leadership in the privatization company in malaysia and the benefit of privatization: the experience...

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UNIVERSITI SAINS MALAYSIA SCHOOL OF SOCIAL SCIENCES MASTER OF PUBLIC ADMINISTRATION SPA 503 ORGANIZATIONAL MANAGEMENT DR. RADZAK ABAQ SAM LEADERSHIP IN THE PRIVATIZATION COMPANY IN MALAYSIA AND THE BENEFIT OF PRIVATIZATION: THE EXPERIENCE IN MALAYSIA AIRLINES (MAS) By: MUHAMAD IZZWANDY BIN MAMAT (P-SM0081/09) 1

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Page 1: LEADERSHIP IN THE PRIVATIZATION COMPANY IN MALAYSIA AND THE BENEFIT OF PRIVATIZATION: THE EXPERIENCE IN MALAYSIA AIRLINES (MAS)

UNIVERSITI SAINS MALAYSIA

SCHOOL OF SOCIAL SCIENCES

MASTER OF PUBLIC ADMINISTRATION

SPA 503 ORGANIZATIONAL MANAGEMENT

DR. RADZAK ABAQ SAM

LEADERSHIP IN THE PRIVATIZATION COMPANY IN MALAYSIA AND THE BENEFIT OF PRIVATIZATION: THE EXPERIENCE IN MALAYSIA AIRLINES

(MAS)

By:

MUHAMAD IZZWANDY BIN MAMAT (P-SM0081/09)

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LEADERSHIP IN THE PRIVATIZATION COMPANY IN MALAYSIA AND THE BENEFIT OF PRIVATIZATION: THE EXPERIENCE IN MALAYSIA AIRLINES (MAS)

1.0 PRIVATIZATION

1.1 The Definition of Privatization in Malaysia

In Malaysia, privatization is generally defined as the transfer of ownership from public to

private sector. It could also be referred as changing status of a business, service or industry from

state, government or public to private ownership or control. Occasionally, the term privatization

is to include the use of private contractors to provide services previously rendered by the public

sector. Full privatization is not the norm in Malaysia; hence most privatization involves

transferring only some of the government ownership.

In sum, privatization is a policy of transferring government ownership to private

ownership through various methods. In this definition, privatization includes the transfers of a

full or partial government ownership to private ownership through the sale of equity in the

capital market. Privatization in state-owned enterprises is based on a strong proposition that

private sector enterprises are subject to economic disciplines which are not present in the state

enterprises. The disciplines of competition and the need to earn a profit in order to grow keep

private sector enterprises relatively more efficient than their public sector counterparts.

Therefore, one common objective of privatization by transferring state ownership to private

investors is to make the enterprise become more efficient and more profitable. The privatization

may also have other objectives such as changing behavior of economic agents and discipline of

the market, reducing budget deficit to harness savings and finally promoting wide share

ownership.

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On the other hand, different countries have their own specific objectives of privatization

of state-owned enterprises. Those objectives depend upon the condition and the situation the

countries are facing. However, whatever the political motives of those countries toward

privatization policy, every country tends to have common objectives of increasing firm

efficiency and profitability and reducing government financial burden.

1.2 Privatization Policy in Malaysia

Privatization started getting attention in Malaysia from middle year 1983 when Tun Dr.

Mahathir Mohamed launched Malaysia Incorporated Policy who is also had alluded role of the

private sector in development and management of the country. Privatization was contrary with

nationalization, namely a process increase government ownership and mastery in economic.

Privatization involves several certain interest or government investments to private sector. Prime

Minister in opening speech conference “The Securities Industry in Malaysia” in 1984 said

government world over is notorious for inefficiency when running enterprises, even aided by

monopoly and authority of government. On other hand, private sector is better motivated and

generally more efficient. It is hoped that privatization will improve economic and general

performance of services, resulting in a more rapid growth of nation as a whole.

Privatization also defined as the transfer of the public sector activities and functions to

the private sector. This applies to the commercial and industrial enterprises which are often

owned, managed and implemented by the public sector which could otherwise be operated by the

private sector. Privatization is premised on the assumption of the superiority of market forces

over administrative directives in governing economic activity to achieve efficiency. The first

project of privatization is being upgrading of a public road into a tolled road by passing the town

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of Klang, Selangor. From then on, the government has extended the privatization projects to

cover other sectors.

1.3 Objectives of Privatization

To relieve the financial and administrative burden of the government

To improve efficiency and increase productivity

To facilitate economic growth

To reduce the size and presence of the public sector in the economy

To help meet national development targets

1.4 Type of Privatization

By section - namely government sectors which are service based that had been

transferred to the private sector. Example: Airod Co. Sdn Bhd.

By choice - mainly government sectors that are partly privatized. Example: Klang Port in

Selangor.

Trade oriented - whereby the government still holds the company but the capital concepts

are privatized. Example: Tenaga Nasional Berhad (TNB)

By contract - whereby the private sector would prepare the services for the government.

Example: rubbish burning by Dewan Bandar Raya Kuala Lumpur (DBKL)

By mortgage - where by the facilities provided by the government would by rented by the

private sector. Example: Malaysia Airlines (MAS) and TV3 or Media Prima.

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The Privatization Master Plan will chart the future direction of privatization to help ensure a

systematic and organized implementation of the programmed to be in line with the general

economic policies and development strategies. A Privatization Action Plan (PAP) which is a two

year rolling plan reviewed at the end of each year has also been formulated to also serve as a

feedback mechanism.

Privatization policy is in line with New Economic Policy (NEP) and The National

Development Policy (NDP) which is an effort of the government to be an industrial and business

country. Under NDP, privatization has geared up its focus on joint ventures companies between

bumiputra and non-bumiputra. Other than encouraging a united front in business, it also enables

a transfer of technology and experience between themed such as Indah water consortium for

waste treatment project. Privatization also enables the government to provide world class

facilities such as under concession scheme. Privatization also enables the government and the

nation to promote the abilities of private sector and private sector plays the role of the nation’s

engine of growth.

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2.0 THE PRIVATIZATION OF MALAYSIA AIRLINES (MAS)

2.1 The Background of Malaysia Airlines (MAS)

Malaysian Airlines was established in 1937 under the name of Malayan Airways Limited.

After Malaysia gained its independence from Britain in 1957, the airline changed its name to

Malaysian Airways. It changed its name again in 1966 to Malaysia-Singapore Airlines as a result

of a joint ownership by the governments of Malaysia and Singapore. In 1972 when both

countries decided to create their separate airliners, Malaysia-Singapore Airlines became

Malaysia Airlines System. Fifteen years later the airline management decided to rename the

airline again, and from 1987 on it is known as Malaysia Airlines (MAS).

In the early 1980, Malaysia Airlines (MAS) suffered losses due to high interest rates and

fuel costs. In setting up the national airliner the government acted as the entrepreneur. Tun

Mahathir believed that the government would benefit more if part of MAS could be privatized.

By picking the aviation industry as a winner, the Malaysian government would support MAS,

which in essence became a mixed state-private sector company.

The government’s own financial difficulties and other priorities also limited the funds

available to MAS for expansion. An attractive solution to the problem was partial divestiture,

regarded by some as a form of privatization. In the case of MAS, therefore, privatization only

involved partial divestiture as majority ownership remained in the hands of the government.

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3.0 THE LEADERSHIP IN PRIVATIZATION OF MALAYSIA AIRLINES (MAS)

3.1 The Definition of Leadership

Leadership is an art that is used by individuals in missions or tasks. It cited as an art

because not all individuals have the skills to influence other individuals to perform something

properly; perform the task with full willingness and without compulsion. To get individual's

willingness to work is not an easy thing. We may direct a person to work, but the result has not

been guaranteed as what we required.

Leadership is also known as a person who may have power but not necessarily have

influence. But the influential person will certainly have the power. With the influence owned, a

person has the power easily. Influence and power if used properly can persuade others to do

something as intended. The situation is similar between a manager and a leader. A manager will

not necessarily be a leader but a leader will certainly be a good manager. In this case, a manager

will be a leader when it has the characteristics of leadership, among the most important skills that

cover all areas and management functions such as planning, organizing, leading and controlling.

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3.2 The leadership Style and Theory

The various assumptions have been made by researchers to highlight the arguments

justifying that someone is a leader. Theories given by them can be defined as a basis of accurate

and comprehensive understanding about leadership. Look to the authority of some world leaders

such as Gandhi, Napoleon, and others. The researchers assume them as the individuals which are

born as leaders. They are considered as a charismatic leader.

This assumption is reinforced by the argument which states that the leader has certain

characteristics that are not owned by others. They are said to be wise, have a high capacity,

initiative, skilled and knowledgeable and also have a certain character. The weakness of this

assumption is not all leaders have the same characteristics.

Other than assumptions above, the researchers felt that the leadership arises due to one

specific situation to solve one specific problem. This assumption associated with the function or

role of a leader to make decisions, advising, planning, implementing, and others.

Some theories and assumptions about leadership as presented above, if analyzed

separately has many disadvantages. Therefore, a comprehensive approach should be taken that

leadership is not commonly mistaken as a skill inherited solely, but must be recognized as the

characteristics that exist in each individual. Leadership can be learned, and through the process

of learning, leadership style can be shaped to achieve a goal. 

As assumptions have been made about leadership, researchers also express some styles of

leadership. Two styles of leadership that many get highlighting is democratic and autocratic

style. Both styles of leadership is said to be a leadership style that is most widely practiced and

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vice versa. For autocratic leadership, everything starts from the leadership itself. Followers

follow all instructions without protest. While a democratic leader concerned about his views in

addition trying to influence them with noble qualities such as caring, respect, and not use his

power to arbitrarily.

Between democratic and autocratic leadership style, emerged independent leadership

style (free-reign or laissez-faire) which is contrary to the democratic and autocratic style. They

have a style that gives freedom to his followers without control and supervision which led to the

situation become chaotic and chaos.

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3.3 The Charismatic Leadership of Tun Dr. Mahathir Mohamed toward of

Development and the Rise of New Policy: Privatization Policy and The

Privatization of Malaysia Airlines (MAS)

The charismatic leader means a leader who has the ability to motivate subordinates to

transcend (greater) their expected performance. This type of leader can improve power to inspire

or attract others. The charismatic leaders pay a great deal of attention in scanning and reading

their environment, and are good at picking up the moods and concerns of both individuals and

larger audiences. Nowadays, many politicians use a charismatic style, as they need to gather a

large number of followers they create atmosphere of change by visionary ideas that excite,

stimulate people to work hard.

A charismatic leader uses a wide range of methods to manage their image and, if they are

not naturally charismatic, they may practice constantly at developing their skills. They may also

create trust through visible self-sacrifice and taking personal risks in the name of their beliefs.

They will show great confidence in their followers. Many politicians use a charismatic style, as

they need to gather a large number of followers. In order to increase the charisma, studying

videos of the great leader speeches and the way they interact with others is a great source of

learning. Religious leaders, too, may well use charisma, as do cult leaders. 

Besides, charismatic leaders who are building a group whether it is a political party, a

cult or a business team, will often focus strongly on making the group very clear and distinct,

separating it from other groups. They will then build the image of the group, particularly in the

minds of their followers, as being far superior to the others.

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3.4 The Charismatic Leader in Malaysia

The charismatic leadership of Tun Dr. Mahathir helps Malaysia succeeded in becoming a

developing nation. The life of the people under his government's leadership was also very

prosperous and comfortable. The ambitions of Tun Dr. Mahathir were very high and pure. He

wanted the people intelligent, clever, rich, highly educated, dynamic, efficient, strong religious

beliefs and morals. He did not want the people gullible, made fools of easily and stooges of other

countries. Besides, he did not want the people to give up easily without even trying hard.

Tun Dr. Mahathir had a far sighted vision on where he wanted to take the people and

nation in terms of a more meaningful mindset and lifestyle. Thus, he developed the Multimedia

Super Corridor (MSC) based on Silicon Valley in Sepang designed to enable Malaysia's foray

into Information Technology (IT). Developed countries looked up to Malaysia because of the

wisdom and braveness of him in his fast drastic action on 1 st of September 1997 by pegging the

Malaysian ringgit so that it could not be fixed by the market forces. He took this step to save the

nation’s economy from falling even more and eventually heading to poverty and thus creating all

sorts of problems.

Although many world leaders objected and made fun of his brave decision because he did

not want to consider their advice which was to get financial help from the International Monetary

Fund (IMF). However, they accepted the fact that the action he took was correct and exact to

curb a national recession. Since becoming the prime minister, Tun Dr. Mahathir has brought the

nation and people to the forefront of the world and showed that eventhough we have been seen

as backward but Malaysia is capable to compete with the other more developed nations of the

world. We can also be proud that it was in his era that the Islamic Centre, Islamic Bank,

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International Islamic University (IIU), Malaysian Islamic Understanding Institute, Islamic

Museum.

Tun Dr. Mahathir also launched the ‘Look East Policy’ and the abortion of Islamic values

in the government machinery to pioneer in justice, honesty, hardworking and integrity to combat

corruption and other vices. He also pioneered in the corporatization and privatization where the

private sector was given a higher responsibility to develop and build the nation’s economy like a

privatizations Malaysia Airlines (MAS). All his hard work and vision clearly showed the ability

to succeed with the birth of fast development and conglomerates that were able.

The previous Prime Ministers before him had their own era and achievements. For

example, Tunku Abdul Rahman brought independence to Malaya, Tun Abdul Razak brought the

development and Tun Hussein Onn brought the unity whereas Tun Dr. Mahathir's era covered all

of it. There are so many landmarks of his ideas in developing the country such as the Kuala

Lumpur Tower, Kuala Lumpur International Airport (KLIA), Petronas Twin Towers and the

proudest of all the Putrajaya, Cyberjaya and the Formula 1 circuit. Thus, he is known as "Father

of Modernization".

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3.5 The Leader and Elite Theory in Introduce of Privatization Policy

Generally, elite theory is a theory of the state which seeks to describe and explain the

power relationships in modern society. It is said to be the theory of the state of which a small

member of the population control the country. Elite groups constitute a distinct power-based

ruling class in terms of holding the highest status positions in the political, economic and social

structure of a society. By virtue of holding these positions, elite groups can also influence the

value system in a society so as to entrench and protect their social class positions by inculcating

an ideology of superiority that rationalizes and protects their dominant positions.

Essentially, this means that certain groups in dominant political, economic and social

institutions are able to assert themselves as elite groups, influencing and controlling the power of

decision making with the authority and the ability to get the things they want by exercising this

power. In introducing the Privatization Policy, Tun Dr. Mahathir Mohamed has a power as an

elite group. He is the forth Prime Minister when introducing the Privatization Policy. Thus, he

has an authority, ability and power during that time.

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4.0 THE LEADER IN MALAYSIAN AIRLINES AFTER AND BEFORE

PRIVATIZATION

4.1 Dato' Haji Abdul Aziz bin Abdul Rahman

Dato' Haji Abdul Aziz bin Abdul Rahman was appointed managing director of

Malaysia Airlines (MAS) in 1982. Under his leadership, he took immediate steps to improve the

company’s position. He identified two major steps which had to be taken to turn the situation

around: stringent cost control and quick generation of revenue. With these strategies in mind,

Dato' Abdul Aziz established two committees and a cost control committee headed by the

director of finance, and a revenue generation committee headed by the director of customer

services. These two committees were responsible for identifying areas where costs could be

reduced and revenue generated.

The company froze staff recruitment while ruling out retrenchment. It also reduced

variable costs, such as in-flight meals and other passenger costs, without compromising on the

quality and standards of service. Other cost control measures were directed towards staff

overtime, communication costs and pure chasing. Dato' Abdul Aziz felt that it was important to

pay meticulous attention to details to realize cost savings He used tender committees to make

purchasing decisions and personally reviewed all decisions made. In his view, it was prudent not

to give power to just one or two individuals on such matters.

He also instigated surprise internal audit checks and "moved people around all the

time" to prevent corrupt practices in the purchasing division. All these steps, according to Dato'

Abdul Aziz, saved the company millions in expenses. To generate revenue, the company

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introduced various promotional schemes to gain market share and made efforts to increase the

load factor.

To avoid losing market share, the company monitored routes closely on a daily basis. It

added services to sectors where demand was high and reduced services on sectors where demand

was inadequate to justify having a flight. In the words of Dato' Abdul Aziz, the strategy was "to

maximize revenue after identifying the tactical strategies on how to get market share in the

market place." Dato' Abdul Aziz also recognized the importance of the human element in the

achievement of the company's objectives. He expressed a strong commitment to establishing a

good employee-management relationship and believed that the key to the company's success was

employee support. As he went around talking to employees, he sensed deteriorating morale and

felt the need to rectify the situation quickly.

Dato' Abdul Aziz described how he approached the human challenge at that time.

According to the example gave by he, leadership means if a boss is lazy, employees will tend to

be lazy too but even a lazy employee will eventually work hard if he sees that his boss is hard-

working. To further boost employee morale and establish esprit de corps within the company,

MAS organized various social and sporting events.

Dato' Abdul Aziz made it a practice to attend all such activities. Although Dato' Abdul

Aziz felt the need for some management reshuffling, he waited a few months before making

substantial changes in the organization structure. This was because he felt that too many changes

at the outset would create additional problems and dampen morale at a time when the company

could least afford it. The most significant changes made were those affecting the sales,

marketing, and customer services divisions.

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4.2 The Beginning of Privatization

In line with the Malaysian government's policy on privatization, the company was

privatized at the end of 1985 by an offer for sale of 30% of its capital to the Malaysian public..

The privatization, apart from injecting a substantial amount of cash into the company, had also

improved its debt equity ratio and Commenting on the privatization exercise. According to Dato'

Abdul Aziz, One possibility that can arise out of the privatization process is that the operations

of the airline will be based solely on economic fundamentals-with political considerations taking

a back seat. The privatization exercise had made MAS better off because through the injection of

equity, the company's cost of funds would be stabilized in the long run and so cushion the

company against fluctuations in interest and exchange rates.

4.3 Types of Leadership Style of Dato' Haji Abdul Aziz bin Abdul Rahman

In administration of this company, the leader is a democratic leader. This style

encourages employees to be a part of the decision making. This style is needed in dynamic and

rapidly changing environments where very little can be taken as a constant. In these fast moving

organizations, every option for improvement has to be considered to keep the group from falling

out of date.

The democratic leadership style also means facilitating to conversation, encouraging

people to share their ideas, and then synthesizing all the available information into the best

possible decision. The democratic leader must also be able to communicate the decision back to

the group to bring unity to the chosen plan. The democratic leader ship keeps the employees

informed about everything. This style requires the leader to be a coach who has the final

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decision, but gathers information from staff members before making a decision. Democratic

leadership can produce high quality and high quantity work for long periods of time.

Most of admin and leader in company use the democratic style such as to develop plans

to help employees in order to evaluate their own performance, allows employees to establish

their goals and objective as well as to encourages employees to grow on the job and recognizes

encourages achievement in order to establish the company. According to this way, the

administration and the leader wants to keep employees informed about matters that affect them,

wants employees to share in decision-making and problem-solving duties and to provide

opportunities for employees to develop a high sense of personal growth and job satisfaction. On

the other hand, this style can bring the best out of an experienced and professional team. It

capitalizes on their skills and talents by letting them share their views, rather than simply

expecting them to conform.

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5.0 THE PROBLEM AND CHALLENGES FACE BY MALAYSIA AIRLINES (MAS)

BEFORE PRIVATIZATION

Following the separation of Singapore from the Federation of Malaysia in 1965, the

Malaysia - Singapore Airlines (MSA) partnership was dissolved in 1971 when the two

governments decided to restructure the company into two separate airlines - Malaysia Airlines

Berhad and Singapore International Airways (SIA). Malaysia Airlines Berhad was renamed

Malaysian Airline System Berhad on November 1971 and started operations in October 1972.

The first stated of Malaysia Airlines (MAS) was face some problems like difficult to get new

destination and has to compete with the Singapore Airlines.

The first half of 1978 Malaysia Airlines and government witnessed a major confrontation

with Britain when Malaysia refused to back down on its decision on to permit the supersonic

Concorde to fly over Malaysia air space. Both governments were deadlocked in talks over

additional right for MAS peppered the negotiation with a political flavor. This confrontation

involved MAS into a big problem like difficult to get air space and place to landing their flight.

The governments of Malaysia did not allow the Concorde to fly over because it can harm the

environments and disastrous long-term ecological consequences for marine life. Thus, it gives

impact to the relationship between British government and Malaysian government.

In the early 1980, Malaysia Airlines (MAS) suffered losses due to high interest rates and

fuel costs. This sector plays an important role in the global development and travel because it is

the centre in the process of international trade.

In setting up the national airliner the government acted as the entrepreneur. Tun Mahathir

believed that the government would benefit more if part of MAS could be privatized. By picking

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the aviation industry as a winner, the Malaysian government would support MAS, which in

essence became a mixed state-private sector company.

The government’s own financial difficulties and other priorities also limited the funds

available to MAS for expansion. An attractive solution to the problem was partial divestiture,

regarded by some as a form of privatization. In the case of MAS, therefore, privatization only

involved partial divestiture as majority ownership remained in the hands of the government.

With its ‘golden share’, ultimate control will continue to remain with the government even if it

loses majority ownership MAS’s post-divestiture experience has been different from Klang

Container Terminal (KCT). Management style has not changed significantly as virtually the

same people are still in charge.

Another problem which was faced by the MAS is the lack of passengers at that time. It

happens due to the increase of ticketing prices which gives burden to the passengers because

MAS had to face higher maintenance of aircraft as well as difficulties paying the staff salaries.

On that time, MAS only relay on the transportation of passengers rather than other services.

Nowadays, MAS not only focus on transportation of passengers but also cargo transportation and

air mail in local or international.

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6.0 THE BENEFIT OF PRIVATIZATION TO MALAYSIA AIRLINES (MAS)

As the result of privatization, MAS increased its frequency to Tokyo with six weekly

flights, including one non-stop service, successfully negotiated more rights to the growing

markets of Europe, India and Australia, and introduced more jet services along its domestic

routes.

The impressive growth registered was due primarily to an overall increase in capacity

available arising from the increase in frequency on existing routes and additional capacity on

new routes. A ninth frequency to Tokyo was introduced, weekly flights to London increased to

six, and additional flights to Fukuoka, Seoul, and Los Angeles added. New routes included

services to Guangzhou, Ho Chih Minh City and Pontianak, Indonesia.

After privatization, British Prime Minister; Margaret Thatcher’s intervention to Kuala

Lumpur in April 1985 was to prove politically and commercially astute, resulting in first a thaw,

and later, substantially improved relations between the two countries which had been strained

since 1982. Thus, MAS have not encountered any difficulties to get air space and place to

landing flight.

The privatization policy give opportunity to MAS in developing tourism such as working

closely with the Tourist Development Corporation and numerous international agencies to sell

Malaysia as a major South East Asian tourist destination.

Apart of that, MAS introduced a total integrated passenger system which was fully

commissioned in October. It enabled the airline to be linked with all travel agencies on the

drawing board also were more plans for a new “image change” including new look uniforms for

flight crew, a total overhaul of first class in-flight service including new linen, cutlery and other

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accessories. Aimed at protecting the friendly service of MAS, the new uniforms were designed to

echo the vitality, freshness and colors of the tropics, as well as the youth and dynamism of a

rapidly growing airline.

From privatization, MAS gain higher income. The money was used to build a new MAS

hangar workshop complex and the flight kitchen was expanded at a cost of $15 million at

Subang. Penang started its own $35 million flight kitchen while in Sarawak, the new regional

office and a catering/engineering facility at the airport was completed for about $8 million. A

new $3 million administrative building as well as a cargo cum hangar facility was built in Kota

Kinabalu.

As the result of privatization policy, the airline’s achievements have not gone unnoticed.

In March 1991, it received the prestigious Asian Institute of Management/World Executive’s

Digest Award for excellence in general management and for its success in positioning itself in

the industry. MAS was cited for its competence in virtually all management areas, from

operations to delivering high quality services which have helped ensure continued profitability.

This, in turn, has generated national pride in the carrier.

MAS have won the 1990 Tourism Gold Award given to a non-government agency for

outstanding contributions to the promotion of tourism. In engineering, MAS has received the

“Pride in Excellence Award” four times from the Boeing Commercial Airplane Company as far

back as in 1973, again in 1979, 1988 and recently in 1992.

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7.0 CONCLUSION

7.1 Benefit of Privatization in Malaysia

The benefit of privatization policy to the government is decreasing the expanses in the

development of the country. Budget which is suppose been given to the government agency can

be use to another important government projects. This condition ensure the expanses does not

burden the government as well as it will not be the excuse for not proceed any project for

development. This policy also will ensure the entire development project run smoothly.

Moreover, the level of services in government agency which had been privatized will

increase drastically. This agency will gain profit if the performance of workers and their services

increase to a level much better than before the agency being privatized. Thus, the value of

services given to the public will increase and brings benefit to them.

The increment of the level of services will consequently bring to the competition among

the workers in the new privatized agency. This competition will generate an abnormal working

style until it brings to the increment in the productivity of the privatized agency in a short period.

Therefore, the workers will compete in order to maintain their performance in the privatized

agency. In addition, the tough competition will ensure the chances in working sector increase

due to the abundant of changes in open economy. Variety of new ideas produces through the

competition that needs higher level of skill. This aspect will encourage variety of new job

vacancy in this country.

Other than that, this policy gives new approach to the image of the country. The outsider

as well as the investor will see Malaysia as an effective and efficient country especially in the

management of the country. The ability of the country is through the systematic management, the

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overall public transport, international level of services and high knowledge in human resources.

This country will be the example or the role model in the developmental to the other country in

the world.

In conclusion, this policy brings a lot of advantages and benefits to the government. The

companies such as Telekom Malaysia Sdn. Bhd., Tenaga Nasional Berhad (TNB), Pos Malaysia,

and Malaysia Airlines (MAS) are the government agency which has been privatized which has

resulted in the increment of their services. Until now all of the privatized company are well

manage.

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