Malaysia Airlines: Culture transformation while flying through turbulence

• Main Authors: DIEZ, Fermin, BASHSHUR, Michael R., CHEAH, Sin Mei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Culture; Organizational culture; Organizational change; Change management; Resistance to change; Corporate communications; Organizational Behavior and Theory; Organizational Communication
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/460; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-23-BATCH%20%5BPDF-Pic%5D/SMU-23-0008%20%5BMalaysia%20Airlines%5D/SMU-23-0008%20%5BMalaysia%20Airlines%5D.pdf?CT=1686549132544&OR=ItemsView
• Institution: Singapore Management University

This case study follows Malaysia Airlines Berhad (MAB) through its Culture Journey (2018-2021), an initiative to rebuild the corporate culture as part of a broader turnaround strategy. The airline was stricken by twin tragedies in 2014 – the disappearance of Flight MH370 over the Indian Ocean and the downing of Flight MH17 in Ukraine. Such devastation would have bankrupted any airline, and MAB was particularly vulnerable as it has been battling financial difficulties for years. Having undergone numerous restructurings, nationalisation, and leadership turnovers, the airline’s decision to embark on a culture transformation was unlike that of previous restructuring plans. Unique to the approach were the unconventional ideas of Dato’ Mohd Khalis Abdul Rahim, Group Chief Human Capital Officer, including engaging a religious teacher to boost employee morale, singing the national anthem at company events, and the composition of a corporate song. These efforts to reset the corporate culture were reinforced by a series of neuro-linguistic programming workshops, as well as upskilling and reskilling programmes. While the Culture Journey started to bear fruit, MAB was hit by the strong headwinds of COVID-19 and the eruption of the Ukraine-Russia war. The silver lining was the reopening of Malaysia's international borders in 2022, followed by the rebound of the travel industry and surging passenger traffic volumes. By early 2023, MAB was in its strongest financial position in years. The airline also won a national HR award for the success of its human capital development effort, an integral part of the Culture Journey. However, the road ahead to rebuilding its reputation, repositioning it as a premium airline, and recapturing market share in a highly competitive industry was still long and arduous. The question remained: could the airline sustain its revitalised culture in the post-pandemic world? Students will learn about the challenges that led organisations to change. They will analyse and evaluate the effectiveness of the strategies utilised by the airline, and in doing so, apply concepts of change management to a real-world example. They will also appreciate the importance of communication in culture-based interventions. The case is useful for undergraduate, postgraduate, and executive education courses on HR management, organisation behaviour, and change management.