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Lewin's Model: Malaysia Airlines

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Santi De Juan

on 12 December 2013

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Transcript of Lewin's Model: Malaysia Airlines

Started operation in 1947 as Malayan Airways
Pressures for Change
Increase in operating costs:
Raise of the fuel price
Appreciation of the ringgit (Malaysian currency)

New competitor enters the market: Malindo Air
Air Asia: market leader
2,27 B€ in 2011
MAS: 1,08 B€ in 2011
Luxury traveling will be less demanded due to the attractive ticket price and promotions by low cost carrier.
Corporate governance scandal in the organization where there are negative perceptions towards the management in MAS

Tan Sri Tajuddin Ramli brought 1,8 B€ losses to the company due to corrupt practices.
Subsidiaries of Malaysia Airlines
MAS has suffered net loss of 300M€ and unprofitable routes made up 40% loss in total
Business Strategy
1) Differentiation strategy
become the
preferred premium airline

Cost cutting
: reduce structural and operational costs

Win back loyal customers
with superior value of the enhanced services

Alex Pinies Santi De Juan Jon Azpeitia Ander Zabala

1. Introduction
Driving forces
3. Lewin's Model
2. Forces to change
Resistance to Change
Overt resistance:
8 workers’ unionized groups
MASEU (Malaysia Airlines System Employees Union)

Cabin Crews
Affected by the change (cutting unprofitable routes) - less overseas destination
Source of Resistance
Reluctance to lose control
Participation (Negotiation & Agreement)

Explain the advantages of taking the change & the negative effect if the change is not implemented
Restraining forces
Develop Positive Relationships
Organizational change The concern is on the confidence and trust

Eliminate the bad image created around the managers and board members (due to corruption)
Overcoming resistance to change and promoting driving forces
Desire to become a sustainable company
Eliminate Corruption
The plan will reduce costs
To be a consistently profitable airline
To be the world's five star carrier
Nowadays, price of tickets influences a lot passenger’s decision (the most important factor)
Preferred premium airline
Cost cutting
Win back loyal customers
Reputation and credibility
Threaten to strike
It will generate credibility and confidence, between workers and members, and externally
Finishing with corruption related to the company is one of the objectives of the plan
The routes that have become unprofitable due to an increase in the price of fuel, will be closed
Employees will ensure their job
Organizational change that require many restructuring exercise in the short term with
new tasks - learning and adjustments

Senior managers - afraid power will be reduced
Become the worlds five stars value career
High cost
Desired state
Current state
Education & Communication

Persuade union members to accept the restructuring
Provide clear information about the critical condition of the company
Listen the points of view of the members
Reduce rumors spread about the instability of the organization
Help the members and workers see the logic behind the change
MAS experienced a significant operating loss of 61 million € in the first quarter of 2011 (The Malaysian Insider,2011)
Full transcript