Virgin Group is one of the giant global players and
comprises of several holding companies such as Virgin Atlantic, Virgin Records,
Virgin Express, Virgin Blue, and many more. As a creator of Virgin, Richard
Branson has blanketed the Virgin Empire in a thick layer of secrecy to get a
competitive edge against its rivals. Branson’s own values and management style
has differentiated Virgin group from other formal structured organizations.
Richard Branson has no respect for formal authority and hierarchy. Different organisational
structures can be seen in Virgin Group. Nonetheless, he is considered as a revolutionary
as embodied the spirit of New Britain. Mr. Branson is a charismatic leader and
his followers link him with the English heroes. His leadership qualities
demonstrate more of transformational rather than transactional. He motivates
his employees to do their best and also offers a number of opportunities for
their personal growth and development. Virgin’s success story reflects the
effective communication either within the organisation or to deal with external
forces. Nonetheless, Virgin group excels in offering friendly customer service.
Due to close personal ties among employees, every individual involves to generate
innovative ideas and how to improve the overall performance of the organisation.
Gibson et al. (1994) as cited by Derek and Rollison
(2002) explain that the organisation structure is eternal and it helps to
achieve the desired goals but the changes can be seen in accordance to achieve
the targets. In fact, top management chooses the correct structure which is
beneficial for the organisation. The structure further segregates the organisation
into various parts and defines what roles would be crucial to meet particular
targets. According to Watson (2006), he
mentions the structure of the organisation is more about social science
thinking instead of managerial thinking, and the things involve in it
persistently, as against the concept of structure to roles or activities
exhibited in the organisational chart. Richard Branson has no interest
converting Virgin into a giant corporation with several complex departments as
he believes that it would bring stagnation and slow growth.
Payne (1996)
as cited by Huczynski and Buchanan (2007) demonstrates that the organisation
structure is crucially focussed on the contemplation of how organisations
endeavour to meet their targets successfully. He further adds strategy, culture and
structure are correlated but they are never taken simultaneously. Kast and
Rosenzweig (1979) describes that there are two types of organisations: Formal
and Informal organisation. Formal organisation is very well organised and
reflects the conscious effort to build relationship among the employees to
achieve the targets. In contrast, the informal organisation is very critical
for the smooth performance as it creates such an environment where employees
can embark upon internal and external forces. According to Branson’s own values
and management style, informal way of doing business is a part of Virgin culture
and he does most of the business deals from his family homes such as the Manor
in Oxfordshire, a Maida Vale houseboat and his London residence. Richard’s long
time strategist and business developer, Will Whitehorn expresses Virgin as a
“branded venture capital organization”. Due to informal organization structure
of Virgin, strong culture and healthy personal ties can be seen among skilled
financial advisors and managers.
A holding company
refers to a legal body that controls several companies. It owns the shares of
other companies and controls separate legal entities. Although, the holding
company structure can change management drastically (DePamphilis, 2010). Virgin
group consists of several companies over the world but most of the operating
companies are based within Britain. The equity is owned by Richard and through family
trusts is controlled by Virgin Group Investments Ltd. The connections of all
companies use a single common brand – Virgin trademark and Branson’s role as
shareholder, as chairman while dealing with public, government, or media.
Porter (2005) describes that although the formal
and informal structure of the organisation is important but the centralisation and
decentralisation structure of the organisation also can not be ignored. Since,
centralisation and decentralised reflect to the level either the decisions are
taken at the top level of management or at the lowest levels. In centralised
organisation, it can be seen that decisions at the higher level and vice-versa.
Virgin group comprises a loose alliance of companies associated under the
Virgin trademark and Richard has given a great deal of rights to his employees
to take the decisions for the betterment of the organisation because of his
vision of people-oriented capitalism. Mr. Branson rightly explains each individual has
to believe in hard work and understand its responsibility as it is his/her
company.
According to Child (2005), tall and flat structures
of the organisation can be tracked down by taking hierarchical levels into
consideration in compare to its size and nature of business. A tall structure
has many departments proportionate to total number of employees whereas in flat
structure, only few levels to total number of employees.
The organisational structure of the Virgin Group is
flat as it has little of hierarchical levels, short lines of communication
among employees and senior managers. Due
to a great deal of responsibility and freedom, employees are encouraged to take
initiative, commitment and to come up innovative thoughts.
Nohria and Eccles (1992) demonstrate that the
network organisation is referred to amalgamation of a number of relations such
as informal socialising, advice-giving, promotion decisions and so on. However,
Boddy (2008) explicates that in the network structure, organisations work as
the independent bodies but sometimes they undertake some non-core activities to
attain one common goal. Although, Frances Farrow handles the corporate services
at Virgin Atlantic but she also offers legal advices within the Virgin group because
of her legal background. Likewise, Rowan Gormley is considered as a source of
new business leadership and strategy expertise although his formal position is
supposed to take care of Virgin Direct and Virgin Wine. According to Harris and
Hartman (2002), organic organization structure has no hierarchy and individuals
are invited to work together to accomplish one task. They may be asked to work on
different projects at a time upon their willingness. Branson admires the
Japanese approach to business by following organic organizational structure. Richard
sees many similarities between the Japanese Keiretsu system and the way he
created the structure at Virgin group with 200 small operating companies with
combined “small is beautiful’’.
Leadership is mixture of three important factors:
Influence, group and goal (Shackleton, 1995). Bennis and Nanus (1985) as cited by Sadler
(2003) argue that everyone has leadership potential and there are several leadership
opportunities for people to learn leadership skills. Handy (1993) as cited by
Martin (2005) suggests that the most successful leadership is more about Intelligence,
Initiative, Self-assurance, Overview, Health, Physique and Social background. Starting
from the begining, Richard was an initiator. The success of the magazine
inspired him to spread his wings into various market segments such as Virgin
Records, Virgin Atlantic Airways, Virgin Blue, Virgin Express, Virgin Rail,
Virgin Money and many more. Despite a privileged family background, there is
little distinction between his work and social and family background. The
complete leadership model consists of four major components of transformational
leadership and several features of transactional leadership including
laissez-faire. Transformational leaders engage their colleagues and followers to
accomplish the desired goals efficiently by setting up some agreements where as
transactional leaders offer rewards their followers depending on their
performance (Bernard and Riggio, 2006). Before getting onto any agreement or a
new venture, Branson understands ins and outs of the business then hand over to
his capable managing directors and highly skilled financial controllers who are
given a stake in it. He even does not have any problem in paying modest
salaries to most of his employees for performing well for the organisation.
Levicki (1998) explains successful leaders treat
the organization as much as a social entity as a profit-maximising apparatus. The
leader has a deep care for the organization and he take care of his employing
by providing monetary benefits as well as job satisfaction. Most of the core
members of Virgin are Richard’s cousins, aunts, childhood friends, and dinner
party acquaintances, all are into business relationships with him. He engages
everyone to put their best effort in creating enterprises. Dubrin (2001)
indicates that transformational leaders put their continuous effort with their
followers how to bring positive changes for the benefit of the organisation. Transformational leaders are concerned not
only about achieving the desired goals but also rewarding the deserving
followers for their high performance. The key qualities of transformational
leaders are described as Charismatic, Inspirational leadership, intellectual
stimulation and individualised consideration.
The concept of charisma is about building a special
kind of social relationship between leader ands their followers. Charismatic
leaders are viewed as an extraordinary and special individual by common people
as well as by their followers. The followers have a great respect for their
leaders and allow them to have power over them (Bryman, 1992). Richard is
charismatic and represents the spirit of ‘New Britain’. He can be viewed along
with musicians such as the Beatles, Politicians like Margaret Thatcher and Tony
Blair and new-age entrepreneurs like Anita Roddick. His battles against British
Airways and Coca-Cola made Mr. Brason so popular and followers link him with
the English Heroes such as King Arthur, Robin Hood, and St. George. Branson’s
employees have a great deal of respect for him and refer him as the hippie
entrepreneur of a counter-cultural enterprise. The group holistically follows
Branson’s values and his management style. According to Hickman (2010),
transformational leaders have a capability of inspiring and motivating their
followers. They create such an environment where team spirit can be seen among
employees. Followers also exhibit a great deal of commitment to goals and
shared vision. Mr. Branson understands the importance of creating of such an
environment where his admirable and brilliant employees are encouraged to put
their best to accomplish the tasks with high level of performance.
Individuals
can be satisfied by adequate wages, good working conditions, and other
benefits. However, transformational leaders not only satisfy their followers by
paying well but also pay attention to their other needs for personal growth and
development (Daft, 2008). All the same, Richard displays individualised
consideration by showing great amount of importance towards his employees. He
wants his talented people not to leave the group and prefers to make the
millionaires within the group. He gives his employees a sense of loyalty and
offers minority shareholdings to the manger of subsidiary. Bass (1990) argues that
transformational leaders use latent skills of their followers to solve the
business problems while asking them to view from different angels (cited in
Hunt 1991, p.188). Richard always invites his employees to participate to share
their thoughts and ideas. He even asks his senior managers and advisors to call
up for a meeting so they can discuss about the finance, long-term plans and so
on. He gets ideas from his own people so he can be confident to invest in new
ventures. Moreover, he is always keen
for new opportunities where the conservatism and lack of imagination of
incumbent firms. For instance, Branson didn’t hesitate to sell his most profitable
and successful business, Virgin Music to Thorn EMI for GBP 650 million as he
had great interest to invest in airlines industry. In response, Virgin Atlantic
airways started expanding and won a number of awards for its excellence in
customer service.
On the other hand, Daft (1999) explains that
transactional leaders receive rewards for performing well. It can be explained
a transaction or exchange process between leaders and followers. In contract,
Mr. Branson sometimes does act like a transactional leader. While, he does not believe in giving
financial rewards to his employees but he is much interested in offering
non-pecuniary benefits such as social activities, company-sponsored weekend
gateways and parties. it might be appropriate to say that Richard Branson’s
style of leadership could be more transformational than transactional.
According to Theodorson and Theodorson (1969) as
cited by McQuail and Windahl (1993), communication is about sharing ides,
information, or emotions from one person to another by using symbols. Virgin welcomes
its employees to engage themselves to generate brilliant ideas for the
betterment of Virgin as a whole. Martin and Fellenz (2010) describe that no
organization can exist without communication. Communication is the only channel
where people interact and share information. Communication plays an important
role in every organisation as it provides four major functions such as control,
motivation, emotional expression and information (Robbins, 2005). Virgin has a
unique way of interaction because of its informal corporate structure. Richard
Branson and his senior executives and advisors discuss and share information on
critical issues such as financial control, generate new ideas by developing a
clear channel of communication.
Guirdham (2005) illustrates that the communication
is imperative in every organisation either a small enterprise or a giant
company. Penman’s 1985 study (cited in Kaye 1994, p.12) argues that the
complete communication is all about interpersonal relationship rather than
sharing of information or ideas between people. Owing to Branson’s own values
and management, the group does not have any corporate headquarters so the
employees can interact and share their ideas freely while maintaining the
team-spirit and strong entrepreneurial skills. According to Planalp (1998) as
cited by Hargie and Dickson (2004) describes that individuals engage themselves
in communication to express their emotions for some reasons, whether
accidentally or unintentionally. They want to let other people know how much
they care and some share to need support. One of his employees from Virgin
Atlantic was disappointed as a consequence of insufficiency of bridal shops in
UK. When this story was shared, Branson came with an idea to open Virgin Bride.
Greenberg and Baron (2003) describes that verbal
communication is the process of using words to convey and receive information.
These words can be expressed either orally or in written form. Whether it is a
face to face conversation with a colleague, e-mail from the seniors or
receiving phone calls from the clients. People have now found different ways of
communications media to share information. In 1993, while delivering a speech
to the Institute of Directors, Mr. Branson mentioned that the company should
first priority to its employees, customers and then shareholders, if the goal
was better performance. Some of guiding principles of Branson philosophy such
as; “Shape the business around the people”, “Be best, not biggest”, “Pioneer,
don’t follow the leader” and so on, have been so helpful for Virgin to achieve
success with high performance while motivating his employees. It reflects that
Mr. Branson is always clear to convey verbal messages to his employees, who get
motivated and work with him with great enthusiasm. Nevertheless, in order to open
new important opportunities, Virgin started communicating directly with its
customers through internet and telephone. By using text messages, Virgin
Atlantic started offering discounted airline seats to Virgin mobile customers. The
group established a chat room for cola customers and Train.com was an online reservation
service for train passengers.
Non-verbal communication
is ongoing process. It is considered more accurate than verbal communication
and it reflects a better way of expressing emotions (Fielding, 1997). Richard
Branson sometimes does communicate with his employees non-verbally as a joker,
fair-playing Brit, with the purpose of creating the friendly and environment.
He did even dress as a flight attendant serving drinks and wearing a bridal
gown in launching of Virgin Bride. An information communication network is used
by employees when they involve themselves to pass along personal information,
informal talks, rumours or gossips by avoiding formal communication channel. It
can be seen in most of the organisation where top managers make unofficial
announcements and disclose future projects (Arnold and Feldman, 1986). Most of
the Virgin operating companies are small in size and a small core of Branson’s senior
employees spend time in his London residence and engage themselves in informal
talks, business plans or make announcements.
Rouse and Rouse (2002) illustrates, horizontal
communication refers to communication when employees share ideas or information
with the people of same hierarchical positions especially among manager. This
communication takes place among managers while making any inter-departmental
decisions. Branson’s senior executives and advisors call for the meeting and
discuss about the overall financial control and planning, new business ideas,
future strategy and hiring of new employees. Stuart et al. (2007) argue that
interpersonal communication is neither always personal nor always private. It refers to a process when real relationships
take place through communication between individuals and it can be either
verbal or non-verbal communication. It was the time when Simon Draper, who was
one of Virgin’s record buyers, introduced Branson to Mike Oldfield in order to
expand Virgin into record publishing. Later, Branson’s Oxfordshire home was
converted into fully equipped recording studio. There is no doubt that internal
information plays an important role to plan and control operations but the
organisation should also communicate with outside groups to have relevant
information from the market place about competition (Rosenblatt et al., 1982). Virgin
has been successful because of offbeat marketing strategy and effective
external communication against its rivals that characterised the Virgin start-ups.
Richard was so surprised and excited by an idea of his close associate to get
into airline industry when Randolph Fields, a Californian lawyer called up and
proposed a transatlantic, cut-air plane.
To be the successful market leader, Virgin has to
be quick in decision-making because of changing external market environment to
compete its rivals. Once the goals are defined, Virgin can use the potential
skills of its talented financial and legal advisors. The managers should know
how to excel in performance to overshadow their rivals. They need to focus on
improving its vital competencies so that the rivals can not copy their style of
doing business (Prasad, 2009). Nevertheless, Richard Branson always looks for
new opportunities but he should also focus much more on most profitable
existing companies. In order to improve the services, he can ask his employees
to take initiatives. Carmody (2004, p.85) argues, marketers focus on building
their long-term strategies rather than for short-term goals. Additionally, Virgin
group deals in different kind of products and services but it should satisfy the
needs of its customers for the long-term goals and not for short-term gains.
Author: Musiz Maniacs
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