FACULTY OF ACCOUNTING

MARA UNIVERSITY OF TECHNOLOGY (UiTM)

KOTA KINABALU, SABAH

MGT430

INTRODUCTION TO ORGANIZATIONAL BEHAVIOUR

CHAPTER 9: MALAYSIA AIRLINE SYSTEM (MAS) ORGANIZATIONAL

CHANGES

PREPARED BY:

NAME STUDENT ID

NUR SYUHADAH BINTI HAMIDUN 2021802618

NUR SHARZATTIE FITRIE BINTI RAHMAT 2021478904

NORAZIEHA NATIERAH BINTI MASRI 2021446414

IVY JOVIANA JOSEPH 2021674848

MOHD YUSRAN YUSUF 2020650726

PREPARED FOR:

PUAN DGKU ALMAHIRAH AWANG KEE

DATE OF SUBMISSION:

10th JULY 2022

TABLE OF CONTENT
 TOPIC PAGES

Acknowledgement 3

1.0 Introduction

1.1 Company Background 4–5

1.2 Mission
6

1.3 Vision

1.4 Objective

1.5 Product/Service

2.0 Issue Identification 8

3.0 Discussion 9

4.0 Suggestion/Recommendation 10

5.0 Conclusion 11

6.0 References

7.0 Appendices

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 ACKNOWLEDGEMENT

In the name of Allah, the Most Gracious, The Most Merciful,

Praise be to Allah, Lord of the Universe, we finally managed to accomplish this

assignment which is Organizational Changes for Malaysia Airline System (MAS). Without
his blessings, we wouldn’t have gone this far. This assignment can’t complete without effort
and co-operation from our group member, which consist of Nur Syuhadah Binti Hamidun,
Nur Sharzattie Fitrie Binti Rahmat, Norazieha Natierah Binti Masri, Ivy Joviana Jospeh and
Mohd Yusran bin Yusuf. We always work hard to produce a good assignment with our full
commitment and responsibility.

We also would like to take this opportunity to thank our MGT430 subject’s lecturer,
Madam Dgku Almahirah Binti Awang Kee for her support and advice in completing our
assignment. We appreciate to what she has done in explaining details of assignment and the
guidelines in the Google Classroom as well. May Allah reward her for all her efforts. This
assignment also had tested our abilities mentally and physically also sum up our knowledge.

Last but not least, we would like to express our thankfulness to Mara Technology
University (UiTM) Sabah Campus for giving us opportunity to conduct this writing report
assignment. Finally, an honourable mention goes to our friends and families for the support
and continuous encouragement towards us.

About all, to the Great Almighty, the author of knowledge and wisdom for his countless love.

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1.0 INTRODUCTION

1.1 Company Background

Figure 1.0 Malaysia Airline System (MAS) logo

Malaysia Airlines System Berhad is also known as MAS in short. MAS is founded in
1947 as Malayan Airways, but it has change its name as Malaysian Airline System in 1
October 1972. MAS is the flag carrier which is own by government of Malaysia. MAS
headquarters is situated at Sultan Abdul Aziz Shah Airport in Subang, Selangor. MAS
operates flights at its first base in Kuala Lumpur International Airport, and secondary base
in Kota Kinabalu.

Malaysian Airlines System Berhad is the holding company for Malaysia’s national
airlines carrier, one of the fastest growing airlines in Asia. Malaysia Airlines has two airline
subsidiaries, which is Firefly MASwings. Firefly operates scheduled flights from its two
home bases Penang International Airport and Subang International Airport. The airlines
focuses on tertiary cities although has recently launched services to Borneo from Kuala
Lumpur International Airport. MASwings focuses or inter-Borneo flights. Malaysia Airlines

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has a freighter fleet operated by MASKargo, which managers freighter flights and aircraft
cargo-hold capacity for all Malaysia Airlines’ passenger flights.

MAS are using this type of craft Airbus A330-200 and A330-300. Boeing 737- 400,
800 and 400/400. Malaysia Airlines operates a fleet of aircraft with two cabin
configurations. Malaysia Airlines B777-200ER fleet has a two configuration which is
Golden Club Class and Economy Class. Its B747-400 fleet has a three-cabin configuration,
also including First Class. Malaysia Airlines premium cabins and Economy Class have been
giving numerous awards for excellence in product and service delivery. From a small air
service, Malaysia airlines have grown to become award winning airline with more than
1000 aircraft, servicing more than 110 destinations across six continents. The slogan for
Malaysia Airlines is “Going beyond Expectations”. On 25 January 2007, Malaysia Airlines
launched MH Campaign which means Malaysian Hospitality.

Malaysia Airlines also practiced the online booking and buying to make their
reservation or purchasing way easier for passenger. With this online purchasing, the
passengers need to fulfil their details like the destination they want to go and the departure
place they want. The payment will settling via the online banking. Internet user can book
their air ticket, hotel, and train ticket and rent car via Malaysia Airlines Website.

MAS is a type brick and click company. This is MAS offer both offline and online
ticket booking systems. MAS allows customers to order air ticket and other services online,
and other services also provided. MAS also have its ticketing counter and office in big city
in selected state. The main products offer by Malaysia Airlines web-site is flight tickets.
Besides, it also provides car rental, hotel booking, booking railway ticket and holiday
packages.

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1.2 Mission

1. To provide air travel and transport service that rank among the best in terms of
safety, comfort and punctuality.

2. Make Malaysia Airlines one of the leading standard bearers for the airline
industry in term of safety, efficiency and quality of service.

3. To be a profitable airline

1.3 Vision

1. An airline uniquely renowned for its personal touch, warmth and efficiency.

2. To be the World’s five star value carrier (FSVC).

3. To be the airline of excellence.

4. Going beyond expectations

1.4 Objective

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 1. Highest level of safety.

2. Satisfy legal requirements.

3. Operations are conducted in the most efficient manner.

4. Drive structural cost management.

5. Ability to map efficiency in each area of operations

6. Position as benchmark in the aviation industry

1.5 Product/Services

Malaysia Airlines is the government-owned flag carrier of Malaysia. Malaysia Airlines

operates flights from its home base, Kuala Lumpur International Airport, and its secondary
hub in Kota Kinabalu. Despite a financial restructuring exercise in 2006, Malaysia Airlines
maintains a strong presence in Southeast Asia, East Asia, South Asia, and Middle East on the
Kangaroo Route between Europe and Australasia.

MAS’s non-aeronautical revenue sources include maintenance, repair and overhaul

(MRO), and aircraft handling. MAS has two airline subsidiaries which is firefly and
MASwings. It is one of only six airlines to be given a 5-star status airline by Skytrax. The
other services offered by MAS include engineering, hotel operations, catering, computerized

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reservation services, coach transportation, trucking and warehousing services, retailing of
goods, and tour and travel related activities.

For product under Malaysian Airlines, they offer three travel classes on its
international flight services including Economy Class, Business Class and First Class.
Domestic services within Malaysia typically only feature two classes (Economy and
Business). MAS’ premium cabins and Economy Class have won numerous awards for
excellence in product and service delivery.

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 2.0 Issue Identification

First, the operation management of Malaysia Airlines is inefficient. In 2014, the airline is
still having over 19,500 employees operating a fleet of 108 aircrafts, while Singapore
Airlines, and operates 103 aircrafts with 5000 fewer staffs. Under a collective agreement with
unions, the airline only allows its pilots to fly a maximum of around 800 hours a year, even
though the ministry of transport allows up to 1,000 hours in certain circumstances. This
results in the airline needs to employ more pilots than it actual needs, which is the reasons
more employees are needed to operate a nearly similar amount of aircrafts. In short, using
more economic resources indicate the operational cost of Malaysia Airlines is higher.

Another significant operation management issue is the inefficient planning and

decision
making. For example, the management team had signed a 25year contract with Brahim’s
Airline catering which provides catering on flight. Even if Malaysia Airlines is losing money,
they are unable to reduce the expenditure by finding cheaper alternatives as termination will
lead to breach of contract. Not to mention that poor cost management in other areas such as
maintenance, repair and air route planning also lead to poor performance of Malaysia
Airlines.

Last but not least, the financial management problems also indicate the management
issue of Malaysia Airlines. Other than the unnecessary operational expenditures mentioned
above which leads to financial loss every year, Abdul Aziz said that high salaries paid to
foreign top management, including the CEOs, chief operating officer, and commercial
officers which amounted to hundred thousand ringgit per month is also a reason the airline
bled. Typically, airline management tends to propose pay-cuts and shrink allowances, but as
MAS is one of Malaysia's largest state-backed employers, it is difficult to reduce the
excessive allowance and extravagant employee benefit.

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 3.0 Discussion

Based on our discussion, we'll suggest some solution for Malaysia Airlines Berhad to
consider as they work to enhance their services. First and foremost, we believe that the
management team should replace individuals who lack the skills and expertise necessary to
effectively perform daily operations in order to solve the problem of operational inefficiency.
In fact, as part of the restructuring process in 2014, Malaysia Airlines let go of close to 6000
workers.It didn't dive deep enough to address every legacy issue, though. Additionally,
training and development should be offered to employees in order to guarantee the quality of
the services rendered.To stay competitive in the market, effective training and development
initiatives should be started and carried out.

Besides, making sure Malaysia Airlines has the right people on its board of directors to lead
the airline, Khazanah Nasional Berhad should address the issue of ineffective planning and
decision-making in operation management. In actuality, the board of directors maintained to
include many of the same individuals despite suffering repeated losses. We believe that the
new individuals with innovative ideas and trying to cut capabilities have to be hired to
manage and direct the airline going ahead. It is preferable if the management team consists of
a mix of experienced airline industry leaders and experts in finance, accounting, and law.

Lastly, we believe that various strategies should be used to cut costs and boost revenues in
order to solve the financial management problems. To correct the high pay, the salary of the
entire board, management team, and staff should first be adjusted.In order to cut waste and
ensure a positive cash outflow, the operating expenditure should also be reevaluated to
decrease the allocation of each flow to those categories.
 4.Suggestion/Recommendation

1. Considered to take some actions in order to improve their services.

 It can fix and rebuild Malaysia Airlines company in Malaysia.
2. Resolve operation management issue is the inefficient planning and decision making.
 A wise leader in leadership and decision making can drive Malaysia Airlines to
be more successful.
3. Solve the financial management issue
 Strong finances can guarantee long term stability of the company.

In my opinion, the steps that need to be taken based on the three alternative solutions
mentioned above, Malaysia Airlines need to be considered to take some actions in order to
improve their services. This is based on the subject Operational Management under the
chapter of Quality Management (Chapter 10) which emphasizes quality management. This is
because, when Malaysia Airlines takes some actions in order to improve their services they
can resolve their various internal issues such as restoring their reputation to outsiders,
regaining the confidence of consumers to use their aviation services as well as recovering
their finances which has been a major issue since lately.
Not to mention, Malaysia also has to re-update their process strategy. It is also
important for them to start with a new look by introducing new strategy steps within their
organization to further enhance their airline service. In conclusion, Malaysia Airlines should
formulate a marketing to ensure Malaysia Airlines is still flying high.

5.Conclusion

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As conclusion, to sustain the improvement changing that be done in MAS, it must have a
good strategic structure. Corporate culture is most important in doing changing in
organization, because it can include how people in a company are likely to act in given
situations both inside or outside the organization. The corporate culture has been implement
in MAS is re-naming or re-branding the image of MAS; networking, alliance, strategic
planning; programme management office and communication will be renamed strategic
planning. It is influence service quality and the way in which people are treated, whether
customers or clients. In make the changes, MAS collaboration with AirAsia for strengthen the
position in airlines areas. The collaboration with AirAsia, to expose MAS try moved forward
to changing they position and the AirAsia try to help them to make changing in terms of
sharing knowledge, learning a new structure, re-branding, absorb new structure and values.
MAS try to continuous operational improvement and to do extremely well on three key
dimensions, there are commercial effectiveness, flight operations and cost management.
Managing change in MAS to help them to increase the productivity and performance for can
achieve goals of organization.

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