Application:

Malaysian Airlines (MAS) has recently experienced some serious incidents in its
marketplace. As a result, it has lost its market position, its sales have suffered and its
share price has dropped dramatically. Similarly, Asian Airlines (AA) has also
experienced a downturn due to various bad decisions and experiences. You are a
consultant engaged by a large Venture Capital company. You have been asked to
assess these two companies to find the strengths and weaknesses of both to determine
how the two companies can be merged to become just one company which will once
again take a leadership position in the South East Asian market.

You have conducted some initial analysis and you have found that the two CEOs are
vastly different. The CEO of AA Bing Satya was born in 1953, he is a hard working
corporate climber. He had a Harvard MBA and worked his way up the ladder to become
one of the youngest partners at McKinsey & Company. He started working for AA in
1990 as a chairman and chief executive officer of AAs International Operations. He
quickly rose through the organisation to become CEO of AA in 2001. Satya is a hard,
competitive, egotistical and arrogant manager who looks out for himself as much as
possible. His appointment to CEO in 2001 earned him US$13.2 million for just that year.
It is thought that a lot of the current problems being suffered by AA at the moment are
the direct result of Satyas poor management. One executive has stated to you I
warned him that we could experience a slump in sales when our currency rates began
to fluctuate and this impacted quite negatively on fuel prices, but he didnt give my
report more than a glance. He makes it clear that he is the boss. Position in AA wins
more respect that good ideas. However, Satya has many strengths, he is able to reach
the staff at the lowest levels, he inspires and motivates them, and rallies them to
support the organisation despite their recent wage cuts [the average wage cuts to
workers at the lowest ranks is 20%]. Satya is also well connected with executives in
other airlines and is able to build and maintain strategic alliances.

Rama Rajumta is the CEO of MAS he was also educated in the US, earning an MBA
from Ohio University. He was born in Pakistan in 1954. He was one of the founding
directors of MAS, with another family member in 1977. Rajumta is seen as being
benevolent, kind and charismatic. His management style is more collaborative and
inclusive. He has stayed with MAS from the beginning until the end despite the many
ups and downs. He is well-regarded by the majority of the workers, but he is despised
by the other directors and board members. As a result, many of the strategic initiatives
he has put forward to save the company have been vetoed by the board rendering him
quite powerless as CEO. One example is a move he initiated to in-source maintenance
work from other airlines to reduce slack capacity in MASs large maintenance facility in
Kuala Lumpur. This would have netted MAS around $20 million US per year. However,
the strategy was not supported by the board.

As a result of the leadership of these two organisations they both have contrasting
approaches to the work they do. Your analysis has provided you with the following
descriptive breakdown:
AA. Workers at AA tend to focus on their own work, there is little teamwork and
little cooperation amongst peers their working motto is Get the job done and
go home early. In working with this motto you have even observed many
workers rushing jobs and cutting corners to clear their job sheets as quickly as
they can. One worker who was a baggage-handler said it can be a very tough
working environment with little care for the baggage, the customer, or their fellow
workers he stated: its dog eat dog; every man for himself.

MAS. Workers at MAS have a strong team focus, each staff member serves on
multiple teams there are teams for quality control, for cost cutting, for customer
service, for just about everything. The strong teamwork leads to a highly
integrated and interdependent approach to work, where problems are shared and
solutions are abundant. Workers have flexibility in how and when they work, they
manage their own work schedules and plan their own holidays through a
consensus approach. Strategic plans are circulated to all staff, and most workers
have a say. As a result the company has a strong growth focus, and often tends
to take unorthodox approaches to change.