Virgin Group case study

Introduction  

Virgin group is a group of companies based in UK whose founder   is Richard Branson a UK based business tycoon. The Virgin Group’s business areas include travel, entertainment, finance and live style. The incorporation date of Virgin Group by the Companies House is listed as 1989, whereby its class is a holding company. However, Virgins trading and business activities usually date back to the 1970s. By September 2008, the Virgin Group net worth was £ 5.01 billion. Currently, it consists of approximately 400 companies spread all over the world. Virgin Group mainly operates from its London head quarters (Griffin and Moorhead, 2001).

Moreover, even though Branson has retained complete control and the ownership of the Virgin brand, the use of the brand to set up commercial companies has been complex and varied. However, every company whose operation are under the brand name Virgin acts as separate entities, whereby Branson completely owns some while holding majority or minority stake in some other companies (Brook, 2006). However, the Virgin Group has continued to grow from a simple publishing venture in 1970s to big investment ventures which include Virgin Atlantic, Virgin Express, Virgin Rail, Virgin Blue, Virgin Entertainment Group, Virgin Money, Virgin Net, Virgin Mobile and Virgin Bride. This consistent and constant growth of Virgin Group can be credited to Branson’s entrepreneurial aggressiveness and curiosity to explore new horizons in business (Dubrin, 2001). Moreover, the Virgin brand name usually arose when Branson and his partner were beginning their first business venture which was a record shop. They actually considered themselves to be new in business hence their innocence and naivety led them to embrace the Virgin brand name.

Question one

Virgin group organizational structure

Organizational structure is always very critical in determining how a company arranges its employees and the job with the aim of performing its work and meeting its goals. Most often in small groups where there is frequent face-to-face communication, the formal structure may not be necessary, however in most cases the large organizations involves making decisions which leads to delegation of tasks (Griffin and Moorhead, 2001). Thus, there are procedures which are put in place to determine which responsibilities are to be assigned to which groups. However, the organizational structure of the Virgin Group usually seem unusual where it consists of many companies which are loose alliances and primarily linked by the Virgin trademark as well as the role of Branson as chairman, public relation supremo and shareholder (Brook, 2006). Moreover, the group’s organizational structure promotes the ability of the employees to provide innovative solutions to problems and business ideas (Bryman, 1992). It also promotes the employees norms and mindset that allows them to think imaginatively as well as taking prudent risk, seeking out, creating and introducing innovative solutions.

Moreover, in order to critically analyze the organizational structure of the Virgin Group it becomes vital to consider several models which will enable us to critically analyze and discuss the Virgin Group organizational structure. Such models to be considered includes the ambidextrous organization, innovative council and innovative community of practice all of which advocates for the upholding of innovativeness in an organization which has been a key aspect towards the success of the Virgin Group. Hence the organizational structure models have now to be considered independently in order to facilitate critical analyses of the Virgin Group organizational structure.

The ambidextrous organizational structure

Ideally, this model portrays on autonomous, small and a multi-disciplinary group with a role of driving rapid implementation process (Brook, 2006). This model advocates for a company with very high entrepreneurial culture as witnessed in the case of Virgin Group (Griffin and Moorhead, 2001). This is evident with the operating system of the Virgin Group which is actually relatively independent intended to allowing the effective management of the group’s destiny without any interference from other long-established and incumbent lager organizations (Dubrin, 2001). Thus, this led to the competitive battles of Virgin Group against big corporations which include the British Airways as well as Coca Cola which yielded fruits as a result of persistent efforts to achieve and implementation of innovative ideas and most particularly in the Virgin Atlantic customer service which led to customer’s loyalty. Also the chairman’s consistent advocacy for fair play led to frequent fights of the Virgin Group against the dirty-tricks campaigns of the British Airways who perceived the virgin Atlantic a member of Virgin Group as an underdog.

Moreover, despite the groups humble beginning it persistently strived to exploring investment ventures which were varied and complex due to the aspect of embracing innovativeness as part of the business (Brook, 2006). The ambidextrous model approach also leads to an establishment of operating agreements which are and capable to protecting the fragile business start-ups or even the experimental business ventures. This has also been strongly adhered due to the Virgin Group’s strategy of joint ventures which has greatly contributed to the success of many star-up business ventures. However, the virgin structure is viewed as a consistent structure which is loosely knit; whose companies operate independently despite been under the umbrella of Virgin Group. This has led to the companies making their own independent decision as well as acting as an autonomous unit which operates on their own (Miller, 2009).

Innovative council model

This model usually presents a situation whereby the senior personnel originating from different departments of the company usually comes together with an aim of establishing corporate priorities in case of companies new ventures. This also supports as well as sponsoring any entrepreneurial efforts that are likely to contribute to the group’s growth (Bryman, 1992). Each member of the group is able to present a business or idea concept whose funding depends on its applicability and if it is realistic. This type of structure promotes a situation whereby all the employees are able to present ideas on business ventures whereby the most promising are funded as well as providing a variety of resources and also providing possible facilitation of introduction to other external parties which are capable of providing support (Kets and Florent-Treacy, 1999).

This strategic organizational structure model is evident when the role of senior executives of the Virgin Group as well as the way they interacted. Thus, even though they are formally positioned as executives of companies which are individually operating, a number of them were actually Branson’s long-term associates who greatly participated in the group’s management (Brook, 2006). For example, despite Francis Farrow heading Virgin Atlantic corporate services she also provided legal advice to the wider Virgin Group because of her legal background. Also despite the Rowan Gormley been in his formal positions with Virgin Wine and Virgin Direct he also provided new strategy expertise and business leadership for the whole Virgin Group. Thus, despite Virgin Group not having a corporate structure, Branson the group’s chairman together with his advisors and senior executives did, that is, they formed a team which provided an overall guided strategy, financial control, determining new appointments as well as assessing business ideas which are new (Griffin and Moorhead, 2001). Another good evidence of how this model was portrayed in the Virgin Group organizational structure was adoption of Virgin Bride an idea which came from an employee of virgin group who identified the bridal shops inadequacies within the UK.

Innovative community of practice as an organizational structure model 

            A community of practice model presents a group which is multi-disciplinary and self-governing whose main goal is to support each other through innovativeness with the aim of boosting the image of the community (Brook, 2006). With respect to this model, now our community is the Virgin Group whereas its members are the employee of the group. Thus, over time the level of formality, goals as well as group’s employees’ participation changes (Miller, 2009). However, the Virgin Group’s success has been supported and acknowledged by the senior management which acts as a critical driver and enabler of innovation within the Virgin Group. This is evident from the aspect of team work upholding within the Virgin Group whereby ambitious and talented people are always motivated in order to enable them to achieve their best as well as striving for a performance of higher level. Thus, despite the informal and the anti-corporate working environment at Virgin Group the expectations are also high due to the employees’ commitment.

Question two

Leadership styles

There are two types of leadership styles which are transactional and transformational leadership (Brook, 2006). For instance, the leadership involving two people generally it is greatly based on the exchange level they have. The exchange is not always material or money but can also be other things. Thus, if the exchange is more then the relationship is stronger (Homrig, 2001). For example, in most cases a manager needs more productivity from an employee so that he can give better rewards (Northouse, 2009). However, when something is done to someone on the bases of returns then the relation between them is referred to as transactional type and leaders who perpetrate it are known as transactional leaders. For instance, in case of business these leaders only announce rewards depending on the productivity. However, in the transformational leadership, the leaders always work towards the followers common goal, that is, these leaders usually puts their followers in front as well as contributing to developing them (Griffin and Moorhead, 2001).

Richard Branson leadership style

Richard Branson’s leadership is a transformational one whereby he has the ability of transcending the social classes which there before had traditionally created a division in British society as well as segmenting the consumer market. Branson believes in empowering his employees through creation of proper channels of motivation as well as supporting them to achieve their full potentials (Bryman, 1992). His transformational leadership is also evident in his lack of clear distinction between his family and social life and work. This is reflected from the fact that most of his childhood friends, relatives as well as dinner party acquaintances had been all drawn into business relations with him. Also Branson business relationship approach has always been that work should always be fun and all his employees should be in a position to gain both sense of fulfillment and pleasure from their responsibilities in the process of creating enterprises (Brook, 2006). This has also led to Branson paying modest salaries to most of the Virgin Group’s employees. Hence this clearly illustrates a transformation leadership (Kets and Florent-Treacy, 1999).

The transformational leadership qualities of Richard Branson are also clearly evident in the way he usually chooses his businesses managing directors. He usually immerses himself into a new business venture until he clearly understands its outs and ins whereby he then hands the business over to a good financial controller and managing director who must be given a stake in the same company (Grant, 2008). He also believes that business expansion by adding discrete legal entities contributes to the Virgin Group protection as well as giving the people a sense of loyalty and involvement specifically if they have won his trust with full authority as well as offering the subsidiaries managers minor share holdings (Griffin and Moorhead, 2001). Richard Branson is also proud that Virgin Group has managed to produce a commendable number of millionaires. He has also publicly claimed that he never wants the people he has worked with to live the Virgin Group  to start new ventures outside rather he usually prefers making millionaires within the Virgin Group Limited.

Branson’s disrespect for convention and his informality are always central to the way he does business. Thus, his casualty has practically become the Virgin companies’ trademark. Moreover, he also dislikes office building as well as the usual symbol which indicates corporate success has been greatly reflected from corporate head office absence and also his continued willingness to conduct business from the family homes. This clearly portrays him as a transformational leader by the fact of acting contrary to the expectations of many corporate which usually upholds the transactional leadership.

His continued commitment to joint ventures also portrays his transformational leadership whereby these ventures involves synergizing of efforts among the groups involved most of which  are miner stakeholders thus improving their conditions by providing infrastructure and technical support (Brook, 2006). Thus, in 1993 while addressing Institute of Directors he told them that he puts his staff first followed by customers and then shareholders contrary to many organizations which concentrates on customers only neglecting the staffs (Dubrin, 2001). Moreover, Branson’s values of innovation, irreverence for authority and innocence have been apparent in choosing new ventures. This motivates him to invest in markets dominated by large and well established incumbents thus fostering the aspect of fair play and competition all of which are to the benefits of the services or products end users who get improved products or services (Salem, 1999).

Question three

The virgin group approach to organizational communication

Nowadays the global business environment usually requires organizational communication which is effective both internal and external. This is mainly because of their critical significant impact in the success of an organization (Griffin and Moorhead, 2001). However, in the recent past there has been a continued increase in the organizational communication importance. In overall, the business world has continued to become more complex than it has ever been in the past. Thus, the need for increase learning, knowledge as well as innovation in the organizational communication is very critical to the sustainability of the organization (Grant, 2008). Therefore, an organizational communication which is effective has always been a very critical factor which leads to active engagement of employees which contribute to fostering of respect and trust all of which translates to increased productivity. Hence a proper approach to organizational communication contributes greatly to employees’ job satisfaction.

However, as it has been also noted earlier the organization of the Virgin Group is unusual whereby the group usually embrace a casual style of management as well as absence of control systems and formal structure (Brook, 2006). Moreover, Virgin Group possessed commendable managerial and financial talent; hence what missed in the absence of a formal structure was compensated by a very strong culture as well as close personal ties. Due to involvement of very little hierarchy in the Virgin Group organizational structure, then it offered short lines of organizational communication which presented the capability of flexible responses (Bryman, 1992).  Thus, the Virgin Group approach to the organizational communication usually presents a situation  whereby ideas, opinions,  suggestions and programs would by easily channeled to the management as well as facilitating the possibility of responding quickly to the raised issues (Kets and Florent-Treacy, 1999).

However, the virgin group approach towards organizational communication has been very effective due to its simplicity and efficiency. This usually eliminates the barriers which are encountered in many organizations which have a very well laid down formal communication channel which follows the procedures put in place in the order of protocol (Griffin and Moorhead, 2001). Hence the simplicity of this approach makes it very flexible hence the process of exchanging information takes place easily as well as within shortest time possible. Moreover, this form of organizational approach to communication provides a situation whereby the employees are usually given a greet deal of freedom and responsibility in order to facilitate the stimulation of idea generation, commitment, initiative and fun (Dubrin, 2001).

Moreover, the lack of complex hierarchy in Virgin Group has greatly contributed to the elimination of the complex organizational communication structure. Thus, the usual lack of the Virgin Group corporate headquarters as well as the characteristically  small size features of most of the Virgin Group Limited operating companies were mainly intended to the process of fostering the spirit of team work as well as strong entrepreneurship (Brook, 2006). The team work spirit contributed by the short chains of organizational communication promotes to the achievement of the group’s goals through consistent consultation and embracing one another as well as promoting the aspect of peaceful coexistence among the employees at work place (Grant, 2008).  Moreover, this approach to organizational communication puts in place due to the group chairman disrespect to formal authority and hierarchy, contributes to the group’s commitment to consumers and employees as well as belief in individual responsibility and hard work as well as promoting interaction between employees (Kets and Florent-Treacy, 1999).

Conclusion

            Virgin group has tremendously grown over the recent past to form one of the biggest companies in the UK. However, this traces its roots from very humble beginnings starting from a simple publishing venture in 1970s then to entertainment and finance and also travel (Bryman, 1992). The brand name Virgin originated from the essence of its founder Richard Branson innocence and naivety in the business ventures. However, consistence desire to achieve and innovativeness has been a major contributing factor to the dramatic success of the Virgin Group. Although the virgin group does not have formal framework this promotes hard work and individual responsibility (Griffin and Moorhead, 2001).

However, the company chairman Richard Branson leadership style which is transformational has also greatly contributed to the group’s success (Northouse, 2009). This is because of the aspect of embracing each other promoting team work as well as commitment to joint ventures and also commitment to employees and customers (Brook, 2006). His value for the Virgin Group companies’ staffs has also greatly contributed as a source of motivation to the employees (Dubrin, 2001). Moreover, the groups disrespect to hierarchy and formality has led to simple and flexible organizational communication procedure which promotes easy transfer of information as well as fostering employee’s involvement and team work (Salem, 1999).

 

 

 

 

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