AirAsia Planning and Decision Making

This is the logo and the organization which I interested and I want to intro the planning process and Decision Making in this company. It is one of the famous company in Malaysia.

Asia’s leading airline was established with the dream of making flying possible for everyone. Since 2001, AirAsia has swiftly broken travel norms around the globe and has risen to become the world’s best. With a route network that spans through more than 20 countries, AirAsia continues to pave the way for low-cost aviation through our innovative solutions, efficient processes and a passionate approach to business. Together with our associate companies, AirAsia X, Thai AirAsia and Indonesia AirAsia, They are set to take low-cost flying to an all new high with our believe, ”Now Everyone Can Fly”.

Planning is one of the most important project management and management techniques. Planning is preparing a sequence of action steps to achieve some specific goal. If you do it effectively, you can reduce much the necessary time and effort of achieving the goal. The important of planning involves like defining organization goals, establish strategies to achieve goals,and develop plans to integrate & coordinate work activities.

A plan is like a map. When following a plan, you can always see how much you have progressed towards your project goal and how far you are from your destination. Knowing where you are is essential for making good decisions on where to go or what to do next. The most important to ensure that everyone is clear of what to accomplish.

Planning is also crucial for meeting your needs during each action step with your time, money, or other resources. With careful planning you often can see if at some point you are likely to face a problem. It is much easier to adjust your plan to avoid or smoothen a coming crisis, rather than to deal with the crisis when it comes unexpected time. Example Air Asia plans to expand their operations in Europe, so they consultation to the Government of French . They has been granted landing rights in Paris and is awaiting further details from authorities.

The mission in Air Asia got four major point. The first point is to be the best company to work for whereby employees are treated as part of a big family. Then the second point is create a globally recognized ASEAN brand. The third point is to attain the lowest cost so that everyone can fly with AirAsia and the last point is Maintain the highest quality product, embracing technology to reduce cost and enhance service levels. They had achieved the goals but the second point they haven’t achieved it because in this strong competitive era , too many company like Malaysia Airlines and Tiger Airways also want to be the globally recognized ASEAN brand, but they will work hard to achieve their goals.

Type of plan

The first type of plan is strategic plans. It is long term and apply to entire organization. It also a broad plans. This type of plan is made by the top management for the whole organization such as CEO, COO, and other. This plan is usually done for 5 years and above Example, Air Asia’ CEO planning want to take more route in 5 years.

The second type of plan is tactical plans. It is a short term goal and basically focus on the problems of resource allocation. This plan is made by middle level management such as manager. It done for a period of 1-5 years. Example, they want to buy more bigger airplane in 4 years.

The third type of plan is operational plan. It is encompass particular operational area of the organization. It cover short time period. This plan developed by first line manager such as supervisor. Example, their goal is a daily capacity of 3 million.

The fourth type of plan is long term plan. It is plan with time frames extending beyond 3 years. This plan usually use to making research or market research.

The fifth type of plan is short term plan. It is plans that are clearly defined and no room for interpretation. Example, they promotion and discount the ticket to let more people can fly.

Planning process

The step one of planning process is set objectives which means establish objective and targets while taking into consideration such as mission, strategic plans/goals, environment, and availability of resources. In Air Asia have set their objective like made their ticket price more cheaper and provide better service.

They step two of planning process is analyze and evaluate the environment. Once objectives are established, manager must analyze their current situation and environment (internal& external)to determine what resources are available. Internal environment included such as raw material, machine/ equipments , finance ,money ,and other. External environment included PEST which is policies, economic, social, technology and competitor. Air Asia analyze and evaluate the environment after set their objectives like do survey.

The step three of planning process is identify alternatives which means list down as many alternatives as possible to reach the goals. Air Asia list many alternatives like connect to other company, let their worker learn more language and upgrade their facility.

The step four of planning process is evaluate the alternatives which means evaluate all alternatives to determine which combination of alternatives is the most effective and efficient to achieve the goals. For each alternatives, manager will look at the advantages or disadvantages. Air Asia will try all alternatives and identify before see which is the best.

The step five of planning process is select the best solution which is select the best alternatives that gives most advantages and fewest disadvantages.Air Asia choose the best solution is upgrade their facility so that can let their customer more comfortable.

The step six of planning process is implementing the plan which means decide who will be involved determine, what resources need, how the plan be evaluated and how reporting will be handled. If Air Asia want make their customer more comfortable, then the best away is buy the new and bigger airplane.

The last step is controlling and evaluating the result which means monitor to ensure plan is going according to expectations and make necessary adjustment, if needed.Chart.png

Factors of effective planning

There are some factors of Air Asia to make an effective planning to let them success.

The first is fatten the organizational hierarchy to foster development of planning skills at all level of organization. It can made the company more systematization. The other is practice MBO(management by objective) -technique that emphasize collaboration objective setting by managers and subordinates which means if CEO and other department can effective work together and strengthen their worker then the company sure will be a best company in the world. The third is encourage employees at all levels to provide feedback and suggestions for planning that means the company see their employees are treated equally. The four is develop plan that are specific but flexible which means although the company made the plan to achieve goal ,if got some problem must change and discuss, don’t rigid to follow the original plan. The five is must acquire facts and information that are current and reliable to be accurate in planning that will be made the CEO accurate to made a good plan to their company. The last is develop contingency plans and strategies. It is the very important effective away that can be immediately correspondence when the company got some emergency.

The problem of Air Asia

In 2008-2009, Air Asia got many problem that made their company loss. There some issue that are involved for that company whereby they are unable to achieve their goal. The first one is mission statement & objectives of organization are not clear and precise enough for planning which means the company not follow their step to achieve the goals , it will affect all organization progress, example Air Asia want charge the several fees if customer booking already the ticket but suddenly want change. Although it is rational but some time some customer change their ticket but no need charge the fees, so they not accurate and not follow the mission. The other is some managers are not experiences in planning. It is because the plans always decide by the to management , not by middle management, so if suddenly want manager to decide plan will made some mistake . Some managers have negatives thinking of planning as they think planning is costly, time consuming & waste of time. Air Asia sometime will think that plans will use many costly and if the plan no success will wasting time , so in 2008 their company did not get mush profit. After the end of 2009, Air Asia made a different decision that is change a manager and CEO . The other away is set a new objective and effective to follow the goal that is the first important thing. Example they want reception customer about 100million a day.

Decision Making

Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternatives. Every decision making process produces a final choice. The output can be an action or an opinion of choice. It can making a choice from two or more alternatives. Identify problems or opportunities, developing alternatives , choosing an alternative and implementing it. Decision making also is performed by all level of management in an organization.

Type of Decision

The first type of decision is organizational decision which means made by managers within their authority in accordance with organizational such as goals, policies, procedures, and strategies. Example ,Air Asia wan to be a globally recognized ASEAN brand.

The second type of decision is personal decision which means made based on manager’s personal choice and preference. Example ,the Air Asia ‘s manager made two plan like upgrade the facility first or training the worker first, then CEO choose the one he like.

The third type of decision is strategies decision which means deals with long term plans which is important for growth and survival of organization. Example , Air Asia need to plan a long term plan to achieve goals in this period of economic instability.

The four type of decision is tactical decision which means deals with routine and operational activities. Example manger need to deals the operational activities such as system failure, the environment, and other .

The five type of decision is programmed decision which means repetitive decision that can be handled by routine approach. It using when the problem being resolved straightforward, involve goals that are clear, and information about problem is available and complete. Example Air Asia use in policy, procedure, and rule.

The last type of decision is un-programmed decision which means unique and non-recurring or generate unique responses. It use when the problem are new and unusual and when the information is incomplete.

Decision Making Process

Decision making process is very important to any company

The step one of decision making process is identifying the problem . It is obstacle that males achieving a desired goal or purpose difficult. It also must be know that problem the organization facing and characteristics of the problem. Example Air Asia want lower fares or not .

The step two of decision making process is identifying decision criteria which means factors that are important to resolving the problem. Example price, distance, customer, location ,and time.

The step three of decision making process is allocating weights to the criteria. Assigning a weight to each item places the items in the correct priority order of their importance in the decision making process. Example customer is the first, then is distance , price, time, and the last is location.

The step four of decision making process is developing alternatives. Alternatives are listed without evaluation that can resolve the problem. Manager look for as many alternatives to solve the problem. Example list down their competitor such as Malaysia Airlines , Tiger Airway and other.

The step five of decision making process is analyzing alternatives. Analyze and evaluate each alternatives and find out their advantages or disadvantages. Example identify advantages or disadvantages of lower fares.

The step six of decision making process is selecting an alternatives. Choose the best alternatives and with the highest total weight and with the most advantages & fewest disadvantages. Example lower fares can make more customer come to buy , location no far than 700km, time about 2-3 hours.

The step seven of decision making process is implementing the decision. Putting the chosen alternatives into action. Example Air Asia choose is lower the fares.

The step eight of decision making process is evaluating decision effectiveness which means monitor or provide feedback on how well the decision has been implemented or is there any adjustment and corrective action need. Example Air Asia lower fares because can made more customer buy and increase profit.

Creating Environment for Effective Decision Making

The first of effective decision making is provide time for decision to be made which means manager should not rush and be pushed to make a decision, especially crucial. Negotiate more time and make good quality decision. Example when Air Asia airplane got some emergency problem , then manger should made a clear decision to solve the problem.

The second of effective decision making is have self confidence which means managers must have self confidence and courage especially when making risky. Example manager must have self confidence when decide a high risk plan .

The third of effective decision making is encourage others to make decision which means managers should trust subordinates and allow them to make decision. This will get their commitment when they are involved. Example manager must trust their worker or employee when they made some decision.

The fourth of effective decision making is learn from past decisions which means managers should look at decision that worked and decision that did not & use them as a guide. Example Air Asia need to see the decision first then decide want training their worker or not.

Making Decision to be Ineffective decision

The first point of making decision to be ineffective decision is time pressure which means not enough time to decision then will made mistake .

The second point of making decision to be ineffective decision is limited amount of available information or incomplete information. Sometime some manager cant not get incomplete information so he will made wrong decision.

The third point of making decision to be ineffective decision is higher levels of uncertainty in today’s business environment.

Conclusion

After I research this company ,I learn more about planning and making decision. In my opinion, any company must be planning and decision making because if any company loss any one , will made the company not direction, no achieve goals, and other. And the last is must made customer happy because customer is always right.

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Name

Lim Kok Hui

Student ID

I10005487

Program

DBAD

Course Code

MGT1101

Section

5SS1

Lecturer’s Name

Hardjinder Kaur A/P Balbir Singh

Submission Date

14/6/2010

Aims: To help course participants consider the fundamental areas within management.

Select an organization with which you are either interested or familiar with and

write a 2,000 word essay on any 2 areas of the organization within the following

areas: Planning and Decision Making Process