Branson Richard Branson Leads the Virgin Group Case Study

  • Length: 8 pages
  • Sources: 4
  • Subject: Leadership
  • Type: Case Study
  • Paper: #85603517

Excerpt from Case Study :


Richard Branson leads the Virgin Group as an inspirational leader with a high amount of personal charisma. His views on doing business in an unconventional manner and believing in the power of motivation characterize his style as almost a servant leader. By meeting the needs of his employees, Branson is able to build a team around him that is willing to work hard to overcome obstacles. This paper will outline Branson's leadership style and assess whether that style might translate well to the American market.

Chapter 10 outlines three basic models of leadership. The first is traits leadership, which holds that characteristics of the individual can be used to determine whether or not that person would be an effective leader. Four traits that have been specifically identified are intelligence, maturity and breadth, achievement drive and integrity. A great leader, therefore, should have all four of these in abundance. Branson demonstrates all four traits. He is clearly intelligent, and is able to articulate what he wants and how he wants it done. He understands what makes his leadership style effective, a sign of self-reflection and the ability to analyze different variables to success and recognize those variables that contribute to the success and those variables that do not.

Branson also demonstrates maturity and breadth. He has started numerous failed businesses, but had the maturity to recognize those mistakes and withdraw from those markets. Branson was also able to understand when he was the one who made the mistake, instead of scapegoating others. This emotional maturity combines with an eccentric range of interests. This is probably Branson's strongest of the four traits. He has a high achievement drive. Branson is essentially a serial entrepreneur but he values the opportunity to overcome challenges and do things that others did not think could be done. The result of this is that he has entered some very challenging businesses and succeeded in some of them, such as the airline business. He does not understand the meaning of the word no, indicating his high level of achievement drive. The fourth trait is integrity, and Branson demonstrates that as well. He places high value on dealing honestly with people, and feels that this is a key to success. His high level of personal integrity inspires those around him something that allows him to keep top talent within the Group.

The second model of leadership is the Theory X and Theory Y Model. McGregor's model holds that Theory X managers generally have a negative view of human nature, that people are inherently lazy, are challenged to have self-discipline and need to be directed. Theory Y managers, in contrast, believe in the positive view of human nature. This view holds that people like work, that motivation can come from within and that people will actively seek responsibility. Branson is a clear Theory Y manager, and there is ample evidence to support that contention. He emails with his employees directly, a reflection of his views that employees have personal motivation to solve problems and are willing to take responsibility. He does this to create a high level of organizational trust, which is characteristic of Theory Y management. He believes that when employees are empowered to pursue organizational goals, rather than directed to fulfill tasks, that they will achieve more.

The third model of leadership is the behavioral model. This model is more focused on what leaders do, rather than the perspective they take towards workers or what their traits might be. This model "suggests that leaders help individuals and teams achieve their goals in two ways." The first is with task-centered relations and the second is with consideration and support for the personal objectives of employees. As a people-first manager, Branson clearly adopts the latter approach. His opened with the employees show that he values their inputs, and sees them as people rather than workers. This approach allows Branson to motivate employees because he is showing that he believes in them and their goals, and that creates incentive for employees to contribute to meeting corporate goals. The company is structured, as well. Employees do have set tasks to complete, along with time frames and targets. The key to making these time frames and targets work is that Branson believes in the employees and their ability to achieve these. The two behavioral approaches work in tandem.

Using each of these models results in a more sophisticated picture of how Richard Branson leads. His style is well-suited to an organization that operates in individualistic cultures, where workers do have a high level of intrinsic motivation. Even low level workers in such cultures will have complex visions of themselves in their role in the world and the company. When empowered, people in individualistic cultures are more than willing to pursue their objectives and exceed them. This basis of Branson's style, a Theory Y personal empowerment approach backed by behaviors that illustrate his commitment to that approach, would work well in the United States. Americans have one of the most individualistic cultures in the world and would respond well to the empowerment level that Branson gives his employees.

American culture also has low power distance, which implies that communications can easily be flattened. In some countries, employees might be unwilling to take their concerns or ideas directly to the CEO, but in the U.S. A lot of employees would be more than willing to avail themselves of the opportunity. Again, the style that Branson utilizes in well-suited to the United Kingdom, Australia and countries like that where Virgin has large businesses. Those countries have high cultural similarities to the United States. If Branson's leadership style is effective there, it will be effective in the United States as well because his style works in a specific way that suits the American worker.

2. Branson's leadership style is well-suited to specific markets and specific types of employees. In general, it has worked well with his business model. It is actually difficult to make the case that Branson would need to make significant changes to his style. In order to expand his businesses outside of their core markets, however, Branson might need to make some adjustments to his leadership style. His style works well in the British culture and anywhere similar, but other cultures are more collective in nature and have much higher uncertainty avoidance. In these types of cultures, Branson's culture has little hope of success.

In order to move into markets where the culture is significantly different, Branson would need to scale down the individualism in his style and focus more on the team aspects of Virgin's culture. The team aspects exist, especially in the way that Branson nurtures his managers and looks after his employees on a personal level. This approach would need to be emphasized in a more collectivist culture in order to appeal to those workers. They are not working or innovating for the benefit of themselves so much as for the societies to which they belong -- family, country and company. Emphasizing those motivations would work well for Branson. His showier aspects might also need to be kept to individualistic markets where people appreciate his uniqueness more; flashiness can be off-putting to many in collectivist cultures.

In addition, Branson should ensure that there is a transactional approach to his leadership. This does not need to be the most important aspect, but it should carry some emphasis. The Virgin Megastore in an example of how Branson could be more effective by incorporating more transactional elements to his leadership style. He is focused on leading and inspiring, but had difficulty in recognizing that the underlying business factors were changing and that these would wipe out the Megastore business. He eventually exited that business as a steep loss. There is a role, it is worth noting, for leaders to adopt a transactional style, especially in businesses that are in mature industries. For example, Branson knows how to start an airline, and start it again in Australia, but he might not have as much interest in running the day-to-day aspects. Yet, the people within his company need to be inspired to perform the mundane day-to-day tasks of running business. If Branson's leadership style reflected a little bit more emphasis on the transactional elements, this would make him a more effective leader.

A third recommendation to improve Branson's leadership effectiveness is to focus on the relationships that he is developing. As a relationship-oriented manager, there is a significant emphasis on leader-member exchanges. These exchanges can characterize the relationship that the leader has with the employees. Branson will often move quickly into the mature phase of the relationship, working to tackle the problems of employees he has never even met. This is an interesting tactic, but Branson should be good about starting relationships even with those employees who do not contact him directly. If he takes to visiting work sites and initiating interactions, this will enhance some of his pre-existing leadership strengths, in particular those relating…

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