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Management and Leadership

A Case Study of an Airlines Company

INTRODUCTION TO MANAGEMENT AND LEADERSHIP

There are different types of management issues that a company face and for its improvement they need to apply an effective change management process. The change management process is successful in implementation with the help of proper management and leadership. This report is based on studying the operations of Air Asia and its customer service department (Figliomeni, 2011). This includes identifying certain issues that exist in serving customers and thus identifying suitable model that can be implemented for change management. Further the issues being faced by company are identified for solving these issues by proper change management. Also effective guidance is provided to managers in making complete change management process successful and effective.]

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AIR ASIA

Air Asia is an airline company which has its headquarters in Malaysia. Air Asia has its focus on long haul flights. It has been known for operating as low cost airlines of the world. Air Asia has its plans to strengthen its routes to more and more destinations. It has a commitment to low fares, with 25 minute turnaround, low cost carriers etc. Its prime focus is on customer’s value and quality and thus works in ensuring safety of all passengers (Tell me more about AirAsia, 2013). In this report area that is to be considered for bringing change is customer service department. As this department functions to provide support and assistance to all customers and takes care about their expectations and interests. This report will take into account customer service area in Air Asia, the functions and management of this department and therefore improving services.

CHANGE PROCESS

Change management is a process of bringing changes in various components of an organization that can help in improvement of its operations. Considering customer service department at Air Asia, there are many steps that can be taken up to implement a change management process. These are:

1.Establishing a sense of urgency

This is an important step in complete change management process that will let the employees and managers develop sense of urgency in the customer service department regarding implementation of change (Blokdijk, 2008). This can be created by making people realize importance and relevance of these changes in customer service department and let them realize every step of change by its implications and outcomes that must be visible every day.

2.Creating the guiding coalition

This refers to activity of involving people and developing groups that work upon implementation of change. The groups and teams are encouraged to work in collaboration towards achieving better changes in department. This also requires framing most effective teams with all members performing significant job roles in which they are capable (Paton and McCalman, 2008). The team as a whole should reflect position and power, expertise at their task. The change by this guiding coalition ensures leadership and creditability towards company and its functions.

3.Developing a change vision

This is very important to develop and communicate vision for change among people and motivate them towards working towards achieving that change in customer service functionality. This requires managers to describe the positive aspects of change that will be beneficial for AirAsia as a whole (Anderson and Anderson, 2010). These visions must have strategic perspective and bring significant changes in administration of this department that could be reflected back as positive outcomes for company.

4.Communicating vision for buy- in

This is an important step that ensures that more and more people and employees at Air Asia accept these changes. The people are expected to communicate their visions towards company in bringing commitment to build and accept change in organization. The goals that company communicates to all people in order to accept it must be clear, simple and one that invites more and more suggestions from people in achieving effectiveness (Payne and Frow, 2013).

5.Empowering Broad- based action

This step is based on developing visions in a manner that people are acceptable towards these. The idea of restricting and changing functionality of customer service department may bring several barriers in its actual implementation. These barriers can be structural barriers that may be those that affect the success of vision due to lack of requirements like in sufficient support of managers or employees, inefficient resources, lack of commitment and non supportive organizational structure that may require effective strategies along with vision to ensure that changing customer service facility at AirAsia is important.

6.Generating short- term wins

For successful implementation of change it is very important that success is measurable as well as observable. When the company has efforts to change the projects in long term, the efforts can be revitalized and people can be boosted up if they can see significant results of their efforts in bringing changes to AirAsia. These winning situations must be clearly portrayed in order to make people and employees realize that they are putting efforts that are generating significant results for company (Dawson and Andriopoulos, 2014). Also people of the department must work on proper strategy and planning and not just assumptions or wishing to achieve success. All of them must have an internal pressure or link that leads them to achieve success of their objective and make them work in commitment.

7.Never letting up

This is also a very useful and significant step in change management process that actually checks strengths and patience of complete team and management. Here leadership also plays an important role (Palmer, 2005). As far as leader is concerned, the main task is to facilitate change and make sure that people accept it along with convincing those that are resisting the change. There might be situations that managers face due to excessive resistance from employees towards new change. This is real examination of all that checks strength in determining that if leaders and managers give up this time, the culture and company would not exist for longer and people would always have dominance under such cases.

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8.Incorporating changes into culture

This is adopting new techniques and culture with implemented change and be able to adopt strategies that help in keeping these changes sustained in the department and brings a permanent and positive change (Bajawa and Woodall, 2006). There can be new systems that can be implemented to motivate employees that can shift their focus towards commitment.

There are certain components or elements that can be considered while bringing changes in customer service department. These can be:

Structure

Bringing changes in structure means changing authority levels in department and hiring better people that mange tasks well. Also the reporting relationships also need to be changed.

Tools

The tools and techniques used in functioning of this department can be changed and new technology like use of IT can be supported. Using IT to manage customer relationships and data is effective as a tool for AirAsia’s customer service (Resnick, 2014).

Work processes

The working of all functions and processes can also be made to change, i.e. either criteria of working or way of management needs to be changed.

People

This is a significant step if taken up in change management that involves changing employees of AirAsia. This might include hiring new and efficient people or providing training to present workforce.

KEY ISSUES FACED BY AIRASIA

There are certain issues that can be seen in Air Asia that have been for different factors affecting it. These are:

1.Increasing competition

Even Though AirAsia sustains itself in the market because of its low fare strategy; it has still been facing market competition from certain companies like, Malindo in the Malaysian market and Lion Air group that were competent and major owners of market (Truxal, 2013). It also faces competition with Thai airlines that has forced company to develop better measures to deal with such players in market. This is an issue as company might require formulating better plans for routes or more number of destinations that will make it to present itself to stand with other companies as a major competitor of being the low cost airlines.

2.Decreasing number of customers

Due to global economic recession it has been evident that number of customers is constantly decreasing as spending power of people has been affected and people tend to move towards more economical options or substitutes for air travelling (Kaps, Hamilton and Bliss, 2012). Also low focus on promotions and advertisements is another reason of lowering awareness of Air Asia and thus has made the customers to move towards brands and flights offering excellent offers and schemes.

3.Rise in fuel prices and increasing labour costs

The Increasing fuel prices and labor costs have also made the company to suffer from increased costs of its operations that ultimately tends to affect its prices (Hoppe, 2012). It is therefore seen that all airline companies are affected by increasing fuel and labour costs but they manage to exist in the market competitively by lowering their profit margins. Still Air Asia has to suffer from increased costs due to these factors that demands formulating effective strategies for sustaining itself in market. The USP of AirAsia is its low fare flights as its overall unit cost is very less but due to constantly increasing prices its profitability is being compromised (Abeyratne, 2012).

4.Inadequate infrastructure:

This is also an important issue that needs to be considered by AirAsia. Inadequate infrastructural facilities and inadequate customers support services are major reason of its decreasing popularity. There have been incidents of poor service to customers and insufficient facilities that people have been complaining about and require the company to improve its operations and customer support services. There are some more issues related to inadequate parking facilities, online bookings, check- in systems and use of technology in an efficient way (Spiess and Waring, 2005). These are a part of issues that Air Asia has been facing and lacks proper infrastructural development that is a major cause of its declining position.

5.Route and flight utilization

AirAsia has strengthened itself in deciding best and effective routes that can save time for its customers and make it faster serving company. Also the company has been effectively increasing its destination places to develop more increased opportunities for its development in different cities. It also lacks secondary airports for its customers that are required at some central locations (Harvey, 2009). It has been found inefficient in utilizing its flights properly for all its routes and many a time faces delay in its services resulting in decreased satisfaction of its customers.

6.Safety and security issues

This is one of the most significant issues faced by AirAsia and almost all airline companies today. These airline companies require developing and ensuring effective security of their flights and passengers. This security is focussed on safety of life of people, security from terrorist activities due to impact of attacks in past, safety of flights from being crashed and other issues that are to be taken care of by AirAsia that serve as a major point of focus for the company.

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Apart from these major issues there are some more challenges and problems being faced by the company that involves misleading advertisements that is recent subject of concern over Air Asia. It has been found involved in fake and misleading advertisements that has given wrong guidance to its customers in Australia. Further company could soon realize these factors and make it available to its customers with better promotions that were no more misleading. The company still faces problem in creating its own brand awareness that is very significant to develop its position in market. AirAsia has been very good to all its employees and serve and value them more than its customers (Afsar, Espinouse and Penz, 2009). It provides all motivation and other facilities to its employees to make them work effectively but due to limited human resources it hires, there has been inefficiency in its operations. The major operations of AirAsia rely on outsourcing like customers support and services that can be major factors affecting company and its image. AirAsia is also known to favour only those customers that have minimum baggage and those from Indonesian. This has been responsible in creating a negative publicity for the company and further it has been facing restrictions from government that have affected its business in foreign countries. Further there are lot number of airline companies that exist due to low price and give an intense competition to AirAsia thereby affecting it by their operations and every strategy.

RECOMMENDATIONS THAT CAN BE MADE TO COMPANY TO FACE THESE ISSUES

There are certain strategies that AirAsia can be suggested to adopt in order to face these challenges and issues. AirAsia has been popularly known as low cost carrier airlines that has been a reason for its present sustained position. There can be certain actions that it can focus upon to survive and face these challenges without incurring any type of loss (Kumar, Johnson and Lai, 2009). These can be:

1.Safety first

This can be the plan that company focus upon towards providing efficient service, safety and security to its passengers. People have been hesitant in travelling through flights due to several security concerns like terrorism and safe travelling that impacts the business of not only AirAsia but overall aviation industry. The company needs to promote itself and ensure all its customers about its ultimate of providing best and safe travelling experience to its customers (Wyld, Jones and Totten, 2005). It needs to adopt effective safety mechanisms, security checks at airports and in flights that ensure saving from any possible occurrence of mishap.

2.High aircraft utilization

It has been putting immense efforts in better utilization of its aircrafts that is already an advantage with it. It can move its focus on higher frequency and turnaround of its flights that will be helpful in providing better convenience to its customers. This also aims at achieving better cost efficiencies that will turn out to be better in managing operations and revenues for company (Fraher, 2013). It has been evident from its reports that it has the fastest turnaround time in its area that is about 25 minutes serving best for its customers.

3.Low fare, no frills

Due to decreasing number of customers and increased fuel and other expenses, it is required by company to manage its costs and provide customers with prices and fares that become the factor to attract its customers. Here, though AirAsia offers better quality service at lower fares but the same time it has been managing its cost by keeping separate options for food and beverage facility as extra costs (Ramiller, 2001). It ensures lower fares and best service but does not compromise with its quality.

4.Streamline operations

This means that its operations can be simplified and customized as per the customers’ demands and expectations. The customer service department needs to evolve itself for managing all customers and operations effectively. It requires building up trust among passengers and ensuring that all are provided services and assistance where they need in order to ensure its success. It can adopt plans that make proper arrangements and plans to allow specialized pilots, attendants and operating personnel in providing services (Czipura and Jolly, 2007). They also need to provide training to their staff and ensure that they are well acknowledged about managing the customers. It can also ensure better service by freely allowing passengers to select their seats.

5.Linking operations with technology

This is one of the most important recommendations that need to be followed by AirAsia. There can be many systems and softwares that can be used up in customer support department where all operations can be linked with IT and networking facilities (Huettinger, 2014). The company might adopt facilities like yield management system, computer reservation system, enterprise resource planning for its various operations. The online reservations systems and yield management system can help in identifying availability of seats at different prices and at different items. This facility will improve efficiency of the overall systems and can help in cost reduction that is incurred on personnel involved in booking system (Atalik, 2007). Further Enterprise resource planning system will help in managing all departments and assure coordinated working and linking them through better communication among them. The most important utilization of It in AirAsia can be implementing a customer relationship management (CRM) system that is the need of company in reality. The company requires focusing on managing all its customers that are loyal and provide them with extra benefits and offers that they actually deserve. They can bring about various schemes to manage its loyal customers and keep records of all to ensure continuous link with all (Bajawa and Woodall, 2006).

6.Point to point network

This can be one more strategy that can be adopted by AirAsia that ensures its better connectivity with its employees and infrastructural facilities with all types of customers. For all types of flights may be short haul or long haul better connectivity with all facilities can be provided with utilizing point to point network.
Further AirAsia can also have efficient plans to manage its customer support department. It can involve all its employees in trainings and development that can assist in improvement of skills and knowledge ensuring better management of people (Dawson and Andriopoulos, 2014). This is an important recommendation as ensuring proper management of customers would be beneficial in achieving their trust and satisfaction that will ultimately be responsible for achieving significant market position and share to remain successful and competitive in the industry.

CONCLUSION

There are number of strategies that companies adopt in order to ensure its success in industry. Each of such strategy requires implementing change and it is rather very important to monitor that company accepts these changes. The role of management and leadership is very important in terms of facilitating change effectively. This report is focused on understanding the change management process for customer support department in AirAsia. It describes various steps that are involved for a successful implementation f this process. Further this report discuses various challenges and issues that are being faced by AirAsia. These are increasing costs and competition and reduced focus on customers. Final part of his report includes various suggestions and recommendations that can be made to AirAsia including implementing a better technological system for its customer support department that will be helpful in managing complete processes and passengers.

REFERENCES

  • Afsar, M. H., Espinouse, L. M. and Penz, B., 2009. Building flight planning for an airline company under maintenance constraints. Journal of Quality in Maintenance Engineering.
  • Atalik, O., 2007. Customer complaints about airline service: a preliminary study of Turkish frequent flyers. Management Research News.
  • Bajawa, A. and Woodall, J., 2006. Equal opportunity and diversity management meet downsizing: A case study in the UK airline industry. Employee Relations.
  • Czipura, C. and Jolly, R. D., 2007. Global airline alliances: sparking profitability for a troubled industry. Journal of Business Strategy.
  • Driver, C. J., 2001. Airline marketing in regulatory context. Marketing Intelligence & Planning.
  • Fraher, L. A., 2013. Airline downsizing and its impact on team performance. Team Performance Management: An International Journal.
  • Harvey, G., 2009. Employment relations in liberal market economy airlines. Employee Relations.
  • Huettinger , M., 2014. What determines the business activities in the airline industry? A theoretical framework. Baltic Journal of Management.
  • Kumar, S., Johnson, L. K. and Lai, T. S., 2009. Performance improvement possibilities within the US airline industry. International Journal of Productivity and Performance Management.
 
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