannot precisely define it, but you can sense it and feel it (Mobley, Wang & Fang, 2005). To have a strong and effective organizational culture, you will want to be asking questions like these: Do all employees in my organization have a common understanding of our purpose, strategy and goals? What are the core values in our organization and do all have a common understanding of these values?
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In AirAsia, corporate culture reflects Tony Fernandes’ own personality. The Group prides itself on building a strong, team-orientated corporate culture, whereby employees understand and subscribe to the Group’s core strategy and actively focus on maintaining low costs and high productivity AirAsia motivates its employees by awarding bonuses based upon each employee’s contribution to AirAsia’s productivity, and expects to increase loyalty through its ESOS [employee share ownership scheme] which will be available to all employees. The Group’s management encourages open communication that creates a dynamic working environment, and meets all its employees on a quarterly basis to review AirAsia’s results and generate new ways to lower costs and increase productivity. Employee’s frequently communicate directly with AirAsia’s senior management and offer suggestions on how AirAsia can increase its efficiency or productivity. In AirAsia, loyalty is a crucial element that is looked into and encourages its employee’s to be always loyal, honest and work as a team.
1.5 MOTIVATION Motivation can be defined as “the attribute that moves us to do or not to do something” (Lai, 2011). In AirAsia motivation comes from many different aspects. There are so many of aspect that we can see in the organization such as letting know that the employees have done a good job itself is a motivation. Other than that, having the employees a chance to meet up with higher executives and present their idea or showing the progress of their work is another motivation to the employees. A high portion of AirAsia costs was the salaries and benefits for its employees. Hence, the airline implemented flexible work rules, streamlining administrative functions that allowed employees to perform multiple roles within a simple and flat organizational structure. In AirAsia’s case, a flatter hierarchy improved sped-up communication, resulting in an effective and focused workforce.
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AirAsia’s rumination policy focused on maximizing efficiency and productivity, whilst keeping staff costs at levels consistent with low-cost carrier industry standards. Although salaries offered to employees were below that of rivals, all employees were offered a wide range of incentives such as productivity and performance-based bonuses, share offers, and stock options. This motivated employees, giving them a sense of ‘ownership’. In AirAsia Berhad, it is identified they are using Herzberg’s Two-Factor Theory, which is hygiene and motivators factors. For the hygiene factors, in AirAsia Berhad they practice an open culture-friendly, whereby opinions are accepted. Moreover to the organization their employees come first then customers. Meanwhile, in terms of motivational factors the organization practiced job rotation for example during the interview the interviewer mentioned if a baggage handler would want to shift to an administration job, Tony Fernandes will agree in order they have the passion and dreams. Besides that, the organization recognizes employee’s needs (empathetic), for example “The aircraft maintenance people were complaining regarding their jumpsuit attire and asked Tony Fernandes could you redesign our attire. He said I spend a lot on designing this and therefore he tried it on. He saw the difficulty faced by the aircraft maintenance people”. This clearly shows that the organization looks at their employees needs and this will eventually motivate the staffs in the organization.
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1.6 IMPACT ON LEADERSHIP AirAsia Berhad presents a practicality and difficult perspective in the organization. Realism is the structure of allowing and limiting rules and resources that help frame the roles of workers in operation of an organization (Burns, 2009). In AirAsia Berhad, in effort to cultivate and affirm job enrichment within the responsibilities of the employees, a degree of power is given to them in order to improve the relations of their employees. Nevertheless this power is restricted to how and when is permitted to be used. It is believed that leaders in this organization are alert that this behavior encourages trust, flexibility and creativity enabling employees to integrate the company’s value. An interaction exits between the employees and the organization’s structure. This will result to less autocratic style with more people-oriented leadership style. In AirAsia Berhad, Tony Fernandes has set best examples of the culture and values in order for his employees to adopt the same values. The charismatic leadership style of influencing employees the values and culture of change, culture of rapid response, culture of being honest and straightforward, clarity of communication and teamwork indirectly results in its goals of delivering customer satisfaction as a reflection of its leadership.
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1.7 SELECTION & RECRUITMENT AirAsia Berhad recruitment and selection of employees in the organization include internal sourcing, external sourcing, third-party to source competent and experience candidate to join the organization. Internal sourcing here basically recruits employees within the organization. Reviewing the performance of the employee within their existing teams does this. Internal sourcing help in terms of time and expenses that include advertising or background checking on new employees. In AirAsia Berhad internal sourcing is mainly used as they create opportunity for its employees. Internal sourcing helps to cultivate loyalty and equality among each other in the organization (Richason IV, 2013). Moreover, another strategy used for selection and recruitment in the organization is via external sourcing. External sourcing attracts different and diverse selection to the organization although it may attract both experience and inexperienced candidates. Besides that, third-party sourcing such as JobStreet.com. Third-party sourcing uses different methods in selecting candidates for the organization including background checks, arranging interviews and matching candidates to the job. Interviewing is another method used by the organization in order for a better selection and recruitment In AirAsia Berhad, their standards of selection and recruitment are very high, and they have implemented programs in order to select a good candidate with good attitude. According to Wan Ezrin, the group people strategy mentioned during the selection process they look for candidates that are fun, loyal and has a vision. Once the candidates have been shortlisted these candidates are trained, appointed classes to attend, sent to leadership campaigns thus receive coaching and counseling. The organization uses the key performance index to evaluate the employee’s performance, this is done twice in the year whereby to ensure they are following the goals of the organization.
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1.8 MANAGEMENT OF CHANGE It is said that employees that is trained and disciplined in AirAsia Berhad are constantly reminded to face changes to remain in the competitive market. Through organizational learning employees are trained and encouraged to learn as they make improvements, amending and making corrections wherever whenever it is required of them in AirAsia Berhad. Based on systems theory, it states that organizations are open systems and is open to the environment and external factors of personnel and resources (Scott, 1987). AirAsia Berhad has to regulate and control processes to keep these processes stable in order for good performance. The organization put is effort in providing opportunities to it employees and readily resources in order for quick response, creative thinking and critical thinking. However, researchers criticize that difficulty arises in relating organizations structure to performance and there is no agreed definition of ‘good performance’ (Mansfield, 1984). AirAsia Berhad strongly believes in multitasking system and is introduced in various workstations to empower the team to self-sustained on their resources in order to operate efficiently. Management of change is important to be understood in this world of globalization in order to deliver employees competency skills in their respective fields for the better.
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CONCLUSION There are many diverse definitions of leadership and it is believed leadership is a rational and practical approach of influencing followers. The leadership and management style of AirAsia Berhad in real life mainly look at the basic skills and dependent towards the environmnet. This study helps to understand leadership in practical way rather then theory. It explains how this successful organization motivates and retains its employees as well as training employees nurturing them to incorporate values required to lead a large organization that values philosophies and culture of employees in complex situations in the generation of constant change that is required in order to survive. The culture and values practiced by AirAsia Berhad have brought the industry to a next line. Hence, the leadership style practiced in the organization has made a tremendous outlook and rapid response that allows flexibility and rejects the classical leadership styles of autocracy in organizations. It encourages a workplace that satisfies and motivates employees to continue striving for excellence. The selection and recruitment process have positively shown employees passion and dreams in retaining in the organization. There is no leadership style is best in all situations as good leaders should be wise enough to choose the best approach in managing and handling team members. Hence, to be an effective leader, the leader should be very aware adapting and finding the best approach to any situation.
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REFERENCES
Interview Wan Ezrin, Group People Strategy Officer for AirAsia Berhad, Malaysia AirAsia
Berhad,
2013,
AirAsia
Berhad
[ONLINE]
Available
at:
http://www.airasia.com/my/en/about-us/hi-we-are-airasia.page. [Accessed 20th May 2014]. Burns, B. (2009). Managing Change (Fifth ed.). London: Prentice Hall. Hashim, M. K. (2008). Vision. In Strategic Management. Kuala Lumpur: Thomson Learning. Hybels,B. (2002). Courageous Leadership. Michigan: Zandervan. Kamisan,A., & King,B. (2013). Transactional and Transformational Leadership: A Comparative Study of the Difference between Tony Fernandes (Airasia) and Idris Jala (Malaysia Airlines) Leadership Styles from 2005-2009. Journal of Business Management, 8, 107-116 Lai,E.R., (2011). Motivation: A Literature Review Research Report. Available at: http://images.pearsonassessments.com/images/tmrs/motivation_review_final.pdf [Accessed 20th May 2014]. Lewin, K., LIippit, R., White, R.K. (1939). Patterns of aggressive behavior in experimentally created social climates. Journal of Social Psychology, 10, 271-301 Mansfield, R. (1984). Formal and Informal Structures. (M Gruneberg and T Wall ed.). Chichester: Wiley. Mobley,W.H., Wang,L. & Fang,K. (2005). Organizational Culture: Measuring and developing it in your organization. Available at: http://www.ceibs.edu/link/latest/images/20050701/1394.pdf [Accessed 20th May 2014]. Richason IV, O. E. (2013). Methods of Recruitment and Selection. Retrieved November 17, 2013, from Houston Chronicle: http://smallbusiness.chron.com/methods-recruitment-selection2532.html
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Scott, W. (1987). Organisations: Rational, Natural and Open Systems. Englewood Cliffs, NJ, USA: Prentice-Hall.
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