104LON Foundations of
Coursework 1 Assignment
Richard Branson
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Executive Summary
This report examines the organisational development and leadership style of Richard Branson, CEO of the Virgin Group of companies. The report analyses the business philosophy, organisational theory, leadership traits and a comparative analysis of Richard Branson’s strategic and leadership styles.
The report indicates that Richard Branson’s organisational system is based on innovation and distinctiveness. This culminates in systems of identifying people’s needs and providing them. This includes the needs of workers, managers, customers and other stakeholders. Branson leads through transformational leadership based on a concern for people. In comparison, other leaders who use mechanistic management standards always demand results and they have no sensitivity for what people (particularly consumers) want. This leads to major problems for these leaders and causes them to achieve far less than Richard Branson.
Introduction
Richard Branson is one of the world’s most successful CEOs. The Virgin Group of companies comprises of over 400 companies which are led with his visionary ideas that make him a major leader in the 21st Century. The purpose of this paper is to critically analyse the leadership style of Richard Branson and evaluate the strategic processes used to attain an excellent organisational behaviour in the Virgin Group.
Richard Branson’s business philosophy
The central theme for which Branson is known around the world is his ability to spot and utilise opportunities that most entrepreneurs take for granted. The core philosophy of Richard Branson is based on quality, value for money, innovation and an element of fun in everything he offers to consumers.
The core strategic strength of Branson that he proposes includes ideas and concepts based on determination, agility, mitigating risks and embracing failure on the path to success. These pointers have different implications for the organisational behaviour patterns that can be found in Branson’s businesses and strategic vision, mission and implementation.
Organisational Theory
Richard Branson is classified by all writers as an unorthodox businessman. He is seen to conduct business in ways that is very different from the scientific and classical theorists who drew conclusions on management and organisational strategy. This is because Richard Branson from his onset started to run businesses on the basis of opportunities. And once the opportunities were found, he used a contingent approach to organise resources and make the best of the opportunity. In line with that, the organisational approach is more of a contingency method which is based on the use of a responsive strategy in response to major incidents and activities that occur in a given situation or context based on the variables and circumstances. This means that Branson is more of a reactive manager as opposed to one that is used to structured systems and methods of doing things and carrying out activities.
Organisational Structure
The organisational structure of Virgin group is organismic. This is because agility and cooperation is a central aspect of the company’s activities and processes. This is because Branson is generally flexible and he does things on the basis of what ought to be done. Employees work together to coordinate tasks and authority is delegated. Communication is lateral and there are informal structures in interactions. This boosts innovation and as such, the company can be seen as less mechanistic and more organismic.
Post-modern Organisation
Virgin Group is a textbook example of a postmodern organisation. This is because it operations on the basis of diverse networks with branches all over the world. The workers are self-managed and self-controlled and they perform multiple functions with the hope of achieving organisational success.
Richard Branson’s leadership
This section of the report will examine the leadership style and approach used by Branson to keep his conglomerate growing.
3.1 Trait theory
Richard Branson is a pragmatic hands-on leader who does things rather than formulate theories and have discussions and interactions on every single thing before there is a change. Richard Branson is powered by innovation and a quest to unusual projects which he does well to complete and achieve in the best way and form. Two things are the fundamental basis for Branson’s activities – distinctiveness and consistency. This is because Branson carries out activities in ways that ensures that he is able to carry out things by moving people from one point to another. This involves the control of affairs and the control of pointers in order to achieve optimal results.
Usually, innovation and a quest for change comes with a major deficiency of being unable to maintain consistency. Branson is able to consolidate his gains by building on success and staying consistent to a given vision and view. Thus, he gets his managers to continue to do things in ways that ensures that the business units are always functional and they change or evolve to reflect changes that come up from time to time.
The downside of this approach is that it is dangerous and could focus on changing over and over without looking back. This could cause a firm to become aggressively innovative which could lead to a situation where the company would end up being too focused on new things and then shun important things in the past.
3.2 Behavioural theory
Behavioural theories are a balance between the scientific methods of management and the social schools of management. In the case of Richard Branson, most authorities view him as a transformational leader because he ties his companies’ successes with the workers’ personal needs for development and growth. This is more on the basis of a concern and sensitivity to the worker and people rather than a quest to use workers for the attainment of goals and production standards.
Richard Branson can be said to be employee-centred rather than job-centred. He has social sensitivity and binds this to production emphasis and targets because he encourages his employees to grow and gain better standards and competencies in their activities and processes. Furthermore, he has a concern for people and is seen to be democratic rather than autocratic.
Situational theory
As a transformational leader, Richard Branson can be seen as a leader who is able to examine each situation appropriately and come up with the elements of mutual development and growth for all stakeholders around. This way, he is able to identify the needs of the different people who stand to benefit and make good offers that most of them could not refuse. From there, workers were encouraged to do things that would develop them and improve their competencies and make them better works. This makes Richard Branson a transformational leader.
However, there have been criticisms about aspects of the Virgin Group where they seek to cut down cost by hiring contract staff. These contracted staff members are not given an opportunity to build a career in Virgin because it will be expensive to integrate everyone. Therefore, people in very low positions with skills that are widely available (or unskilled), Virgin does not hire them and does not require them to stay longer. This is a form of transactional leadership because Branson seeks to use their skills to make profits without any form of connection to their desires and needs.
Comparison with other business leaders
Branson is known to lead workers and carry out activities that are in the best interest of workers and stakeholders. Branson is a realist. He is able to identify the opportunities and circumstances that are going to come up and then deal with them. This is different from several leaders who are less flexible and carry out things in the most negative form and processes.
Branson is a leader and business executive for the 21st Century. This is because the 21st Century is a period of innovation, technology and globalisation. The best leaders are those who are flexible like Richard Branson.
Branson’s leadership can be contrasted with the leadership of rigid and mechanistic leaders like Dan Carp who led Kodak between 2000 and 2005. Carp’s approach to leadership was that Kodak was the market leader of the camera industry and as a statistical analyst, he viewed the possibility of leading the market by dictating to the market. Thus, he came up with rigid and strong measures and standards that were to be used to produce cameras and units for the market. Thus, Kodak continued to manufacture cameras that required the use of Kodak camera films and these pictures were to be taken to studios to be washed as it had been in the early 20th Century. Dan Carp did not focus on what consumers wanted. He assumed for consumers and he did not aggressively seek opportunities and circumstances on the market. He used a mechanistic and rigid system of dealing with consumers’ needs and based on that, he presented things for consumers and asked them to purchase them.
This is very much unlike Richard Branson who is led by trends on the market and focused on what consumers want and what will please consumers best. Thus, with the rigid plans and processes, Dan Carp created old cameras and failed to perceive the development of digital cameras. Thus, competitors entered the market and developed digital cameras and outlets to produce digital images and enhance such services. This caused Kodak to decline significantly and to save the situation, Dan Carp had to step down for Kodak for a new leader to take over.
Branson has kept going because he goes on to find what exists on the market. And with that, he identifies what consumers want and based on a realistic view of what consumers are seeking, Richard Branson positions his company and followers to deliver the best goal for the company.
Conclusion
This research indicates that Richard Branson is a dynamic leader who focuses on distinctiveness, innovation and transformational leadership. He identifies opportunities and uses a contingent approach to organize his workers and make the best of it by providing what consumers really want and also helping workers to achieve the best in everything they do through a transformational leadership style and process. Branson’s approach is more appropriate for the 21st Century and it enables his businesses to grow and enter new markets and niches.
Recommendation
First of all, leadership must be based on the best interest of all stakeholders including the workers and professionals. There must be a strong approach towards a concern for people and this must be done by figuring out people’s best interest and providing them.
Secondly, Richard Branson shows that innovation is the best source of competitive advantage. A firm will have to find new ways and new methods that makes it distinct.
Thirdly, consistency is an important aspect of operation. If a firm embarks on an approach of innovation, it will have to find ways of consolidating its organisation to deal with changes that come up and remain productive over a sustained period of time.
Finally, it is noticed that transactional leadership involves using workers as a means to an end with no concern for them. This does not build any connection to the production and this leads to consistency and long-term challenges.
References
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Fraser, H. M. A., 2012. Design Works: How to Tackle Your Toughest Innovation Challenges. Toronto: University of Toronto Press.
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