Management Report Of Sir Richard Branson And Virgin Group Business Essay
This report will provide a critical analysis of three key management issues within The Virgin Group Organisation. It will begin with a concise description of The Virgin Group Organisation. The report will go on to examine the key management theories relating to the use of leadership styles and team development and organisational culture. In the process the theories address will be explained and analysed in relation to The Virgin Group Organisation. In conclusion key finding will be identified that will support future development in an event management role. An additional material will provide personal leadership skills assessment.
Virgin is a leading "branded venture capital" (Virgin, 2011) organisation and is one of the world's most recognised and respected brands, which was founded by the business tycoon Richard Branson. Virgin Group is classed as a Private Limited Company by Companies House. Virgin Group date of incorporation is listed as 1985 (Companies House, 2010), however, business and trading activities originally started in 1970 (Virgin, 2011). Virgin Group has gone on to grow very successful businesses in core sectors ranging from music to transportation, travel, financial services, media, drinks, books, gaming and fitness etc (Virgin, 2011).Virgin has created more than 300 branded companies worldwide, employing approximately 50,000 people, in 30 countries. Global branded revenues in 2009 exceeded £11.5 billion (Virgin, 2011).
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The Virgin Group is structure is quite interestingly complex, although numbers of people recognise the Virgin Group to be a single business entity but this may not be the case. In actuality, each of the Virgin brand companies operates as a separate business entity (Grant, 2005). Although, Richard Branson holds full ownership and control of the Virgin Brand, the commercial set-up of the companies using the Virgin name is varied and complex (Grant, 2005). Even though each of the 300 companies operates as a single entity, Branson completely owns the majority of them either individually or through family trusts and is holding majority stakes in the others. However, occasionally, Richard Branson simply licenses the Virgin brand to a company that has purchased a division from him such as Virgin Mobile USA & Australia, Virgin Radio and Virgin Music. (Grant, 2005). However, what connects the companies is use of the Virgin trademark, Branson's roles as chairman and shareholder and his management role as the face of virgin in publicity, public and government relations. He also has responsibility for appointing senior executives (Grant, 2005). Appendix 1 illustrates the structure of the Virgin Group of companies, including some major operating companies and the holding companies that own them.
Firstly, the report will explore and analyse theories relating to organisational culture for example, definitions, level and types of organisational culture, and will look at the way these theories relate to the Virgin organisation. Finally, leadership styles will be addressed with key theories supporting the importance of leadership and different types of leadership skills. In relation to the Virgin case study the particular value of the transformational type of leadership and the importance of team development will be highlighted.
Case Study Analysis
2.1 Organisational Culture
Organisational culture plays an important role within any organisation. Although the majority of us will have our own understanding of organisational culture, it is a universal concept that is "difficult" to define or "explain precisely" (Mullins, 2007, p. 721). It has been explained, for instance, as "the dominant values espoused by an organisation" (Deal & Kennedy, 2000), whereas, Bower (1966) simply described it as "the way things are done around here". However, despite there not being a unanimous accepted definition, there is a common theme within Deal & Kennedy (2000) and Bower (1966). Their definitions uncover a central theme, that is, organisational culture refers to a system of shared meaning. A more detailed definition is:
"The collection of traditions, values, policies, beliefs and attitudes that constitute a pervasive context for everything we do and think in an organisation." (Mclean and Marshall, 1993 cited in Mullins, 2007)
This clarifies that organisational culture is a mixture of customs and practices and the beliefs and attitudes that these are based on that make up the way of working and the approach of an organisation.
According to Mullins (2007), the culture of an organisation is also often likened to the personality of an individual; this could be said of Virgin. Virgin describes it culture and brand as "making a difference. Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge" (Virgin, 2011). These traits are often used to describe Richard Branson, founder and chairman or the Virgin Group. The company aims to deliver a quality service by empowering its employees and facilitating and monitoring customer feedback to continually improve the customer's experience through innovation (Virgin, 2011). It is evident that Virgin's values and approach to business appeal to the customers and create an adventurous spirit in the organisation that has contributed to its success which has enabled it to branch out into other sectors such as those described above.
Levels of Cultures
To help understand culture more, Schein (2010) has categorized the places where culture is found into three fundamental categories (Figure 1), each category is recognized by its visibility and accessibility by individuals. The deeper one gets, the more difficult it is to discover the culture.
Figure 1 - Schein's Three Levels of Culture
Source: (Buchanan & Huczynski, 2007, p. 622)
Schein's first level is known as "Artifacts", it is the most visible level out of the three. It refers to the observable things that a culture produces. It includes both physical objects and behaviour patterns that can be observed freely through what you see, hear and feel in an organisation, for instance, the architecture and physical surroundings; its products; its technologies; its style (shown through clothing); its published values and mission statement; its language and humour; its myths and stories. In the case of Virgin their uniform is consistently red, their language style is informal 'hip' and the company has its own myth that Richard Branson always walks around with a notebook to record and pick up on every creative idea from employees and how he surprises employees with trips to his islands.
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The next level is less visible and is referred to as the "espoused values" level. It is the beliefs and values, sometime unspoken shared within an organisation and its members, that have meaning and worth to the founders and senior management of an organisation (Buchanan & Huczynski, 2007). The espoused values may have their roots and be based on values that were learnt through childhood whether it's religious, societal or moral upbringing (Buchanan & Huczynski, 2007). These values can give the organisation its distinct character and provide a sense of direction for employees. The Virgin Group has a distinct organisational culture which is characterised by its founder's individual values, personality and personal style the company reflects his ambition a drive for success coupled with his informal "anti-corporate" approach, very much a product of his upbringing and the popular culture of his time (Grant, 2005).
Finally, located at Schein's third level, known as the deeper level of cultural analysis are "Basic Assumptions". This "deeper level" is more commonly known as the "hidden beliefs and assumptions" or "shared tacit assumptions". Basic Assumptions are essential, often unaware, determinants of an organisation's attitudes, thought processes, and actions. These assumptions are central to its culture. Values that gain long-term acceptance often become so embedded and taken-for-granted that individuals are usually unaware of their influence. They usually provide a tacit sense of security and an unquestioned thrust for perceptions and behaviour.
Schein's three levels of culture has proved to be useful as an approach to analysing Virgin Group organisational culture. Schein (2010) emphasises the fact that if organisational culture is understood fully it can be manipulated and managed within the organisation to meet the organisation's purposes. For example, Virgin has been able to use organisational culture to foster loyalty, commitment and hard work within its employees by offering freedom, empowerment and by giving them a sense of being part of something cool and different whist providing social activities.
Schein's three level of culture has also help clarified why Virgin Group should give importance to organisational culture; it is a mixture of execution and culture that makes the difference between one organisation to another. Organisational culture is essential; it is the glue that binds everyone together. Virgin Group holds onto the values, symbols, and rituals that have guided them for several years, and anything new that add to the culture should always supports what already exists.
In summary, organisational culture maybe identified through companies using Schein's level of culture. Though, Schein (2010) does states that there are no consistently quick ways to identify the cultural assumptions of people in organizations. He does recommends observing, talking to people, collecting archival data, listening to stories, and etc, until a pattern finally emerges. However, organisational culture can be developed through effective leadership, empowered employees, strong development programs, good communications and a real focus on customers. All attributes that Richard Branson uses to run his organisation. One thing that is clear is that the culture which Branson created through his own unique leadership style was one that is strongly influenced by his personal style and personality, making it a difficult model to adopt or mimic if he was to leave.
2.2 Leadership Styles and Team Development
Due to the success and efficiency of Virgin Group, the media frequently cover the leadership and management strategies of Virgin Group. Sir Richard Branson is renowned for his vibrant yet competitive leadership style. According to Mullins (2007) and Daft (2002), leadership is essentially a relationship through which one person influences the behaviour or actions of other people, those people intentionally wish for major changes, and the changes mirror purposes shared by followers and leaders. In the case of the Virgin Group, this means that the style of Sir Richard Branson's leadership cannot be separated from the activities of Virgin Group and the effective teambuilding within the organisation. This supported by Grant (2005) and Jackson (1998) who states that a major contributor to the Virgin Group's success is the inventive leadership style of Richard Branson.
This leads us to closely examine Richard Branson leadership styles. In examining Richard Branson's style, his ability as to influence and skill to build a common idea among his employees are renowned. Mintzberg (2009) maintains that you earn leadership from those you lead. He proposes that leadership is about earning the respect of employees, something which Branson appears to do a lot in his career. One of the ways he does this is through his sense of equality and fairness in how he treats people and by promoting flat, non hierarchical structure to run his businesses (Grant, 2005). The early 1980's saw a great paradigm shift in the way of leadership, from transactional to transformational. (Gaughan, 2001). Earlier models to leadership, such as the situational or contingency models of Fiedler (1967), Vroom and Yetton (1973), and Hersey and Blanchard (1969), focused on identifying the styles and behaviours, which predicted effective outcomes depending on a variety of situational factors. In an organisation and environment where constant change is the norm, these authors did not help to offer any advice. During this time, the transformational and charismatic models began to emerge (Bryman, 1992), which comprised ideas such as charismatic and visionary in their concept of what leadership meant. Richard Branson style of leadership is best summarised as a transformational approach (Lussier & Achua, 2009). BransonÂ has also been labelled as a 'transformationalÂ leader' by management lexicon, for his individualist strategies and his stress on the Virgin Group as an organisation driven on informality and information, one that's bottom heavy rather than strangled by top-level management. According to (Bass, 1985) Transformational leadership is a style of leadership that occurs when leaders 'broaden and elevate the interests of their people, when they generate awareness and acceptance of the purposes and mission of their group, and when they stir their people to look beyond self-interest for the good of the group.
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Transformational leaders are frequently compared with others who can adjust quickly to change (Bass, 1985). Branson evidently shows his flexibility and success in adjusting to changing organisational cultures as his been able to bring in new businesses and move into new sector whilst bringing his people with him (Grant, 2005). Studies by Lowe et al. (1996) and Patterson et al, (1995) have confirmed the positive relationship between transformational leadership and performance. This has helped to support why Richard Branson has been able to make Virgin such a success. Bass (1985) states that transformational leadership is more likely reflect social values and to surface in troubled times and change. This lies true with Virgin, an organisation that is centred on constant growth and change, as a result making the transformational style more suitable. For example, of how Richard Branson demonstrated this transformational approach was when he gave Virgin Atlantic employees his personal contact details and encouraged them to forward any ideas and suggestions for improvements by contacting him directly (Jackson, 1998).
Transformational leadership theory implies that this approach of leadership is likely to bring about empowerment and growth among followers (Bass, 1985). However, Howell (1988) states this type of style may cause followers to depend on the leader. This indicates on a psychologically level, followers' self esteem and motivation may depend on recognition and positive feedback from the leader. In the case of Virgin group, this may not necessarily an issue despite Richard Branson personality being marked everywhere all through business he still manages to empower his employees with a degree of independence. A study of charismatic and transformational leadership theories suggests that such leaders possibly will achieve influencing followers who personally identify with this style as well as with the colleagues they work with (Yukl, 2002). According to (Conger & Kanungo, 1998) personal identification with the leader is down to the leader's charismatic approach and is based on referent power. Similarly, Shamir, House and Arthur, (1993) argues one key way leaders can influence followers is by becoming a role model.
Social recognition is another aspect of Richard Branson leadership style worth highlighting. Once individuals associate with a group, they establish their self esteem and self belief to some extent on their belonging to that group, with group failures and successes being faced as personal to the individual (Mael & Ashforth, 1992). Followers are inspired by the leader to identify with the group aims and ethics Shamir, House and Arthur, (1993)by connecting the followers self belief to the mission statement of the organisation and goals of the group.
The ways in which Richard Branson gets his employees to recognise with the organisation, as well as himself, is through managing the mood of his organisation (Jackson, 1998) . He has been known to be empathic and self aware which has allows him to instinctively takes in how customers and employees' feel and estimate the organisation's emotional state. According to Salovey et al (2004), emotional intelligence is the ability to precisely tell apart other's emotions plus your own. Salovey et al (2004)also states one of the main ways of becoming a triumphant leader is through emotional intelligence, something that Richard Branson has manage to achieve through the way he studies himself and others.
Finally, possibly one of the most powerful traits in Richard Branson's leadership style is his persistent determination to accomplish his goals, despite a few obstacles in his way. Zaleznik (2004) states that leaders and managers think about goals differently to one another, leaders tend to be active whilst managers are more reactive. The direction an organisation takes is determined by the influence the leaders uses when changing frame of minds, suggesting expectations and in creating specific objectives and desires. The net outcome of this influence, it changes how people consider what is feasible or desirable in terms of goals. As a result, leaders are able to instil some enthusiasm for particular goals on their followers. Regardless of some negative circumstances mainly external, Richard Branson's persistent shaping of the vision for his company and his ability to infuse these desires to those he hired is the reason for Virgin's continues success and growth (Grant, 2005).
To summaries, Richard Branson's charismatic way of leadership is one that comes from a largely transformational approach to how he influences those in his organisation. He shows clear skills in his ability to read the emotions of others and to assess the mood of his own culture, while having tremendous skills in how he can adapt his style and approach to the particular situation or context he is in. His drive and determination to succeed has been a key element of his success, something that stems from a combination of genetics and family circumstances. His success in becoming and remaining an effective leader of Virgin is largely due to his willingness and ability to empower individuals within the organisation. Branson has shown sensitivity to the needs of others, such as the need for recognition, growth and achievement. Through his attention to and encouragement of ideas and initiatives, Branson has gotten the support of his subordinates. His authority at Virgin is extended by his flamboyant and charismatic personality and attention grabbing behaviour, both of which increased his visibility and appeal to staff and the public. Although unique to Branson himself, this style of leadership is one that works very well within the Virgin empire.
This case study has brought to a light many different strategies that an event manager can utilize in a future role within the event industry as well as to maintain a healthy organisational culture. First suggestion would beÂ to adopt a transformationalÂ leadership style. TransformationalÂ leadership would allow your employees to work together for one common goal which is essential, especially within the event industry when organising an event. By working together your employees can come together to achieve great things and improve their overall efficiency.
My second recommendation would be to utilize delegation. Delegation is a great way to develop the skills of your employees. When management can determine where a person will be most efficient it will help those involved in the project. By putting people in the jobs that they a best suited for it will lead to a more enjoyable and effective working environment.Â
(change to culture)
In a nutshell, there is a lot to be learnt from the culture and leadership of Virgin Group. ChairmanÂ Richard BransonÂ has created a unique culture that has contributed to the long term success of the company. Although there is a clear distinction between culture and leadership, the company has been able to integrate a blend of each in many aspects of Virgin Group. TheÂ transformationalÂ leadership has proved to be a valuable tool for executives, managers, and workers alike. Employees within the company have a willingness to work together to expand and improve the company in order to reach their own personal success in life.
Personal Leadership skills assessment
Looking back at the night before Spy Games Development Day, my initial feelings were excitement, but apprehensive too because I did not know what was expected from me, nor did I know how helpful it was going to be. Thankfully, all that changed after the meeting in the morning.
Leadership has played an important role in the completion of our Spy Games tasks especially the first one; it was not the predictable and usual type of leadership. There was no member of the group who emerged as a sole leader, but we as a group shared and took control of the leadership that was needed to complete our tasks. Each member had the chance to voice their opinions, and from there individually we would nominate ourselves for each task we felt most confident in or had knowledge or experience in. Our group's strongest attribute was that we were very organised; this led to better performance and development. Our group was very optimistic, as there was never a situation where a group member was negative even when we failed to complete a task on time, which was why performance was very high and effective. Even though we were not familiar with each other from the beginning, we still managed to work together without much conflict. The one argument we had was on the topic of whether a group member could be a leader for more than one task. We did resolve the conflict which made our group more comfortable with each other. Overall the Spy Games Development Day was a success; I learnt how to share the leadership role with the members within my group. I learnt that performance and development is a big factor in team roles, and learned that conflict is not always a bad thing.
Shared leadership "does not depend on one person, but on how people act together to make sense of the situations that face them" (Doyle and Smith, 2001). In order to achieve an effective leadership and an effectual result at the end of the Spy Games, a shared leadership needed to be present. In some ways shared leadership was present mostly through the outdoor tasks.
The primary factor
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