Airasia Management Essay

MGMT1136 ESSAY

The aim for any organisation these days is to be able to achieve profits and be able to maintain them. AirAsia is the largest low-cost carrier in Asia, and it has received this title through effective managerial approaches enforced by Tony Fernandes, the charismatic, egalitarian founder of AirAsia. He has successfully been able to turn a heavily indebted organisation into one of the most successful airlines in the world. He hasn’t been able to do this from his own ideas and knowledge and instead tried to grasp concepts from management techniques to help improve his company. His main focus throughout this experience is on his valued and loyal customers, and their satisfaction. He has consistently incorporated the use of classical approaches to management in his practice and by the success of the company you can tell this is paying off. He creates an inviting and pleasant atmosphere for his employees in order to increase productivity in the organisation, and applies concepts to maintain efficiency and productivity throughout the company as a whole. Productivity is the measurement of the efficiency of a worker at transforming inputs into useful outputs. Efficiency is the use of all input products to create the maximum output products; the ideal use is low input for great output. Having the main focus on employees has caused Fernandes to face issues due to his style of management. However, he has overcome these issues through the use of classical management techniques (Schermerhorn, et al., 2014). This case study was sourced through the textbook and these are the many ways he has and will, be able to adapt to improve his company.

Over the years, AirAsia has evolved from a heavily indebted government-conglomerate airline to the largest low-cost carrier throughout Asia, and classical approaches to management have played an important role in influencing this expansion (Schermerhorn et al., 2014). There are three subfields that define classical approaches and all are based on the assumption that people act rationally but each branch varying by having their own slightly different emphasis (Samson & Daft, 2012). These subfields include scientific management, administrative management and bureaucratic organisations. As a unity, these branches form an approach to management that focuses on the output, productivity and, efficiency of the organisation and its employees (Schermerhorn et al., 2014; Davidson, 2009). Since the takeover of AirAsia by the now CEO, Tony Fernandes, the company has allegedly prospered under his authority and control. There are many theories and approaches that may have contributed to the now thriving company, but the classical approaches to management seem to have played a distinctly important role in allowing Fernandes to turn AirAsia’s success, productivity and efficiency rates around. The first of the three subfields is scientific management. Scientific management puts a large amount of emphasis on the careful selection and training of workers, and supervisory support (Schermerhorn et al., 2014, p. 36). Frederick Winslow Taylor, who was dubbed the ‘father’ of scientific management (Robbins et al., 2012), created principles that included selectively hiring workers with the right abilities to fit the job requirements, to then train and support them by attentively planning their work that includes rules of motion, standardised work procedures and the proper working conditions (Schermerhorn et al., 2014). An example of these principles are featured in the way AirAsia uses one type of aircraft to minimize the training of employees and also the rapid twenty-five minute average turn around of the AirAsia aircrafts which is evidently the fastest in region. This can be associated with each employee being specialized and well trained in his or her job thus improving standardized work procedures. This also puts emphasis on the rules of motion for each employee will be able to work more productively within their team to improve efficiency and thus allowing for expansion. Another classical approach subfield that can be seen throughout AirAsia’s expansion is administrative principles. Mary Parker Follett believed that is was the managers job to help people in organisations cooperate with one another and achieve an integration of interests with employees owning their work to create a sense of cooperate responsibility (Schermerhorn et al., 2014). Fernandes as manager seems to integrate himself into the average employee position by doing “a day a month as a baggage handler, a day every two months as a cabin crew member and a day every three months as a check-in clerk”. By displaying this kind of egalitarianism nature he has been able to create an organization where employees cover each other’s shifts regularly, to maintain efficiency and morale, which in turn can influence expansion (Schermerhorn et al., 2014). The above-mentioned classical approaches have played a significant role in influencing the expansion and evolution of AirAsia and will continue to impact today’s organisations as they have helped build the framework for many modern day approaches (Pryor, et al., 2011).

As previously mentioned, AirAsia cut services and fares to the bare minimum to become the largest low-cost airline carrier in Asia. The scientific management theory just discussed wasn’t quite enough on its own to allow organisations like AirAsia to be able to remain at such a low-cost. From here the behavioural theories of management were created by a group of psychologists and sociologists who relied on this scientific method for the study of organizational behaviour to be able to enhance the managers and employees within an organisation (Robbins et al., 2012). “The behavioural approaches maintain that people are social and self-actualising”, this corresponds to the assumption that employees within the organisation seek satisfying social relationships, react and respond to group pressures and are continually searching for personal fulfillment (Schermerhorn et al., 2014, p. 92). The behavioural theories that can be realistically incorporated to help improve AirAsia include the Hawthorne Studies and Maslow’s theory of human needs. The Hawthorne Studies were a series of analyses that were run throughout the 1920s and 1930s that were able to provide an array of new insights into group and individual behaviour (Robbins et al., 2012). They also alluded to the notion that psychological and social forces are able to influence work behaviour and that suggests that better ‘human relations’ may improve work performance within the organisation. This initiated a revolution in worker treatment for improving organizational productivity. From the Hawthorne Studies, the Hawthorne effect arose. The Hawthorne effect is described as “the tendency for people who are singled out for special attention to perform as anticipated merely because of expectations created by the situation” (Schermerhorn et al., 2014, p. 43). Fernandes is able to realistically incorporate this effect into his organisation easily and competently to improve the dynamics and efficiency between employees and managers. It is an exceptionally low-cost solution to help improve productivity and efficiency within the organisations as complimenting or commending someone doesn’t cost a cent to the company. Another behavioural theory of management philosophy that Fernandes could realistically incorporate into the organisation is Maslow’s theory of human needs or otherwise known as, Maslow’s hierarchy of human needs. “Needs are physiological or psychological deficiencies a person feels the compulsion to satisfy” (Schermerhorn et al., 2014, p. 94). Maslow’s hierarchy started with physiological needs and advanced to belongingness, safety, esteem and self-actualisation needs. He introduced the concept of self-actualisation and the potential for people to experience self-fulfilment within their work. Maslow suggested that if managers can help their employees satisfy their important needs in the work force it could enable workers to reach higher levels in the hierarchy and achieve productivity. If Fernandes is able to fulfil the needs of his workers and allow them to move up and reach sequentially higher hierarchy levels, thus the productivity and efficiency of AirAsia will improve vastly. By incorporating and implementing some of these philosophies into his organisation, Fernandes will be able to simply but effectively be able to encourage his employees to enhance their efficiency whilst at the same time benefitting them personally. Behavioural theories have to a large extent shaped the way today’s organisations function from the way that the managers work with employee teams and design motivating jobs, and to how they use open communication have all played major roles in the success of organisations, especially those that aim to minimize and remain at low-cost (Robbins et al., 2012).