AirAsia was founded in 1993 by Malaysian government as a second airliner to the major national air company MAS (Malaysian Airlines) and AirAsia started operating after three years on 18th November 1996. During the following 5 years, AirAsia failed every year to bring profit, therefore AirAsia had a great debt of about USD $ 37 million in 2001. However, this time is the time when the real story of the largest low-cost airlines began. In 2001, Dato’ Sri Dr Tony Fernandes with partners Dato’ Pahamin Rejab (former chairman of Air Asia), Dato’ Kamarudin Meranun, and Dato’ Aziz Bakar purchased the AirAsia from Malaysian owner HICOM Holdings Berhad (now known as DRB-HICOM Berhad), for a symbolic price RM1 (USD 0.25 cents), and agreed to close the debts of the company. (AirAsia Annual Report, 2008, p.3)
They started with an innovative goal to make air travel cheaper and more affordable to people that “Now Everyone Can Fly”. AirAsia was re-branded and re-launched and started new life with two Boeing B737 planes, approximately 250 staffs and had only five destinations to Kota Bahru, Kota Kinabalu, Kuching, Labuan, Langkawi and Penang. According to AirAsia website, after 10 years Air Asia has around 100 air planes and flies to more than 60 destinations from 23 countries. Additionally, Air Asia operates more than 3,500 flights a week and has around 8,000 staffs. In 2009 AirAsia ferried more than 22 million passengers and AirAsia is ASEAN (Association of South Asia Nations) carrier. (AirAsia Annual Report, 2009, p.4). The Air Asia subsidiaries are the likes of Thai Air Asia, Indonesia Air Asia, Viet Jet Air Asia and Air Asia Red Tix. Meanwhile, Air Asia associate companies are Air Asia X, Tune Hotel and Tune Money.
AirAsia Mission, Vision & Values
Basic Principle of AirAsia
The founding principle of AirAsia is to be aware at all times that we are engaged in a business where the responsibility of peoples’ lives is in our hands. We safeguard that responsibility through the safety and quality of our operations. We operate with the highest level of integrity, striving to exceed industry standards in a proactive manner while doing so with respect to others and the environment.
Safety Values of AirAsia
The safety values of AirAsia are:
• Provide a product with safety and quality as our first goals.
• Do our job with the highest level of integrity.
• Prepare our employees through first-class training.
• Provide equipment that is well maintained.
• Select contractors, vendors and suppliers who meet our values.
• Value oversight from regulators and other organizations that enhance our system through checks and balances.
• Embed an ethical culture by maintaining openness with regard to safety and quality.
• Embed a continuous improvement ethos by learning from aviation industry experiences.
• Maintain a high level of environmental consideration in all of our activities.
This basic foundation for doing business allows us the pleasure of serving our guests.
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.
• To be the best company to work for whereby employees are treated as part of a big family
• Create a globally recognized ASEAN brand
• To attain the lowest cost so that everyone can fly with AirAsia
• Maintain the highest quality product, embracing technology to reduce cost and enhance service levels
• Safety conscious
A safe airline is a happy airline. Our guests’ safety is our primary concern so we do our jobs with care. Because where safety is concerned, every little thing matters.
It’s a warm and friendly feeling to have, so we take pleasure in caring for our guests in ways that make them feel at home.
Being passionate means going the extra mile to achieve a purpose much larger than ourselves. They say passionate people can change the world and that’s something that’s very close to our hearts.
• Full of integrity
We believe everything that is worth doing, is worth doing right. It’s about us doing the right things at all times.
It means one team, working together towards a common goal. Whether it’s meeting our 25 minute turnaround time or making sure we keep you connected to the best destinations at the lowest prices, we do it as a team. All for one. One for all.
Fun means we celebrate life. It means we laugh louder, our smiles are wider, and we can be our own unique selves. We’re a sociable bunch and we enjoy sharing ideas and solutions to make things even better. After all, fun is meant to be shared.
The organizational structure of geography divide the workers by geographical area designated as below at different part of its branches operation. It was formed on the request of customers who are far away or outside an organization’s operations centre. The organizational structure of geography in operation among different staff is responsible for carrying out business activities in designated locations. The chart below shows an example of the organization of geographical structure. I have also presented the advantages and disadvantages of the organizational structure of geography adopted by The Air Asia Management.
In this geographic structure, units and divisions based on the places and the geographical area. This structure is suitable when companies or offices operate in many different geographical areas in which the state, religion and country. In addition, the geographical structure is the coordination of work and workers in the unit or where different parts are all responsible for each of the organization or activity in a specific geographical area. Based on the geographical structure chart of the Air Asian Management, it has expanded its production in some specific geographical area. The advantage gained is the company able to expand its business across borders including financial markets, social relationships and the resulting product or products to the local market. In addition, the company is able to foster a closer relationship between places worldwide. The company is also able to expand the understanding and friendship between the peoples of the world with opportunities for personal conversion that is progressively emerged. Thus indirectly the company has formed or able to meet its own slogan which is “Now, Everyone Can Fly”. In addition, the company is also able to improve the standards prescribed or used in the ranking of global requirements such as the standards prescribed or used in the ranking of global requirements such as copyright law. The company on the other hand is also able to shape the universal’s value and get the technology needed to help in spreading its market (marketing) throughout the world. The company is also conducting management activities between the border and the processes of development which will be adopted when the emergence of a global market in the future. In addition, these companies are also more frequent use of advanced technologies because it often built connection or get connected between the borders and to develop a global telecommunications infrastructure
ADVANTAGES OF GEOGRAFIC STRUCTURE
1) The whole organisation is able to use the expertise of all staff in ‘worldwide’ speaking according to the geographical location of the organization.
2) Products and services can be produced and marketed to different countries thus, make marketing job easier and effective
3) It is able introduce the organization to the world.
4) The organization becomes larger.
5) It can reduce organisation costs by putting the resources of the organization closer to the geographical area specified.
DISADVANTAGES OF GEOGRAFICAL STRUCTURE
1) There might be difficulty in coordinating the departments in the geographical area because its location that is far from each other.
2) Lack of control might occur to each geographical department of the organization
3) Redundancies can happen
4) It cannot guarantee the full loyalty of employees to the organisation
5) The existence of a change in products (travelling) and services as cultural factors, physical and weather
In a company nowadays, general management engaging in the four major functions of which is planning, organizing, leading and controlling. The process of achieving organizational goals may not sufficient and supportive for the organization succeed in the world of complex environments. It concerns about the process to manage the company internally but do not concentrate more on creating competitiveness regarding environments affecting the organization. Even companies adopt general management to sustain profitability by reducing the defects or costs, and improving operations process in order to increase productivity, they may not succeed in the competition because they perform only similar activities better than competitors but do not create distinctive competitiveness. Additionally, they perform only operational effectiveness but not strategy. Operational effectiveness and strategy are both essential to superior performance but they work in very different ways. Strategy is about competitive position that the company performs different activities from rivals or performing similar activities in different ways. To learn how the companies create strategies and put them into action, the executives or strategists should examine carefully an aspect of strategic management. Moreover, the organization or company nowadays is faced with constantly changing external environments and needs to ensure that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment. Organizations or companies do not exist simply to survive in the market place but want to grow and prosper in a competitive environment. In order to make sense of what is going on around them, firms must undertake an analysis of their external and internal environment. To understand and how take an action about external and internal environment, a company needs to support themselves with a good strategic management.
Because of this reason, AirAsia need to consider a strategic management as the important things in their company. The strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully. AirAsia company needs to consider and stress to a strategic management because the globalization. The globalization consideration impacts virtually all-strategic decisions in a company. The globalization also forced AirAsia Company to survival for business. To see and appreciate the world from the perspective of others has become a matter of survival business.
The underpinning of strategic management hinge upon managers gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide. The price and quality of firm’s products and services must be competitive on a worldwide basis, not just a local basis. The globalization makes a rapid change in the business environment. Every company has a same chance and opportunity for doing their business. For those company doesn’t aware and take this as important consideration, they will failed to compete with their rival or competitors in their business. Moreover, the strategic management becoming important due to the following reason is because the rapid development in E-Commerce. Nowadays, E-commerce is becoming a business tool. E-commerce also has become a vital strategic management and allows a company to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness, improved products, and higher profitability.
In conclusion, Air Asia is need to aware and consider with the strategic management. The reason of the airline industry is a unique and complex industry, not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully, and the last one is because the effect of globalization and E-commerce becoming an effective tool in a company nowadays.