Leading the Skies – AirAsia Tony Fernandes, the head of Air Asia believes that y
ID: 336400 • Letter: L
Question
Leading the Skies – AirAsia Tony Fernandes, the head of Air Asia believes that you can achieve anything through hard work and perseverance. Tony took the challenge to reduce flight costs and unnecessary expenses to promote low-cost flights that can be affordable to everyone with the tagline, “Now Everyone Can Fly”. Many felt that AirAsia would collapse with this low-cost model but they were proven wrong because Tony is able to shift his thoughts quickly to exploit market opportunities, react to challenges and not give up easily. Tony sacrifices everything to run the airline, committed to his work and a strong belief in his projects, although the airline industry faces tough challenges. As a result, AirAsia manages to be the world’s best low-cost airline company. At AirAsia, Tony is admired by his employees. His easygoing manner is translated into a management style that focuses on outcomes. Everyone is treated equally, the hierarchy is flat, decision-making is de-centralised and the employees are empowered. From Tony’s management approach, AirAsia was able to introduce innovative concepts such as online booking and check-in, travel insurance and holiday packages. Underlying his leadership style is the concept of employees come first and customers come second. If you have a happy workforce, they will look after your customers. Tony believes that his style of leadership is the best way to make a company flexible and profitable in order to survive in a dynamic environment. (Source: Adapted from Robbins S. P, Coulter M (2014), Management (12th edition). Pearson International Edition, New Jersey. Page 585)
(a) Explain Tony Fernandes’s leadership style. (10 marks)
(b) Explain how a flat hierarchy, decentralised decision-making and empowered employees make AirAsia successful. (15 marks)
Explanation / Answer
(a) Tony Fernandes's leadership style is what revolutionised Air Asia to world's best low cost airline company. There are several types of Leadership Styles in management: 3 Classic leadership styles are (1) Auto cratic- full command with leadership, no employee inputs, quick decisions from top for the whole organisation, all important decision vested only with top management (2) Democratic: Employee empowerment, inputs/opinions from emplyees or groups and incorporated into the final decision made, distributed and collaborated responsibilities. (3) Laissez Faire: encourage ownership and autonomy amongst employee, all decision taken by employees and not leadership with minimal interference, full free hand to employees.
Other modern leadership styles are (1) Transformtional Leadership: Leader and employee work together to transform each other to the next level. Leader inspires, guides, motivates his employees to take decisions and work in the best interest of the organisation to achieve a milestone or raise the organisation to a particulalry standard in the industry. (2) Transactional Leadership: Management enetrs the whole system and punishes the employees who have performed negatively. (3) Bureaucratic Leadership: wherein leader formulates certain guidelines or rules and the employees have to fall in line as per the laid out rules of the book (4) Charismatic leadership: where the leader is the role model and he inspires everyone to the extant that the employees follow him, want to be like him (5) Participative Leadership: Here the elader consults his employees confides in them for all decision making processes.
Mr. Tony Fernandes is definitely a Democratic and specifically Tranformational leader who is available for all his employees, works with them, confides in them helpd them in decision making, empowers them guides them till they achieve final target. In Air Asia the Transformational Leader had to prove to the world that travelling by air can be affordable and can be for the masses. He empowered his employees, inspired them to tranform systems trends in the air line industry and together both the leader and the employees at Air Asia made achieved a milestone for them in the global airline industry.
Mr. Tony was first made employee comfortable and ensured that employees can approcah him any time with any ideas or opinion about the organisation. He made the employees think, decide, manage contingencies in tight collaboration with him. This enables to the employees to feel important, feel that they are part of a very important transformational process wherein each one's contribution will leave a mark for the organisation. With so much of motivation Mr. Tony put in place processe to minimise cost, best service even though costs are less through best staff recruitment. Thus Air Asia made its flight low cost and is able to maintain its dominance in the low cost airline industry based on good service, more connectivity and an airline for the masses.
2.(b) Explain how a flat hierarchy, decentralised decision-making and empowered employees make AirAsia successful.
Flat organisational structure is one where heirarchy is not there. People communicate, are readily available and thus innovation and ideas are free flowing. The employees are fully empowered, they know their job responsibilities, they know how to discharge their duties and they decide at every stage what is best in the organisations interest. If any confusion comes up the employee can directly contact their bosses or top management for opinion, advise.
Air Asia was launched as "The low Cost Carier"for the masses, everyone can fly. In such a capital extensive and expensive, dynamis industry like aviation with high ATF (aviation turbine fuel), global government regulations in place and still to be able to operate profitably even able to break even was a big challenge which was well taken by the leader Mr. Tony Fernandes who transformed his whole organisation to go lean but together with employee empowerment established his Air Asia brand.
Air Asia launched concepts like online ticket booking, web checking, travel insurances, special holiday packages which were all innovation suggested by employees and impacted by the management. The flat organisational structure ensured that every one interacts, discusses how to meet orgnisational vision, mission and goals. Under Mr. Tony's able guidance they teamed together and ensured best ways to increase revenue with their promised service is achieved.
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