The organizational structure of geography divide the workers by geographical area designated as below at different part of its branches operation. It was formed on the request of customers who are far away or outside an organization’s operations centre. The organizational structure of geography in operation among different staff is responsible for carrying out business activities in designated locations. In this geographic structure, units and divisions in view of the places and the geographical area. This structure is suitable when companies or offices operate in many different geographical areas in which the state, religion and country. Furthermore, the geographical structure is the coordination of work and labourers in the unit or where distinctive parts are on the whole in charge of every one of the association or action in a specific geographical area. In view of the geographical structure diagram of the Air Asia Management, it has extended its production in some particular geographical area. The advantage gained is the company able to expand its business across borders including financial markets, social relationships and the resulting product or products to the local market. Also, the organisation can foster a closer connection between people and places around the world. The organisation is likewise ready to grow the comprehension and fellowship between the people groups of the world with open doors for individual change that is continuously risen. In this way by implication the organisation has framed or ready to meet its own trademark which is “Now, Everyone Can Fly”. What’s more, the organisation is additionally ready to enhance the principles recommended or utilised as a part of the positioning of worldwide necessities, for example, the guidelines endorsed or utilised as a part of the positioning of worldwide prerequisites, for example, copyright law. The organisation then again is additionally ready to shape the general’s esteem and get the innovation expected to help in spreading its market (showcasing) all through the world. The organisation is likewise directing administration exercises between the fringe and the procedures of improvement which will be embraced when the development of a worldwide market later on. What’s more, these organisations are likewise more regular utilisation of cutting edge advances since it frequently constructed association or get associated between the outskirts and to build up a worldwide telecommunications infrastructure
ADVANTAGES OF GEOGRAFIC STRUCTURE
1) The whole organisation is able to use the expertise of all staff in ‘worldwide’ speaking according to the geographical location of the organization.
2) Products and services can be produced and marketed to different countries thus, make marketing job easier and effective
3) It is able introduce the organization to the world.
4) The organization becomes larger.
5) It can reduce organisation costs by putting the resources of the organization closer to the geographical area specified.
DISADVANTAGES OF GEOGRAFICAL STRUCTURE
1) There might be difficulty in coordinating the departments in the geographical area because its location that is far from each other.
2) Lack of control might occur to each geographical department of the organization
3) Redundancies can happen
4) It cannot guarantee the full loyalty of employees to the organisation
5) The existence of a change in products (travelling) and services as cultural factors, physical and weather
In a company nowadays, general management engaging in the four major functions of which is planning, organizing, leading and controlling. The process of achieving organizational goals may not sufficient and supportive for the organization succeed in the world of complex environments. It concerns about the process to manage the company internally but do not concentrate more on creating competitiveness regarding environments affecting the organisation. Even companies adopt general management to sustain profitability by reducing the defects or costs, and improving operations process in order to increase productivity, they may not succeed in the competition because they perform only similar activities better than competitors but do not create distinctive competitiveness. Additionally, they perform only operational effectiveness but not strategy. Operational effectiveness and strategy are both essential to superior performance but they work in very different ways. Strategy is about competitive position that the company performs different activities from rivals or performing similar activities in different ways. To learn how the companies create strategies and put them into action, the executives or strategists should examine carefully an aspect of strategic management. Moreover, the organization or company nowadays is faced with constantly changing external environments and needs to ensure that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment.
Companies or organisations don’t exist just to survive in the market place but want to grow and prosper in a competitive environment. Keeping in mind the end goal is to understand what is happening around them, firms must attempt an investigation of their external and internal environment. To comprehend and how make a move about external and internal environment, an organisation needs to help themselves with a good strategic management. As a result of this reason, AirAsia need to think about a strategic management as the essential things in their organisation. The methodology that AirAsia require isn’t exactly how to decrease cost and make the operational exercises running adequately. In any case, AirAsia needs to turn out with the system that can make focused position that the organisation performs diverse exercises from adversaries or performing comparative exercises in various approaches to accomplish their business effectively. AirAsia organisation needs to consider and worry to a key administration on the grounds that the globalisation. The globalisation thought impacts for all intents and purposes every vital choice in an organisation. The globalisation likewise constrained AirAsia Company to survival for business. To see and value the world from the point of view of others has turned into a matter of survival business.
The year 2008 to 2009 was truly turbulence for everyone, yet AirAsia Bhd triplet its promoting spending. AirAsia saw chances to expand beyond economic slowdown. “I always believe nothing is impossible and for me, at this time of uncertainty, a lot of opportunities are there for us to grab,” CEO Boss, Fernandes clarified in airasiafansclub.blogspot.com (2009). Later he focused on “… This is the best time for you to manufacture your image as others are making a stride in reverse,” he said. As a rule, everyone concurred that AirAsia has its own Finance Guru, and that must be simply the CEO. Since 2009 AirAsia has been named ”The World’s Best Low Cost Airlines” in the world. The best strategies applied during the economic downturn by AirAsia in 2008 to 2009. Amid global downturn, Wong (2014) stated “AirAsia increased endeavours amid the global downturn as Air Asia’s rivals shrank back and cut down on flight routes. This strategy is called “Seize the opportunity to lead the sheep away”. AirAsia even gave a great millions of free seats and increased advertising. What AirAsia did is to top off the vacuum left in the business and use to poach clients from different airlines. AirAsia’s success as referred to (AirAsia Berhad, 2009, p.6) had something to do with its guest confidence who prefer low fare with no-frills, convenient while at the same time hassle free in air travel. The key is to consistently maintaining lower cost. AirAsia made it possible by following these key strategies:
(I) Operational Strategies
As Bateman & Snell (2013) has expressed that Öperational planning identifies the specific procedures and processes required at lower levels of the organization”.
Safety First – Never compromise on Safety is the single most important criterion in every aspect of the operations, an area that AirAsia will. AirAsia complies with the conditions set by regulators in all the countries where the airline operates. In addition, AirAsia partners with the world’s most renowned maintenance providers to ensure that its fleet is always in the best condition.
High Aircraft Utilisation – AirAsia’s high frequency flights have made it more convenient for guests to travel as the airline implements a quick turnaround of 25 minutes, which is the fastest in the region. This has resulted in high aircraft utilisation, lower costs and greater airline and staff productivity.
Low Fare, No Frills – AirAsia targets guests who are prepared to do away with frills such as meals, frequent flyer miles or airport lounges in exchange for fares lower than those currently offered without comprising on quality and service. Guests have the choice of buying exclusively prepared meals, snacks and drinks from our in-flight service at an affordable price.
Streamlined Operations – Making the process as simple as possible is the key to AirAsia’s success. We are working towards a single aircraft fleet; this greatly reduces duplicating manpower requirements as well as stocking of maintenance parts.
Lean Distribution System – AirAsia offers a wide and innovative range of distribution channels to make booking and travelling easier for its guests. AirAsia’s ticketless service provides a low cost alternative to issuing printed tickets.
Point to Point Network – The LCC model adopts the simple point-to-point network. All AirAsia flights are short haul (four-hour flight radius or less) while our sister airline AirAsia X focuses more on the medium to long haul flights (more than four-hour flight radius). The underlying business is to fly a person from point A to B.
(II) Tactical Strategies
As Bateman ; Snell (2013) elaborated, “Tactical planning translates broad strategic goals and plans into specific goals and plans….often are functional area like marketing or human resources…”. This was how the biggest budget airlines was built. Lee (2013) wrote that Tony Fernandes had mentioned 12 success strategies applied by AirAsia during 2009 until 2013, they are :
A good grasp of finance – Similar to Megaworld’s Andrew Tan, Fernandes is an accountant by training and good at numbers. Educated at the London School of Economics, from 1987 to 1989 he worked as the financial controller of British tycoon Richard Branson’s Virgin Records in London. He is from Malaysia’s ethnic Indian minority, with ancestral roots in India’s former Portuguese colony of Goa, which explains his Portuguese-sounding surname. Fernandes was formerly Southeast Asian regional vice president for Warner Music Group from 1992-2001. No need to become accountants, but we all need a good understanding of accounting and finance.
Determination – During a speech at the Sabah International Business Luncheon Talk 2012, Fernandes was quoted by the Borneo Post as saying nothing is impossible to achieve as long as there is determination. He turned around an unprofitable and small airline company with only two airplanes to one that now has a 160-strong fleet of aircraft in only 12 years!
Do not fear failure – “I don’t care about failing because I do not want to sit down in my older years and say, ‘How come I didn’t try?’ So we did and Malaysia is the country which allowed four Malaysians to go out and make their dreams come true,” Fernandes said.
Take care of key assets, your people — One of Fernandes’ strengths is his caring for and nurturing good employees. He sees people as the “key asset” of any business and hopes to help develop their full potential, passions and dreams. His business offices have no walls and he seeks ideas from his staff. On Dec. 12, Fernandes gave 263 Chopard watches totalling five million ringgit as gifts to 263 staff members who’ve been with the company 10 years. Chopard is a 153-year-old Swiss luxury watch brand. Also, after typhoon Yolanda destroyed Tacloban City, Fernandes reportedly sought out one of his employees whose home was wiped out and I heard the tycoon will help rebuild the house.
Branding – Earning profits is not enough in business, that it is important to create a brand or brands. One believer in the power of brands is Tony Fernandes. He said it took him seven years to consciously and consistently build up the AirAsia brand name and logo as distinct and internationally known.
Marketing – Tony Fernandes invests in and excels in marketing. He said: “If you have a great product but no one knows about it, its history.” Fernandes reminds me of his former boss, Virgin Group’s colourful Richard Branson and America’s high-profile realty developer Donald Trump. Like Trump, Fernandes this year hosted the Asian version of the TV series The Apprentice Asia, with the winner being Filipino UP Diliman economics graduate Jonathan Allen S. Yabut, who is now also chief marketing officer of AirAsia Zest.
Support from Government – As in most societies, entrepreneurs cannot go against the government but need their support. Fernandes got his break in 2001 when then Malaysian Prime Minister Dr. Mahathir Mohamad heard of his dream to start an airline and advised him to just buy the heavily in-debt, government-linked AirAsia. Fernandes mortgaged his house and got personal savings to buy this firm with two old jets and US$11 million worth of debt. He bought the company for one ringgit (about 26 US cents). After he turned around AirAsia, in 2003 Fernandes lobbied Dr. Mahathir to raise the “Open Skies” idea with leaders of Thailand, Indonesia, and Singapore, leading to these nations giving AirAsia and other budget airlines landing rights.
Use digital technologies – Fernandes believes in using digital technology for his businesses. Much of his business comes from AirAsia.com. In fact, one unique thing about AirAsia flights is its inflight magazine Travel 3Sixty, which has this reminder: “Touch me, feel me and flip me over, but you can’t take me home. Read me online.” I think Fernandes isn’t scrimping on publishing costs, it is part of his clever marketing strategy to make passengers discover and enjoy his website.
Generosities – Fernandes is legendary for his personal and corporate generosity. He gives people big gifts, not only to generate loyalty to the business, but he is also generous in philanthropy, for example, his relief assistance to typhoon Yolanda victims here in the Philippines. His AirAsia Foundation also recently supported the social enterprise Rags2Riches led by Reese Fernandez-Ruiz of the Philippines. Rags2Riches is a genuine NGO helping underprivileged Filipino artisans transform their lives and turn scrap into high-fashion bags and other items.
Passion – seems to be a common denominator among achievers in business, the arts, sports and other fields. Tony Fernandes hires people with passion. He is exceptionally passionate, not only about his firms, charities and employees, but also about sports. He owns a football team in England, an F1 car racing team and is a major supporter of Asia’s biggest mixed martial arts sport, the OneFC.
Bold Vision – Tony Fernandes has a bold, global and long-range vision for his various companies. As a child, he dreamt of three things: running an airline, owning an English football club and owning a Formula One racing team.
Dynamic Corporate value – Fernandes said: “In AirAsia we consider ourselves basically a dream factory. We deliberately decided that we wanted a company where people can pursue their passion and we wanted to make use of all the talent that we have in-house. The culture that we have stems from the fact that we want openness and we want people to be creative and passionate about what they do. In order to do that, we’ve got to inspire them.”
Apart from traditional Human Resources, it is learned that Airasia has one of the most flexible and dynamic workforce structure, even recruitment process, training, reward systems, and labour system. According to airasia fan club, (2009) the success stems from AirAsia’s work culture, which stresses innovation, openness and a never-say-die attitude. Its offices have few physical barriers between desks, there are no titles on name cards and everyone is encouraged to use first names. Cabin crew are pushed to develop their own personality, instead of conforming to preconceived notions about their role, resulting in a relaxed on board environment. There are no reduction process during downturn of 2008 to 2009. This is due to expansion made to create more routes instead of hold on to cost as others airlines did.
Nextup Asia (2014), found the leader behaviours in Tony Fernandez as he adopts a walk around management style. “If you sit up in your ivory tower and just look at financial reports, you are doing to make some big mistakes.” For him, few days in a month he will work on the ground or in the cabin and getting feedback from the crew before making important decision. This type of management is called Transformational Leadership. “Leaders who motivate people to transcend their personal interests for the good of the group.” Bateman, 2013, p.425. Further examined by (Kamisan & King, 2013) they found that Tony Fernandes has more freedom in decision making and traits of entrepreneurship skills. This proven b expanding his businesses to various portfolios such as Tune Talk, Tune Insurance, Tune Hotel. Due to this it is understood that Tony Fernandes can be very effective in manoeuvring the organization in the downturn scenario. Moreover his kind of interpersonal communication has no barriers when it comes to mix with subordinates. It always been said that there are no walls in AirAsia office, so everybody can directly meet Mr Tony Fernandes.
AirAsia is the leader in airline business. According to airasia fan club, (2009) “Commerce, rather than governments, drives Asean. Countries will always want more want tourists and traffic. Asean governments realised they had to open up or always play second fiddle to China and India,” That was on the bureaucratic control system. As the first mover into low cost carriers businesses, AirAsia definitely has the competitive advantage over rival. Business expansion is inevitably, in airasia fan club, (2009) Fernandes quote to say AirAsia is now the region’s largest low-cost operator, with a network of 122 routes covering more than 65 destinations. It has carried over 65 million passengers since its inception and grown its fleet to 80 aircraft. It has gone public, ordered 175 Airbus A320s, started associates in Indonesia and Thailand, and finally secured access to Singapore after overcoming various obstacles. Fernandes and AirAsia have also helped to start AirAsia X, a long-haul, low-cost airline that has 25 Airbus A330s on order and will imminently sign a deal for around 25 Airbus A350s.
Economic downturn 2008 to 2009 has given many opportunities to AirAsia. With Tony Fernandes leadership’s style, AirAsia has become the biggest airlines players in South East Asia. But Airasia needs to be aware and consider with the strategic management. The reason of the airline industry is a unique and complex industry, not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully, and the last one is because the effect of globalization and E-commerce becoming an effective tool in a company nowadays.