Submitted by

Md Rubel Ahmed
1303986
Doctor of Business Administration (DBA)
School of Business
University of Wales: Trinity Saint David (London Campus)
Module: Managing in Complex Environments: Strategies, Insight and
Solutions
(SBPD 7006)

Date: 28/11/2014

Abstract
Along with two recent incidents, the complex and dynamic environment bringing
changes in each and every dimensions of Malaysian Airlines business. Thats why,
Malaysian Airlines is facing tough challenges to survive followed by two major
incidents this year. Now it is becoming very crucial to redesign their business and
value creation model because they are losing money and already lost brand image
including market reputation as well. Under these circumstances the report aims to
develop agile or adaptive HR capabilities that can meet the external and internal
challenges. Also, the report needs to prepare a change programme on current
situation of Malaysian Airlines. So, it is very important for Malaysia Airlines to make
the organization agile or adaptive. It is so, because the agile or adaptive form of
organization enables Malaysia Airlines to meet the challenges derived from both
outside and inside of the organization by using the scarce but alternative useable
resources they have. This form of organization can also give it a source of
sustainable competitive advantage. Therefore, the report has been discussed high
commitment/best practice of HR for the agile or adaptive based on Pfeffer (1999).
Also, the found that blended approach would be suitable for competitive advantage
for the MAS HR. In addition, the report found behavioural approach would be
suitable towards selective hiring and sophisticated selection based on core
competences test. Again, proper utilization of integrated report framework, the report
found how MAS agile HR can take more advantages and value add from the human,
social and intellectual capital. Based on MAS current situation, the report
recommended some steps towards HR such as create cultural learning environment,
reduce the hierarchy structure and destroy harmonisation, more focus on working
together to build up trust each other towards develop innovative solution for the
problems, prepare a frontline team by learning, developing and motivating to deliver
quality service and retain talent and promote them within the organization recognition
performance and reward. Al last, the report has produced a change programme
model towards three years plan.

Table of contents

Page

Abstract

02

1.1 Introduction

05

1.2 Current situation of Malaysian Airlines

06

1.3 Agile/adaptive HR what and why

08

1.4 Business agility perspective of HR

08

1.5 Common characteristics of agile or adaptive organization

08

1.6 Agile organization and HR role

09

1.7 Agile adoption and HR importance

10

1.8 Agile or adaptive HR for Malaysian Airlines Why?

10

1.9 Importance of agility

11

1.10 Agile work place

12

1.11 Benefits of agile or adaptive HR

13

2.1 Broad discussion

14-26

2.2 Importance of high commitment/best practice of HR and Ulrich and Brockbanks

updated model

14

2.3 High commitment/best practice of HR

15

2.4 Blended approach

15

2.5 Pfeffer high commitment/best practice HR components

16

2.5.1 Employment security and internal labour market

16

2.5.2 Selective hiring and sophisticated selection

18

2.5.3 Extensive training, learning and development

20

2.5.4 Employee involvement, information sharing and worker voice

21

2.5.5 Self-managed teams/team working

24

2.5.6 High compensation contingent on performance

25

2.5.7 Reduction of status differentials/harmonisation

26

3.1 Key Recommendations

27

3.2 Change model for MAS

27

3.3 Conclusion

29

References

30-34

Appendices

35-45

Figure 1: Agile culture

10

1.1 Introduction
According to International Business Monitor (IBM, 2014), it forecasts that Malaysia
standard corporate governance is improving greatly time to time than neighbouring
countries. Any manufacturing companies are mostly welcomed on FDI because it
has numerous incentives offer from government. Malaysia airline is facing tough
challenges to survive followed by two major incidents this year. Now it is becoming
very crucial to redesign their business and value creation model because they are
losing money and already lost brand image including market reputation as well.
Under these circumstances the report aims to develop agile or adaptive HR
capabilities that can meet the external and internal challenges. Also, the report
needs to prepare a change programme on current situation of Malaysian Airlines.
Malaysian Airline now in survival position and needs to overcome next stage
thrasher (better then survival) and finally should go for outperformer. However, it is
only possible when MAS return on investment will increase. This will focus on
transforming HR roles, functions, process and accountabilities from traditional HR
which will help to overcome current complex MAS situation. Also, the report will
discuss how transforming HR is finding the potential effective way and procedure to
best fit. Moreover, the transformation process of HR consists of three core focuses
such as strategic values, a competitive mindset-rather than the idea of being a
monopoly service provider without competition and process outcomes-creating a
balance between excellence in process and the delivery of specific measureable
outcomes (Weiss, 2000).
The report will cover whole discussion through current situation of Malaysian Airlines
(internal and external environment), characteristic and importance of agile or
adaptive HR within the complex situation, broad discussion of Pfeffer (1998) seven
successive steps for agile or adaptive HR supported by Ulrich and Brockbanks
(2005) updated business model and core competences of high commitment HR. In
addition, the report will produce some key recommendation for agile or adaptive HR
including change programme as well. Finally, the report will summarise the whole
discussion for Malaysian Airlines in current complex situation to agile or adaptive HR
through conclusion.

1.2 Current situation of Malaysian Airlines

At present, Malaysian Airlines is suffering more challenges such as debt burden,
poor brand recognition, exit from equity market, low turnover, lack of customers
reliance, extensive regulatory conditions to operations (Appendix 1). It is very crucial
that Malaysian Airlines most of the employee very much concerns about their job
security after the two incidents and 6000 staff cut announcement. It is consistent with
Maslows second step though employees are little bit concern about Maslows first
step because they have alternative option to survive their life either government help
or any other job facilities. Again, these two incidents are affecting their personal and
family life towards health care, safe neighbourhoods and shelter from internal
environment as well external. In addition, they have lost their confidence,
relationship, trust, social stability and intimacy as well. Therefore, there is no selfactualization in this situation of Malaysian Airlines internal environment because they
have lost their interested related potential fulfilling (Appendix 7). However, Malaysian
Airlines has some of the positive site in this situation such as government funding,
improve infrastructure, broad geographic presence, one world coalition membership
reputation and established on line presence (Appendix 1). Further, the study would
like to say that organization structure is functional, hierarchical and bureaucratic
including central control (Appendix 5). In terms of leadership style, Malaysian Airlines
is following transactional leadership and very much adapt with situational leadership
construct (Kamisan and King, 2013). Again, one of the studies (Appendix 8) has
been described human status in their complex environment and its very much
related with current Malaysian Airlines internal environment where employees are
concerned about their security such as job and safety needs. From that position,
employees are lost their self-development, advancement and personal growth. It
means employees are feeling frustration and organization getting regression
performance.

There are some external factors such as legal, environmental and social impacting
more intensely than others such as political and economic (Koon et al., 2014;
Hamzah and Govindasamy 2014). Malaysian Airlines has own aircraft preservation
subsidiary company. Therefore, it is their positive side and dont need to training and
retain existing staff for the maintenance (Harrison, 2014 and appendix 2). In that
6

situation, Malaysian Airlines has a plan to reduce their fair and cut-off some
international routes as well. They want to reduce fairs because at this complex
moment most of the travellers are middle age and they dont worry about the quality
service but they care about prices (Harrison, 2014 and appendix 2). In addition, they
have planning to introduce advance and adopting new technologies towards
customers and employees for the better services. This plan will cover control over
domestic and international competitors. The organizational structure of Malaysia
airlines is bureaucratic (House et al., 2004), strong/large power distance (Hoecklin
1994) and low uncertainty avoidance (Hoecklin 1994). In addition, their external
market position and its effect to high and just surviving maintain relationship with
business partner (Appendix 3). If the study discusses on risk analysis, it is very clear
that risk is also high in every aspect and some aspect has medium probability but
impact high in current situation (Appendix 4). According to Appendix 5, the study
would like to say that culturally it is low cost organization but before the incidents the
brand symbol was high cost airline and now dispersed share rights. Basis on
Appendix 6, they are facing tough challenges and realized significance of
stakeholders and their activities as well. They believed in order to get success and to
overcome the current situation they need commitment with all the stakeholders to a
national compact. As a result MAS management are now listening stakeholders
opinions, taking suggestions very seriously and implementing accordingly. Different
stakeholders are helping MAS by developing and delivering and operational plan that
leads to a successful new Malaysian Airlines. Stakeholders will be helping improving
internal alignment through collaboration with unions and resetting work rules,
process, employment terms to industry standards and to get the best talent for MAS
they will upgrade top 500 leadership with global flying professionals. MAS
employees will be continuing to perform their tasks with the highest levels of
professionalism and service quality. Unions will be supporting them to participate in
the Employee Consultative Panel (ECP) to making sure their voice would be heard
on any major evaluations. Stakeholders will also develop and deliver the overall
permitting recovery plan, progress monitoring and contingent funding. They are
allowing MAS to operate only commercial business model and supporting MAS to
enactment of a standalone Act. Stakeholders will reset their contracts if necessary in
service levels in line with market norms and airlines (MAS) standards. Stakeholders

are offering continuous support for complete redecoration to continue to fly MAS
(Khazanah Nasional, 2014).

1.3 Agile/adaptive HR what and why

The main HR role is oversee and accountability towards human capital investment.
In general, both terms such as assets and money are talking people for cultivate and
their talents. However, traditional HR professionals waits for any change which to be
compulsory on them. Therefore, agile HR is contributing not only the core people
process but also helping the organizational transformational and value added
process (Hinge, 2013). The agility enables HR to realize and understand the internal
clients need and design the process that contributes towards the internal solution
and value addition (Weiss, 2000).

1.4 Business agility perspective of HR

Generally, it means speed and flexibility. According to Sanders (2014) it is the
capability of organization to adjust rapidly with cost capably in response towards
changes in complex business environment either internally or externally. It is again
focusing on goods and services maintaining and adapting towards customer
demands, adjustment of changes environment and taking advantage of human
resources.

1.5 Common characteristics of agile or adaptive organization

There are some common characteristics for agile or adaptive organization:
Understand the whole structure
Adapt a catalyst approach of leadership
Organization should continuous learning from experiments
Promote open communication approach
Long-term business value governance and adaptation
Members seek mastery in their respective skills
Source: Ray et al., 2012, Glenda, 2012

1.6 Agile organization and HR role

Agility will generate a latest role for HR function. Within the organization, HR
maintains an approach towards their own effort for the agile service. When
organization faces tough challenge on internal or external work environment, it is
essential workforce contribution for the future. On the basis of complex environment
and change introduced, it is characteristically better hold by resilient individuals.
Also, it is enhanced integrated with peoples those are used to stable change.
Therefore, it will bring peoples understanding of interaction, control and resilience.
People who grip change most efficiently recognize to facilitate change can be
terrifying, perhaps unlikeable and it constantly requires something diverse from
them. In spite of this, they carry on rising towards occasion and will do effective
performance on job responsibilities. It will make a core competency about handling
ambiguity (Ullah, 2012).

According to Brue et al. (2010) the organization workforce should have several
attributes as an agile worker:
Responsiveness to modifying customer needs
Responsiveness to modifying environment conditions
Speed of initial new skills along with competencies
Speed of innovative practice organization skills
Effectiveness of helping across efficient boundaries
Ease of touching between projects
Employee empowerment designed for self-governing decision making

1.7 Agile adoption and HR importance

HRD can play the vital role in the process of agile on complex situation. It should be
strategic and innovative fir the organization agile adoption journey. On this journey,
HR needs to prepare and arrange for developing and sustaining agile culture within
the organization. Therefore, HR can follow the below figure which starts from hire the
new employees until the retention motivated employees through restructuring the
organization and practice organization performance. However, agile is impacting on
HR by the three major different ways such as personal changes, training and
development changes and rethinking career path (Appelo et al., 2013).
Figure 1: Agile culture

Hire best
employee

Retention
motivated
employees

Agile
culture

Restructuring
the
organization

Performance
of
management

Source: Appelo et al., 2013

1.8 Agile or adaptive HR for Malaysian Airlines Why?

Along with two recent incidents, the complex and dynamic environment bringing
changes in each and every dimensions of business. So, it has become very crucial
for Malaysia Airlines to make the organization agile or adaptive. It is so, because the
agile or adaptive form of organization enables Malaysia Airlines to meet the
challenges derived from both outside and inside of the organization by using the
scarce but alternative useable resources they have (Purvis et al. 2014). This form of
organization can also give it a source of sustainable competitive advantage. Agile
HR is not only working together with consumers but also focusing on the difficulties
10

within the organization to ahead of following core question Are these HR problem
solutions in the best attention towards the customers? This potential approach is
making the HR more active and serious towards customer problem solving including
satisfy the customer needs as well. In addition, this strategic HR approach will help
the organization towards support of value added and competitive business strategy.
However, agile HR strategy is not forcing to organizational direction change but
helping the good decision making process.

Redefine relationship among other

clients might be creates a good environment for working together and try to establish
the best resolution. Most important factor, it is very much tough and challenging for
internal clients to accept it (Price, 2008). It is also true that some cases HR credibility
not well enough to cope with senior managers because many executives doesnt like
adapted to telling them what to do in business rather than only support the system. It
is the key challenge for agile HR. In addition, demanding better and unique process
outcome through traditional HR even by process improvement and process
reengineering is ineffective (Weiss, 2000). So, emphasis on process improvement
through this new system may lead the MA to explore alternative ways of delivering.
In the past many companies perceived HR as an administrative function rather than
as a profession having its own knowledge base and excellent process. In this case
the HR is allowed to use external resources in a more economical and efficient
manner that can work as a source of achieving strategic objective. Many companies
before changed their work process and sustained higher ratio of HR professional to
employees through distribution works or activities to other functions those have the
capability to perform. It can clearly define specific outcomes that are needed and
identify the process that need to be recreated to achieve those outcomes. In agile
the expected outcomes are clearly defined while results are measureable and
process improvements are evident.

1.9 Importance of agility

The importance of strategic agility is that its faces challenging and complex
situations such as globalisation, dynamic environment, increase innovation and
mergers and acquisitions (Weber & Tarba, 2014). The requirement of strategic agility
is that its creating new categories and new business models instead of reorganising
old categories and products. Researchers advised to create strategic agile
organisation mainly transform the HR to compete with rising strategic disruptions and
11

discontinuities which is included business transformation and renewal manage in a

new ways, dynamic capabilities development, create imitation abilities, maintain high
level organisational flexibility and ambidexterity, develop knowledge and learning
transfer skills, use adaptive organisation culture and more (Weber & Tarba, 2014).
Again, it includes a set of actions for organisations to take when situation change
rapidly and unpredictably. Those organisations are agile organisations who adapt
this disrupting environment successfully. In addition, it is required changes which are
different from other daily and routine kinds of changes. The strategic agility changes
results are specified such as continuous, organisations systematic variations by
products, services, processes and structures. The strength and differences are high
for these changes, thus those organisations are agile who demonstrate high
flexibility. Also, quickness is needed to feel the environmental changes and to
appropriately respond. As a result, strategic agility demands a big investment of
resources to keep the high level of flexibility and quickness necessary to be able to
respond to unexpected environmental opportunities and threats (Weber & Tarba,
2014).

1.10 Agile work place

On the basis of above Malaysian Airlines complex environment work place, the study
would like to discuss about agile work place. It is mainly focusing three areas such
as practices, facilities and technology (Hinge, 2013).
Practices: The implementation of agile workforce, it is very necessary to offer
all of or as much as possible employees towards practices of flexible work
experience. It is meaning that employee performance will be measured by
innovative output not on the basis of contract hours or where or which
environment employee works for organization. For example: Unilever already
has given this flexibility to their all employees. Practice on this flexibility, it will
bring huge change and build up trust between managers and employees to
work need to be done in the fruitful way.
Facilities: As like as home, human is dividing their living place into different
rooms for different functions such as kitchen, bedroom, lounge and so on.
12

Therefore, the agile workplace facility should same as living place because
employee needs to work independently within their areas and can connect
and collaborate with other employees. Provided by this facility, Unilever
approximately is using 40% less space from the previous. From that facility,
all employees (non-exempt to executive) thinks that they are working for
Unilever.
Technology: Latest technological invest is one of core part for agile
workplace. For example: virtual collaboration technologies like telepresence
meeting must be reduced the global travel cost for organization employees.
Highly developed mobility technologies facility must be help employees
working from other locations.

1.11 Benefits of agile or adaptive HR

There are some benefits of agile or adaptive and there are as follows: there are
many reasons to use agile/adaptive development such as:
Better ROI: Agile always highlights early delivery period of tasks. It is also
allowing and producing the return on investment (ROI) very quickly. It is
contributing the business on the basis of agreement with discipline way.
Therefore, the business is getting high-valued return with quality.
Squeeze business: Agile is always accepting changes of business conditions
but traditionally changes quite impossible to adapt with business.
Agile development raises productivity
Creating a continuous development of environment
Enabling developing innovation
Building trust along with relationships
Engaging employee with motivation
Addressing the actual facts of problem and need of changes for the business
It keeps attention stakeholders on the change process
It is providing lower risk, density and more intelligibility, visibility towards the
business
Source: Moran, 2010
13

2.1 Broad discussion: Basis of above situation, the study here would like to
process by using high commitment/best practice of HR as suggested by Pfeffer
(1998: 71-81) and Ulrich and Brockbanks (2005) update model.
2.2 Importance of high commitment/best practice of HR and Ulrich and
Brockbanks updated model
In current complex situation of MAS, the study would like to suggest that Pfeffer high
commitment/best practice of HR and Ulrich and Brockbanks model is suitable for the
agile or adaptive. The following importances are supporting this complex situation of
MAS.
A) High commitment/best practice of HR: The high commitment of HR foremost
advantage is that it enables independently to highlight on strategic business process.
It helps MAS towards creates the value and will deep concentrate on achieve the
competitive advantages. On the basis of that activity, some cases HR professional
has tremendous desire for extensive ranges on information and techniques. And it
will help to HR recognized and valuable asset for the organization (Kearns, 2010).
High commitment of HR will carry new vision and accountability towards the
organization following internal factors such as return on investment, process and
people. In general, traditional HR is helping to achieve organizational goals without
any focus of organization direction. Now a day, it has completely changed. Instead of
that organization expect HR will help not only the financial statement but also help
the organization human capital as well (Kearns, 2010). High commitment of HR is
accessing the employees standard level of skills and knowledge that will help the
expertise towards resolve the strategic challenges and gain credibility which can
bring the organization acceptance through leadership (Pfeffer, 1998:71-81).
B) Ulrich and Brockbank model:

Quicker reaction according to practice organization requirement

Quicker reaction to the organization transformed conditions
Proactive HR advancement towards internal and external customers
Better attitudes for the Measurement of HR
Better knowledge transmits within the organization whole team
Faster service during automation and process of generalization
14

 Higher HR reliability
Source: Truss et al. 2012:72 and Swift, 2012: Ch 1.

2.3 High commitment/best practice of HR: According to Beer (2009), it is the

combination of three terms outcomes such as performance alignment, psychological
alignment and capacity of learning and change. To achieve and contribute the
organizational performance, it is the set of HR practices. It is very much related with
following term such as managing staffs attitudes and behaviours, improve quality
and customer service, raises the labour turnover and finally reduce absence.

2.4 Blended approach: It is the combination of universal and contingency

approach. Universal approach links with resource based view. It should follow the
every organization (Pfeffer, 1998). Basically, it is encouraging promoting people
(Pfeffer, 1998). It deals with decision-making, human performance and systems
analysis. Moreover, it is using for analysis of fast developing area and understanding
of practice organization (Rees and Hall, 2013: Ch 6). On the other hand, contingency
approach links with knowledge based view. It is dealing only adaptive strategies and
it is suitable for complex situation i.e. it is the adaptive view of HR. It is interrelated
and interconnected with innovation and development. However, it varies from
situation to situation. It actions on employee behaviour outside environment (Rees
and Hall, 2013: Ch 6). In addition, MAS is based on resourced based view (Pfeffer,
1998). But, current complex situation is referring that MAS HR should follow
knowledge based view (Spender, 1996).

Now the question what will be HR approach for that situation? From the above
discussion, the study would like suggest that blended approach (universal +
contingency) will appropriate for the MAS HR. Because, none of the approach is not
suit with the MAS current complex situation and both approach has some positive
side and these sides are interrelated and interconnected with RBV and KBV.
Therefore, MAS HR should take the good elements from the both side then
combined it for the implementation. It will bring the competitive advantage for the
MAS HR.

15

2.5 Pfeffer high commitment/best practice HR components:

Employment security and internal labour market
Selective hiring and sophisticated selection
Extensive training, learning and development
Employee involvement, information sharing and worker voice
Self-managed teams/team working
High compensation contingent on performance
Reduction of status differentials/harmonisation

2.5.1 Employment security and internal labour market: The main point in
this section is that it will be unrealistic to offer employee share their ideas,
commitment and hard work for the organization without any liability i.e. employment
security and future career concerns. Also, employment security is one of the
essential implementation for the high performance of organization best practices. It is
very crucial that Malaysian Airlines most of the employee very much concerns about
their job security after the two incidents and 6000 staff cut announcement. In
addition, it is also not possible to give them any financial or direct intensive from the
organization because organization already bankruptcy and taking fund from the
government for improve infrastructure. At that situation, HR could take the following
actions:
To arrange learning and skills development programme
To promote employee within the organization
To deep concentration on Maslows hierarchy of needs or Alderfer ERP
theory
To match employee future wishes with suitable opportunities
To negotiation with union
Overarching philosophy
Therefore, these actions will bring some positive outcomes like employee will be
more productive, belongingness and feel comfort to concentrate work. Again,
negotiation with union could bring outcome on employment obligation or
contractually layoff terms against employee performance. It will be important strategy
16

for the high competition within the employee. In addition, employee will feel more
secure within the organization and that feelings will increase human capital as well
(Ulrich and Brockbanks, 2005). On the other hand, it is the one kind of challenging
issue reason why it has implicit employment contract and legal procedures as well.
At this stage, MAS is complex phase and showing downward performance.
Therefore, it is important to transform HR. However, that situation existing employee
might not have enough power and motivation which was in the initial stage. Thats
why, it will be very crucial to aligned them into the transformation process. Without
development of HR, it is quite impossible to build up relationship with clients and
beyond control employee through create the support of value added. Again, support
the value add is not enough for MAS current stage because MAS needs higher level
of competitiveness and it will help MAS become imperative. Thats why, MAS HR
needs to link directly with business strategic competitive interest.
Finally, the study would like to suggest that MAS needs to continue employment
security towards their employee but on the basis of layoff agreement and can
prepare them on the basis of above actions. The following two examples are
supporting the author suggestion.
For example: When General Motors introduced Fremont automobile assembly plant,
they gave job security offer towards their employee and got free contribution of
experience including knowledge sharing and employee full support and efforts to
improve productivity. Also, GM kept their commitment with retain employee on the
basis of union negotiation towards job security and got quick and rapid response
from the employee in financial difficulty (Pfeffer and Veiga, 1999). Another relevant
example is Southwest Airlines. Southwest Airlines employee take care strategy was
long terms interest rather than substantially more returns in short-terms on the basis
of commitment more job security. It helped to keep our labour smaller number and
influenced employee towards more productive (Kelleher, 2007).
However, the perspective of Malaysian Airlines internal labour market requires
further analysis to future course of action.

17

2.5.2 Selective hiring and sophisticated selection: There are three main
ideas are playing in this section. Three ideas are as follows:
The HR wants to have large candidate group for best select
The HR wants to know and need to be clear from candidates critical skills and
attributes
The HR wants to know candidate skills and abilities relevant with particular job
requirements and organization approach to its market
Therefore, these three ideas could bring some outcomes on the basis of the actions
such as:
High quality recruitment brings committed staff for the best practice of HRM
Psychometric tests and structured interviews will increase the selection
decision validity
Competencies will bring trainability, flexibility, assurance, drive along with
determination and initiatives
However, the perspective of Malaysian Airlines, it is necessary that selective hiring
and sophisticated selection should be based on behavioural approach. The purpose
of core competency is involving all employees within complex situation of the firm for
a specific goal achievement on the basis of design, development, services and
delivery (Griffiths, 2014:20). The elements of core competences are as follows which
directly related with different skills: critical thinking, problem solving, communication,
leadership, integration, collaboration, knowledge sharing, synthesizing intelligence
and entrepreneurship (Griffiths, 2014:20). On the basis of current MAS complex
situation, it is necessary that HR should practice of core competences approach for
the best fit. Because, some of the employee has different qualities and skills who
might be critical thinker, has good leadership style skills and approach of good
communication skills. For example: senior employee has experience skill and this
skill can share within the organization to other employees. Young and graduate
employee has theoretical knowledge, critical thinking power and problem solving skill
through team work and can lead the team as well. Therefore, MAS HR needs to find
out these types employee those have above qualities and skills and can provide
training towards the overcome the complex situation. Finally, it will increase
employee engagement and create organization value as well. Because it will bring
18

some benefits for organization on candidates following skills such as integrity,

leadership, initiative, communication, problem solving, interpersonal, adaptability,
self-belief and self-confidence (Dubrin, 2012:22-25,321-325). In addition, it will
increase high competence of candidate selection process (Griffiths, 2014:17-29 and
CPLD, 2012:5-11). The study also would like say that HR team needs to recruit/hire
expertise from the outside in this complex situation. The expertise will help following
way to the HR team:

To help develop a plan and try to sustain this plan according to HR

requirements and implementations as well based on experience, skills and
knowledge
To help and focus on HR change process (if organization does) and impact on
budgets including technological functions
To make a plan on HR inbound or outbound strategies towards better
performance
Source: Weiss, 2000
Usually, recruitment from the outside is meaning that organization needs
transformation process on internal cultural and environment which directly link with
different factors such as employee job insecurity and de-motivated as well. At that
stage, MAS is suffering and hanging as well. So, change is necessary. However,
some of the employees are very successful from the start up and growth stage,
these employees may not be willing to follow the new way of doing job from the
expertise (Price, 2008). But on the basis of MAS current situation, it is very expected
from the leaders/HR to recreate the environment with a new direction for the HR that
creates a sense. In addition, organization complex is saying that someone who is
well known/experience in complex situation needs to handle and talk about this
situation to recover it. This may indicate releasing employees who do not have the
skills, competencies to effect the change and bringing in new who turn the system
around. This may mean to hiring experts or specialists such as HR leadership who
can leverage HR for competitive advantage.
In terms of strategic values, it is the extent to which organisational process and
people provide competitive advantage. Traditional HR activities such as recruitment19

selection, employee relation, compensation, training and development are necessary

but not sufficient to help the companies to thrive and outperform in the new turbulent
changing environment. The agility will help MA to redefine its HR role so that it can
help to concentrate on providing strategic value through gaining relative advantage
against competition (Kearns, 2010).
Therefore, this process will increase competitive advantages towards the human
capital and develop the functional expert as well.

2.5.3 Extensive training, learning and development: It is true that training is

helping employees to strengthen their performance. Employee performance is
source of competitive advantage for organization towards their competitor. But in
competitive world, technology is changing so it is very crucial that sustain the
employee performance. Another way, training is one kind of investment for the
organization. So, it is necessary to ensure benefits of training against its costs.
Sometimes learning style conflict to change may come not for the new or additional
roles but for the chosen way of learning or style of influencing people (Weiss, 2000).
So therefore it is HR responsibility to find the path of least resistance to influence not
only line managers but also people to change their role so that they took the primary
responsibility to attending company needs. On the basis of training, learning and
performance, organization is offering employee for the promotion but whom skilled.
In practically, mainly three key reasons behind the promotion:
A job need to be filled, find a person who is fit and want to do the job
Hopping that new manager will leverage the company with new skill and
knowledge
Promotion open up an opportunity for the company to put more money and
benefits in the hand who deserve
But when the new manager joins the position start to handling more complex issues
and dilemmas instead of teaching other the knowledge and skills and proved himself
as an individual service provider. In this case the person misses the primary reason
of receiving promotion. In this situation the HR needs to help this person creating a
learning environment through which other employees can learns what he knows. So
therefore the role of HR will be proactive by accomplishing the function of
trainer/educator through the following:
20

 Creating an ongoing learning environment by which manager can develop

people practice organization skills
Excitement and sprit with a core focus on the external customer
Provide ongoing support and coaching so that they can work with employees
It is one of the key challenges for HR to learn how to help manager to be people
manager instead of stepping into the void by taking over their responsibility. Or help
them to do it instead of do it for them. As Nowlan (2011:40-49) suggests that the HR
should not be an extra pair of hands for managers but help them to manage their
employees effectively and efficiently.
Although there is a union in MAS indicating that the HR is not only place to raise any
concern if the employees are not satisfied. But to become the employee conscience
or champion of employee need the HR is expected to function as an employee
representative becoming advocate for their collective needs (Price, 2008). However
it is very often now a day to have time and capacity to handle but it is also should not
leave everything for manager to manage employees. It is HR responsibility to
provide necessary resources and skill, create learning cultural environment, training
and development to manage their employee because the only way of HR to reaching
employee is enabling managers to become excellent people managers (McCarthy,
2014). And that will increase competitive advantages of human capital value.

2.5.4 Employee involvement, information sharing and worker voice:

Employee involvement has so many reasons but three prime reasons mostly
accepted such as strategic participation, organizational participation and task
direction (HBR, 2013). To achieve the overall organizational success, employee
engagement very much important and it was opinion 71% respondent. To allow
recognition of high performers, employee engagement significant impact more than
the organization success and this is 72% (HBR, 2013). Here it is important how the
organization should involve employee with organization. Therefore, Rousseau (1989)
psychological contract is mostly accepted towards employee involvement. Rousseau
(2011) mentioned that there are three steps need to fulfilment for the psychological
contract such as mutuality, alignment and reciprocity. However, there are some key
features laying in psychological contracts such as beliefs and trust, implicit,
perceived agreement, exchange, ongoing and developing career.
21

In current MAS complex situation, HR team can take following actions towards
employee involvement:
To communicate senior leader with strategies to employee (HBR, 2013)
Safe and friendly environment from the Rousseau belief and trust point of
view
Providing sufficient training from Rousseau exchange point of view
Providing job security from their best abilities from Rousseau perceived
agreement point of view
To promote skills and experience employee from Rousseau developing
career point of view
To open more interaction and disagreement with possible flexibility from
Rousseau implicit point of view
To potential negotiation with union from Rousseau ongoing understanding
point of view
To allow recognition for high performers (HBR, 2013)
Source: Conway and Briner, 2005: and Robbins et al., 2008:81-89

When employee will be involved with organization, end of the day they will say that it
is my organization and feel comfort towards their job security. According to (HBR,
2013) almost 77% customer satisfaction is depending on employee engagement.
In addition, integrated framework report can help the MAS current complex situation.
This report is mainly dealing to create value for the organization through the efficient
and productive allocation of human, intellectual and social capital (IIRC, 2013).
On the basis of this IR framework, MAS has employees competencies, capabilities,
experiences and motivations. So it can lead to employee towards innovation. Also,
employee has ability to understand situation, strategies and implementation.
Therefore, it can be lead employee towards improving processes, goods,
collaboration and services. It is the MAS human capital and this capital can create
value for the MAS. Intellectual capital point of view, MAS has tacit knowledge which
again intangibles like intellectual property, patents, protocols and system. Based on
proper utilization of intellectual capital, HR can help to increase brand and reputation
of MAS. Again, social capital is mainly dealing to build up relationship between the
22

MAS and community, stakeholders and other networks towards trust, common
values and shared norms. All above three core capital will create the organization
value and will bring the outcomes of internal (staff morale, organization status and
revenue) and external (brand loyalty, customer satisfaction, positive effect of social
and environment) (IIRC, 2013). It is often argued that some HR professionals may
view them as monopoly service providers; they also believe that managers and
executives will not consider using external sources for HR services (Truss et al.,
2013). It takes them go beyond the complacent situation to foster change
proactively. The competitive mindset will help to set high standards service and
perform benchmarking initiative against their competition. Develop people and
organisational strategies to enable company in delivering values for customers. It
can also emphasize HR priorities that can help MA to gain competitive advantage. It
is essential for HR to create a working environment across the company that fosters
collaboration and partnership, at the same time develop a mindset that helps
company to create value for companies (Truss et al., 2013).
Another important elements known as information sharing is highly related with MAS
performance and employee involvement. Based on information sharing, organization
can control and measure the operation, financial performance and strategies.
However, the trust is the main element of information sharing. One of the proverb
An organization where people are all-for-one and one-for-all, you can't have
secrets. For instance, open book is representing the value of trust. Some cases, it is
true that motivated and trained people cannot contribute towards organization
performance because of shortages or not sharing of information. Thats why, HR
team of MAS needs to share their information openly with employees from top to
bottom.

Worker voice point of view, trust is taking a vital role for employee voice. Employee
voice can come through trade union representation or collective good deal by the
established compliant or dispute procedures. In practically finds that the relationship
between union and employer is suffering because lack of trust (Sanders, 2012).
From that point of view, MAS is facing challenge from the union after 6000 jobs cut
announcement. To overcome this problem, HR needs to build up high trust

23

relationship with union and involved them within the early stage of decision making.
It will bring the solve problem rather than culture of blame against each other.
Therefore, listening worker voice and engage them openly towards solve the
problem will make trust and honesty types of behaviour. It will be make mutual
cultural trust relationship between the union and practice organization (Saundry et
al., 2011). For example: First Direct and London Ambulance Service. Again, MAS
HR needs to more focus on working together to build up trust each other towards
develop innovative solution for the current problems (McCarthy, 2014).
Finally, the study would like say that it will create value towards MAS and will make
relationship with strategic partner.

2.5.5 Self-managed teams/team working: Research and study found that team
work is leading better result of decision making and way of achievement towards
creative solutions. It has more satisfaction for employee when works within the team.
In addition, it has some major advantages such as higher efficiency, more thoughtful
ideas, greater effectiveness, mutual support, improved morale, increased innovation
and greater flexibility (Mullians, 2013:305-325). MAS current complex situation, it is
necessary that employee working within the team towards specific goal on the basis
of information, skills, knowledge, experience and idea sharing. However, it is also
crucial task to build up team because it has barriers such as time, leader, place,
learning style, longer process, not equal participation, limited creativity thinking, and
conflict (Mullians, 2013:335-342). At this moment, MAS HR has not enough time
build a team. In addition, some cases telling that self-managed teams are less
optimistic. Though, it has some limitation but team work is bringing more potential
outcomes in the present business world. Therefore, MAS HR can build the team for
their specific goal. Employees are often highly committed and aligned with the
direction of the organisation as a whole (Weiss, 2000). It de-emphasizes the
bureaucracy and wants to look the HR as a strategic partner with the capability to
make unique and make difference contribution. It will move its focus to companys
strategic direction and business. At last, it will increase trust and build up a good
relationship with strategic partner. Because HR will be able to know what customer
expect from the company or the voice of the customer. It helps HR to be aligned
internal initiatives to support customer initiatives. Another factor time, it is not enough
24

MAS hand so short time is taking a competitive advantage in this situation. Because,
it is quite unlikely to believe that the business environment is stable enough to insure
that a longer term investment will be pay off. Moreover the long term strategy
assumes a stable and predictable business environment (Price, 2008). In current
business environment companies expects those strategies that increases revenue
immediately and decrease the cost at the same time. Open an opportunity to work
with other departments either individually or as a team of the organisation as a
strategic partner in developing clear priorities regarding how to add value.

2.5.6 High compensation contingent on performance: Current competitive

business environment is increasing stakeholder level of expectation. Again, it is
putting human resources on the centre point of value adding process (Pfeffer, 1999).
For any organization within any industry to run the business, it is necessary that
select the best people for survive, strive and outperform. Therefore, organization is
selecting best people as much as possible on the basis of their offering available
opportunity to attract them. It is true that high compensation is playing a vital role in
the business success. But it is not for all industries just for certain industry like retail
or highly educated employees or home depot. Usually, home depot business is more
profitable and their stock price can bring exceptional returns. In addition, it is
possible and affordable those are successful organization. However, MAS is facing
tough challenges in current time and already bankruptcy. So, they cannot afford the
high compensation towards the performance. Instead of that MAS can afford
contingent compensation towards high performance. According to different HR
theories (Maslow hierarchy need, Harzberg two factor model, ERG theory) there are
different type of motivator can be used to motivate employees that can help them to
come up with additional energy and high degree of commitment. Again, contingent
compensation can take various forms such as performance or feedback based,
payment system, intrinsic, gain and profit sharing, team-incentives and role based
but it is completely based on organization business strategies. Other way MAS can
afford contingent compensation towards high performance to encourage employee
to take different opportunity within the organization. When employee will get different
opportunity as much as possible they will think that they are the part of MAS owner.
This feeling will bring organization high performance for the success. It will bring

25

work life balance. For example: Southwest Airlines, Wal-Mart and Microsoft (Pfeffer,
1999). So, it can be possible with the help of employee performance.

2.5.7 Reduction of status differentials/harmonisation: Research found that

high performance practice organization system is achieving high level performance
on the basis of ideas, experience, skills and energy, reduce the status and effort
more or less equally within organization (Pfeffer, 1999). It is already mentioned
under just above section where it is argued that key way of achieving this would be
to develop a self- managed team and individual. For example: Japanese HR
practices always like treat and encourage employee equally from top to bottom.
From that employees are getting open practice organization culture and believe they
are valued and treated equally through same uniforms, sick pay, pensions, working
hours, shared canteen and car parking facilities.

From MAS current situation, it is clear that organization structure is functional,

hierarchical and bureaucratic including central control (Johnson, et al., 2011).
Therefore, it clear proves that status is not equal within the organization like Asian
practice organization culture (Yoo et al., 2013). Therefore, it is very necessary that
MAS HR should reduce the status difference on the basis of modern western
practice organization culture. But question is how? It is possible according to Peffer
(1998: 21) reduction of status difference can be brought about in two major ways.
The first one is symbolically by constructive and meaningful use of language and
level, physical space and dress. The Subaru-Isuzu could be cited as an example
where everyone (from president to frontline employees) is called Associate where it
is stated that Subaru-Isuzu does not hire workers but associate who will work as a
team and keep themselves aligned with the company values. From the practice of
modern western practice organization culture and destroying the harmonisation, the
MAS can improve psychological contracts including more employee engagement.

26

3.1 Key Recommendations: In general, the study already has been

recommended some steps towards current MAS complex situation within above all
discussion for the HR. Therefore, the study would like to suggest some key
recommendations for this report. These are as follows:
Create cultural learning environment
Invest towards training and development from the capability
Traditional training and development will be replaced by knowledge and
learning based employee development
Reduce the hierarchy structure and destroy harmonisation
Improve the psychological contract towards more employee involvement and
engagement
Proper utilization of human, social and intellectual capital based on integrated
report frame work towards value adding
More focus on working together to build up trust each other towards develop
innovative solution for the problems
Retain talent and promote them within the organization
HR approach will be blended
HR transformation will be holistic way
Prepare a frontline team by learning, developing and motivating to deliver
quality service
Employee motivation through recognition and reward

3.2 Change model for MAS: Now the question is how the MAS will follow the
process of change. In this process, the study would like to recommend the change
programme developed by Balogun Hop-Hailey (2004).
The model has nine steps and it is discussing for MAS HR:

27

Power: Stakeholder analysis: 1) Government 2) Khazanah 3) Employee 4) Strategic

partner 5) Completely competency map 6) Culture
Time: Total three years process: 1) Crisis for six months 2) One year employee
engagement 3) Two to three years support 4) Continuous incremental change 5)
Best fit approach
Scope: Change in terms of internal and external labour: 1) Transformational and
holistic approach 2) Security of employees 3) Recruitment and selection process 4)
Competency skills
Preservation: Preserve highly competent talent: 1) Psychological contract 2)
Cultural change 3) Destroy de-harmonisation 4) Reforms and reshapes HR
policies/strategies
Diversity: Diversity of workforce (Positive): 1) Creating feedback loops 2) Cultural
excellence 3) Moves to knowledge based view 4) Transparency and accountability 5)
Impacts on loyalty and identity
Capability: Abilities exists for the change (Negative): 1) Line manager needs to
trains to retrain his/her team 2) High employee morals by high employee
engagement and empowerment 3) Communicate through stakeholders
Capacity: Sources (Cash, time and people): 1) Competency test (Basis knowledge
and skills) 2) People from RBV to KBV 3) Return on investment 4) Cost benefit
analysis (Benefits > Cost) 5) Expertise to initiate change programme
Readiness: Awareness and commitment: 1) MAS ready to change 2) Good
communication 3) Evolvement in change process 4) Contingency approach 5)
Strategic partnership
Design choices: Change target, path, style, start point and levers role: 1) Cost
effectiveness

2)

Incremental

3)

Structural

change

3)

RBV

to

KBV

4)

Transformational 5) Employee mindset change 6) Improving efficiency 7)

Performance measurement

28

3.3 Conclusion
Malaysia airline is facing tough challenges to survive followed by two major incidents
this year. Now it is becoming very crucial to redesign their business and value
creation model because they are losing money and already lost brand image
including market reputation as well. Under these circumstances the report aims to
develop agile or adaptive HR capabilities that can meet the external and internal
challenges. Also, the report needs to prepare a change programme on current
situation of Malaysian Airlines. This form of organization can also give it a source of
sustainable competitive advantage. Agile HR is not only working together with
consumers but also focusing on the difficulties within the organization to ahead of
following core question Are these HR problem solutions in the best attention
towards the customers? This potential approach is making the HR more active and
serious towards customer problem solving including satisfy the customer needs as
well. However, HR capability means that strategic involvement. Therefore, agile HR
can make the difference i.e. taking creative competitive advantage. From all above
discussion on current complex situation of MAS, the study has been found that high
commitment/best practice of HR can meet and overcome the MAS current complex
situation based on Pfeffer (1999) recommendation and Ulrich and Brockbank
updated model. It can lead the MAS HR to agile or adaptive. In addition, the study
suggested towards MAS agile HR such as blended approach on change process,
transformational and holistic way, destroy de-harmonisation, prepare a frontline team
to delivery service and move RVB to KBV. Finally, the study has been produced a
change programme model for the MAS agile HR.

29

References
Appelo, J., Fischer, H., and Findwise, E.N. (2013), Meet the talent soft team on
agile HR Agile Conference Paper, 27th November, Stockholm, Sweden
Alderfer, C.P. (1972), Existence, Relatedness, and Growth, Free Press, New York,
USA
Beer, M (2009), High commitment High performance: How to build a resilient
organization for sustained advantages, John Wiley and Sons, San Francisco, USA
Balogun, J. and Hope Hailey, V. (2004), Exploring strategic change 2nd edition,
Pearson Education, Harlow, UK
Brue, K., Hemingway, C. J., Strathern, M., & Bridger, D. (2010), Workforce agility:
The new employee strategy for the knowledge economy, Journal of Information
Technology, Vol. 17, pp. 21-31
Conway, N. & Briner, R. B. (2005), Understanding Psychological Contracts at Work:
A Critical Evaluation of Theory and Research Oxford: Oxford University Press, UK
CPLD (2012), Competency based recruitment and selection Available on <
http://www.ntu.ac.uk/cpld/document_uploads/98694.pdf > [Accessed on 11/11/2014]
Company profile Malaysian Airline System Berhad (2014), Available on market line
report < http://ezproxy.tsd.uwtsd.ac.uk:2114/bsi/pdfviewer/pdfviewer?sid=b4c7ce631681-4d09-b0f0-e021cfb47395%40sessionmgr4003&vid=3&hid=4109 > [Accessed
on 29/10/2014]
Dubrin, A.J. (2012) Essentials of management 9th edition, South-Western: Cengage
Learning, Mason, USA
Glenda Eoyang (2012), Adaptive Action See, Understand and Influence
Organization, Journal of Asia Pacific, Vol. 12, No. 5, pp. 123-148
Griffiths, D (2014), CPA Excellence: A Quick Start Guide to defining and mastering
vital skills for success 1st edition, CPA Center of Excellence, Indiana, USA
30

Harvard Business Review (2013), The impact of employee engagement on

performance Harvard Business School, Harvard, USA
Harrison, A., (2014), Malaysian Airlines strategic management, Available on
<http://www.slideshare.net/harrisonaimiyekagbon/malaysian-airlines-power-point>
[Accessed on 06/11/2014].
Hamzah, AL-Z., Govindasamy, S. (2014), Malaysian Airlines to cut 6,000 jobs and
de-list in $1.9 billion restructuring, Available on
<http://uk.Reuters.Com/article/2014/08/27/uk-malaysia-airlines-staffidukkbn0gq27k20140827> [Accessed on 29/10/2014]
Hinge, P. (2013), Changing HR practices in agile organisation: A current trend - A
global scenario ASMs International E-Journal of Ongoing Research in Management
and IT, Vol. 13, No. 32, pp. 1-7
House R.J. et al. (Eds.2004), Culture, Leadership, and Organizations: The Globe
Study of 62 Societies, Thousand Oaks, CA: Sage.
Hoecklin L. (1994), Managing Cultural Differences: Strategies for Competitive
Advantage, Addison Westey Publishing Company, New York.
IBM (2014), Malaysia business forecast report, Quarter 4, Available on <
http://ezproxy.tsd.uwtsd.ac.uk:2114/ehost/pdfviewer/pdfviewer?sid=557f992d-246d4e52-9a47-c6b53139e432%40sessionmgr4002&vid=5&hid=4201 > [Accessed on
10/11/2014]
IIRC (2013), Integrated Reporting Available on <
http://dysgu.ydds.ac.uk/pluginfile.php/242937/mod_resource/content/1/IR%20Frame
work%202014.pdf > [Accessed on 10/11/2014]
Johnson, G., Whittington, R. and Scholes, K. (2011), Exploring Strategy, 9th
Edition, Pearson Education, Harlow, UK
Kamisan, P. A & King, B. E. M. (2013), Transactional and Transformational
Leadership: A Comparative Study of the Difference between Tony Fernandes
(Airasia) and Idris Jala (Malaysia Airlines) Leadership Styles from 2005-2009,
International Journal of Business and Management; Vol. 8, No. 24, pp. 107-115
31

Kelleher, H. D. (2007), A culture of commitment leader to leader Vol. 1, No. 23

Kearns, P. (2010), HR strategy: Creating business strategy with human capital 2nd
edition, B-H Publication, Oxford, UK
Koon, C.P., Han, C.E., and Chew, E. (2014), Malaysia Airlines to Eliminate 6,000
Jobs amid overhaul, Available on <http://www.Bloomberg.Com/news/2014-0828/malaysia-airlines-reports-sixth-quarterly-loss-before-delisting.Html> [Accessed on
29/10/2014]
Khazanah Nasional (2014), Media Statement, Available on <
http://www.khazanah.com/docs/140829%20Khazanah%20announces%2012point%20MAS%20Recovery%20Plan.pdf > [Accessed on 04/11/2014]
McCarthy, D. (2014), Interview of HR Director British Airways Available on <
http://dysgu.ydds.ac.uk/pluginfile.php/246815/mod_resource/content/1/Tony%20Mc
Carthy%2C%20HR%20Director%20
%20British%20Airways%20%20theHRDIRECTOR%20%20The%20only%20magazine%20dedicated%20to%20HR%20Directors.pdf >
[Accessed on 12/11/2014]
Moran, D. (2010), Top 10 Reasons to Use Agile Development, Available on <
http://www.devx.com/enterprise/Article/44619> [Accessed on 06/11/2014]
Mullians, J.L. (2013), Management and Organizational Behaviour, 10th edition,
Pearson Education, Harlow, UK
Nowlan, J. (2011), Flawless consulting: A guide to getting your expertise used 3 rd
edition, Jossey-Bass, San Francisco, USA
Pfeffer, J. and Veiga, J.F. (1999), Putting people first for the organizational success
Academy of Management Executive, Vol. 13, No. 2, pp. 37-45
Price, A (2008), Human resource management in business context: HR and that
elusive strategic role South-Western: Cangage, London, UK
Purvis, L., Gosling, J. and Naim, M. M. (2014), The development of a lean, agile and
leagile supply network taxonomy based on differing types of flexibility, International
Journal of Production Economics, Vol. 151, pp.100-111
32

Ray, A., Jens, C., Israel, G. and Jorgen, H. (2012), Developed with funding from
Agile Alliance, Conference Paper, May 5-7, Orlando, Florida, USA
Rees, G. and Hall, D. (2013), Leading, Managing and Developing People CIPD
Publication, London, UK
Rousseau, D. M. (2011), The individual-organization relationship: The psychological

contract. In S. Zedeck (Ed.), APA handbook of industrial and organizational

psychology (pp. 191-220). Washington, DC: American Psychological association
Robbins, S.P., Judge, T.A., Millett, B. and Waters-Marsh, T. (2008), Organisational
Behaviour, 5th edition, Frenchs Forest: Pearson Education, Australia
Sanders, C. G. (2014), Why the positional leadership perspective hinders the ability
of organizations to deal with complex and dynamic situations, International Journal
of Leadership Studies, Vol. 8, No. 2, pp. 136-146
Saundry, R., McArdle, L. and Thomas, P. (2011), Transforming Conflict
Management in the Public Sector - Mediation Trade Unions and Partnerships in a
Primary Care Trust, IROWE, University of Central Lancashire, ACAS Research
Paper.
Spender, J.C. (1996), Making knowledge the basis of a dynamic theory of the firm
Journal of Strategic Management, Vol. 17 (Winter Special Issue), pp. 45-62
Sanders, D (2012), Employment relations comment Available on <
http://dysgu.ydds.ac.uk/pluginfile.php/246812/mod_resource/content/1/Placing-Trustin-Employee-Engagement.pdf > [Accessed on 10/11/2014]
Sudworth, J. (2014), Malaysia Airlines flight to Beijing vanishes, Available on
<http://www.Bbc.Co.Uk/news/world-asia-26492748> [Accessed on 29/10/2014]
Subang (2014), Malaysia Airlines Records RM443 million Loss for Q1 2014,
Available on <http://www.malaysiaairlines.com/uk/en/corporate-info/pressroom/latest/malaysia-airlines-records-rm443-million-loss-for-q12014.html>
[Accessed on 09/11/2014]
33

Swift, G. (2012), Managing people and organizations, 1st edition, CIPD Publication,
London, UK
Truss, K., Mankin, D. and Kelliher, C. (2012), Strategic Human Resource
Management, Oxford University Press, New York, USA
Truss, C., Shantz, A., Soane, E., Alfes, K. and Delbridge, R. (2013), Employee
engagement, organizational performance and individual well-being: exploring the
evidence,

developing

theory

International

Journal

of

Human

Resource

Management, Vol. 24, No. 14, pp. 2657-2669

TTG Digital (2014), Malaysia Airlines to be nationalised, Available on <
http://www.ttgdigital.com/news/malaysia-airlines-to-be-nationalised/4692366.article >
[Accessed on 06/11/2014]
TTG Digital (2014), Operators in doubt over future dealings with Malaysia Airlines,
Available on < http://www.ttgdigital.com/news/air-travel/operators-in-doubt-overfuture-dealings-with-malaysia-airlines/4692187.article > [Accessed on 06/11/2014]
Ullah, M.M. (2012), Emerging roles of HR professionals in driving organizational
change, Journal of

Knowledge

Management, Economics and Information

Technology, Vol. 3, pp.1-11

Weber, Y. & Tarba, S. Y. (2014), Strategic Agility: A State of the Art California
Management Review, Vol. 56, No. 3, pp. 5-12
Weiss, D.S. (2000), High Performance HR: Leveraging Human Resources for
Competitive Advantage, 2nd edition, John Wiley & Sons, Ontario, Canada
Yoo, B., Neelankavil, J.P., Gizman, G.M. and Lim, R.A. (2013), Personality Type
Preferences of Asian Managers: A CrossCountry Analysis Using the MBTI
Instrument Asian Institute of Management, Working Paper 13.

34

Appendices
Appendix 1: SWOT Analysis of Malaysian Airlines:
Strengths

Weakness

Improve infrastructure

Substantial debt burden

Broad geographic presence

Poor brand recognition

Established on line presence

Government intervention

Government Ownership

Exit from equity market

One world coalition significantly

Low Turnover

Lack of customers reliance

boosts global traveller feed

Extensive regulatory conditions

impact operating margins
Opportunities

Threats

Demand for regional roots

Market competition

Increased demand for global air

Increase fuel cost

High degree of regularity

transport
Positive outlook about air transport
Restructuring efforts may start to

condition
Restructuring the organization
Constant scanning by

bear fruit
One world coalition membership

consumers
Strong unionized workforce

could facilitate to improved

reputation and generate increased
revenues
New International routes

Source: Market line report, 2014; Sudworth, 2014; Koon et al., 2014

35

Appendix 2: PESTEL Analysis of Malaysian Airlines:

Factors

Influence of these factors

There are two main factors affecting Malaysian

Political

Airlines like security control and restriction on

migrations. According to TTG digital (2014) and
Khazanah Nasional (2014), The Government has
taken a decision on Malaysian Airlines will be
nationalised after two tragedies this year. Basis on
this decision, the biggest state investment firm
Khazanah National (Malaysia) has given a proposal
to buying shares. The firm already has owns 69.4%
of the airline. In addition, the firm has offered to pay
0.27 ringgit (0.05) per share for the outstanding
stock.
Again, two major factors are playing vital role in the

Economical

Malaysian Airlines such as increasing

fuel prices

and fluctuations of exchange rates. After the two

tragedies like July, MH17 and March, MH370, the
government is expecting, it is most likely most likely
by Russian separatists in eastern Ukraine. Because
of that it was shot down. Again, Malaysian
government has been lost Chinese market because
of cancel route from Kuala Lumpur to Beijing for
March MH370 incident. Almost 60% drop sales
from the vital China market in the wake of the
aircrafts disappearance. Past nine months, the
Malaysian Airlines has been fallen 40% market
value. On that situation, Khazanah has been
proposed more than $1 billion investment for
restructuring all aspects of the airlines operations.
This investment will cover business model and
finance as well (TTG digital. Com, 2014 and

36

Khazanah Nasional (2014))

Social

Changing consumers attitudes and rising life

expectancy in development country are impacting
on current situation of Malaysian Airlines. It is very
important to show sympathy and condolence for
those who have lost their friends, family and
relatives in this MH17 disaster (TTG digital.com,
2014). It is remarkable from one of the reaction like
My wife had a close relative killed when a Korean
flight was hit in rather similar circumstances in the
1980s. In reply from Malaysian Airlines Reaction
is hardly constructive and those of us more
pragmatically minded see the incident as a most
unfortunate one off. Therefore, It has shacked the
confidence and commitment on airline especially on
social factor. (TTG digital.com, 2014 and Khazanah
Nasional (2014)).
In this section, there are major three factors playing

Technological

vital role such as increasing green technology,

online booking service and compare price and
security check technologies.

Most crucial factor energy consumption controls is

Environmental

impacting on current situation of Malaysian Airlines.

Two important factors like employees rights and

Legal

customers rights have also be followed and

changes in

laws and

regulations are direct

impacting on current situation of Malaysian airlines.

In aviation industry, there is a number of growing
airlines and their demand worldwide review on how
to operate and determine air safe for the fly

37

because they are concern about game-changing

MH17 tragedy. In general, fly zone not less than
32,000 ft limit for any airlines whether Malaysian
Airlines Boeing 777 maintained that and there was
a no-fly zone up to 32,000 ft in place in the area
where the Malaysia Airlines Boeing 777 crashed.
However, Jet Airways is always maintaining the
limit above 33,000 ft in fly zone. The chief executive
Tony Tyler advised governments to reconsider how
such gaps are examined to prevent a related
catastrophe

in

prospect.

Also

he

added

Governments will need to take the lead in

reviewing how airspace risk assessments are
made. However, the industry will carry out the
entire

that

it

preserves

towards

support

governments throughout ICAO (International Civil

Aviation Organisation) but it is one of the difficult
effort that slander ahead (TTG digital.com, 2014
and Khazanah Nasional, 2014).
Source: Compiled by author, 2014

38

Appendix 3: Porters six forces analysis of Malaysian Airlines:

Forces

Intensity

Justification
There are three factors taking vital role in this

ENTRY INTO

Low

MARKET

current

situation

such

as

huge

capital

requirements, high compliance and specialized

skills requirements.
Two prime factors such as telecommunication

THREAT OF

High

SUBSTITUTES

and smart and fast rail transporting system are

main threat for Malaysian Airlines in present odd
situation.
Here, it is remarkable that following three factors

BARGAINING

High

POWER OF

are impacting not only the Malaysian Airlines but

also the whole aviation industry. These factors
are as follows: limited numbers of suppliers

SUPPLIERS

within the Industry, suppliers are relatively bigger

and high switch over costs.
There are more availability of airlines (United

BARGAINING

High

POWER OF BUYERS

Airways,

Jet

Airways,

Singapore

Airlines),

increased customer awareness and easy access

to information are more impacting on current
situation

of

Malaysian

Airlines.

Therefore,

customers have more available options to choice

low price airlines.
Airlines industry characterized by very little
COMPETITIVE
RIVALRY

High

differentiation on their own product. So, airline

industry position is in very week because of
these products and conditions of present market.
In

addition,

airlines

industry

is

mostly

disappeared because of non-price competitions.

Also, current two incidents Malaysian Airlines

39

has been put into the high fixed costs most and
left in a difficult negotiating position.
At present, there are available complements
Complements

Low

within the airline industry to travel. It is

remarkable that determine magnitude relations
and its maintained so difficult.

Some of the

available products and services are very much

related within the airline industry complements to
travel like hotel rooms, restaurants, leisure and
rent a car price as well. Therefore, above
complements and its cost when lower, it will
create

greater

demand

within

the

airlines

industry. Therefore, the above complements

discussion was very well organized before the
two incidents of Malaysian Airlines. However, it
is

now

totally

discrete

and

suffering

complements service with their business partner.

Source: Compiled by author, 2014

40

Appendix 4: Risk analysis of Malaysia Airlines:

ID
1

Risk

Probability

Impact

Action

Poor brand

High

High

More focus and

recognition

concentration towards
best practice of
marketing plan and
strategies

Increase fuel price

Medium

High

Need to better
prevarication practices

Strong unionized

High

High

workforce

To set up a acceptable
terms and conditions
with union workforce

Government

Medium

High

High

High

intervention

Lack of customers
reliance

Need to build up
customer relationship
management on the
basis of restructuring
HR policy and practices
towards customer trust

High degree of

High

High

regularity condition

Need to maintain
aviation industry
standard regularity
condition

Source: Compiled by author, 2014

41

Appendix 5: Cultural web analysis of Malaysian Airlines: Based on Johnson et

al. (2011:176)
Stories: In this section some of the following factors are affecting the Malaysian
Airlines especially HR:
Salvation meaning money making deal
In terms of leadership style towards blame practice within the organization
including low cost culture
Symbols: Brand is symbolizing high cost before two incidents. After the incidents
dispersed share rights.
Power: Control by CEO and Corporate Board Directors. It has egotism and male
dominant including visible.
Organization: The organization structure is functional, hierarchical and bureaucratic
including gaps of guiding principles.
Control: All controls centrally on the basis of Board Corporate plan and lots of
measurements.
Rituals and Routines: Within organization, everything going fast through routine. In
addition, it has formal induction and challenges as well.
Paradigm: At present, it has gaps on collaboration, quality customer service and
employee engagement. Senior management evangelizes and more focus towards
overcome the present crisis.

42

Appendix 6: Stakeholder analysis of Malaysian Airlines:

Stakeholders are individual, groups or organizations who have potential interest in
the company. Stakeholder can be internal as well as external. Like other airline
industries, MAS has many stakeholders including the Malaysian Government, who
recently bought the ownership of the Malaysian airlines. Stakeholder relationship
explains the connections between the stakeholders and the organization. Malaysian
airlines have a great number of stakeholders group. Important stakeholders are
The Government: Government is the main stakeholders of MAS. They have
got huge range of legislation for domestic, Asian and international. Those
regulations have huge impact on Malaysian airline industry. Due to their
regulations and bilateral agreement MAS cannot run in some routes.
However, government allowing MAS to mainly operates commercial business
model (khazanah Nasional, 2014).
MAS Management: Developing and delivering operational plan that is leading
to build a successful new Malaysian Airlines. They are resetting work rules,
processes and negotiating with suppliers and creditors to business standard
(khazanah Nasional, 2014).
Khazanah: Khazanah is developing and delivering the overall enabling
recovery plan, monitoring the progress and preparing an enabling
environment as well as providing progressive and contingent fund (up to RM6
billion) to support MAS recovery (khazanah Nasional, 2014).
MAS Employees and Unions: Although employees are under pressure to
keep their job open as MAS management decided to cut down 30% of
employees but still performing their highest level to support the MAS
restructuring as they have the huge power of influencing customers. Due to
recent staff cut proves that MAS management and employees do not have
strong relationship and it is making employees dissatisfaction. Unions are
strongly supporting them to raise their voice on taking major decisions
(khazanah Nasional, 2014).
Suppliers, Contractors and Financiers: They are delivering services and
terms reliable with market standards (khazanah Nasional, 2014).
Media: Media is one of the important stakeholders as they have huge impact
on MAS. MAS need to maintain high quality of relation with media after the
43

recent incidents in order to have the very good relations with publics
(khazanah Nasional, 2014).
Shareholders: Malaysian Airlines need very strong relationship with all the
shareholders as MAS is running under huge financial loss last few years.
Shareholders have very high interest in the financial success of MAS (khazanah
Nasional, 2014).
Appendix 7: Malaysian Airlines internal environment analysis basis on
Maslow's hierarchy of needs:

SelfActualiz
External
Esteem
Needs
Internal Esteem
Needs
Social Needs

Safety Needs

Physiological Needs

Source: Mullians, J.L. (2013:253)

On the basis of above figure, it is very crucial that Malaysian Airlines most of the
employee very much concerns about their job security after the two incidents and
6000 staff cut announcement (Koon et al., 2014, Hamzah and Govindasamy, 2014
and Subang, 2014). It is consistent with Maslows second step though employees
are little bit concern about Maslows first step because they have alternative option to
survive their life either government help or any other job facilities. Again, these two
incidents are affecting their personal and family life towards health care, safe
44

neighbourhoods and shelter from internal environment as well external. In addition,

they have lost their confidence, relationship, trust, social stability and intimacy as
well. Therefore, there is no self-actualization in this situation of Malaysian Airlines
internal environment because they have lost their interested related fulfilling
potential.
Appendix 8: ERG Theory
Alderfer (1972) has divided Maslows six steps by three such as growth, relatedness
and existence. Alderfer idea was same like Maslows on the basis of following below
figure but his argument was simple menthods:
Satisfaction = Progression (Organization performance increase), Frustration =
Regression (Organization Performance decrease)

Source: Alderfer (1972:18-29)

45