FACULTY OF BUSINESS AND MANAGEMENT

ABCR2103
PRINCIPLES OF CORPORATE COMMUNICATION

TUTOR

NAME: CHE CHE ZAWAWI BIN MAHMOOD

NO. MATRICULATION: RF130143001
NO. PHONE:
E-MAIL: chezawawi@oum.edu.my

January SEMESTER / YEAR 2016

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COMMUNICATION IN ORGANIZATIONS

In organizational management, communication is one of the significant contributors

to the process of generating a movement working towards the achievement of its
objective. In other words, the daily practice of the organization's work is to create a
weighted coordination of work activities with the objectives of the organization. In the
process of coordination of work it involves two activities, namely the exchange of
communication and information sharing and networking at various levels of work. By
Euske and Roberts (1987) acts as a social communication within the organization. Social
cohesion in organizational communication occurs at the level of its members, sub unit-
subunit and the organization as a whole.

In the meantime they also pointed out that the communications involved in all
processes, structure and development stage formed by actions based on the characteristics
of the organization and aspirations boss. Without their explicit communication, the
management of affairs does not exist. Review some scholars (Mintzberg, 1975;
Megginson, Mosley and Pietri, 1989; Kovach, 1989) showed that 80 percent of the time
spent by the manager is to communicate with others, include subordinates, colleagues,
superiors, customers and suppliers. This communication activities carried out are
intended to move towards the achievement of organizational goals or personal goals.
Based on the findings indicate that most of the time is used to communicate in various
stages of the work. Thus the communication style used by members of the organization
will work to impaction treatments and eventually work in the organization's output.
Outcome of the process of effective communication in said relationship with job
satisfaction, commitment and high performance.

According to Koontz and Wiehrich (1991), communication is important in the

management of an organization, because it combines the functions of management. In
particular, the communication needed to 1) establish and disseminate the goals of the
organization, 2) develop a plan to achieve those goals, 3) manage human resources and
other resources in the most efficient and effective, 4) selecting, shaping and evaluating
staff members of an organization, 5), lead, lead, motivate, and create a climate that will

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trigger the desire to contribute, and 6) control the performance.

Most scholars (Zalabak, 2003) in the field of management said there are two
styles of management, namely management based management descriptions of feeling
(expression), and the management block (suppression). Block management style refers to
the practice of the autocratic management organization and information flow pattern
down, while also demonstrating the expression of management style management
practices that emphasize the involvement and participation of all levels of staff through
the decision making process. Similarly, the flow of information flowing from all levels in
the organization's work. This management style will also determine whether the
organizational climate patterned closed or open. According to Weick (1969), through the
process of controlling an organization, each organization creates its own environment.

Similarly, organizational excellence, it is not located on the responsibility of an

individual, or a part, but it is the contribution of all levels of the organization's work.
Failure to communicate will affect the process of reconciliation of work and so on will
affect the process of achieving the objectives of the organization (Rosenbalt, 1992). Thus,
a combination of subsystems within the organization and coordination of activities of
effective work through the flow of information and very good relations. Finally, the
practice of effective communication it will help solve a problem of organization and
decision-making process that aims ultimately to the achievement of the objectives of
generating an organization.

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management organization by most scholars of management is to make planning,
leadership, business management, coordination and control. By Rosenbalt (1992) in
carrying out this role can not escape the managers use a variety of communication
methods. Whether the practice of effective communication in practice or not depends on
the skills of managers choose an effective method of communication, as well as all levels
of work within an organization using effective communication. Based on the figure 1.1
we can see how a management role within the framework of communication in
organizational management at all levels of staff in the decision making process. Similarly,
the flow of information flowing from all levels in the organization's work. This
management style will also determine whether the organizational climate patterned closed
or open. According to Weick (1969) in the management of the organization, each
organization establish its own environment. In other words, the organizational form of
interaction among members of the business, and it's not exist in a natural way.

Euske and Roberts (1987), said there are four theories of organization are often
used as a theoretical framework by researchers reviewed the practice of communication
in an organization. These theories are structural-classical theory, human relations, and

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behavioral decision theory, system. Generally, most theories of many organizations do not
specifically deal with communication practices especially communication approach used
in the management of work activities in an organization.
However, in describing the practice of communication in theories of organization,
there are four basic things that are seen, namely, the direction-flow communication,
communication, communication content and communication style (Miller 1999).
Classical management theory describes the process of managing work much emphasis on
communication practices on the bottom, while the theory of human relations at the level
of the importance of communication and communication colleagues from the ground up.
There is also a focus on systems theory focuses on the flow direction of a whole range of
communication and interaction between subsystems for purposes of coordination of work
in-house and external environment of an organization.

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ORGANIZATION OF SELECTED: AirAsia

Since AirAsia introduced the concept of cost without 'frill'nya in December 2001, the
airline has been flying to over 40 destinations in Malaysia, Thailand, Indonesia, Macau,
China, the Philippines, Cambodia, Vietnam and Myanmar as well as to form two
undertakings agreed that successful in Thailand through Thai AirAsia and Indonesia
through AWAIR, expand its fleet of two aircraft was originally up to twenty-eight today.
Air Asia also have revolutionized air transport in the region by offering very low fares
through its innovative sales channels. To date, AirAsia has carried over 23 million
passengers.
In June 2003, AirAsia has announced three new investors the IDB Infrastructure
Fund LP, Crescent Venture Partners and Deucalion Capital II Limited which has acquired
equity AirAsia Berhad amounting to US $ 26 million (RM98.80 million).
AirAsia starting its regional flights in November 2003 with the introduction of flights
to Phuket in Thailand. Airlines are then stretched its reach with flights to Bangkok, and
next to Hat Yai from Kuala Lumpur International Airport. Next the airline introduce
flights to Bali, Medan and Padang. AirAsia made history in Bandung when it became the
first airline to offer low added direct flights between Singapore and Kuala Lumpur in
April 2004. In July 2004, this low-cost airline started service to the Special
Administrative Region of Macau (Special Administrative Region, SAR of Macau) by
introducing flights from its Thai operation in Bangkok.
In November 2004, AA International Limited (AIL), a company owned 99.8 percent
by AirAsia Berhad, has successfully signed a purchase agreement with a private airline in
Indonesia, PT AWAIR to acquire a 49.0 percent stake in the company. AWAIR
successfully relaunched as a low-cost airline that provides domestic routes in Indonesia
on December 8, 2004. AWAIR Center is located at Soekarno-Hatta International Airport
in Jakarta, Indonesia. In April 2005, AirAsia became the low-cost, no frill first to provide
service between Bangkok and Xiamen in China, and Clark (Philippines) from Kuala
Lumpur and Kota Kinabalu.
AirAsia is also a public company listed on Bursa Malaysia, having successfully
emerged as one of the largest public offering in Malaysia and raised funds of $ 717.4

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million for its development on 22 November 2004. In accordance with the development
plan and development, AirAsia has made an agreement with Airbus to A320 is 130 (100
for sure, 30 option). Through this makes 130 aircraft AirAsia plane as a kind of buyer the
largest in Asia-Pacific and is likely to be one of the airlines that have set the highest in the
region. The new aircraft will replace the Boeing 737-300 of the existing AirAsia
gradually.
On 23 March 2006, AirAsia successful transfer of operations to the Low Cost Carrier
Terminal (Low Cost Carrier Terminal LCCT) new. This is a major achievement because it
is a special terminal for the operation of the first low-cost carrier in the world. LCCT
designed to accommodate 10 million passengers per year with 30 points layover for a
flight. It can be upgraded to accommodate 15 million passengers if necessary. This
terminal gives us many opportunities of cost savings and more efficient operations.
Phenomenal growth of AirAsia indicate its intention to become an ASEAN brand. As
one of the low cost development in the region, AirAsia is a symbol of cultural diversity
and ASEAN with the power source. Pernerbangan company also intends to provide a low
cost to the ASEAN, as well as promote and develop trade and tourism industry among
ASEAN countries.

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INTERNAL COMMUNICATION THAT PRACTICED BY AirAsia

International Business Research (2009) found that AirAsia is attractive Web page and
create a new atmosphere to the customer with their welcome to browse the website again.
The color red plays a role as a key element in creating the look that attractive compared
to 100% service provider's website to other airlines. The interactive help customers to
connect easily from one page to another. This site also provides information that can be
easily downloaded and provides accurate information such as flight bookings, rates,
packages and other clearly point to the products and services offered. Basic information is
shown because this audience is always required for the first time. It also found that the
promotions are always a major factor to be advertised in the website because it creates a
sense of "know more" and the navigation was considered a "user friendly". This leads to
the potential to create sales and thus make a profit to AirAsia. Although they have been
facing a number of challenges it is one of the keys to becoming a better flight service
provider by subscribers. The following image is a screen AirAsia's website on June 26,
2016 Although they have been facing a number of challenges it is one of the keys to
becoming a better flight service provider by subscribers. The following image is a screen
AirAsia's website on June 26, 2016 Although they have been facing a number of
challenges it is one of the keys to becoming a better flight service provider by
subscribers. The following image is a screen AirAsia's website on June 26, 2016

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International Business Research (2009) found that AirAsia's website is sone of the
best sites of secured Internet transactions and make this aspect proved by looking into the
whole process of buying and making payments for services offered. Their website
convinces customers to be more rested on the transaction due to a listed phone number
and address as it connects customers and prospective customers for personal assistance
AirAsia which is a life that can be reached. It proves that AirAsia always keep in building
customer trust.
International Business Research (2009) found that AirAsia always specify clients as
their priority in all considerations as these can be seen on the first page of the AirAsia
website states that the sign member. Customers can always connect to AirAsia as special
promotional booking etc. After becoming a member, which takes customers to develop
information that will ensure that members are always one step ahead of everyone else.
Data from the client will be protected and guaranteed of a private airline.
FCU ePaper (2009-2010) found that AirAsia provides many languages including
English but the language is most Asian countries due out in Asia Pacific market.
Information on their website is complete and constantly updated news. People can easily

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buy or book tickets using the features on the website and can check flight schedules.
FCU ePaper (2009-2010) found that AirAsia has other social networks to provide
communities such as Air Asia Blog, Facebook and Twitter which is at the bottom of the
website, so people can share their comments about Air Asia service. Meanwhile, they
have introduced the Short Messaging System (SMS) to reserve a seat and get promotions
through mobile phones.
Lim, Mohamed Ariffin and Guan (2009) have found that AirAsia logo written in red
cursive capital letters against a white background in the colors and fonts used signifies
courage, simplicity and fun. slogan "Now everyone can fly" with the brand name clearly
captures the company's vision to offer the lowest fares for everyone. The new logo
AirAsia is more vivid and dynamic than the previous logo. The following image is a new
logo in red and blue color is the old logo of the airline.

Lim, Mohamed Ariffin and Guan (2009) found that CEO of AirAsia, Tony
Fernandes, believes that every aspect of the business should be simplified so that the
entire philosophy, vision, mission and objectives can be understood by all stakeholders,

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especially employees and customers. This style brings transparency in decision making
and access to high media and the investment community. In addition, he believes that
management should continue to talk to the staff about the brand. He tried to promote a
sense of loyalty, dedication and commitment of its employees to the company in the daily
interaction with the staff to protect the image. This opinion was encouraged by both staff
and customer relations for talks at any time and the atmosphere friendly atmosphere.

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'Management by Objectives (MBO)

Cathay Pacific Airways has a strategy aimed towards increasing the company's name
as the leading low-cost rates and so well received. In the company's business plan,
AirAsia Berhad found to apply the concept of MBO. MBO is a management system that
combines a group of workers with the manager to achieve the goals set. To this end, the
MBO set the direction, timing and achievement rewards will be given after the goal is
reached.
MBO has four elements, namely the specific goals, participation in decision-making,
a clear timeframe and impact performance of the company. One problem is their MBO
program may not be effective in a changing environment dynamic time. Thus, MBO
program needs more stability for workers employed to accomplish the purpose.
The success of AirAsia can now boast with their focus on the combination of user
requirements, employees whose dedication, hard work, getting the right foundation,
effective expenditure control and determination to achieve something great. Method
MBO has been a guide for parents to understand the needs and concerns of consumers. In
order to increase consumer understanding, AirAsia Berhad has introduced new products
to find the problem and its solution. In addition, Etihad Airways will also reduce
production costs to improve quality and add consumer appeal for the world's leading
aviation market by providing extremely low cost so that people can fly. Airlines will
introduce more incentives in the future to encourage more users to use aviation services.
Through MBO also Airways had formulated a long-term incentive to improve the quality
of airline service.

BENEFITS OF AN EFFECTIVE INTERNAL COMMUNICATION

When its founder, Dato 'Seri Tony Fernandes, announced his dream to launch the
first low-cost carrier in the region, many are cynical and do not believe in their dreams.
But after nine years, he proved that nothing is impossible in this world and what is more
interesting, modular business services AirAsia's low fares to join rivals such as MAS
establishing Fireflyz, SIA establishing Tiger Airways and Qantas Airways to establish

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Jetstar Airways , What is the secret of success adopted by Dato 'Seri Tony Fernandes and
AirAsia managed to put on stage now? Are solely because the relatively cheap cost? Or
because the attraction attendant red-uniformed stewardess? An answer, there is no secret,
there was just the right business strategy used by AirAsia. AirAsia's business strategy is
not only limited to the marketing strategy and the product alone, but it accounts for the
management of all aspects of the business.

Workers Company's Assets

Among the management team effective work. AirAsia called his employees AirAsia
AllStars because of the key factors contributing to its success is the role played by
employees. Notwithstanding any sophisticated aircraft or the operation of computing
systems used by AirAsia, it will not mean anything if there are no workers who move it.
Therefore AirAsia proudly states on its website as follows:

"Our people are our GREATEST ASSET. They make all the DIFFERENCES in the
world. Our DRIVING FORCE has always been our people. From our humble beginnings
to the present family size of 8,000 people, we stand UNITED and SHARE one common
culture. "

To create an effective working team, AirAsia not only provide the necessary training to
its employees even Airways initiated the establishment of the Corporate Culture Unit
which is responsible for implementing the values and practices of the company to all
employees.

Cost Per Seat Only RM0.82!

Among the other strategies is AirAsia ensure effective cost management. This is because
only through effective cost management that will enable AirAsia continues to offer low
fare flights to its customers. AirAsia management efficiency in controlling costs, as
evidenced by its recognition as a low-cost carrier that has the world's lowest cost
USD0.24 (RM0.82) per seat.

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Build Ties With Malaysia

One of the unique business strategy AirAsia is to build relationships with people. Every
success, big or small, is not only celebrated but touted either on their website or
disseminated through the media and displayed as Malaysians with success rather than just
the success of AirAsia or Dato 'Seri Tony Fernandes alone. Even in his blog, Dato 'Seri
Tony himself said:

'As a nation, we must believe that we can do anything. We can be the best. Our children
need to stop and look up to the people of countries such as Manchester United, Ferrari
and Steve Jobs. Stop assuming that the best is coming from abroad. We need to begin to
believe that as Malaysians, we can. We can compete and be the best in the world. '

For them, this success is not only a personal success but success must be shared with the
people of Malaysia as the brand AirAsia is a Malaysian brand.

Dreams despised Now Flying High

What is interesting about the strategies of Austrian business is that it is universal. These
strategies not only can be used by a large business but also in small and just starting to
gain a foothold. And by making reference to business strategy that has proven effective as
the above, it can help business owners minimize their risk and avoid repeating the
mistakes made by their predecessors engaged in the business.

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CHALLENGES FACING PROBLEMS OR

Communication skills arising from the personalities who have high self-confidence
of the coaching while studying and working in England and in Kuala Lumpur. He also
showed minimal ego attitude and willing forgive and forget that allows him to make the
best of the Company consider that in any time. For example, in dealing with the
Government of Singapore for permission to land there, he was faced with resistance by
the protracted resistance, which usually dampen the spirit of the common man.
Nevertheless, he can still interact with officials of the Singapore government officials
with good, while assuming seconds seconds bitter traveled only as challenges in
developing the routes of Air Asia.

Before that, he passed the first challenge arises from the attitude of the Malaysian
business community itself were to be cynical about his plans to set up airlines. This does
not dampen his enthusiasm, even with fast, by Dato 'Pahamin Rajab, the youth managed
to convince Tun Mahathir, the Prime Minister, to approve his plan, starting with how to
take over the airline, Air Asia, a real flop and held by the government.

After a successful start with the company Air Asia, he shifted the focus to make the
Subang Airport a hub for low-cost carrier in the Asean region. He knew this was a very
difficult thing acceptable to the government because the country needs to strengthen its
position KLIA recently completed therewith. But Tony never takes no for an answer. He
used the media to influence the public and the government. Finally insist government
rejected the proposal of Air Asia in the national interest, but in this process Tony managed
to get a new air route path and get a new LCCT at KLIA with a discounted tariff rates. It
helps strengthen the competitiveness of Air Asia when dealing with Malaysia Airlines and
other airlines.

Likewise Tony cope with a number of challenges in order to obtain landing rights
airport in Bangkok, Singapore, Hong Kong and more either in Asia or continent or other
continents. But apparently it was Singapore's experience in the most demanding.

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Based on the book The Story of Air Asia written by Sen Ze and Jayne Ng, for Tony,
the quality of an entrepreneur's most important is perseverance or in English is willing to
never take no for an answer. For Tony, "Hold fast to your beliefs. If you are listening to
someone else, you might not be able to start something. That is why they do not become
entrepreneurs. People who give such advice is not entrepreneurs. If not, of course they
carry themselves. We just have to believe and execute "

AirAsia also use medium porter 5 Force model to assess the competition. Here are 5 of
the Air Force model Asia:

1. Power Supply Suppliers

AirAsia flight involved with the institution will have the bargaining power of
suppliers is quite high. This is because in terms of the use of aircraft, suppliers simply
consists of Boeing and Airbus only. In addition, high maintenance costs will also lead
to the power supply provider will be limited. The high power supply provider also
due for replacement product for the method is a little low and if you can use other air
routes will also have disadvantages such as helicopters that can only be used for short
distance travel and a small amount of charge.

2. Power supply Buyers

Buyers have the ultimate power to choose the best flight service to themselves. The
bargaining power of buyers as well as no payments they need to change direction to
select the best low against the buyer resulting purchasing power is very high. If we
take the example of telecommunications companies such as Maxis and Celcom where
customers who want to terminate the contract with the company must repay existing
debt, while for the duration of the contract they are required to pay fines and so on.
But the aviation industry is different and there are no transition costs incurred. In the
bargaining power of buyers Buyers also can mebandingkan prices through the internet
and so on.

3. Threat of substitutes.
For AirAsia and other airlines, substitutes for the airline industry is the industry that
there are in the transportation industry such as trains and ships. But the structure of

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geography in parts of Southeast Asia that does not help to transport such as trains and
ships has caused the threat of substitute materials is very low.

4. The threat of new entrants.

For the aviation industry barriers to entry into the aviation industry was very high, for
example, capital requirements and legal requirements by the government are high.
But most of the recent Southeast Asian kingdom has been cut rules imposed on
airlines for the airline industry to reduce the cost of providing low-cost services to
residents in Southeast Asia and thus, the competition will be increased by several
companies that also provides low cost mine. For example, the success of AirAsia
providing affordable flight rates has been demanded by large companies to start their
own low-cost carrier and has the advantage of brand marketing and loyalty towards
the parent company.

5. judging the competition

Rate is high competition among airlines due to high competition in today's
increasingly lucrative market reach. Information on most airlines is available via
annual reports and can be evaluated by other companies. For example Cebu Pacific
Airline started the business in 1996, has 16 flights by the end of 2005. Entry of new
competitors has also increased the competition for AirAsia they have competition
from airlines, land transport, sea transport and services.

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PROPOSAL
We suggest some alternatives as corporate strartegi to be applied by AirAsia
management. There are some fragments of strategy in the growth strategy of Integration
Strategy, Strategy Intensive and Diversity Strategy. Of the three strategies available, we
have chosen two of the proposed strategy to AirAsia namely Intensive Strategy and
Diversity Strategy.
In the strategy we have chosen the intensive market development. Market
development is introduced products and existing services into new geographic areas and
to coincide with the demographic characteristics of a country. Through the development
of the market, AirAsia can join the airline in other countries such as Indonesia, Thailand,
the Philippines and other countries in Southeast Asia. For example, AirAsia has partnered
with Asia Aviation in Thailand and has established a new company, Thai AirAsia. In
addition, AirAsia also worked with VietJet of Vietnam namely VietJet by buying shares
of 30% and has changed its name to VietJet AirAsia.
In addition, AirAsia also have the market penetration. Market penetration by trying to
increase the market share for existing products. AirAsia can penetrate into untapped
markets or potential for gain. For example, Tiger can penetrate into the market on the
African continent. It bepotensi because Africa is a country known for its wildlife where it
will attract tourists to get there. In fact, the people there can also use the services
provided by AirAsia as the best on offer is cheap.
We also suggest that Tiger uses Diversity Strategy. There are two strategies that
diversity-related diversity and unrelated diversification. In a related diversification,
AirAsia can diversify its product in the same industry, AirAsia X. AirAsia X is the low-
cost long-haul flights, such as in Australia, Europe, China and others. In addition, the
diversity of unrelated products and services that are not related to the aviation industry.
For example, AirAsia has been involved in the hospitality industry to help passengers get
accommodation at a cheap price in a destination. It is known as Tune Hotels.com operates
in Malaysia, Indonesia and the United Kingdom.
AirAsia has also been involved in the telecommunications industry by offering the
cheapest prepaid mobile phone called Tune Talk. Tune Talk is a network in cooperation
with Celcom (Malaysia) Berhad. It uses Celcom's 2G network. In addition, AirAsia also

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offers the lowest cargo known as AirAsia Cargo. Furthermore, it also makes the delivery
of goods to the world. Advantages Cargo Airways is the customer can track the current
location of the goods.
In terms of products, we recommend AirAsia using cost leadership strategy. Cost
leadership strategy is used to lower costs compared with the costs incurred by the
competitor. Therefore, AirAsia can offer lower prices compared with other competitors
with high quality standards. Despite rising prices and raw material costs, AirAsia can still
maintain a low price compared to competitors.