HUMAN RESOURCE MANAGEMENT
ABB 10902
Malaysian Airline
System Berhad (MAS)
Human Capital Issues
and Strategic Solution
Program:
Bachelor of Aviation Management, UniKL MIAT
By:
Muhammad Aq Aqwa Md Mansor – 53276210188
Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology
Muhamad Nazmi Mohd Ghazali – 53276210296
Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology
Atikah Muhd Sahar – 53276210024
Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology
Nur Fatin Che Soh – 53276210022
Bachelor of Aviation Management, UniKL Malaysian Institute of Aviation Technology
Date submitted:
14 April 2011
Human Resources Management | Group No. 4
Abstract
The case deals with the problems faced by the Malaysian Airlines, the national
“ag air carrier of Malaysia. While the company had many notable achievements,
since the 1970s, it began to face major financial trouble since late 1990’s. The
case examines the strategies pursued by MAS to overcome the challenges. The
case also describes a brief description of demands and challenges in the
international airline industry.
Purpose – This study seeks to investigate, through the Human Resources
Management practices in the context of several issues discussed, whether the
issues are manageable and gives an impact to the whole organization.
Design/methodology/approach – A discussion was held with the lecturer of
Human Resources Management and several experienced lecturers that have
been a managers in the industry itself at the speci*c department. The theories
are applied in this research and been transformed into a model. The model is
developed; we come out with additional theories. Our group has come with a
hypothesis that performance of a company tallies with the Human Resources
Management strategies and efficiency because the output of the individual
performance can affect the whole organization performance. We are required to
look for issues that are related to Human Resources Management in a particular
company and seek for solution to handle an issue. Then, a deeper exploratory
factor analysis is used from a conducted interview with the Human Resources
Management in the company itself focusing on the Engineering Department in
MAS.
Findings – The dominant issues in HRM practices in MAS were found to be:
Tangibles, Recovery, Responsiveness, and Knowledge.
Further results indicate that, although the direct effect of HRM practices is
important, the indirect effect with MAS handling the matters in the way of
practicing the human resources management theories that we have learnt is a
stronger driver for the organization to perform its best. Through our finding and
Human Resources Management | Group No. 4
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methodology that is we sent a general questions to the interviewees that are
related to our research and we add new questions based on the interviewees’
reaction and answers.
Research limitations/implications – A notable limitation is that the present
study focuses only on the airline services and uses only one industry (Air
transportation industry) to illustrate the finding. Future research should
examine other aviation service categories.
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Introduction
The commercial airline is an extremely competitive, safety–sensitive, high
technology service industry. People, employees and customers, not products
and machines, must be the arena of an organisation’s core competence. The
implications are vast and pervasive affecting no less than the organisation’s
structure, strategy, culture, and numerous operational activities. Pertaining to
this, a lots of issues of Human Resources Management arises in retaining the
competencies. Strategic management seeks to coordinate and integrate the
activities of the various functional areas of a business in order to achieve long-
term organizational objectives. A balanced scorecard is often used to evaluate
the overall performance of the business and its progress towards objectives.
Human Resources Strategic management provides overall direction to the
enterprise and is closely related to the field of Organization Studies. Strategic
planning and management are more than a set of managerial tools. Train some
of the employees in the area of time management, material handling at work
etc. Retrenchment of surplus employees caused due to superior speed Pay for
performance Promotions based on efficiency High quality work environment at
the production place.These human resource issues are also known as functional
strategies of HRM. In many cases the response to the problem or opportunity
will require the continuous attention of senior management of the organization.
Be interconnected with other issues and developments. Sub-optimisation, or
poor quality in regards to management, decision making, teamwork, employee
motivation, or communication can translate into loss of customers, loss of
market share, loss of organisation assets, and above all, loss of life. In such a
safety-sensitive, customer service-centric environment, the traditional product-
centred industrial model of corporate structures and industrial relations is
inappropriate. Human resource management (HRM) expertise is required now,
more than ever, to spearhead internal marketing strategies in order to gain
customer lock-on. The primary area of focus of strategy is the manner in which
the HR department in MAS.
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Malaysian Airline System Berhad (MAS) Background
Malaysian Airline System Berhad (MYX:3786), DBA Malaysia
Airlines(abbreviated MAS), is the government-owned “ag carrier of Malaysia.
Malaysia Airlines operates “ights from its home base, Kuala Lumpur
International Airport, and its secondary hub in Bayan Lepas, Pulau Pinang. It has
its headquarters on the grounds of Sultan Abdul Aziz Shah Airport in Subang,
Selangor.
Organisational vision
“To be the largest, most successful and most respected airline in the world.”
The Beginning
Malaysia Airways Ltd. (MAL) was founded in 1947 by British Overseas Airways
Corporation (BOAC – now British Airways), Ocean Steamship Company of
Liverpool and the Straits Steamship Company of Singapore. By the end of 1947,
Malayan Airways engaged in an expansion exercise and MAL began providing
regional “ight services. The presence of BOAC also facilitated MAL’s entry as a
member of IATA. A year after the Independence of Malaya in 1957 and with the
participation of BOAC, QANTAS, the government of the Federation of Malaya,
Singapore and the Territory of North Borneo, MAL was launched as a public
limited company. MAL then entered the jet age with the purchase of Vickers
Viscount aircraft and by 1960 MAL propelled into other far-“ung regions of Asia.
The acquisition of an 82-seater Briston Britania in 1960 made mass transport by
air a reality. This marked the first international non-stop service for MAL, which
operated directly between Kuala Lumpur and Hong Kong.
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After the formation of Malaysia in 1963, the airline was renamed as Malaysian
Airlines Limited (MAL). The formation of a new nation saw the need for MAL to
be a national carrier to integrate and connect the far corners of Malaysia. Two
years later, Borneo Airways merged with MAL resulting in “eet and network
expansion. In 1966, the Governments of Malaysia and Singapore became the
majority shareholders in the national carrier and Malaysia-Singapore Airlines
(MSA) was formed. In 1971, the partnership between Malaysia and Singapore
was dissolved, and Malaysia Airlines Berhad was incorporated. With an
authorized capital of RM100 million1, the company made a final revision to its
name in November 1971, and Malaysian Airline System Berhad (MAS) was born.
By 1972, Malaysian Airline System was already servicing 34 domestic routes
and six international destinations.
Modernization
The year 1976 saw MAS enter the information age, when it computerized its
whole
operation. In the 1980s, MAS became the first major government agency to be
privatized
but a change of business practice did not change the company’s focus on being
customer driven. As part of its modernization and expansion, MAS also invested
in a new maintenance hangar facility, as well as extending its catering facilities
in Subang, where the then international airport of Malaysia was located. As a
final part of the restructuring exercise, MAS moved into its new corporate
headquarters to a 36-storey building, which became the hub for the future
direction of the company.
Global reach
The year 1986 saw MAS offer the first “ight service to the United States. By the
end of 1987, MAS had established itself as an international carrier of choice,
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offering 34 domestic routes and 27 international destinations. MAS changed its
corporate identity and became known as MAS, with the objectives to create a
greater awareness of Malaysia. As part of its “eet modernization program, MAS
invested RM9.6 billion to expand its “eet of aircrafts in 1991.As of March 2001;
MAS had a “eet of 95 aircrafts in its network serving over 114 destinations.
Achievements
MAS received international acclaim from many independent organizations for
various aspects of its services. Its top management team received an award
