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Management and Leadership of Richard Branson at Virgin Group Ltd

Article Notes: MGT/330 Week 5

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Virgin Group Ltd is widely known for its presence in a vast array of global markets that include music, radio, and mobile services, among others. The leadership and management tactics of the company are often covered by the media for its track record of success and efficiency. The Virgin brand was founded in 1968 and is now recognized worldwide for its success in many different industries. Sir Richard Branson is the current chairman of the company and is well known for his colorful yet competitive leadership style. Many scholars and business analysts attribute the Virgin Group’s success to the innovative leadership style of Branson. He often took on risky business ventures in an attempt to diversify and add value to the company. His business plan is to focus on very small segments of a particular market and doing a high quality job at providing the product or service. This concept is able to gain small monopolies on a market share and often creates very high profit margins (Werdigier, J). Contributing to his success was his ability to lead people to innovate and grow. This philosophy sets the tone for the management team within the company.



The organizational culture of Virgin Group is quite complex. Virgin Group serves as a parent company of over 100 separately run companies that operate in industries that are often completely unrelated. The common denominator within each company is the Virgin Brand. The brand is similar or identical within each separate operation. This symmetry serves as a guideline for the image that each division or department is expected to represent. This image is one of quality and innovation (Virgin). By creating an exceptional brand, the company is able to create a high level of loyalty within its customer base. The diversity of businesses operated by Virgin Group helps the company maintain a high level of loyalty in many different industries. This is the ultimate reason why company has seen a high level of success throughout is many different business ventures. Managers within the company use the concept of innovation to inspire the employees to contribute to the company at all levels, rather than just doing what they are told. Employees can contribute to the cutting edge products that the company creates as well as look for new ways to increase the overall efficiency of the company. The Virgin Group has been able to create a management style that encourages employees to be competitive. This also gives people the desire to see the company succeed in order to be a contributor to a fresh and creative business model.

There is a solid distinction between leadership and management within the Virgin Group. Transformational leadership comes from the top managers and executives within the company. Richard Branson along with other company executives have set many common goals for the company to achieve as a whole. These ambitious goals include expansion into international markets, utilization of new technology, loyalty among customers, and joint ventures with other companies. Goals of this level are voiced to all people involved with the company. This has a benefit to the company by giving everybody involved a challenging mission to accomplish. The highest level of management encourages employees to use their skills in a way that will best compliment the company. The idea behind this is to promote the philosophy that the overall benefit of the company will lead to individual benefits for each person involved. Group contribution will eventually lead to rewards for executives, managers, employees, shareholders, and customers alike.



The lower level management positions tend to focus more strictly on the management side of the company. Leadership is encouraged among managers, but it often takes strict management to get the job done. Each management function varies within the different divisions in the company. Managers at the Virgin Group have a wide range of goals to pursue. Because each division within the company varies in its specialization it takes well trained managers to run it effectively. Managers hired by the company tend to have a solid background in their area of specialization. They also need to have a history of proven management experience to be considered for a position. Ultimately, managers within the Virgin Group deal with managing the day to day tasks required to keep their division running efficiently.

Organization is a crucial component to the success of the Virgin Group. Because the company is very complex, organization is critical step in the planning process to be considered. First, the company has a wide range of goals it wants to achieve as a whole, such as creating brand loyalty and expanding to a global level. The top executives are in charge of determining these goals and explaining them to the rest of the company. In order for the goals to be received well by the employees, executives must be confident that the goals can be achieve while simultaneously making them challenging. The purpose of this is to give people the sense that they are involved in an important and meaningful task. Second, these goals must be organized within each division. Each division will have separate specialized goals on how to increase their market share and improve their product or service in the process. As you move down the supply chain the goals become more specific and short term. This system of organization keeps the company on track to achieve the top level goals set by executives. The success of the Virgin Group over the years has proven this to be an effective organization system for the company.

 


The planning function of management is the first step to creating a winning team of managers. As mentioned before, planning at the highest level is done by the top executives within the company. The complexity of the Virgin Group requires detailed planning at multiple levels in the business. Strategic planning is done by executives, which is voiced to every person involved with the company. This allows all employees to understand what their mission is in the broadest sense. From there, planning must be done for each individual division within the Virgin Group. For example, Virgin Trains, which is a railroad operator in the United Kingdom, has a set of goals that is specific to the business that they deal with. Their goals will differ substantially from that of Virgin Mobile, which will need to take much different steps in order to become a successful business. Each division of the company shares the same brand and is responsible for maintaining the integrity of the brand and increasing customer awareness of the Virgin brand. Planning at every level of the company ensures that each division has specific goals and the steps needed to complete each goal.

The organizing function is also very important to the company. A high level of organization is needed at all levels of the operation. For example, each division needs to organize their management structure. This is often done by trial and error to determine the most efficient ratio of managers to non-managers. When the proper determination is made the company can organize its management structure in order to meet the highest level of efficiency.

Leading is perhaps the most interesting and important function of management to the Virgin Group. The leadership dynamics start with Chairman Richard Branson. He is a very vocal and flamboyant leader. His mission is to inspire those who work below him to work to the best of their abilities for the good of the company. He often pushes his belief that by contributing to the good of the company it will increase the rewards for everybody involved. He has stated that he tries to bring the best out of people and does this for workers at the lowest levels as well as the top ranking executives. This philosophy is encouraged to all managers within the company. Management is expected to embrace this principle and pass it on to the employees that they are managing. Another aspect of Branson’s leadership style is that he tends to give people a high level of freedom in their work (Carmichael, E). It is his goal to first give them direction in their work, and then let them take control of the situation there after. Freedom in their work allows them to excel without the need for micromanagement. Richard Branson’s leadership style and vision for the company has made him the center of attention within many business and management discussions throughout the world.

The controlling function of management is the least important function to the Virgin Group. As a whole, controlling is often felt to be unnecessary by top level management. The company believes that employees should have a certain amount of freedom to make choices for the good of the organization. It is this freedom and decision making that has the potential to bring out the best in an employee. Branson has stated that if an employee does not excel at their work they should be given another chance with a different job within the company (Carmichael, E). This innovative thinking helps to create a healthy organization structure.

Managers can utilize many different strategies to maintain a healthy organizational structure. My first recommendation would be transformational leadership. Transformational leadership allows groups of people to work together for one common goal. By working together a group can come together to achieve great things and improve their overall efficiency. This differs with transactional leadership where individuals are rewarded for their personal performance. This type of leadership can lead to greed and a lack of teamwork. My second recommendation would be to utilize delegation. Delegation is a great way to develop the skills of 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.

In summary, there is a lot to be learned from the management and leadership of Virgin Group Ltd. Chairman Richard Branson has created a unique management formula that has contributed to the long term success of the company. Although there is a clear distinction between management and leadership, the company has been able to integrate a blend of each in many aspects of the business. The transformational 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.

References

Carmichael, E. Losing his Virginity: How Branson Achieved Success. Accessed on 6/15/08 from http://www.evancarmichael.com/Famous- Entrepreneurs/592/Losing-His-Virginity-How-Branson-Achieved-Success.html

Werdigier, J. Oct 2007. Virgin Group Plans for Venerable British Bank, Now Troubled. New York Times. Accessed on 6/15/08 from http://www.nytimes.com/2007/10/13/business/worldbusiness/13bank.html

Virgin. 2008. What We’re All About. Accessed on 6/15/08 from http://www.virgin.com/AboutVirgin/WhatWeAreAbout/WhatWeAreAbout.aspx


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