Organizational leadership and corporate strategy are significant components of any business company. They often shape the organization’s “economic appearance” and define its course of action in ordinary situations and during a crisis. If an external environmental challenge, such as the coronavirus pandemic, threatens the well-being of a company, its organizational leadership and corporate strategy may significantly influence the decision-making process. Thus, the purpose of this paper is to conduct a critical analysis of the organizational leadership and corporate strategy of a specific Malaysian company and investigate how these factors may influence the decision-making process during a crisis. The company chosen for this study is Maxis Berhad, or Maxis Communications, one of Malaysia’s leading providers of communication services. This study provides the necessary background information on the company, a critical analysis of its organizational leadership and corporate strategy, and the potential impact of these elements on decision-making in case of external environmental challenges. Overall, the transformational character of leadership in Maxis Communications will help the company during a crisis, yet the company should adjust its corporate strategy to deal with the current issues and be ready for external challenges.
Maxis Communications: Background Information
As mentioned earlier, Maxis Berhad is a major provider of communication services in Malaysia. The company was founded and established in 1993 by Malaysian billionaire Ananda Krishnan.1 The list of services provided by Maxis Berhad is extensive and includes access to wireless internet and broadband services, mobile products and services of telecommunication, multimedia-related services, and services of cellular connection.2 According to researchers, the period from 2011 to 2015 caused rapid changes for Maxis Communications, primarily because of hiring a new CEO in 2013 and alterations in the board of directors. Although such significant changes are often associated with various risks, Maxis Berhad managed their stock price to remain stable during the whole five years.3 That stability demonstrates the company’s ability to confront difficult situations and deal with the related issues appropriately, without severe damage to the business.
Organizational Leadership in Maxis Communications Company
There are several different forms of leadership (or leaderships models) that can be adopted by a company. Although many companies often combine various forms of leadership in their business activity, the primary model can be identified in most cases. According to recent studies, the primary style of organizational leadership in Maxis Communications is transformational leadership.4 The study’s authors define this model as “a style of leadership that emphasizes on collective interest between the employees of the organization working to achieve the same objective.”5 There are several significant components that can characterize transformational leadership, including idealized influence, stimulation of intellectual activities, inspirational motivation, and others.6 However, the main point of this model is associated with the ideals of collectivism and the corresponding principles related to the cohesive work of all members of the organization to achieve a common goal successfully.
Transformational leadership can significantly influence organizational performance in different ways. The model under discussion suggests that leaders “have the ability to transform organizations through their vision for the future.”7 Transformational leadership plays a crucial role in leading the organization through the path of significant changes, which are usually necessary for effective management and overall organizational performance.8
However, that necessity may have a negative impact on the company in case of particular circumstances making the organization unable to embrace changes, which, in turn, can lead to management inefficiency. For instance, a company is low on financial and human resources, which slows organizational development and makes the organization stay in stasis until it is ready to change. The transformational leadership model, which requires necessary changes for effective management, is inapplicable in this case, and the company leaders will have to change their leadership strategy; otherwise, the company may suffer severe negative consequences. Although Maxis is a significant and widescale company, there is still a chance they may confront a situation like the one described above.
However, transformational leadership can still be an appropriate leadership model for Maxis company, primarily because of their scope of business activities and the field of their work. Researchers claim that the industry of telecommunication lives in a dynamic environment nowadays, and the events happening around often significantly influence the field.9 Such a state of affairs makes transformational leadership highly efficient for Maxis Communications because constant changes and the developing status of the company have a positive impact on organizational performance.10
Additionally, creativity and innovation are critical in organizations wishing “to sustain their competitive advantage in today’s world that has higher growth of new knowledge, ideas and accelerated rate of globalization.”11 The leadership model under discussion is strongly associated with creativity and innovation because that leadership style implies constant changes for the company’s transformation, while creative actions and innovative ideas help maintain those changes.12 Transformational leadership appears as a positive model for Maxis Berhad because the innovative character of management positively affects the company in the rapidly developing business field of telecommunications.
Overall, transformational leadership is an adequate model for Maxis Communications, and its positive influence is more significant than potential negatives consequences the company may suffer. It is essential to consider that the industry of telecommunications is one of the largest business fields nowadays because it severely facilitates the lives of people globally.13 Telecommunications are unique because the related services allow consumers to interact with each other in different ways, meaning that the field does not provide products to customers separately, working with an entire “network” of consumers.14
Such specificities of the industry have made the evolution of mobile technologies highly active, advancing from 0G to 5G with many significant changes throughout the advancement history.15 The high rates of mobile technologies evolution force telecommunications operators “to leave behind the old traditional business models and alter their strategies from voice-based subscription to innovative bundle plans that include internet data, voice, messages.”16 Everything mentioned above demonstrates the efficiency of the transformational leadership model for Maxis Communications, as it allows the company to remain stable and commercially successful while the industry is rapidly developing.
Corporate Strategy of Maxis Communications Company
Corporate strategy is an essential element of any business company, and it is especially significant for Maxis Communications to maintain a solid corporate strategy since the industry of telecommunications shapes Malaysia’s economy in many respects. Analyzing the corporate strategy of Maxis Berhad requires addressing various financial and non-financial factors that take place in the organization’s business activities. According to recent studies, the Maxis’ 4G, 3G, and 2G services reach 95%, 83%, and 15% of the population of Malaysia, respectively, making the organization a leading company in the market field.17 That is probably one of the consequences of Maxis constantly revamping its model of corporate strategy, adjusting it to the circumstances of the business environment.18 However, the general principles of the company’s corporate strategy can be traced throughout the history of its work.
The first factor that should be addressed in analyzing Maxis’ corporate strategy is the surrounding business environment. To make a macro-environmental analysis for Maxis Communications, researchers used PESTEL, a model invented by Francis Aguilar, a Harvard professor, in 1967, which aims to investigate the environmental risks for the organization.19 PESTEL was used to investigate the business atmosphere for Maxis by discussing political, socio-cultural, environmental, economic, technological, and legal factors and the corresponding sub-factors that can influence the industry of telecommunications and Maxis in particular.20
The study results show that the overall microenvironment is favorable for Maxis and the industry at large, with ratings of the organizational capabilities for the company.21 In other words, Maxis currently manages its activity with the positive influence of the external factors of the business environment. Such a state of affairs allows Maxis Communications to constantly revamp its business model, making extraordinary (or even risky) strategic choices for the company’s benefit.
Micro-environmental factors also significantly contribute to the course of action established by Maxis’ corporate strategy. To analyze the micro-environment of Maxis, researchers used modified Porter’s model of five forces, including subscriber power, supplier power, new entrance, and degree of rivalry.22 First, the results show moderate subscriber power, meaning the number of Maxis’ subscribers is considerably lower compared to the company’s competitors, making the company focus on customers’ interests when formulating a corporate strategy.23 In other words, Maxis has to apply a customer-centric business model to be effective in the market, taking into account the competitive character of the business environment in the telecommunications industry.24
Threats of new entrants into the market and degree of rivalry are also moderate for the company, but in 2015-2019, Maxis performed on the lowest level compared to its competitors, according to profitability measurement.25 Thus, though Maxis Berhad is the leading organization in the industry in Malaysia, it may be at risk of losing its market position if they do not maintain a strong, customer-centric corporate business strategy.
Overall, the corporate strategy of Maxis appears to be variable because of the positive influence of external macro-environmental factors, but the company’s key performance indicators are low compared to competitors. Researchers claim that exploitation of the market needs requires Maxis Communications to adjust its business model to micro-environmental factors.26 Maxis has to strengthen its corporate strategy in order to keep its leading position in the industry of telecommunications and cope with its competitors on a proper level.27 However, the positive impact of the business macro-environment gives Maxis Berhad an opportunity to use its resources effectively, which can help the company recover from its current situation.
Impact on the Decision-making in Maxis Communications
The final phase of this study addresses the potential effects of leadership and corporate strategy and the corresponding factors described in the previous sections on decision-making during an external environmental crisis. Scholars report that strategical decision-making in extreme situations implies “management teams’ consideration of frequent, unforeseen, potentially threatening and disruptive incidents.”28 Such events should always be considered in Maxis’ strategy because they can directly influence organizational performance and internal and external stakeholders.29 The specificity of extreme situations makes the decision-making process harder because it is often conducted under time pressure, meaning that managers have to make strategic choices according to the limited resources.
First, it is essential to discuss the potential influence of the transformational leadership model used in Maxis Communications, as described in the previous sections of this study. Transformational leadership can be highly effective in times of severe crises because the company that follows the path of constant transformation is supposed to be ready for changes at any moment. An external environmental crisis, such as the COVID-19 pandemic or other similar occasions, is often associated with the urgent need to revamp the organization’s strategy using creative ideas and extraordinary decisions.30 Recent studies say rapid decisions are “rarely underpinned by sequential, logical or optimizing strategies, but rather conform to simplistic and simplifying principles.”31
However, it can be traced through the background information on Maxis that the widescale company is leading in the industry of telecommunications, being one of the largest firms in Malaysia. Simplified decisions can be dangerous for Maxis’ organizational performance since many significant factors and minor details have to be considered during the decision-making process. Nonetheless, the transformational character of the leadership of Maxis Communications will probably help the company maintain its economic balance and manage an external environmental crisis appropriately because of the company’s constant readiness to adjust to changes.
The corporate strategy of Maxis Communications will also have a significant impact on its organizational performance during a crisis. It is vital to understand that Maxis Berhad remains a large commercial organization, even when confronting severe environmental challenges. In other words, the implications of corporate strategy during a crisis should be efficient in terms of the crisis itself and the profitability of Maxis Communications. Researchers define the decision-making process during a crisis as finding “acceptable solutions to complex problems without having to search the entire landscape of possibilities.”32 The positive status of the business macro-environment will provide Maxis Communications with opportunities to operate “freely” in the industry, allowing the company a large landscape of potential courses of action. However, the company’s issues related to its low market position compared to its competitors, as described in the previous sections, may conduct additional challenges for Maxis during a crisis.
Currently, Maxis Berhad has to make efforts to maintain its market position and increase the company’s organizational performance and commercial effectiveness. If an external environmental crisis occurs, the company will have to address two significant issues: maintaining and improving its market condition and dealing with the consequences of the crisis. Such a situation involves affective reactions to business disruptions, meaning that it can be challenging for Maxis Communications in terms of their organizational performance since the company will have to deal with multiple problems simultaneously.33 Therefore, Maxis should address their current issues as soon as possible to facilitate the consequences of a potential crisis.
Conclusion
Summing up, transformational leadership will positively influence Maxis’ decision-making during a crisis, but the issues regarding their market position will make an extreme situation more challenging for the company. The transformational character of the company’s leadership allows the corporation to maintain economic stability and be commercially successful while constantly developing and applying critical changes to the organization’s business activity. According to recent studies, the business macro-environment is currently favorable for Maxis Communications, helping the company efficiently operate in the telecommunications industry in Malaysia. At the same time, the firm is currently at risk of losing its market position to competitors due to its low key performance indications compared to other organizations working in the same field.
Everything mentioned above illustrates that Maxis Berhad is mainly ready to confront a severe external crisis, but it can have negative consequences for the firm’s organizational performance. If an environmental crisis occurs, the company will probably be able to deal with it, but there is a high chance it will lose its market position to competitors because of the inability to address external and internal issues simultaneously. Maxis Communications currently appears to be able to deal with its problems on a micro-environmental level, but the company should fasten the process and make the corresponding adjustments to its corporate strategy. Otherwise, other companies working in the industry of telecommunications may use an external environmental crisis to their advantage and take the leading position that Maxis Berhad currently holds.
References
Koh, W. H. (2017). Study of relationship of company’s performance with internal and external factors on Maxis Berhad. Munich Personal RePEc Archive. Web.
Netz, J., Svensson, M., & Brundin, E. (2020). Business disruptions and affective reactions: A strategy-as-practice perspective on fast strategic decision making. Long range planning, 53(5), 1-21.
Ramalingam, T., Piaralal, S. K., Osman, Z., & Arokiasamy, L. (2021). Effect of transformational leadership and creativity and innovation on organizational performance: A conceptual model. Electronic Journal of Business and Management, 6(1), 20-31.
Ullah, N. (2021). Corporate strategy of Maxis: A telecom industry of Malaysia. Munich Personal RePEc Archive. Web.
Footnotes
- Koh, 2017.
- Koh, 2017.
- Koh, 2017.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021, p. 21.
- Ramalingam et al., 2021.
- As cited in Ramalingam et al., 2021, p. 23.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021, p. 21.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021.
- Ramalingam et al., 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Ullah, 2021.
- Netz et al., 2020, p. 1.
- Netz et al., 2020.
- Netz et al., 2020.
- Netz et al., 2020, p. 3.
- As cited in Netz et al., 2020, p. 3.
- Netz et al., 2020.