PRINCIPLES AND PRACTISE OF MANAGEMENT (MGT 420)

GROUP ASSIGNMENT 1
A WELL-KNOWN ORGANIZATION:
CAPITAL A (PREVIOUSLY KNOWN AS AIRASIA)

PREPARED BY
Student ID Name Group
2022406588 Mariatulkaftiah binti Othman NBCS2553A
2023516519 Muhammad Ikhwan Bin Mohammad Faisal NBCS2553A
2022596238 Nurjannah Nadhirah binti Yazib NBCS2553A
2022671538 Siti Nur Amirah Binti Abu Bakar NBCS2553A

BACHELOR OF COMPUTER SCIENCE (HONS) COMPUTER NETWORKS (CS255)

PREPARED FOR
PROFESOR MADYA DR MOHD KHIRZANBADZLI B A RAHMAN

SUBMISSION DATE
JAN 7, 2024
 APPRECIATION

We, the members of Group 1, would like to extend our heartfelt gratitude to our
esteemed lecturer, Professor Madya Dr. Mohd Khirzanbadzli, for their unwavering guidance,
support, and mentorship throughout the completion of this report. His expertise and dedication
have been instrumental in shaping our understanding and enabling us to meet high standards
of academic excellence.

We would also like to express our appreciation to each member of our team, whose
collaborative effort and commitment have played a significant role in the successful completion
of this report. The collective contributions and dedication of each team member have been
invaluable, and we are proud of what we have achieved together.

Furthermore, we wish to acknowledge the accomplishment of this report, which

represents the culmination of our hard work, research, and shared knowledge. It stands as a
testament to our collective capabilities and our commitment to the pursuit of academic
excellence. In closing, we express our profound thanks to all those who have contributed to the
realization of this report, and we look forward to building on this experience as we continue
our academic journey.

Sincerely,
Mariatulkaftiah Binti Othman (2022406588)
Muhammad Ikhwan Bin Mohammad Faisal (2023516519)
Nurjannahnadhirah Binti Yazib (2022209102)
Siti Nur Amirah Binti Abu Bakar (2022671538)

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 TABLE OF CONTENT

Content Page
LIST OF PICTURES 4
LIST OF TABLES 5
1.0 INTRODUCTION 7 - 12
1.1 Company background 7
1.2 Organization Restructure to Capital A 8
2.0 OBJECTIVES 13
3.0 METHODOLOGY 13 - 15
3.1 Limitation of study 15
4.0 DISCUSSION 15 – 28
4.1 PLANNING 15
4.1.1 Organization Vision, Mission and Business Model 16
4.1.1.1 Vision 16
4.1.1.2 Mission 17
4.1.1.3 Air Asia Bhd Business Model 17
4.1.1.4 Capital A Business Model 19
4.1.2 Strategy Formulation 20
4.1.2.1 Corporate Strategies 21
4.1.2.2 Business Strategies 23
4.1.2.3 Functional Strategies 24
4.1.3 SWOT Analysis 26
4.1.4 Issue in Planning: A Call for Comprehensive Preparedness 28

4.2 ORGANIZING 28 – 41
4.2.1 Organization Chart 29
4.2.1.1 Before Restructure (Air Asia Bhd) 29
4.2.1.2 After Restructure (Capital A) 30
4.2.2 Organizational Structure by Level 31
4.2.3 Organizational Structure by Departmentalization 35
4.2.3.1 Before Restructure (Air Asia Bhd) 35
4.2.3.2 After Restructure (Capital A) 37

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 Content Page
4.2.4 Organizational Culture and Value 38
4.2.5 Issue in Organizing: Illuminating the Path of Organizational 41
Transformation

4.3 LEADING 41 – 46
4.3.1 Leadership Style 41
4.3.1.1 Charismatic and Inspiring 42
4.3.1.2 Intellectual Stimulation 43
4.3.1.3 Individualized Consideration 43
4.3.2 Groups or Teams 43
4.3.3 Motivation 44
4.3.4 Issue in Leading: Nurturing Leadership Beyond Individuals 45

4.4 CONTROLLING 46 – 50
4.4.1 Type of Control 46
4.4.1.1 Feedforward Control 47
4.4.1.2 Concurrent Control 48
4.4.1.3 Feedback Control 49
4.4.2 Issue in Controlling: Fortifying Control Capabilities for 50
Operational Excellence
5.0 RECOMMENDATIONS 51 –57
5.1 Planning 51
5.2 Organizing 53
5.3 Leading 54
5.4 Controlling 56
6.0 CONCLUSION 57
7.0 REFERENCES 58 - 59
8.0 APPENDICES 60

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 LIST OF PICTURES

No Picture Page

1 Picture 1: Air Asia Berhad Group Subsidiaries in 2005 8

2 Picture 2: Corporate structure of Air Asia 29

3 Picture 3: AirAsia Bhd Organization Chart 30

4 Picture 4: Capital A Organization Chart 30

5 Picture 5: Corporate Governance Framework After Restructure 31

6 Picture 6: AirAsia Aviation Group Corporate Structure 38

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 LIST OF TABLES

No Tables Page

1 Table 1: Capital A Business Portfolio and Subsidiaries in 2022 9

2 Table 2: Finding from Secondary Data 14

3 Table 3: Analysis on Capital A Business Strategies Plan 24

4 Table 4: Analysis on Capital A Functional Strategies Plan 25

5 Table 5: SWOT Analysis for Capital A 27

6 Table 6: Capital A Allstar Core Values 39

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1.0 INTRODUCTION

“From Zero to Hero”. The company that we chose for this group assignment is Capital
A, previously known as AirAsia Bhd. AirAsia Bhd is a well-known low-cost airline that brings
the tagline “Now Everyone Can Fly” has been admired by the big business in the world. The
company's journey from humble beginnings to international acclaim, marked by innovative
strategies and resilience, offers a rich landscape for exploration. Capital A paradigms shift in
the aviation industry, admired by global business entities, provides an excellent opportunity to
delve into strategic management, organizational growth, and the impact of visionary
leadership. In essence, Capital A serves as an impressive case study for dissecting and
understanding the dynamics of turning challenges into triumphs within the business realm.

1.1 Company Background

AirAsia was incorporated in 1993 by the Malaysian industrial conglomerate, DRB-

Hicom and a local aviation company, Mofaz Air. It began its operation on 18 November 1996
and was designated to operate both domestically and internationally. In September 2001, DRB-
Hicom sold its’ 99.75% share in AirAsia to Tune Air, owned by Tony Fernandes for 1 Malaysian
Ringgit (MYR) and assumption of 50 percent (40 million ringgit) of AirAsia's net liability,
while Mofaz Air retained the remaining 0.25%. According to Shuk-Ching Poon, T., & Waring, P.
(2010), in December 2001, just a few months after the terrorist attacks on New York and
Washington left the international airline industry reeling, the sale of AirAsia was finalized and
it was announced that the airline was going to operate on a “no frills, less expensive domestic
fares” concept (Man, M. K., & Justine, J. B., 2011). Within 11 months of acquiring the
company, Tune Air had fully repaid this debt and by January 2003 the company was operating
six aircraft domestically. In 2006, AirAsia boasted a fleet of 35 Boeing 737-300 aircraft and
eight Airbus 320 aircraft with orders for 100 more A320s and was forecast to carry nine million
passengers to 52 domestic and international destinations. From humble beginnings operating
just two aircraft domestically in early 2002 as a full-service domestic carrier, AirAsia (recast
as a low-cost carrier – LCC) now has an average fare of RM 195.22 in 2022. It Carried 34.2
million guest and flew a total of 209 routes connecting 106 destinations with a balanced mix
of domestic and international routes (Capital A 2022 Annual Report 2022, p. 67)

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 Picture 1: Air Asia Berhad Group Subsidiaries in 2005
Source: https://www.capitala.com/misc/ar2005.pdf

1.2 Organization Restructure to Capital A

In early 2022, Air Asia Berhad rebranding to ‘Capital A’, a dynamic corporate identity
that embodies the group evolution from an airline to digital travel and lifestyle brand. Their
diverse business verticals include aviation, aviation services, Super App, fintech portfolio
company BigPay, logistic venture Teleport as well as Ventures.

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Business Portfolio Subsidiaries
Aviation Group AirAsia
- Four airlines spanning across Malaysia, Thailand, Indonesia
and Philippines.
- Extensive network of over 106 destinations across the regions
Logistics Teleport by AirAsia
- Fast growing Asean Air Logistics venture of Capital A, with the
largest cargo network in Asean
Aviation Service ADE
- A one-stop center offering a broad range of services, including
line and base maintenance, component and tools, technical
support and digital solutions
GTR
- Offer comprehensive coverage of ground handling services.
Air Asia Consulting
- Offer tailored consulting services for global LCC airlines and
investors.
AirAsia’s Santan
- Serving food both in the air and on the ground via nine Santan
Restaurant and cafes.
Digital Air Asia Super App (currently known as Move)
- Travel and lifestyle super apps with over 11 different products.
Ikhlas
- Provide access to faith-based lifestyle product and services.
Financial Sevice Bigpay
- Digital financial services in Southest Asia.
Ventures AirAsia Academy
- Digital Learning platform.
Grocer
- Provide farmer with stronger distribution channels and
effective logistics solutions.

Table 1: Capital A Business Portfolio and Subsidiaries in 2022

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 Based from Capital A 2022 Annual Report, the AirAsia portfolio encompasses a diverse
range of businesses and subsidiaries, each with clear objectives and missions. In the aviation
segment, The AirAsia Aviation Group aims to secure a position among the Top-10 global
airlines while maintaining its status as the largest airline group in Asean. Their mission is to
create extensive connectivity by linking over 1 billion people throughout Asean by 2026. In
2022, the aviation segment comprises AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia,
and AirAsia Philippines.

AirAsia Malaysia made a resilient comeback in 2022 as air travel in Malaysia resumed
on April 1 when borders were reopened for vaccinated individuals. The airline strategically
focused on resuming profitable routes and exploring new underserved destinations. By the end
of the year, AirAsia Malaysia successfully operated flights to 65 destinations, including 48
international routes, with plans to have its entire fleet of 100 aircraft back in the skies by the
third quarter of 2023. Noteworthy accomplishments include a remarkable 435% year-over-year
increase in the number of guests carried, totaling 16.8 million, and a substantial 384% year-
over-year surge in overall capacity to 20.1 million. Achieving a commendable load factor of
84%, on par with pre-Covid levels, certain international routes exceeded a 90% load factor,
exemplified by Penang-Indonesia and Kuala Lumpur-Chiang Mai. Additionally, AirAsia
Malaysia integrated its FACES system with Malaysia Airports Holdings Berhad (MAHB)
biometric solutions, enhancing passenger convenience through the utilization of MAHB e-
gates and the passenger reconciliation system at boarding gates. These operational highlights
underscore the airline's adaptability and strategic prowess in navigating the challenges of the
post-pandemic travel landscape.

Reflecting on a year marked by substantial recovery, AirAsia Indonesia (IAA)

experienced a resurgence in travel, encompassing tourism, business, and academic pursuits.
Responding to this renewed demand, IAA not only reopened all its popular domestic and
international routes but also inaugurated nine new domestic routes. The airline exhibited
adaptability and resilience by nurturing its charter business and ensuring guests could leverage
the advantages of the Group's digital innovations. Noteworthy achievements include
concluding the year with a match of pre-Covid domestic routes (20) and a commendable
recovery of 71% of pre-Covid international routes (17 out of 24 in 2019). Balancing the
equation, IAA achieved 65% of pre-Covid domestic capacity and 30% of pre-Covid
international capacity, resulting in a total operational capacity at 43% of pre-Covid levels.
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 Embracing modernity, the airline introduced self-check-in and booking features
through the AirAsia Super App, aligning with its commitment to enhancing the passenger
experience and meeting evolving travel expectations. These operational highlights underscore
AirAsia Indonesia's pragmatic approach and strategic initiatives in navigating the evolving
travel landscape while prioritizing convenience for its travelers.

Meanwhile, AirAsia Philippines (PAA) navigated the changing landscape with a

strategic focus on reigniting domestic travel demand and fortifying the AirAsia brand.
Collaborating with stakeholders, PAA organized tourism fiestas to open up new holiday
destinations like Roxas and Dumaguete, demonstrating a commitment to fostering tourism.
Ensuring a smooth international travel experience, the airline kept travelers informed about
evolving travel requirements. With a community-centric approach, PAA amplified its corporate
responsibility program, alwaysREDy: anytime, anywhere. The year was characterized by a
concerted effort to rekindle relationships and create mutually beneficial outcomes with various
stakeholders. PAA concluded the year flying 15 aircraft, achieving a pre-pandemic aircraft
utilization rate and an impressive load factor of 89%, surpassing both 2021 and 2019. The
reactivation of 26 pre-Covid routes and the introduction of five new routes contributed to the
airline flying close to quadruple the number of guests compared to 2021. PAA's initiatives also
extended to launching the airasia Super App to stimulate greater travel demand and the Stellar
Awards, recognizing partners supporting the aviation and tourism industry from media,
industry, and celebrity spheres. These operational highlights reflect PAA's resilience,
adaptability, and collaborative spirit in the evolving aviation landscape.

In the ever-changing landscape of the aviation industry, AirAsia Thailand (TAA)

demonstrated adaptability and resilience throughout 2022. The demand for travel gained
momentum from the second quarter, allowing TAA to recapture a substantial share of the
domestic market and reaffirm its leadership in this segment. While international travel faced
challenges due to China's prolonged zero-Covid policy, effectively restricting inbound and
outbound tourism, TAA strategically redirected its focus toward the second largest Asian
market, India. Noteworthy achievements include the recapturing of 29% of the domestic travel
market, flying an impressive total of 7,938,962 domestic guests. TAA re-launched six routes
and introduced a new route to India, achieving a commendable average load factor of 86% to
these destinations. By the end of the year, TAA was operating a network of 33 domestic routes
and 34 international routes. The airline, with an end-of-year fleet of 42 aircraft from a total of
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54, showcased significant growth in total seat capacity compared to the previous years. TAA's
commitment to operational excellence was evident through its remarkable on-time
performance of 92%. These achievements underscore TAA's strategic efforts to navigate
challenges, recapture markets, and maintain a strong foothold in the dynamic aviation
environment.

In the Aviation Services sector, Asia Digital Engineering strives to be the premier
Maintenance, Repair & Overhaul (MRO) service provider in Southeast Asia, offering high-
quality, innovative services at competitive rates. AirAsia Consulting envisions being a
preferred global aviation consulting firm, recognized for delivering exceptional results in
driving growth and operational excellence. Ground Team Red aspires to be Asean’s first-choice
ground handling service provider, with a mission to create a globally recognized Asean brand
through innovation and value. Meanwhile, Santan aims to be the leading Asean fast-food chain,
bringing Malaysian and Asian favorites, including nasi lemak, both in the air and on the ground.
This diverse portfolio combines practical ambitions with a commitment to quality and
innovation, shaping a dynamic narrative for the AirAsia group.

In the vast tapestry of the AirAsia portfolio, a mosaic of diverse ventures unfolds.
Teleport stands as the logistics powerhouse, simplifying the movement of goods across
Southeast Asia with a straightforward mission: to move things better than anyone else in the
region. Meanwhile, the AirAsia Super App emerges as the digital hub aspiring to be the go-to
super-app in Asean, connecting customers with everything, everywhere, and providing value,
togetherness, affordability, accessibility, and inclusivity. BigPay, the financial partner for
Southeast Asians, seeks to empower lives one transaction at a time. Ikhlas, aiming to be a
leading global Shariah lifestyle platform, focuses on enriching the lives of Muslims through
digitalization and community improvement. In the realm of ventures, Redbeat Capital serves
as the innovation engine, fostering new businesses to enhance the Capital A ecosystem globally.
AirAsia Academy aims to disrupt education in Asean by offering a comprehensive platform for
education and employment needs, while AirAsia Grocer endeavors to lead the cross-border
airflown food trade in Asia, targeting a revenue milestone by the end of 2026. This vibrant
collection of enterprises paints a dynamic picture of practical aspirations and meaningful
contributions within the AirAsia family.

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2.0 OBJECTIVES

The primary objective of this group assignment endeavor is to undertake the following tasks:

2.1 To retrieve and process information related to Capital A management concepts and
principles.

2. 2 To utilize Capital A main management functions (Planning, Leading, Organizing,

Controlling) to critically review the organization's management practices.

2.3 To write a comprehensive report on Capital A operations, including issue identification,

discussion, suggestions/recommendations, and a conclusion.

2.4 To demonstrate competencies in integrating managerial roles (planning, organizing,

leading, controlling) into Capital A management practices, critically reviewing and analyzing
the effective application of management principles to diagnose and solve organizational
problems, and developing optimal managerial decisions.

3.0 METHODOLOGY

To achieve this group assignment objectives, we implement qualitative approach by

conducting in-depth literature review and comparing with secondary data to see the connection
between the theory and reality. We have collected data from secondary data like journals,
articles, books, research papers and internet articles to find the content about leadership in this
airline company. We also collect data from the annual report, company website and other
websites like news websites.

According to Wahyuni (2022), good qualitative research should pay attention on how
valid and reliable of the study has been guaranteed. The ensure the credibility and internal
validity of this study, we use source triangulation by comparing secondary data by variable
from credible source. The external validity of this group assignment has been achieved by using
thick description. We also take some quotes to describe what is happening in the field. The
table below shows some research finding from the secondary data.
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 No Author (Year) Title Major Findings
1. Badzlina, M., Fitriyana, Key to a Successful Leadership Tony’s leadership has
Sihotang, B., Cesario, I., of Tony Fernandez in Air Asia succeeded in making
Danang, F., Pamungkas, & AirAsia become one of the
Djojohadikusumo, S. leaders in the world low-
(2022) cost airline market.
2. Fickry, A., Mui, D., Leadership and Organizational Leadership is one of the key
Sallehuddin, M., Nurul Success: A Study of AirAsia success factors of AirAsia
Nabila, & Siti Nuraishah.
(2020)
3. Mamrina, Y., Kee, D. M. H., A Case Study on Critical Reason customer choosing
Tursynbay, A., A/P Jayagopal, Success Factors of AirAsia Air Asia due to cheaper
D., Binti Mohd Athiyah, H. ticket price
A., & Muhamach, R. (2020)
4. Man, M. K., & Justine, J. B. AirAsia In the Malaysian AirAsia successfully
(2011). Domestic Airline Market: implemented new strategy
Empirical Analysis of Strategy. within its own right, without
affecting MAS.
5. Shuk-Ching Poon, T., & The lowest of low-cost carriers: AirAsia cost leadership
Waring, P. (2010). the case of AirAsia. sustainable
6. Kanta, M.A., & Ahlan, A.R. Low Cost Business Model in Low-cost model has been
(2017). Airlines Industry (A Study on successful for the airline
AirAsia). industry under the right
circumstances
7. Ahmad, R., & Neal, M. AirAsia. Asian Journal of AirAsia low-cost business
(2006). Management Cases model

Table 2: Finding from Secondary Data

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3.1 Limitation of Study

While AirAsia has successfully undergone restructuring to become Capital A, our focus
will be primarily on the aviation group subsidiaries instead on other company subsidiaries. We
anticipate occasional interchangeability of terms between Capital A and AirAsia in our
discourse.

4.0 DISCUSSION

Management is a dynamic function and an ongoing process. All the functions of

management, such as planning, organizing, leading, and controlling (P-O-L-C) are performed
continuously. The dynamism of management enables the constant analysis and handling of
opportunities, alternatives, and challenges, utilizing intelligence consistently. This becomes
crucial when a company is undergoing a crisis; multiple stakeholders often come into play,
including some who may not have been regarded as significant stakeholders before the
organizational crisis occurred (McDonald et al., 2010). Unforeseen conflicts and challenges
can arise as a result. Each of the four components of this management tool (P-O-L-C
framework) plays a critical role in the success of a business, and they are interdependent and
interconnected.

4.1 PLANNING

Planning is the function of management that involves setting objectives and

determining a course of action for achieving those objectives. Planning requires that managers
be aware of the environmental conditions facing their organization and forecast future
conditions. It also requires that managers be good decision makers. In other words, planning is
the process by which managers set goals and specify how it will be met. Planning is important
for any organization, as it outlines the long-term goals and short-term goals of the organization.
It starts with vision and mission and concludes with setting goals and objectives.

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4.1.1 Organization Vision, Mission and Business Model

Tony Fernandes’ philosophy stated that all criteria of business must be clarified so that
the goal, vision, mission, and objectives should be acknowledged by all stakeholders, mainly
the employees and customers (Fickry, A. et. al, 2020).

4.1.1.1 Vision

A vision refers to a conceptual image that requires thinking strategically about the future
direction and trying to become a reality in a company’s future. Therefore, it is crucial for
AirAsia to establish a vision statement while planning.

AirAsia's first vision was to become the biggest affordable airline in Asia, serving three
billion people with poor connectivity and high fares. After reviewing this vision, they adjusted
it to a new one: "To lead the airline industry and be the most recognized affordable airline that
offers a great flying experience in Asia." The new vision still focuses on being the largest low-
cost airline in Asia. As AirAsia grows, more people will easily recognize it, creating a strong
brand for customers.

In the wake of rebranding and restructuring, AirAsia's mission has undergone a

significant transformation. In 2020, the company marked a pivotal moment in its history by
accelerating its digital transformation, evolving beyond its identity as a mere airline. Today,
under the umbrella of Capital A, it has diversified its portfolio to encompass a range of
businesses. This transformation includes ventures into e-commerce, ride-hailing, edutech, and
fintech solutions within its SuperApp. Moreover, it now extends its services to logistics,
engineering, and aviation consulting.

Capital A has evolved into an investment holding company, boasting a diverse set of
businesses. These entities synergize with each other, aiming to deliver unparalleled value at the
most competitive costs. Despite this expansion, AirAsia remains steadfast in its commitment
to championing the ASEAN region. The new mission, "Uniting ASEAN and Beyond," reflects
the company's dedication to a region abundant in culture, diversity, and talent. It emphasizes
the vision of fostering unity in a region connected by shared heritage and collective aspirations.
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4.1.1.2 Mission

Mission outlines the fundamental reason for an organization's existence and often
encapsulates its core values and aspirations. The original mission of AirAsia is “to be pleasant
organization to work for whereby employees are handled as part of a huge family”, “create a
globally diagnosed ASEAN brand”, “to achieve the lowest cost so that everybody can fly with
AirAsia”, and “keep the best quality product, embracing technology to lessen cost and enhance
service levels.”

However, after an evaluation of AirAsia mission announcement, the brand-new mission

statement is written as: “To carry complete best service to the clients but providing the lowest
flight fee.” Hence, it fulfilled the ‘now everybody can fly’ tagline correctly. The following is
“with a solid and galvanized staff team and build a closed relationship between the employees
and also the management of Pinnacle.” Lastly, is “Updating and embracing the technology all
the time to fulfil the goals of AirAsia that is reduced the fee to the lowest”.

In the dawn of 2022, AirAsia underwent a transformative rebranding, emerging as

'Capital A,' a vibrant corporate identity symbolizing our evolution from a mere airline to a
dynamic digital travel and lifestyle brand. Their new mission, "Connecting People,
Transforming Lives," encapsulates the essence of their commitment. At the core of their
endeavors are people, and their purpose is to forge connections that transcend boundaries and
link everyone to everything, everywhere. In this pursuit, they strive to uplift the underserved,
foster communities, and catalyze transformative experiences that unite the diverse tapestry of
ASEAN.

4.1.1.3 Air Asia Bhd Business Model

According to Kanta, M.A., & Ahlan, A.R. (2017), choosing a business model is an
important step when deciding to start a business. This means deciding how you want to make
money and add value to your company. Just making cool products isn't enough for success.
You need a business model that brings in money over time and avoids spending too much. It
should have the right prices, the right way to deliver products, and reach the right customers.

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Building a successful business requires focusing on details and creating a clear business model.
Both things should happen at the same time.

Upon takeover by new owners, AirAsia adapted a new operating model following those
used by other low-cost airlines such as Southwest Airlines in the US and Ryanair and Easyjet
in Europe, namely the low-cost carrier (LCC). According to Badzlina, M. et.al (2022), this
business model is a unique flight model with a strategy to reduce operating costs. By carrying
out cost efficiency in all lines, AirAsia engages in practices that deviate from the typical habits
observed in other airlines. If the full board services, the airline provides services such as
catering, newspapers, in-flight entertainment, lounges, free taxy after landing and so on.
Contrary to this, low-cost carrier (LCC), airlines have eliminated traditional airline services,
such as by reducing catering, booking airplane tickets with the aid of IT technology so that the
service looks simply and can be faster. The simple service results in cost reduction, but the
safety factor is maintained to ensure the safety of passengers until they reach their destination.

Low-cost carrier (LCC) is an airline business model that provides affordable ticket
prices and minimizes flying services. In essence, the product offered always has a low-cost
principle to reduce operational costs so that they can capture a wider lower market segment.
According to Man, M. K., & Justine, J. B. (2011). AirAsia adheres to the principles of Low-
Cost carrier (LCC), with following below key methodologies:

(i) Safety first

Safety is the absolute most imperative criterion in each part of the operations, a range
that AirAsia will never compromise on. AirAsia consents to the conditions set by
controllers in every one of the countries where the airline operates. Joining forces with
the world's most famous maintenance provider and conforming to world aircraft
directions.

(ii) High aircraft utilization

AirAsia's high recurrence flights have made it more helpful for visitors to go as the
carrier executes a brisk turnaround of 25 minutes, which is the speediest in the region.
This is the cause of high aircraft usage, bring down expenses and more prominent
aircraft and staff efficiency.

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 (iii) Low charge, no frills
Giving visitors the decision of tweaking administrations without bargaining on quality
and administration. AirAsia targets visitors who are set up to get rid of ornamentations,
for example, dinners, preferred customer credits or airplane terminal parlors in return
for admissions lower than those right now without including on quality and
administration. Visitors have the decision of purchasing solely arranged suppers,
snacks, and beverages from in-flight benefit at an affordable cost. AirAsia’s fares are
based on when the tickets are purchased. No frills services on AirAsia flights meant no
complementary meals or drinks and no in-flight entertainment. The following reviews
in detail the execution by AirAsia of the “Southwest Strategy”.

(iv) Streamline operations

Ensuring that procedures are as basic as could reasonably be expected. Making the
procedure as basic as conceivable is the way to AirAsia's prosperity. Making the
procedure as basic as conceivable is the way to AirAsia's prosperity.

(v) Lean distribution system

AirAsia offers a wide and inventive scope of appropriation channels to make booking
and voyaging less demanding for its visitors. AirAsia's ticketless administration gives
a minimal effort contrasting option to issuing printed tickets. Straightforward
Distribution System Simple is great, basic is the thing that we need and basic is the
thing that we as a whole need.

(vi) Point to point network

Applying the indicated point organize keeps operations basic and expenses low.

4.1.1.4 Capital A Business Model

Capital A is about democratizing services that people value. Through their airline
business AirAsia, they have pioneered low-cost air travel in Asean, adapting the lean, no-frills
business model employed in the US and Europe to the local landscape. Through their digital
and technology platforms, Capital A are replicating their low-cost model across various lines

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of business in order to make quality everyday lifestyle services affordable, accessible and
inclusive to all.

(i) Aviation
▪ Ensure everyone in Asean can fly with their safe, low-cost airline model
▪ Follow previous AirAsia business model

(ii) Aviation services

▪ Provide a comprehensive range of digitally-enabled aviation
maintenance, repair and overhaul (MRO) services
▪ Provide ground-handling services for AirAsia and third-party airlines
▪ Provide inflight catering service and operate restaurants on the ground
▪ Provide aviation consultancy services to airline clients

(iii) Digital
▪ Offer a complete travel-related to ecosystem on their own superapp
▪ Provide Muslim-centric travel and related services
• Offer the young and digitally savvy quick and efficient fintech services

(iv) Logistic
▪ Provide end-to-end logistics services

(v) Ventures
▪ Invest in and scale up digital startups that support the Capital A
ecosystem

4.1.2 Strategy Formulation

Strategic formulation refers to development of a set of corporate, business and

functional strategies that allow and organization to accomplish its mission and achieve its goals.

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4.1.2.1 Corporate Strategies

Corporate strategies refer to a company's overarching plan or framework designed to

achieve its long-term objectives and gain a competitive advantage in the market. It involves
decisions and actions that shape the company's overall direction, scope, and resource allocation
to meet the needs of various stakeholders, including shareholders, employees, and customers.
Corporate strategy is aligned with the company's vision and aims to create value and increase
profitability. It encompasses various aspects such as business portfolio management, resource
allocation, and organizational design.

The strategy can be classified into different types, including growth, stability,
retrenchment, and re-invention strategies, each with its own set of objectives and sub-types.
Ultimately, corporate strategy serves as a blueprint for the entire organization, guiding its
efforts to minimize risk, maximize growth, and achieve long-term success. Based on the Capital
A Berhad Annual Report 2022, the company has implemented a set of corporate strategies
which are:

(i) Aviation Expansion

The company focuses on expanding its route network, enhancing operational
efficiency, and improving the passenger experience. It has also increased its
effective control of Philippine AirAsia to 100%, indicating a strategic move to
strengthen its position in the aviation market. AirAsia's aviation group has outlined
a robust expansion plan from 2020 to 2030, aligning with the company's corporate
planning. The timeline of the expansion plan is as follows:

2023
The company eyes growth with the addition of 19 more aircraft, with plans to start
flights to Australia in March 2024, operating daily roundtrips between Kuala
Lumpur and Australia. Additionally, the group expects to increase its fleet by
nineteen A320s and return all remaining parked aircraft. The long-haul AirAsia X
operations are set to receive an additional fifteen widebodies, and the company
plans to expand its route networks, increasing capacity to China and India, and
launching a new route to Central Asia (Karp, A. & Casey, D., 2023)

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 Beyond 2023
AirAsia has 362 A321-200NX on order, with deliveries scheduled from 2024. The
company also plans to expand its route networks, including service between Kuala
Lumpur and Almaty International Airport, Kazakhstan, and flights to the
Philippines. The expansion plans will be made possible thanks to AirAsia Malaysia
and AirAsia X Malaysia, with a significant increase in flights between China, India,
and Malaysia (Karp, A. & Casey, D., 2023)

2030
AirAsia aims to restore its full fleet of 204 aircraft, supported by a refreshed
agreement with its long-term partner and engine provider, CFM International. The
company looks forward to expanding to above 300 aircraft in the next five years, as
it continues to connect people across Asean and beyond with affordable and best-
value travel.

This expansion plan is in line with the company's vision to be the largest low-cost
airline in Asia, serving the 3 billion people who are currently underserved with poor
connectivity and high fares. The company's focus on safety, cost reduction, and
transparency is supported by its expansion plans, and the emphasis on innovation
and adaptability is evident in its continuous efforts to expand its route networks and
increase its fleet size. Overall, AirAsia's expansion plan from 2020 to 2030
demonstrates its commitment to growth and its strategy of becoming a leading low-
cost carrier in the Asia-Pacific region.

(ii) Corporate restructure from AirAsia to Capital A

AirAsia's recent transition to "Capital A" showcases a bold and visionary corporate
strategy that transcends the conventional boundaries of a low-cost airline. This
strategic shift underscores the company's commitment to redefining its role in the
market, moving towards a comprehensive digital travel and lifestyle platform. By
diversifying into financial and lifestyle services, such as insurance, e-commerce,
and digital payments, AirAsia is not just adapting to change but actively shaping
the future of its industry.

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 The move to Capital A is more than a symbolic rebranding; it signifies a deliberate
expansion into a broader business portfolio. This strategic decision aligns
seamlessly with AirAsia's overarching goal of not only being the largest low-cost
airline in Asia but also providing inclusive travel and financial services. Leveraging
its well-established brand and extensive customer base, AirAsia is poised to offer a
holistic range of services, creating a unique position in the market.

What makes this corporate strategy particularly commendable is its emphasis on

sustainable growth and value creation for stakeholders. AirAsia's transformation is
a testament to the power of strategic planning in achieving long-term objectives and
exceeding stakeholder expectations. The company's ambition to evolve into a
world-leading travel and lifestyle brand, coupled with a robust commitment to
sustainability, sets a high standard for innovation and forward-thinking in the
aviation and travel industry. This strategic direction not only reflects the
adaptability of AirAsia in a dynamic market but also positions it as a pioneer in
shaping the future landscape of travel and lifestyle services.

4.1.2.2 Business Strategies

In the context of management, a business strategy refers to the set of decisions and
actions that outline how a company will achieve its long-term goals and gain a competitive
advantage in the market. It provides a framework for guiding organizational decisions, such as
resource allocation, product development, and market positioning.

A business strategy is essential for setting organizational goals, creating value for
customers, employees, and other stakeholders, and ultimately ensuring the company's success.
It encompasses various elements, including vision and objectives, core values, and specific
tactics to be employed in pursuit of the overall strategy. Business strategies are dynamic and
must evolve to adapt to changing market conditions and consumer expectations, making
continuous education and strategic planning essential for business leaders. Based on the Capital
A Berhad Annual Report 2022, the company has implemented a set of business strategies which
are which has been summarized in table below.

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 Bil Key Priorities Execution Plan
1. Digital Ventures Capital A has ventured into digital initiatives,
including the development of the AirAsia Super
App, which offers various services such as ride-
hailing, delivery, and e-commerce.
2. Full integration of all services onto Introduced Community and SUPER+ integrated
a single consumer facing platform Airasia rewards into Airasia Super App
3. Connecting and making available Completed airasia Super App Asean expansion
products in all cities across Asean
4. Become the lowest cost producer in Introduced AIrAsia Consulting to promote low-
all lines of business cost airline business model to interested clients in
the aviation industry
5. Enhance data competencies and Grew learning centre of excellence within Capital
capabilities of people, processes A ecosystem through Airasia academy; grew
and systems across the Group inhouse data consultancy team
6. Be the most efficient in everything Innovated and enhanced existing systems such as
they do FACES and Super App features to provide
seamless travel experience

Table 3: Analysis on Capital A Business Strategies Plan

4.1.2.3 Functional Strategies

Functional strategy refers to a business strategy that focuses on the action plans by a
particular functional area in order to achieve the set business objectives. It aims at improving
the effectiveness of a firm's operations across various functional units or departments.
Functional strategies are specific to different business functions, such as production, marketing,
sales, human resources, and finance. These strategies help set objectives that guide the optimum
allocation of resources among different business functions and drive a company’s distinctive
value proposition. Ultimately, functional strategy also helps shape the corporate strategy, as it
guides and facilitates coordination among the functions to maximize their contribution to the
overall business objectives. Functional strategies are concerned with how each organizational

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function will achieve its strategic objectives and are essential for aligning the goals from
different business functions to achieve a singular goal, ensuring the organization's success.
Based on the Capital A Berhad Annual Report 2022, the company has implemented a set of
business strategies which are shown as table below.

Bil Functions Execution Plan

1. Culture Unit / Department Accelerating high performance culture among
Allstars
2. AirAsia Super Apps (Move) Integrate Muslim-friendly travel and lifestyle
platform into Airasia Super App; increase
collaboration between Airasia Super App and
BigPay.
Introduce Ask Bo to provide a proactive, attentive
and hassle-free customer service with
personalized experiences
Simplify details update process for guests through
advanced Ask Bo features
Drive up conversion rate from new customers to
AirAsia customers through low-cost and
personalized offerings.
3. Aviation Group Expand aviation group into Cambodia
Improve airlines on time performance
4. Asia Digital Engineering (ADE) Expand Asia Digital Engineering into Philippines
and Indonesia
5. Teleport by AirAsia Expand Teleport’s delivery network coverage
6. AirAsia Digital Full restored digital businesses to capitalize on the
return of pre-Covid capacity
7. AirAsia Academy Onboard more content providers in AirAsia
Academy platform to enable Allstars to access the
best courses around the region

Table 4: Analysis on Capital A Functional Strategies Plan

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4.1.3 SWOT Analysis

The SWOT analysis is a valuable strategic planning tool that provides a comprehensive
assessment of a company's internal and external factors. By identifying strengths, weaknesses,
opportunities, and threats, companies can gain valuable insights to make informed decisions
and develop effective strategies. It is a structured approach that enables organizations to
capitalize on their strengths, address weaknesses, leverage opportunities, and mitigate potential
threats. Conducting a SWOT analysis is essential for understanding the competitive landscape,
identifying areas for improvement, and making well-informed business decisions. It provides
a holistic view of the business, enabling companies to align their resources and capabilities
with the dynamic market conditions.

This SWOT analysis provides a comprehensive overview of the internal and external
factors that may impact Capital A companies as they restructure and expand into new business
areas. It highlights the company's strengths, weaknesses, opportunities, and threats, providing
valuable insights for strategic planning and decision-making. Overall, Capital A companies
have a strong brand recognition and reputation in the aviation industry, but they face challenges
associated with dependence on the aviation industry for revenue and exposure to risks
associated with the industry. However, the company's diversification into financial and lifestyle
services provides new growth opportunities and can help reduce reliance on the aviation
industry. The company should continue to focus on cost reduction and operational efficiency
while exploring new markets and strategic partnerships to achieve long-term success.

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 Strength (S) Weakness (W)
S1: Diversification W1: Market Dependency
Capital A's restructuring to offer a range of The company's historical focus on the
financial and lifestyle services demonstrates aviation industry may pose a weakness as it
its ability to diversify its business portfolio. expands into new sectors, potentially
S2: Brand Recognition exposing it to market risks and uncertainties.
The AirAsia brand is well-established and W2: Operational Challenges
recognized in the aviation industry, The expansion into new services may present
providing a strong foundation for expansion operational challenges, particularly in areas
into other services. where the company has limited experience.
S3: Cost Leadership W3: Regulatory Environment
AirAsia's business-level strategy of cost The company may face regulatory challenges
leadership has been a key strength, allowing as it enters new industries, requiring
the company to offer competitive pricing and compliance with diverse sets of regulations
attract price-sensitive customer and standards.
Opportunities (O) Threat (T)
O1: Market Expansion T1: Competitive Landscape
The expansion into financial and lifestyle The company may face intense competition
services presents significant opportunities in the financial and lifestyle services sectors,
for growth and revenue diversification. requiring significant investment in marketing
O2: Customer Loyalty and customer acquisition.
Leveraging the existing customer base from T2: Economic Uncertainty
the aviation business to cross-sell financial The current economic environment may pose
and lifestyle services can be a major a threat to the successful expansion of the
opportunity. company into new sectors.
O3: Digital Innovation T3: Regulatory Risks
The company can capitalize on digital The company may face regulatory risks and
innovation to offer seamless and integrated compliance challenges as it enters new
services, leveraging its existing digital industries, particularly in the financial
platforms and customer data services sector.

Table 5: SWOT Analysis for Capital A

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4.1.5 Issue in Planning: A Call for Comprehensive Preparedness

AirAsia is in a tough spot because of COVID-19. In the past, they were a successful
budget airline that focused mainly on flying people. However, the pandemic has exposed a
weakness in their planning, especially when it comes to dealing with unexpected problems.
Unlike other companies, they didn't have a backup plan for situations like this. Their primary
focus on flying made them very vulnerable when people couldn't travel due to COVID-19. The
situation got worse when they had to stop flights because of the Movement Control Order
(MCO), which hurt their finances a lot.

Since they depended so much on flying, they didn't have other ways to make money
when flying became difficult. This lack of different plans and backups left AirAsia dealing with
significant financial problems. It got so bad that they had to let some employees go, which is
unfortunate. This whole situation not only makes us worried about AirAsia's current financial
state but also makes us think about how companies should be prepared for unexpected things
like COVID-19. They need to plan for big problems that go beyond what they usually deal
with. As AirAsia faces these tough times, it's clear that they need to change how they plan and
do business to be ready for anything that might happen.

4.2 ORGANIZING

Organizing, the second element in management following planning, involves managing

human interactions, coordinating resources, and integrating both to achieve goals. It
encompasses determining methods for executing plans, identifying roles and relationships, and
efficiently utilizing resources to attain targeted goals. This process involves human activities,
resource gathering, and their integration into a cohesive whole to achieve specific objectives.
Organizing is a managerial function, also referred to as the organizational process.

Organizing is important for managing a company well. It's not something you do all at
once, but a series of actions. It involves getting information about people and how they work,
which is influenced by their surroundings, skills, and the changes happening inside and outside
the company. We need to make the organizing process better based on these changes. So,
organizing is like a dynamic, always-changing thing. While organizational structure refers to
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formal system of task and reporting relationships that coordinates and motivates organizational
members, so they work together to achieve organizational goals.

4.2.1 Organization Chart

An organizational chart is a visual representation of the structure and hierarchy within

an organization, displaying the relationships and relative ranks of its parts and positions/jobs.
It is a valuable tool for understanding the organization's structure, identifying key roles and
responsibilities, and facilitating communication and collaboration among employees.

4.2.1.1 Before Restructure (Air Asia Bhd)

Picture 2: Corporate structure of Air Asia

Source: Ahmad, R., & Neal, M. (2006). AirAsia. Asian Journal of Management Cases

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 Picture 3: AirAsia Bhd Organization Chart (Source: AirAsia 2018 Annual Report)

4.2.1.2 After Restructure (Capital A)

Picture 4: Capital A Organization Chart (Source: Capital A 2022 Annual Report)

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 Picture 5: Corporate Governance Framework After Restructure
Source: Capital A 2022 Annual Report

4.2.2 Organizational Structure by Level

An organizational structure by level refers to the different hierarchical layers within an

organization, where each level has specific responsibilities, authorities, and communication
channels. Generally, organizational structures have at least three levels: top management,
middle management, and low-level or frontline workers. There are two main types of
organizational structures by level: tall and flat organizations:

(i) Tall Organization

A tall organization has a more traditional hierarchical structure, with a higher level
of authority and decision-making power concentrated at the top. This structure is
characterized by multiple layers of management, with each layer having limited
decision-making authority and primarily focusing on executing the decisions made
by the layers above them. Tall organizations tend to have more formal
communication channels and a more formal chain of command.

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 (ii) Flat Organization
A flat organization has a less hierarchical structure, with fewer layers and more
equal distribution of power and authority among employees. The middle
management is absent from such organizations and the head of the organization has
several different individuals acting as teams on their own. Flat organizations are
generally referred to as self-managed organizations with only two to three levels of
hierarchy. This structure encourages collaboration, open communication, and
flexibility, as employees at different levels are more likely to interact and make
decisions that affect their work directly. Flat organizations have fewer formal
communication channels and a more flexible chain of command.

The choice between a tall or flat organization depends on factors such as the company's
size, industry, and culture. Each structure has its own advantages and disadvantages, and
businesses should carefully consider their specific needs and goals when determining the most
appropriate organizational structure for their organization.

AirAsia (before restructure) and Capital A (after restructure) assumes a flat structure
with only two layers of management; at the top of the CEO; with only two layers of
management; at the top the CEO, Vice CEO, and executive vice presidents, and the second
layer is the managers of the different functions. It allows more visibility and easier access to
management. This promotes a sense of trust and belonging in the employees and increases their
motivation towards optimal performance.

(i) Greater Managerial Independence

Each year organizations carry out comprehensive “Goal Setting” exercises for their
employees and the following year their performances are evaluated against the goals
set. This exercise is referred to as Goal Setting exercise. The goals of a typical
department lead are 70% related to his functional area such as Finance or IT and
30% related to team management. In a taller organization, a large amount of a
manager’s daily time is spent on team management and team development
activities, and little is left for business development. The bureaucratic style of
management in such organizations provides little room for self-management. In
flatter structures on the other hand the employees feel more empowered to manage
their timelines and can manage their tasks effectively.
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 According to Badzlina, M. et.al (2022), Tony is known as an open leader, and he
really avoids hierarchical structure (anti-hierarchy). This is also shown by his words
when was interviewed by Founder Magazine (2019).

“People said I have an open-door policy, but the doors closed. Bureaucracy and
politics is the cancer of any organization, so we confront it and we deal with it.”
(Fernandes, 2019)

Fickry, A. et. al (2020) also mention in his research that Tony believes that having
a lot of bureaucracy can hinder business growth because business now days we very
competitive.

(ii) More Involved in Decision Making

“Decisions are more effective when people are involved from the start”. Flat
hierarchical structure enables organizations to take efficient decision making. A flat
org structure allows a greater span of control and decentralized decision making.
Flat organizations make the process of decision making more involved and
inclusive. This is the reason organizations are focusing now on developing their
Mission Statement and Vision in the presence of all or most of its team members in
annual training meetings and seminars. With greater involvement of people at large,
employees take greater ownership and are willing to go the extra mile to perform
their tasks.

Earlier on the mission statements were developed by a company’s top executives

behind closed doors and employees would only see wall mounts of the same in
offices. This was the reason; employees did not feel part of the organization and did
not own the mission of the organization. Bureaucratic organizations even today just
take decisions on their own and do not involve their employees even in decisions
such as setting self-improvement goals or goal-setting exercises.

Fickry, A. et. al (2020) mentions in his research that ideas contributed by the staff
will be heard by Tony very well and accepted if it will be of benefit for the company.
Other than that, the outstanding ideas will also be rewarded.
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 According to Badzlina, M. et.al (2022), for Tony, assuming the role of a company
leader doesn't imply possessing exhaustive knowledge. Instead, this motivates him
to perpetually seek knowledge, viewing his employees as valuable sources of
insight. This approach has facilitated considerable learning about the airline
industry and the specific dynamics of his company. Tony is unhesitant about seeking
advice from his team, often basing business decisions on their observations,
experiences, and suggestions.

Tony believes in being open with his team to build strong trust. He talks to his
employees to understand the real issues they face every day. This helps him make
better decisions. In an interview, he talked about his time working with the Ground
Handling crew. When AirAsia changed its planes from Boeing 737 to Airbus, which
needed costly loading and unloading equipment, he initially said no because it was
expensive. But when he tried doing the manual work himself, he realized how hard
it was. He admits that if he didn't listen and try things himself, he might make
decisions that harm his employees.

“I could have made my decision – a very wrong decision that damaged a lot of
people and destroyed the morale of the organization of that level.” (Fernandes,
2010).

(iii) Openness in Communication

Tony believes that to make his plan work and make his team work well, it's more
important to have a culture where people can freely talk and feel like they're all
working together. Instead of focusing a lot on how the organization is structured in
a strict way, Capital A goes for a more flexible structure. Communication is open
and encouraged across all layers, to foster sharing of knowledge.

According to Fickry, A. et. al (2020) Tony believes in open communication and has
a special way of managing his staff. He avoids strict rules in his workplace. All his
employees can enter his room if there's something urgent to discuss and fix quickly.
This action by Tony has really helped the company do well. The employees are
happy, and they work hard to reach the company's goals. Also, he says it's crucial
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 for the managers and workers to talk regularly. Tony consistently encourages
employees to feel loyal and committed to the company. He emphasizes the
importance of always being watchful to safeguard the company's image.

With all the characteristics described above, we can say that Capital A tends towards a flat
organization and this design is in alignment with their cost leadership strategy. Flat
organizations might have more freedom with a focus on creativity.

4.2.3 Organizational Structure by Departmentalization

Departmentalization is the process of grouping teams or activities into departments or

functions with specific objectives and outcomes to be achieved. It is a way of dividing an
organization into separate parts (departments), each with its functions and responsibilities but
all geared towards achieving the organization’s goals. The primary forms of
departmentalization are functional, geographic, product, market, customer, and sometimes
matrix (also called project organization)

4.2.3.1 Before Restructure (Air Asia Bhd)

Functional departmentalization is the most common form of departmentalization,

where employees are grouped based on the functions they perform within the organization.
This type of departmentalization creates departments such as finance, marketing, logistics,
human resources, and operations, where employees with similar skills and expertise are
grouped together to perform specific functions.

This approach promotes the division of work and provides the benefits of specialization,
as employees become more specialized when they repeatedly perform the same tasks. It also
allows for economies of scale and increased efficiency, as employees focus on specific tasks,
leading to improved productivity. However, it can lead to potential disadvantages such as
inflexibility, as issues requiring multiple skill sets may necessitate increased communication
and cooperation. Functional departmentalization is advantageous in many business settings as
it allows for tighter control of assignment delegation, simplifies operations, and can lead to
increased organizational efficiency. It also simplifies communications and the organizational
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roles of employees, making it an effective method of organizing personnel within an
organization.

AirAsia tends to have functional departmentalization, which includes grouping

activities or tasks based on functions such as Engineering, Data Science, Customer Happiness,
Safety, AirAsia Software & Technology, Internal Audit, Technology Operation, Safety,
Security, Product and Investor Relations. This approach enables the top-level managers to
control the company and make a profit, as the hierarchy is clear, and employees know the
manager they are to report to. Functional departmentalization simplifies contact and decreases
employee confusion, allowing employees to be secure in their roles. This approach is efficient
and helps AirAsia run its business effectively. The company's use of functional
departmentalization is aligned with its mission to provide passengers with complete premium
amenities while maintaining low fares, and to ensure the security of its people and guests. This
structure also supports the company's commitment to safety, cost reduction, and transparency
in decision-making and information sharing.

However, AirAsia also involves in geographic division. This way of organizing is good
for companies that do business in many different places, like international companies or ones
that are known across a whole country. It's also helpful for companies that want to start new
branches in different areas. With geographic organization, it's easier for the company to talk
directly to people in each location. This helps the company understand what people in each
area want and need. It also makes it simpler for the company to change things based on what's
happening in each place. Some good things about geographic organization are that it makes it
better to help people in each area, it helps to coordinate activities by setting up divisions for
each place, and it makes it easier to meet what people in each area want. But, it's important to
know that this way of organizing can cost a lot because each area might need its own
management and support structure.

Referring to AirAsia 2018 Annual Report, there are some geographical divisions in the
world, such as AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia, AirAsia Philippines,
AirAsia India and AirAsia Japan. Each AirAsia group have one manager to control the
organization and they need to report to the CEO of the geographic or the functional head of the
AirAsia. From what we discussed about earlier; it seems like AirAsia has an "organic"

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organization structure. This means that the way the organization is set up is not too rigid. As
the organization structure is flatten and the communication is horizontal and directly across
organization rather than vertically between the manager and their direct reports. People talk to
each other across the organization rather than just up and down. In AirAsia, many employees
have a say in making decisions, both formally and informally. They often work in groups and
share their thoughts on tasks. AirAsia likes to communicate directly, and this helps everyone
understand their roles in the company better. The setup in AirAsia allows for more flexibility
and is good at handling changes. Employees also have more freedom in their jobs, and the
management is well-organized

4.2.3.2 After Restructure (Capital A)

Product departmentalization is a method of organizing a company's structure by

creating separate departments for each product or product line. In the case of Capital A, the
company has appointed a CEO for each of its different product lines, which include the Aviation
Group, Digital, Asia Digital Engineering (ADE), AirAsia Super Apps, Teleport, Bigpay,
Redbeat Capital, and AirAsia Academy. Each of these product lines has its own distinct set of
functions, such as finance, marketing, personnel, and other operational activities, which are
brought together under the concerned department. This method of departmentalization is
suitable for multiproduct complex organizations, as it brings specialization in a product or
service, allowing for the optimum utilization of human resources and the ability to focus on the
productivity and profitability of each product or service.

The appointment of a CEO for each product line allows for a clear focus on the specific
needs and challenges of each business area. This approach enables the company to integrate
and coordinate all activities associated with each product line, enhancing the speed and
effectiveness of decision-making, and making monitoring and evaluation easy and effective.
Furthermore, it allows for each product/service manager to be held accountable for the
profitability of each service/product, which can ultimately lead to increased profit for the firm.

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 Picture 6: AirAsia Aviation Group Corporate Structure
Source: https://www.aavplc.com/en/about/organisation-structure

4.2.4 Organizational Culture and Value

Organizational culture refers to the shared set of beliefs, expectations, values, and
norms that influence how members of an organization relate to one another and cooperate to
achieve organizational goals. While organizational values refer to the shared standards that its
members use to evaluate whether they have helped the company to achieve its vision and goals.

Capital A's emphasis on culture, as evidenced by the appointment of a Head of Culture,

Attila Emam which is responsible for ensuring that Capital A's goals and the day-to-day
business practices of its portfolio of companies are consistent with its stated purpose, vision
and values. A significant part of his role involves driving continuous improvement of the
employee experience with the aim of creating a workplace where Allstars can grow themselves,

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understand how they contribute to the organization’s strategic goals and enjoy collaborating
with each other. Capital A address their employees as Allstar because they want them to feel
much more special and unique while working in AirAsia because each of them plays a unique
role in the company. With the tagline of One Nation of Allstars as their culture, that describe
as below:
1. Customer – Obsessed
2. Playing to win as a team
3. A connected community
4. A place for personal growth
5. Wellbeing at work
6. Respect for all

According to them as well there can be no string culture without a set of clear values.
Capital A does have 5 core values that they practice, and these core values will determine
success of an individual on becoming a successful Capital A Allstar. Followings are the 5 core
values that Capital A Allstar practice as per table below

Capital A Allstar Core Values Explanation

Dare to Dream - Dream the impossible
- Believe the unbelievable
Make a Difference - Get stuff done
- Be passionate
Win as One - We are always better together
Change the Game - Keep moving
- Do better
Celebrate All Individuals - People and their talents are the heart
of it all

Table 6: Capital A Allstar Core Values

Source: https://www.capitala.com/allstars.html

According to Badzlina, M. et.al (2022), Tony Fernandes had a big vision that helped
make AirAsia one of the most well-known airlines today. The airline's success is closely

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connected to how Tony leads the team with precision and consistency. With Tony's guidance,
AirAsia has built a strong organizational culture that brings everyone together to achieve
common goals. Tony believes that organizational culture is crucial and forms the base of the
company. Here's a part of what he said in an interview with Founder Magazine in 2019.

“Culture is the most important thing in the success of AirAsia. Cultures in AirAsia are
transparency and openness.” (Fernandes, 2019).

The values and organizational culture established by Tony Fernandes have significantly
impacted the expansion of his company, fostering a sense of unity among all employees as they
work towards a common objective. Tony expressed the following sentiments during his
interview with Founder Magazine (2019).

“Utilize everyone’s brain and teamwork is critical. We embrace diversity, we don’t care
what race, color, sexual and preference. I think that’s a strength because that gives us
a huge diversity in our workplace and huge ability to attract great talent and idea.”
(Fernandes, 2019).

Tony regards every employee as family, irrespective of differences, leveraging these

distinctions to cultivate a work environment that fosters creative ideas. While it may appear
straightforward, when practiced by the company's top leader, this approach can have a profound
impact, instilling a sense of pride in employees for being part of the team. Tony cares a lot
about his employees. He talked about it in an interview:

“Employees come number one; customer come number two. IF you have a happy
workforce they will look after your customer anyway.”

According to Fickry, A. et. al (2020), Tony successfully built a positive work culture at
AirAsia. He emphasized the importance of teamwork over individual efforts. He treated his
employees well, being approachable and friendly. Tony made sure he was easily reachable for
his employees. Leaders like Tony have a crucial role in creating a work environment that
focuses on the behaviors, rules, and values needed to achieve the organization's goals.

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4.2.5 Issue in Organizing: Illuminating the Path of Organizational Transformation

Many members of the public may not be aware of the recent organizational
restructuring within AirAsia to become "Capital A." This significant transformation marks a
pivotal moment in the airline's evolution, and understanding the intricacies of this restructure
is essential for both passengers and the general public. The lack of awareness regarding a
company's organizational changes can have significant implications. It may lead to
misunderstandings or misperceptions among the public, affecting their expectations and
perceptions of the company. Transparency and communication are crucial in ensuring that
stakeholders, including the public, are informed about organizational changes. Failure to
communicate these changes may result in a lack of trust, confusion, or even negative
assumptions about the company's direction and operations.

4.3 LEADING

Leadership is a process in which an executive can direct, guide, and influence the
behavior and work of others towards accomplishment specific goals. job satisfaction among
the employees. Leadership is a big deal for a company. Leaders have lots of responsibilities to
make sure the company is heading in the right direction to reach its goals. A company can't last
for over 20 years and survive the ups and downs of business without a good leader. The person
we really look up to at Capital A is Tony Fernandes. He's not just the boss, but also the guy
who runs things. Thanks to him, AirAsia is now known as one of the coolest airlines around
the globe.

4.3.1 Leadership Style

Different leadership styles may affect organization effectiveness or performance

(Nahavandi A., 2002). According to Badzlina, M. et.al (2022), Air Asia success was initiated
by Tony Fernandes with this leadership style. Thanks to the leadership of Tony Fernandes,
AirAsia has made many achievements who is known for its service to its employees and
customers. Initially, AirAsia only had 200 staff and served 250,000 passengers, but now Capital

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A has 55,943 staff and 55 aircraft with a target to connect over 1 billion people throughout
Asean by 2026 (Capital A 2022 Annual Report). Based on this, Tony Fernandes is believed to
have succeeded in turning a “sick” and almost bankrupt airlines onto a successful airline.
Moreover, AirAsia was awarded as the Skytrax 2022 World Airline Awards and World’s Best
Low-Cost Airline for 13th Consecutive Year.

The first challenge faced by Tony Fernandes as AirAsia leader was managing a debt-
ridden airline of RM40 million into a sustainable airline. In addition, AirAsia experience
another challenge such as the crash of an Indonesian AirAsia plane QZ8501 around the Java
Sea while flying from Surabaya to Singapore, a decline in AirAsia’s operation, conflict during
Covid-19 pandemic any other problems.

Fickry, A. et. al (2020) mention that Tony has implemented transformational leadership
in their company to rise. The study said that transformational leadership need to involve the
inspiring followers to commit to a share version that provides meaning to their employees to
perform beyond expectation. The transformational leaders will motivate their employees to do
more than they expected when doing their work. There are three empirically derived factors
and the theory of transformational leadership that is charismatic and inspiring, intellectual
stimulation and individualized considerations.

4.3.1.1 Charismatic and Inspiring

According to Fickry, A. et. al (2020), charismatic leaders need to have a strong

influence, inspire loyalty, earn respect, and understand what's important in the organization.
Tony, when dealing with shareholders or employees, shows humility by asking questions and
sharing his phone number for any help they might need. This makes everyone more motivated
to share the same goals and work hard to achieve the company's objectives. It shows that
charismatic leaders can excite and inspire their team.

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4.3.1.2 Intellectual Stimulation

According to Fickry, A. et. al (2020), intellectual stimulation involves behaving in ways

that challenge followers to be innovative and creative by questioning assumption and reframing
old situations in new ways. Tony showed his intellectual stimulation when he was handling,
for example the crash of flight QZ8501 in ava Sea off Borneo shortly after take-off on 28
December 2014 with no survivors. When Tony heard about this news, he immediately wished
his consoled in his Twitter and compensated his employees that with crash. This shows that the
company is always ready when things are not expected to happen in their company. Based on
BBC news, Tony is going to the site of the crash as soon as he knows that incident happened.

4.3.1.3 Individualized Consideration

According to Fickry, A. et. al (2020), individualized consideration means behaving in

ways that help followers reach their full potential through coaching, mentoring, and
development. At Capital A, employees can share their unique ideas or raise complaints directly
with Tony. His open leadership style makes employees feel comfortable and respectful. When
they have ideas, he works to turn their dreams into reality.

4.3.2 Groups or Teams

According to Fickry, A. et. al (2020), a manager is someone who encourages and

influences people and groups in a company to reach their goals. They make sure tasks are
finished, pay attention to each job, and oversee what others are doing. Good leaders also give
a vision and direction for the growth of employees. A manager’s qualities are important for a
company to keep running smoothly because they are close to the employees. One of the key
successes in AirAsia is the leadership the management team shows in the company.

In AirAsia, managers have two main qualities: good leadership and management skills.
These skills are a bit different. Management is about doing things the right way, while

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leadership is about doing the right things. Both are important because they influence people in
the organization and help achieve goals.

In the research paper by Mamrina, Y., et.al (2020), AirAsia has been developed
management team with good quality. The employees of AirAsia are very competitive and have
good communication skills, diverse experiences, and knowledge in their working area. For
example, they work cooperatively with the government, other airlines and even aircraft
manufactures like Airbus and gain advantages in the form of subsidies and sales.

4.3.3 Motivation

A good leader should encourage and inspire their team members to give their best at
work and use all their abilities. This helps to make sure that the employees are happy with their
jobs. According to Badzlina, M. et.al (2022), Tony successfully inspired his employees to
believe in and be motivated to implement the innovations he conceived to rescue his company
during the initial years of his leadership. Possessing a robust determination to achieve his
objectives, he seizes every available opportunity in his path. Maintaining a consistently positive
outlook, he fearlessly confronts risks, as affirmed in his interview with Founder Magazine
(2019). With his leadership, Tony has succeeded in transferring his motivation and views to his
employees so that he can move AirAsia to success.

“Failure doesn’t worry me because I rather be fail than not try at all. Many people are
too worried about failure so they do anything.” (Fernandes, 2019).

Tony thinks that keeping his team motivated and inspired is helpful. He likes to have
informal chats with his staff and described his leadership style as relaxed during a Facebook
Live event. He believes that finding good employees is just one part of being a leader. Taking
care of them is a whole different task. For this, he focuses on three things: being transparent,
showing appreciation, and giving his staff opportunities to grow. Tony believes that when a
leader talks casually with their team, it makes the employees feel valued and boosts their
motivation to work for the company.

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 Research by Fickry, A. et. al (2020) also agree that Tony Tony is a leader who always
inspires and encourages his staff to be exceptional individuals capable of coming up with
creative ideas, products, services, and solutions that have a positive impact on the company. A
leader's ability to boost energy, enthusiasm, commitment, and a sense of connection with the
mission and direction of an organization is crucial for a growing company. Tony has influenced
all his followers by setting many good examples of being creative and innovative individuals.

Tony became famous for his thoughtful ideas and innovative business strategies, such
as the unique introduction of no-frills airlines, zero-cost fares, and the well-known AirAsia
tagline, "Now everyone can fly." Most of his ideas have become strong and competitive
business strategies for his company today. Through these good examples set by Tony as a
leader, he indirectly motivates and inspires all of AirAsia's team to act and think like him.

4.3.4 Issue in Leading: Nurturing Leadership Beyond Individuals

Even though Tony is good at bringing the team together and making sure everyone has
the same goals, there's a problem with this kind of leadership. It's tough to find someone to take
over when the leader is so connected with the employees, especially if there are strong
emotional bonds. This is true for Tony too, as he's been leading AirAsia for almost 20 years
and hasn't picked someone to take over after him.

Depending too much on the leader, especially Tony Fernandes, in AirAsia can be risky.
This reliance on one person may cause problems when it comes to planning and having stable
leadership for a long time. Tony Fernandes has been important for the company, especially
during tough times like the loss of flight QZ8501 in 2014. He was actively involved and shared
updates during the crisis, showing strong leadership and genuine care. While this was helpful,
it also showed a risk in relying too much on one person, the CEO, for managing crises.

Moreover, Tony Fernandes, who is known for changing the budget of air travel in Asia,
is planning to focus on other areas like health, education, and private equity. This means he
might step back from leading AirAsia directly. This change makes it clear that planning for the
future leadership of the company is important.

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 Depending too heavily on the CEO can make it difficult to carry out plans and build a
strong structure that works well even when the CEO is not directly involved. It's crucial for
organizations to make sure decision-making and leadership responsibilities are not only on the
CEO but spread across the leadership team. This helps reduce the risks of relying too much on
one person and ensures the company can handle challenges well. Even though the CEO is very
important, relying too much on them for decisions and crisis management can be risky in the
long run. Organizations should set up strong leadership structures and decision-making
processes to handle these risks and make sure the company can keep performing well over
time.

4.4 CONTROLLING

Controlling is the process of monitoring and adjusting organizational activities to

ensure they are being accomplished as planned. Controlling is a crucial function for managers
to systematically supervise, inspect and measure the performance of management activities
according to predetermined objectives and standards. If deviation occur, corrective measures
should be taken to keep the whole activity in line with established plan and standards. Addition,
control function requires managers to correct organizational behavior, control internal and
external risks, collect information feedback and so on. Proper control function ensures that the
organization uses resources effectively to achieve the goals.

Controlling consists of three steps, which include (1) establishing performance

standards, (2) comparing actual performance against standards, and (3) taking corrective action
when necessary. Performance standards are often stated in monetary terms such as revenue,
costs, or profits but may also be stated in other terms, such as units produced, number of
defective products, or levels of quality or customer service.

4.4.1 Type of Control

In modern organizations, there are three kinds of control practices which are
feedforward control, concurrent control, and feedback control. Controls can be categorized
according to the time in which a process or activity occurs. Feedforward control anticipates
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future implications, concurrent control concerns the present and feedback control concerns the
past.

4.4.1.1 Feedforward Control

Feedforward control is also known as preventive control which involves anticipating

trouble rather than waiting for a poor outcome and reacting afterward. This control is designed
to detect unwanted material, financial or human resources used as inputs to the transformation
process. Based on Capital A 2022 Annual Report, we analyze the risk business operation risk
that used feedforward control as a mitigation below, explained as below.

(i) Cybersecurity Risks

Data is classified as the new oil, meaning one of the most critical resources of the
Group. Nonetheless, corporate data is becoming more vulnerable to cybersecurity
threats, including ransomware, phishing, data leakage, hacking, and internal threats.
These threats pose a substantial risk of damage and loss to the Group. In late 2022,
AirAsia was indeed targeted in a ransomware attack; however, it impacted only a
system that had already been rendered obsolete.

As a mitigation plan, the Group has a dedicated information security team that focuses
on detecting, containing, and remediating cyber threats as cyber resilience is a core
element of business resilience. They have adopted a robust information security system
that revolves around the ISO/IEC 27001 principles and methodology to secure all our
systems. Meanwhile, infosec awareness training has been made mandatory for all
employees, and penetration tests and source code reviews are performed to ensure cyber
resilience.

(ii) Safety Risk

As AirAsia airlines resume flight operations, once again expanding their routes and
attracting greater passenger volumes, their exposure to operational safety hazards will
increase.

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 For mitigation plan, threats and hazards are identified through the Safety Management
System, which are mitigated using Root Cause Analysis methodology. The Safety
Review Board (SRB) further monitors their processes and procedures to ensure safety
targets are met through strict compliance with safety and quality standards. The Safety
department captures data regularly for safety risk analysis and improvement via digital
tools. Operations and aircraft are subject to routine mandatory safety audits and checks.
For the current year, the Group has completed all IATA Operational Safety Audits with
the relevant certifications for Malaysia, Thailand, Indonesia and the Philippines - which
is the global benchmark for always upholding the highest standards of operational
integrity.

(iii) Regulatory Risks

Non-compliance or breach of local laws, regulations, industry guidelines or consumer
authority requirements of multiple jurisdictions could lead to operational delays and
restrictions.

As for mitigation plan, the Group’s Compliance function has developed a master
repository that monitors compliance requirements. This risk is further addressed by
maintaining high level engagement with the regulators of each jurisdiction so that all
regulatory requirements are adhered to consistently. The Group monitors all local
regulatory landscapes for new or amended regulations that affect the Group.

4.4.1.2 Concurrent Control

Concurrent control, also known as steering or real-time control, is used to ensure that
quality and consistency are maintained. These controls are focused on the transformational
process to ensure that it is running smoothly and to identify and correct problems as they arrive.
Thus, this control is associated with adjusting a performance before any high damage is done.
Political and environmental instability are threatening AirAsia. Political unrest, business
downturns, natural disasters, health pandemic or epidemics and other events in geographical
areas that could have an influence on its business operations. Based on Capital A 2022 Annual
Report, we analyze the risk business operation risk that used concurrent control as a mitigation
below, explained as below.
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 (i) Pandemic Risk: Financial/Liquidity
From mid-2022, the Aviation segment was on a fast recovery path, transitioning in a
post pandemic environment with added impetus from rapid resumption of international
travel. While restrictions on air travel, specifically international air travel, continue to
ease, AirAsia is still experiencing operating cash flow challenges and operating losses
due to the spillover effects from the previous years.

As a mitigation plan, the Group has outlined restructuring plans to deliver cash flow,
undertake cost optimization, secure fundraising, and loans, and negotiate
lease/payment terms with vendors. They are also cashing in on pent-up demand for
travel and actively strategizing their next steps accordingly.

4.4.1.3 Feedback Control

Feedback control, also known as post action control, is the act of controlling that takes
place after a process is complete. It is reactive and attempts to measure the result of certain
actions. If a problem exists, corrective action is taken. The disadvantage of feedback control is
that modifications can be made only after a process has already been completed or an action
has taken place. A situation may end before managers are aware of any issues. Therefore,
feedback control is more suited for processes, behaviors, or events that are repeated over time,
rather than those that are not repeated, such as in customer service field.

Based on Capital A 2022 Annual Report, Capital A had applied a feedback control
method to measure customer satisfaction. They have a Customer Happiness Team to conduct
customer satisfaction surveys to gauge the Net Promoter Score (NPS) and customer satisfaction
(CSAT) level for services offered across the group. The airline and Super App teams used NPS
to assess operational and commercial performance whilst CSAT is used to access customer
satisfaction on AirAsia’s schedule sanctity, pricing, service delivery at touchpoint and other
interactions with the Customer Happiness Team. Surveys are sent to guests once they complete
their bookings, and then they complete their journey.

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 The survey is initiated automatically by their customer relationship management system
and is conducted in-house, with controlled access to data to ensure anonymity, confidentiality,
and credibility. The survey measures how satisfied their guests are with their service and where
we stand in relation to key competitors. Accountability for NPS and CSAT lies with the CEOs
of the airline and Super App teams. The Customer Happiness department shares the NPS and
CSAT results with all AOC CEOs during monthly strategy meetings as well as through monthly
NPS reports that are sent to Group CEOs for all AOCs. Reviews are done monthly at the
Customer Experience Steering Board meetings.

Capital A received over 2.4 million responses to their NPS survey, achieving an NPS
score of 36; and over 280,000 responses on their customer satisfaction survey achieving a
customer satisfaction rate of 47%. They had acknowledged a sharp deterioration in their scores
compared to 2021 as they come out of Covid-19 hibernation. They also expect their NPS scores
to remain below pre pandemic levels for another year as they navigate the challenges of
rebuilding networks in the face of industry-wide shortages. However, they expect the situation
to improve as operations stabilize and new AI tools to speed up case handling take effect.
Decision to rebranding of AVA chatbot to Ask Bo system featuring enhanced AI and machine
learning (ML) capabilities as step to improve navigation features to address customer concerns.

4.4.2 Issue in Controlling: Fortifying Control Capabilities for Operational Excellence

Air Asia Control capabilities remain poor, as evidenced in many ways and one of the
major issues that contribute to it is a supply chain disruption issue. Sourced from Capital A
2022 Annual Report, the aftermath of the pandemic and the current geopolitical situation has
put a lot of pressure on the global supply chain. Delays in obtaining aircraft spare parts and
equipment required for maintenance works would reduce the rate of aircraft coming out of
hibernation while also grounding aircraft that are already operational, impacting the Group’s
schedule and operations.

The Group has been working on further enhancing their vendor management initiatives
by engaging with key vendors to ensure minimal disruption to the supply chain. The planning
and warehouse team constantly monitor their plans and ensure adequate stocks to mitigate
operational disruptions, however it still failed to overcome the issue. It is like a domino effect,
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when the flight fails to take off on schedule time, it will cause dissatisfaction among many
customers. Hence, they will lose customers who care about time. It has to be said that this is
very poor control management which will cause a large number of consumer losses and
financial losses.

5.0 RECOMMENDATIONS

In navigating the complexities of the aviation industry, Capital A, previous known Air
Asia Bhd has encountered several management challenges across planning, organizing,
leading, and controlling aspects. These challenges have been exacerbated by the unprecedented
impact of the COVID-19 pandemic, revealing vulnerabilities in the airline's planning and
operational strategies. As the company strives to overcome these hurdles, it is imperative to
implement strategic recommendations tailored to each facet of management.

5.1 PLANNING

Recommendations to improve planning and adaptability is by applying the

Comprehensive Contingency Planning. It was suggested to develop a robust contingency plan
that addresses various scenarios, including global crises like pandemics. This plan should
outline alternative strategies, revenue sources, and cost-cutting measures to navigate challenges
more effectively.

Scenario Analysis
Conduct a thorough analysis of potential scenarios that could pose a threat to the airline
industry, considering factors such as global health crises, economic downturns, and
geopolitical uncertainties. Identify specific challenges that may arise during these
scenarios.

Alternative Revenue Streams

Develop a comprehensive plan that outlines alternative revenue streams beyond
traditional aviation operations. This could include detailed strategies for diversifying

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 into areas such as cargo services, logistics, or digital ventures. By having well-defined
alternative sources of income, AirAsia can better withstand financial shocks during
disruptions.

Cost-Cutting Measures
Establish a set of predefined cost-cutting measures that can be implemented swiftly in
response to a crisis. This may involve renegotiating contracts, reducing non-essential
expenses, and implementing temporary cost-saving measures. The goal is to enhance
financial resilience by efficiently managing costs during challenging periods.

Financial Modeling
Develop financial models that simulate the potential impact of various crises on the
company's financial health. These models should incorporate different scenarios and
allow for the assessment of the organization's ability to weather disruptions. This
proactive financial planning can guide decision-making during turbulent times.

Communication Protocols
Outline communication protocols for various stakeholders, both internal and external,
during a crisis. Clearly define roles and responsibilities within the organization and
establish efficient communication channels to ensure that information is disseminated
promptly and accurately.

Testing and Rehearsals

Regularly test the effectiveness of the contingency plan through simulations and
rehearsals. This proactive approach allows the company to identify weaknesses, refine
strategies, and ensure that the team is well-prepared to implement the plan when
needed.

Regular Updates
Continuously update the contingency plan based on evolving circumstances, lessons
learned from past disruptions, and changes in the business landscape. Regular reviews
ensure that the plan remains relevant and effective in addressing current and emerging
challenges.

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 A comprehensive contingency planning approach equips organization with a strategic
framework to navigate uncertainties, promoting adaptability, and enhancing the company's
ability to thrive in a rapidly changing environment.

5.2 ORGANIZING

To address the issue of public awareness regarding the recent organizational

restructuring within AirAsia to become "Capital A," the company should consider
implementing a comprehensive communication strategy. This strategy should aim to inform
the public about the changes and the reasons behind them, as well as the implications for
passengers and other stakeholders. The following are some recommendations that Capital A
could consider.

Develop a Communication Plan

Capital A should develop a communication plan that outlines the key messages, target
audiences, communication channels, and timelines for the communication of the
restructuring. The plan should be comprehensive and include both internal and external
communication.

Use multiple communication channels

Capital A should use multiple communication channels to reach a wider audience. This
could include press releases, social media, email newsletters, and website updates. The
company should also consider partnering with media outlets to ensure that the message
reaches a broader audience.

Engage with stakeholders

Capital A should engage with stakeholders, including passengers, employees, and
investors, to ensure that they are aware of the changes and understand the implications.
The company could hold town hall meetings, webinars, or other events to engage with
stakeholders and answer their questions.

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 Provide clear and concise information
Capital A should provide clear and concise information about the restructuring,
including the reasons behind it, the implications for passengers, and the benefits for the
company. The information should be easy to understand and accessible to all
stakeholders.

Monitor and evaluate the communication strategy

Capital A should monitor and evaluate the effectiveness of the communication strategy
to ensure that it is reaching the intended audience and achieving its objectives. The
company should be prepared to make adjustments to the strategy as needed.

By implementing these recommendations, Capital A can enhance transparency, build

trust, and foster positive perceptions among the public during the organizational restructuring
process.

5.3 LEADING

To address the leadership challenge at Capital A, where Tony Fernandes' strong

connection with the team makes succession planning difficult, a strategic and innovative
approach is required by implement a Leadership Development Program as below:

Identify and Nurture Internal Talent

Establish a comprehensive talent identification system to spot potential leaders within
the organization. This involves assessing skills, capabilities, and leadership potential of
existing employees.

Structured Mentorship Programs

Create mentorship initiatives that pair high-potential individuals with experienced
leaders within and outside the organization. This provides a structured learning
environment and fosters the development of leadership skills.

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 Leadership Training Modules
Develop specific leadership training modules that focus on the key competencies
required for leading a dynamic and innovative company like Capital A. These modules
can be tailored to address the unique challenges and opportunities within the aviation
industry.

Succession Planning Task Force

Form a dedicated task force responsible for succession planning. This team should
regularly assess potential successors, considering factors such as leadership qualities,
industry knowledge, and the ability to drive innovation.

Encourage Cross-Functional Experience

Promote a culture of cross-functional exposure. Encourage leaders and high-potential
individuals to gain experience in various departments to develop a holistic
understanding of the business.

Leadership Rotation Programs

Institute leadership rotation programs where individuals can lead different teams or
projects. This not only hones their leadership skills but also prepares them for diverse
challenges.

Transparent Communication on Succession Planning

Communicate openly about succession planning to employees at all levels. This
transparency fosters a sense of purpose and ensures that potential leaders are aware of
the organization's commitment to their development.

External Leadership Assessment

Periodically bring in external leadership assessors to evaluate internal talent objectively.
This provides an unbiased perspective on potential leaders' readiness for higher roles.

Incentivize Leadership Development

Introduce incentives for both mentors and mentees involved in the leadership
development programs. This creates a positive feedback loop, encouraging active
participation in the development process.
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 By systematically implementing these measures, an organization can cultivate a pool
of capable leaders, reducing dependency on a single individual and ensuring a smooth
transition in leadership when the time comes.

5.4 CONTROLLING

To address the persistent supply chain disruption issue affecting Capital A control
capabilities, consider implementing the following impressive suggestions:

Diversify Vendor Sources

Expand the network of vendors to reduce dependence on a single source. This
diversification can enhance resilience against disruptions from a specific supplier or
region.

Technology Integration
Invest in advanced technologies, such as real-time tracking and inventory management
systems, to optimize the supply chain. This can facilitate quicker identification of
potential disruptions and enable proactive solutions.

Strategic Stockpiling
Strategically stock essential spare parts and critical equipment in multiple locations to
minimize the impact of delays. Having reserves in various warehouses can ensure a
more agile response to unforeseen challenges.

Supply Chain Risk Assessment

Conduct a comprehensive risk assessment of the supply chain, identifying vulnerable
points and potential disruptions. This proactive approach can help in developing
targeted mitigation strategies.

Collaborative Relationships
Strengthen partnerships with key vendors through collaborative agreements. Work
closely with them to establish contingency plans and mutually beneficial solutions to
overcome supply chain challenges.
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 Data Analytics for Forecasting
Leverage data analytics to predict potential disruptions and optimize inventory levels.
This can enhance the accuracy of demand forecasting and support better decision-
making in supply chain management.

Customer Communication and Compensation

Implement transparent communication channels with customers to inform them
promptly about delays. Offer compensation or alternative solutions to mitigate the
impact of schedule disruptions, demonstrating a commitment to customer satisfaction.

Continuous Improvement
Establish a culture of continuous improvement by regularly reviewing and refining
supply chain processes. Encourage feedback from relevant teams to identify areas for
enhancement and promptly implement changes.

By adopting these strategies, Capital A not only addresses the immediate supply chain
disruption issue but also build a more robust and resilient control framework for future
challenges, thereby minimizing consumer and financial losses.

6.0 CONCLUSION

In the grand orchestration of Capital A's management practices, it becomes evident that
the synergy of planning, organizing, leading, and controlling has propelled the company toward
achieving its objectives. The applied management practices showcase a commitment to
adaptability, innovation, and the cultivation of a resilient organizational spirit. As Capital A
continues its journey, the foundation of sound management principles ensures not only the
successful navigation of challenges but also the realization of its strategic objectives. This study
serves as a testament to the effectiveness of Capital A's management practices, providing
valuable lessons for organizations seeking sustainable success in a dynamic business
landscape.

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7.0 REFERENCES

Ahmad, R., & Neal, M. (2006). AirAsia. Asian Journal of Management Cases, 3(1), 25–50.
https://doi.org/10.1177/097282010500300104

Badzlina, M., Fitriyana, Sihotang, B., Cesario, I., Danang, F., Pamungkas, &
Djojohadikusumo, S. (2022). KEY TO A SUCCESSFUL LEADERSHIP OF TONY
FERNANDES IN AIRASIA. Business Review and Case Studies, 3(2).
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Capital A 2005 Annual Report. https://www.capitala.com/misc/ar2005.pdf

Capital A 2018 Annual Report. https://www.capitala.com/misc/ar2018.pdf

Capital A 2022 Annual Report. https://www.capitala.com/misc/Capital_A_ar2022.pdf

Fickry, A., Mui, D., Sallehuddin, M., Nurul Nabila, & Siti Nuraishah. (2020). Leadership and
Organizational Success: A Study of AirAsia. 1(1), 12–25.

Founder Magazine. 2019. This music executive Bought an airline for 30 cents and transformed
it into a billion-dollar company. https:// www.youtube. com/watch?v=QaAKJnKsO1Q
[July 2021].

Kanta, M.A., & Ahlan, A.R. (2017). Low-Cost Business Model in Airlines Industry (A Study
on AirAsia). International Journal of Science and Research (IJSR). ISSN (Online):
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Karp, A. & Casey, D., 2023. AirAsia Plans China, India Growth Amid Entry To Central Asia
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india-growth-amid-entry-central-asia-market

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Mamrina, Y., Kee, D. M. H., Tursynbay, A., A/P Jayagopal, D., Binti Mohd Athiyah, H. A., &
Muhamach, R. (2020). A Case Study on Critical Success Factors of AirAsia.
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McDonald, L. M., Sparks, B. and Glendon, A. I. (2010) 'Stakeholder reactions to company

crisis communication and causes', Public Relations Review, 36(3), 263- 271.

Nahavandi A., The art and science of leadership, 3rd ed., Upper Saddle River, NJ, Prentice Hall
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Shuk-Ching Poon, T., & Waring, P. (2010). The lowest of low-cost carriers: the case of AirAsia.
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Wahyuni S. 2022. Conducting Qualitative Research Method. Jakarta: Salemba Empat.

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 APPENDICES

TASK DELIGATION AMONG GROUP MEMBERS

STUDENT NAME SCOPE

Mariatulkaftiah binti Othman 3.0 Methodology
2022406588 4.2 Organizing
4.4 Controlling
8.0 References
Muhammad Ikhwan bin Mohammad Faisal 1.0 Introduction
2023516519 4.3 Leading
8.0 References
Nurjannah Nadhirah binti Yazib 4.1 Planning
2022209102 7.0 Conclusion
8.0 References
Siti Nur Amirah binti Abu Bakar Appreciation
2022671538 2.0 Objectives
8.0 References

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