Principles of Management: Malaysia Airlines Ethical Conflicts

Introduction

Ethics are essential in the Airline business because they are the framework that guides individuals in the process of making business decisions. They usually cover three features, i. e. an application of one's professional skills, incorporation of one's values and lastly, good judgment. Codes of ethics are formal declarations of the moral values that guide companies. Ethics is an area of corporate liability where businesses are legally and socially obligated to conduct business ethically. Business ethics includes five key elements such as loyalty, integrity, trust, confidentiality and openness. Within the business world, ethical choices are made each day that have an impact across all organisations. Therefore, in the arena of ethics, Malaysian Airline industry through its useful implementations and also through its formal declarations. However, some conflicts happened in Malaysia Airlines about the lays off 6000 employees in 2015. This conflict occurs after the two deadly disasters that rocked that airlines in 2014. The two accident is the loss of MH370 airlines and the crash of MH17 airlines. ISSUE In 1947, Malaysia Airlines began as Malayan Airways Limited and flew its first commercial flight in 1947.

The airlines' assists were divided in 1972 to form Singaporean flag carrier Singapore Airlines and Malaysian Airline System After a few years of Singapore‘s independence. Even though numerous awards from the aviation industry and recognition from the World Travel Awards as the leading airline in and to Asia (2010-2011, 2013, 2015) the air struggled to cut costs to compete with new, low-cost carriers in the region since the early 2000s. The airline initiated a turnaround plan after large losses beginning in 2011 and cut routes prominent, but unprofitable, long-haul destinations, such as the Americas ( Los Angeles and Buenos Aires) and South Africa in 2013. Malaysia Airlines also began an internal restructuring and expected to sell units such as engineering and pilot training. In 2014, Malaysia Airlines lost two aircraft which is MH370 and MH17 less than five months apart with a combined 537 people killed, provoke the airlines' financial troubles and leading to renationalisation of the airline. In 2015, the company’s new CEO Christoph Mueller planned to offer at least 14 000 jobs to the carrier’s roughly 20 000 existing employees today.

However, the airlines announced that 6 000 jobs would be lost. Starting on September 1, Mueller will begin his plans to rebrand the company to repair the damaged image. One of the action to rebrand the company is to paint new livery. This is the company’s response regarding issue MH370 and MH17 which is MH370 had gone with 239 passengers and crew on board and is still missing. A few months later, flight MH17 was blown out of the sky by a suspected ground-to-air missile over Ukraine. The tragedies gave a significant impact on the company’s image. The company was long expected to go bankrupt, but the two disasters were the nail in the coffin. Fortunately, a state investment fund took over and managed to avoid the company from going bankrupt. As the analysts, says that the tragedies were the final straw for Malaysia Airlines because of the poorly maintained for years and slipping further into the red. Then, a state investment fund has taken Malaysia Airlines over in order of a rescue bid late in 2014 and also tapping Christoph Mueller to take the helm.

In that announcement said that Malaysia Airlines would plan to stop the bleeding in 2015, stabilise next 2016 and seek to growth again by 2017. Nowadays, Malaysia Airlines were focused immediately on the task such as rationalising its headcount and route systems. SOLUTION Malaysia Airline System (MAS) is Malaysia's national airline. With the fleet of more than 100 aircraft, the company covers almost 114 destinations worldwide. The company has a strong brand image around the world. This group has controlled its strong brand image to win loyalty Customers to expand its partnership. However, fierce competition in industry aviation may adversely affect marginal groups so that flight MH370 is experiencing problems disappearing from the radar. The solution that can be made is to be friendly with all countries to ensure Malaysia's customers and security. Secondly, Malaysia Airlines has improved the technology. Malaysia Airlines has acquired newer aircraft and efficient fuel such as Airbus A380 and other Boeing aircraft to compete further with its rivals. Currently, Malaysia Airlines is still operating Boeing 747-400, and by introducing better and more advanced aircraft and excellent flight services, customers may use Malaysia Airlines as the company's option to ensure the comfort of the apparatus to operate the plane well for the sake of providing the support of the aircraft to operate this aircraft properly.

The convenience of passengers and planes operators feel safe because they have a better technology system. The Malaysian government's effort in promoting Malaysia as medical tourism, Malaysia Airlines is currently developing medical packages for its customers. "They are expecting more than 200,000 passengers coming to Malaysia as medical tourists next year," said MAS senior general manager (network and revenue management) Dr Amin Shan (MAS for medical tourism) this is indeed an opportunity for Malaysia Airlines to introduce medical packages for potential health customers all over the world by partnering with local hospitals. Currently, most of the medical tourists are from Indonesia, Cambodia, Vietnam and Bangladesh. This trend is expected to increase by 16% over the next three years as Malaysia can achieve a developed nation level in Asia. The threat is an element of outside organisation that can negatively affect the company. Some risks will affect Malaysia Airlines such as economists, competitors, fierce competition, violence and political turmoil, and technology, rising oil jet prices and foreign currency fluctuations have resulted in lower profits. Therefore, Malaysia plans to attract tourists to attract Malaysia Airlines services while attracting tourists to travel to Malaysia.

Today at Petaling Jaya on 19 June 2016 the CEO of Outgoing Malaysian Airlines Bhd (MAS) Christoph Mueller said that he had to cut 6,000 jobs because many of the 20,000 employees were doing nothing. According to an online news, Malaysiakini and German broadcaster Deutsche Welle(DW), Christoph Mueller said that he was not impressed with the state of MAS was in when he took over and despite announcements by the government a turnaround wasn't initiated by the he became the CEO. Then he also said that many of the 20,000 employees who worked for the airline had nothing to do. In Fact, when he walked through the hangars, people were sleeping that is why he radically cut 6,000 jobs. Also, Christoph Mueller said MAS was in dire straits before he took over because of poor personnel management and bioted workforce that why he laid off 6,000 workers and streamlined the firm's operation.

In an immediate response, the National Union of Flight Attendants Malaysia (Nufam) hit out against Christoph Mueller saying that he was an outsider and might not understand the work culture in that country and Nufam also said there might be reasons why employees were caught sleeping on the job as some workers had 24 hour shifts while some also worked overtime causing them to be tired at the end of their shifts. Furthermore, Nufam said it is unlikely workers turned up to their workplace just to sleep it is more comfortable to sleep at homes. Nufam called for Christoph Mueller to provide proof that the workers had been sleeping on the job. It is very important that the cabin crew has to get enough sleep because it's would freshen them up for long trips. In otherhands, Christoph Mueller also said that MAS also suffered from a bloated and overpriced supply chain, partly because of the airline bought products from suppliers at prices 20 to 25 percents higher than market value. Then, Christoph Mueller said he were not going to bad negotiators and in any case corruption is punishable also in Malaysia. After that, Christoph Mueller also pointed that MAS had about 20,000 suppliers as a result the glut made it difficult for the airline to get volume discounts from anyone and Chrisotoph Mueller observed that the previous so-called turnarounds plans announced for the airline were half-hearted at best.

Conclusion

From the issue of Malaysian Airlines Berhad (MAS) we can conclude that ethical value in workplace is very important thing and how well the organisation was strong related to ethical standard which is determine the organisation’s productivity, the well-being of all stakeholders and subsequent profitability. In aviation industry, there are several problem issues faced by MAS and they still holding their reputation in this industry. However, management should take decision to improve their internal factors through implement logical decision approach rather than magical approach. The companies like aviation industry, by made a decision management require thinking analytically to resolve their problem. However, management need to reflect some decisions and challenges which are difficult because probably they do not have the necessary knowledge or experience, in which case they need first to decide if the decision which made by them or challenge is actually suitable and necessary for at this stage. There have few decisions which have to be made whether managements are ready or not, others might not be as pressing as they imagine.

Moreover, it also would not be considerable to change-based decision if having considered the implications carefully to decide that it is not the best thing. Malaysian Airlines Berhad should take decision in right way as in right time so they can be avoiding their nearest problem. For high productivity, it’s essential that all stakeholders observe moral conducts in their dealings with one another. This must be openly displayed through positive approaches; committed teamwork, high integrity and self-discipline. The efforts must be made to ensure and observe etiquette and ethical conducts within work centres for the expected goals of the complex organisation to be attained. An absence of protocol in workplaces has created among the employee's attitude, which may hinder productivity. On the part of the MAS workers, for ethical conducts to have been correctly observed, there is the need to align wage demands an increase in potency and performance. A stable guide of rising productivity will naturally improve and sustain wages and favourable conditions of the employment relationship in Malaysia.