Malaysian Airline Reputation Turnaround Approach
Company reputation status is essential in obtaining trust and integrity in the community, thereby enabling the company to advance towards its objectives and goals. The responsibility of business over time has changed from just generating profits for its investors to being sensitive in corporate social affairs of the community in general. True to the fact of expanding responsibilities of business enterprises there arise even more multidimensional reputation, things are further made difficult by the reality of globalization which has denied companies the privilege of being sole managers (Time, 2018). Limited privacy coupled with the aspect of ever-increasing demand for accountability of businesses have made it necessary for companies to put in place measures to sustain their positive reputation. Companies, therefore, ought to ensure that they consolidate good reputation from their various stakeholders.
In the year 1963, it was rebranded to Malaysian Airways immediately after Federation of Malaysia was put in place. The year 1966 saw the airline yet again change its name to Malaysia Singapore Airlines (MSA) the same was witnessed in the year 1972 when it rebranded to Malaysian Airline System (MAS). The airlines take pride in the history it has had over the years, the products and image of the company have been of high appeal to customers and investors until the recent crises that bewildered the company. The company has won the various award that made it famous among its peers, notably, the company was crowned “The World’s 5-Star Airline” in the years 2009, 2012 and 2013 and also recognized by World Travel Awards as “Asia Leading Airline” in the years 2010, 2011 and 2013.
With over 50 destinations over the world the company acts as an important link to the world, this is also enhanced by the fact that the airline has over 300 flights on a typical day. Most acknowledged that their journey from especially Kuala Lumpur to Beijing would never be the same again as result of this mysterious missing of flight MH370. The management of the Airline also was unable to give a clear report regarding which direction the plane was headed to when it actually vanished from control radar this further complicated the issue as the Airline top management were portrayed as incompetent to hold their offices at least to those who don’t have any experience in Aviation Industry. The uncertainty which surrounds this incident gave room for the creation of all kind of theories which did not help but further damaged the Airline’s reputation.
The impact of the missing plane was directly felt as shares of the Airline Company fell drastically just one day after the incident by 18 percent perhaps reflecting the damage dealt with company’s reputation. However, it should be noted that shares price of the company were on a decline for at least a decade prior to this incident. Studies have shown that customers are increasingly becoming sensitive to the ethical aspect of the products they consume. Also, studies have acknowledged the importance of quality as far as customer decision on buying certain commodity or service is concerned and thereby comparison of various similar services and commodities. Akram asserted that customers’ financial perception and performance hazard influence negatively their preference of a commodity and consequently its popularity among users.
Various scholars have admitted that customers will generally go for a commodity that from a popular company as opposed to commodity from an unknown company (Zayed, A. Rep Trak model This model was developed by Reputation Institute and mainly measures the reputation of a company based on nine dimensions namely product and service, innovation, workplace, governance, citizenship, leadership, and performance. This would translate to general acceptance of the company in the market as more stakeholders will be willing to buy, invest, accept, defend, work and even advocate the various aspects of the company. Products and Services A company is best known for what it offers its customers the nature of the services and products identifies the company in the market where other companies offer substitutes.
However, many customers will prefer certain company’s products and services because of their perception regarding the company. Research shows that 60% consideration of products and services is based on consumers’ perception regarding the company producing them. This highlights the importance a company to ensuring its image in the market is guarded. One way of creating enabling environment is through recognizing employees and rewarding them accordingly. Governance Governance is the board of directors in company setup charged with the responsibility of making critical decisions in the institution. The responsibilities of the board includes financial, legal and strategic. Any alteration of the board of directors normally impacts a company in one way or another. A company can decide to change the board when it feels they have failed in their mandate say offering the right advice and so on.
This highlights the essence of having competent and experienced manpower. The issue that was affecting Malaysian Airline is mismanagement possibly because of lack of experience of those who were running the company. The appoint of Ahmad Jauhari in September 2011 who had no experience in Aviation Industry as CEO was bad decision which plunged the company to more problems. Shortage of skilled and qualified professions can be blamed for the problems Malaysian Airline found itself in. This really damaged its reputation as people were not sure where the company has qualified pilots to fly their airlines for example. Such statements can be interpreted by the reputation management team and solutions can be sought that will help return the company image to its original positive form.
Brand reputation management will ensure that the clients think highly of a company after using the services offered by the company. This would normally have the outcome of having the customers come back for the same company’s services in future. Customers that get impressed by the services may then talk to their friends about it and the name of the company would grow, attracting more customers. One way in which brand management does this is by using customer feedback mechanisms. Over the internet, the company advertises its flights and customers make their bookings. The only problem with the strategy used at Ryan is the fact that they substituted honest services with cheap flights. A number of customers who have made use of their services have attested to the fact that the companies impose some charges on the customers especially for some simple mistakes or for things such as check-in calls.
It is as if the company simply reduced the cost of flights and then substituted the cost of other petty services. Due to this, the company has lost its reputation among customers. For this reason, the reputation for Ryanair has become worse. Some companies such as EasyJet which have also brought cheap flights into the table may soon take over and get some of the customers that use Ryanair. The reason being that EasyJet does not insist on making cheap flights at the expense of honest services. EasyJet instead makes use of cost-effective flights but retains good quality services for customers and keeps them happy enough to want to come back and book another flight. Another case scenario that illustrates how reputation management cam salvages the image of a company after a tragedy can be observed in an incident that occurred with the US airline company.
The operations of the company ought to be designed in a way that will be easy for all stakeholders to track them thus creating the sense of transparency. Malaysian Airline should not make a mistake of appointing staff without experience in Airline to head its various department. The company ought to appoint a chief executive officer with experience in aviation industry going forward. Malaysian Airline should fast track the process of bringing the company back to profitability status. Malaysian airline has been hit by two tragedies within a very short time span and is now in its stages of recovering from the effects of these tragedies. In short, attempts need to be made by the company, in reassuring their customers that they are concerned about customer safety and they have measures in place that will help ensure that tragedies are avoided in future.
Another possibility for the Malaysian airline that does not include selling the company and changing the name is to rebuild a number of things about how it operates. One such is to rebuild it response system to tragedies such that the response system is flexible enough to be ready for varied types of tragedies that may befall the company. The company should also make safety changes and publicize them such that the Malaysian public becomes aware of the changes that have been made, so that some reassurance may be achieved at least with the Malaysian people. It was also noted by some experts that the plane that was shot down by an air missile was flying over a disputed area that is inhabited by rebel groups.
If one is able to keep the customers happy and comfortable, then it is possible that the customers will like the brand and even tell their friends about it. A cost-effective system is more preferable in brand reputation building than a cheap system. It would be unwise to have a cheap system that denies customers the quality services that they often want to receive. A better method would be to be clear to customers on what they are getting for the price that they are paying. It would also be unwise to promise customers heaven and deliver nothing as seen from how Ryanair advertises cheap flights to customers but at the end charges customers a lot more in terms of offering paid for services such as booking check-ins.
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