Backup of Backup of IC VNA
Backup of Backup of IC VNA
1. Overview
Vietnamese civil aviation began with the Civil Aviation Authority's January 1956
founding, which led to Vietnam Airlines. Vietnam Airlines was established in April 1993
as a big state-owned air transport unit. Vietnam Airlines Corporation was founded on
May 27, 1995, by combining 20 aviation-related firms with Vietnam Airlines at its heart,
according Prime Minister's Decision No. 328/TTg. Vietnamese industrialization,
modernization, economic development, social progress, and civil aviation industry have
benefited from Vietnam Airlines Corporation's 20-year rise. Vietnam Airlines' main
business is passenger and freight air travel. The national GDP gains greatly from Vietnam
Airlines. The Corporation controls 80% of Vietnam's domestic aviation and 40% of its
tourism markets. With an average flight age of 5.4 years, this airline has the region's
youngest and most modern fleet (Ori, 2024). Besides serving enterprises, commercial
partners, and other organizations, they sell airline tickets and flight-related services to
consumers.
2. Organizational structure
Figure 1: Vietnam Airlines’s Organization Structure (Source: Vietnam Airlines ‘ 2023
annual report)
On April 1, 2015, The Corporation formally changed its name to Vietnam Airlines
Corporation - Joint Stock Company. Charter capital was VND 10,576,380,000,000 when
the Corporation became a joint stock corporation. Vietnam Airlines had its 2021
Extraordinary General Meeting of Shareholders on December 14, 2021, to discuss major
organizational and corporate transformation in light of the COVID-19 pandemic.
Vietnam Airlines will reorganize from 2021 to 2025 to streamline and reduce
intermediaries to improve operational efficiency. It would reform corporate governance
by improving management and encouraging IT and digital transformation (Anh, 2021).
Diagram 1 shows the functional organizational model of the Corporation, which serves as
a general support apparatus for the Board of Directors and the General Director. This
apparatus includes the Deputy General Directors, Chief Accountant, office, specialized
and professional departments, and equivalent agencies. Their function is to advise and
assist the Board of Directors and the General Director in managing and operating the
work.
Leisure travelers
CUSTOMER Business travelers
SEGMENTS Cargo/freight customers
Vietnamese diaspora and international visitors to Vietnam
Figure 2: Business model canvas
4. Personnel structure
1. SWOT analysis
STRENGTHS Famous and trusted brand image: Many people trust the
airline because it is the country's long-standing national airline,
which is especially important when there are few alternatives to
air travel during the pandemic. On top of that, youGov, an
international data research firm, ranked Vietnam Airlines as the
number 2 brand in Vietnam in 2021. While the COVID-19
pandemic took place in 2021, Vietnam Airlines acted quickly
and decisively to implement comprehensive measures to prevent
the spread of the disease, ensuring maximum safety for its
passengers. As evidence, Vietnam Airlines, the first airline in
Vietnam and the 9th airline in the world to achieve this
certification, was recognized by Skytrax with a 5-star rating, the
highest level, for safety in preventing the spread of the COVID-
19 pandemic. Transporting doctors, nurses, frontline workers,
medical equipment, protective clothing, and bringing overseas
Vietnamese back home are just some examples of the social
activities that Vietnam Airlines has actively participated in to
promote epidemic prevention nationwide, in addition to focusing
on flight quality (Ngan, 2021).
The best air network in Vietnam: Vietnam Airlines' flight
network spans 21 provinces and cities nationwide. The airline
has expanded its international flight network to 28 destinations
in 26 countries and territories, providing flights to major cities in
Asia, Europe, Australia, and the Americas.
Having government support: its status as the national airline
and a reputable state-owned enterprise in the aviation industry.
With hundreds of flights carrying human resources, medical
equipment and products for business in the context of the
COVID-19 pandemic, Vietnam Airlines has shown its
determination to join hands with the Government, the Ministry
of Health and the people in the fight against the epidemic. This
will stabilize the aviation industry while ensuring the airline’s
operations. Both passengers and employees of the airline will be
protected (Tuyen, 2021).
Strong financial resources to invest and develop more in
digital technology, online customer experience or marketing
(Ori, 2024).
The reliance on the state management process: Vietnam
Airlines may be slow to make decisions and will not have much
flexibility from senior management. There have been a series of
problems involving its pilots and flight attendants in the past few
years, which shows that the management and training of
personnel and pilots are still lacking. From a grassroots level,
this shows that the airline's management is far from perfect.
WEAKNESSES
High operating costs: Vietnam Airlines owns the largest
number of aircraft in Vietnam with 107 aircraft (Tu, 2021). The
aircraft that Vietnam Airlines owns are also modern and
advanced aircraft such as Boeing 787 or Airbus A350, so the
cost of maintaining operations is very expensive. Compared to
low-cost airlines, Vietnam Airlines' operating costs remain high,
putting pressure on ticket prices and competitiveness.
OPPORTUNITIES Enhance credibility and reputation: At a time when the whole
country and the world are "straining" to fight the pandemic,
Vietnam Airlines can support the government and the health
sector in terms of transportation, ensuring supplies and
equipment, and facilitating the repatriation of Vietnamese
citizens living abroad.
Taking advantage of the increase in cargo transportation:
Few airlines prioritize and expand cargo transportation services
during that period. Vietnam Airlines can take advantage of that
time to generate more revenue to maintain operations and
weather the storm.
Invest in technology and online customer experience: To
make it easier and more convenient for customers to access the
company even during the pandemic isolation period. This will
help VNA expand the market and strengthen customer
relationships.
Financial strain on the tourist business due to the COVID-
19: Vietnam Airlines has reportedly lost money for six straight
quarters, beginning in 2020 and continuing into 2021.
Accordingly, in the second quarter of 2021, the company lost an
additional VND 4,528 billion, bringing the accumulated loss in
the first half of 2021 to VND 8,585 billion (Thanh, 2021).
THREATS There's a lot of rivalry among airlines: Both low-cost and
full-service airlines surround the airline (Hien). Vietnam
Airlines, Pacific Airlines, Vasco, Vietjet Air, Bamboo Airways,
and Vietravel Airlines are the six airlines operating in the
Vietnamese market at present. Consequently, there is a great
deal of rivalry among airlines over ticket costs, routes, and
operational frequencies.
Lewin’s model
Many companies worldwide use Lewin's change management methodology. Physicist
and social psychologist Kurt Lewin created it in the 1940s. He explained social
development using an ice cube metaphor thanks to his physics knowledge. Lewin's
change model involves unfreeze, move, and refreeze (Awati, 2022). In the first phase,
"unfreeze," Vietnam Airlines must mentally prepare for the transition and handle any
resistance. This makes the change simpler to accept and embrace, reducing opposition.
After communicating the change, implement it without delay or complications. During
transition, the airline must streamline regulations, plan and schedule, modernize
technology, and manage capacity. In the final step, Refreeze, the second phase's
improvements and adjustments are normalized into firm operations. Staff may need time
to adjust to new procedures, this process can be sluggish. This is vital to ensuring
changes stick and the current embraces new energy. It also prevents employees from
reverting to bad company practices.
Kurt Lewin developed a popular diagnostic tool called Force field analysis in the mid-
20th century. This model helps individuals and organizations decipher and map the
dynamics of change. The core of Lewin’s force field analysis is identifying and
evaluating the driving and restraining forces that impact a proposed change. This model
when applied to Vietnam Airlines:
Vietnam Airlines needs to ease workers' minds by helping them adjust to new procedures
and by making sure those procedures are well-structured and risk-free. Simultaneously,
the airline may boost motivation and buy-in by increasing communication and engaging
stakeholders more. Furthermore, it can use outside forces, like changes in the market or
regulations brought about by COVID-19, to its advantage in order to instill a feeling of
urgency.
III. Typology of change
Change can be said to be a movement or transition from one state to a desired state.
Organisational change can be classified as both discontinuous (episodic) or incremental
(continuous) change (Nadler & Tushman, 1995; Weick & Quinn, 1999; Hayes, 2002).
Nadler and Tushman (1995) suggested that depending on whether or not the change was
anticipatory or reactive, organisational change can be sub-cate- gorized into four types:
tuning, adaptation, reorientation, and re-recreation.
Given the small volume of cargo carried in the belly compartment (only 2-10 tons), many
aviation experts argue that commercial aircraft are not effective for long-term cargo
transportation. On the other hand, removing seats from the passenger compartment to
transport goods is appropriate during epidemics to transport essential goods for
prevention of epidemics, relief goods, etc. (Dang T, 2021). Furthermore, since the
COVID-19 pandemic has passed, Vietnam Airlines is no longer threatened with the
cancellation of domestic and international passenger flights, thus it is reasonable to
assume that this is a transitory measure. This short-term adjustment is what allowed
Vietnam Airlines to boost production and company efficiency, link supplier chains, and
earn an expected 7,700 billion VND in 2021 (Vietnam Airlines, 2022).
Vietnam Airlines' culture can be better understood by adopting Robbins and Judge's
seven characteristics (Judge & Robbins, 2018):
The adjustment was successful due of Vietnam Airlines' culture. Given their safety
commitment, Vietnam Airlines' passenger cabin conversion to a cargo hold is justified.
Vietnam Airlines achieved COVID-19 consumer and cargo safety. An airline that
prioritizes passenger needs will also emphasize cargo. Their detail-oriented culture helps
Vietnam Airlines increase cargo safety and sanitation. Through high-quality service and
honest cargo, the airline met its national airline criteria. To fight the sickness, VNA and
the government have shipped 300 tons of medical supplies, vaccines, and other resources.
Improved work ethic, freight transportation, and operations promote employee well-being
at the airline. Performance and output rise. Learning throughout life helps businesspeople
succeed. By improving abilities, a company can retain personnel. Finally, this culture can
assist Vietnam Airlines increase revenue and customer loyalty by improving customer
experience and reputation.
Goal setting is essential for organization like VNA to motivate employees, link them with
company goals, and ensure performance in everyday operations and crises like the
COVID-19 pandemic. Goal setting affects employee, team, and business performance.
By making goal setting part of its culture, Vietnam Airlines can boost morale, manage
people, and measure performance. Vietnam Airlines aims to overcome the pandemic and
capitalize on development opportunities by focusing on operational safety, epidemic
prevention, aviation sector leadership, digital transformation, and extensive restructuring
(Vietnam Airlines, 2021).
Vietnam Airlines is facing a very challenging production and business environment,
exacerbated by the ever-increasing complexity of the epidemic and the severe
competition from its rivals. The importance of "Self-reliance - Self-strengthening - Self-
mobilization" is openly acknowledged by the company. Also, the Vietnam Regional
Branch of the company is always ready to take on challenges, has no fear of trying new
things, and is always following the orders of higher-ups when it comes to operational
resolutions and action plans. This has allowed them to adapt to the pandemic market
conditions or to other emergencies (Vietnam Airlines, 2023).
Management and leadership at Vietnam Airlines may have felt intense pressure from the
government, either directly or indirectly, to make changes to the company's operations in
order to stabilize its finances, given that the airline is a state-owned enterprise. Senior
management or government officials would issue formal instructions that the airline's
leadership was expected to comply with, regardless of how tough or unpopular the
decision may be. This type of coercion would be clear-cut and formal. Senior
management at the airline would have communicated the decision to shift cabins clearly
to lower-level managers, crews, and operations teams. Converting cabins, rearranging
flights, and retraining employees to handle freight instead of people would have been part
of this. Given the critical nature of the situation, these directives would have been
portrayed as absolutely necessary.
Due to the hierarchical structure of the company, employees may feel implicit pressure to
accept management choices without inquiry in the Vietnamese commercial and cultural
context. Managers and subordinates may feel compelled to comply with unpopular or
difficult decisions to rearrange the passenger cabin because of the seniority of the
decision-makers.
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