Master of Business Administration

Managing Human Resource

Assignment( Virgin’s Culture)

Tutor: Dr. George Medline

Student: Hassan Tariq

STU: 22392
Date of Submission: 31st January 2011

Word count (4040)

1
Table of Content Page
1.0) Introduction…………………………………………………………….........4

2.0) Culture………………………………………………………………………5

2.1) Virgin’s Culture………………………………………………………….5

3.0) Recruitment…………………………………………………………………10

3.1) Virgin’s Recruitment…………………………………………………….10

4.0) Training……………………………………………………………………..11

4.1) Virgin’s Training………………………………………………………….12

5.0) Leadership…………………………………………………………………..12

5.1) Leadership – Richard Branson……………………………………………13

6.0) Recommendations………………………………………………………….16

7.0) Conclusion………………………………………………………………….17

8.0) References………………………………………………………………….19

2
Table of Figures Page
Fig 1.0 Culture and HR Aspects………………………………………………….6

Fig 2.0 Flat Structure at Virgin…………………………………………………..7

Fig 3.0 Leadership execution at Virgin…………………………………………..10

3
1.0 Introduction:

This project will be base on organisation culture as a whole in comparison with

innovative organisation Virgin’s culture, Is it having a single or multiple cultures? And
then culture linkage with business aspects (Strategy, Structure, Pay/Rewards and
Leadership).

Furthermore this assignment will proceed towards Recruitment and Training &
Development processes and implementation in virgin group, what criteria they have to
hire and train their people?

Then leadership style of Richard Branson will be under discussion to analyse that, is he
really a charismatic leader or rely on his hand picked management team?

These all points will be critically analysed and then at the end of this project there will
be some recommendations for virgin group for its future development.

4
2.0 Culture:
Organisational culture is a vital part to understand an organisation there are lots of definitions
on culture some of them are mentioned below.

“Culture is how the things done around here, it is what is typically of the organisation, the
habit and the prevailing attitudes the grown up pattern of accept and expected behaviour”

(Drennan, 1992, Pg. 102)

“Culture represent the’ Social glue’ and generates a we feeling thus contracting process of
differentiation which are on unavoidable part of the organisation life”

(Furnham and Gunter, 1993)

“ A set of understanding meanings shared by a group of people, the meaning are largely tacit
among members, clearly relevant to the particular group and distinctive to group, meanings
are passed on to new group members”.

(Louis, 1980)

2.1 Virgin’s Culture:

Virgin’s group emphasis on people oriented culture which is directly reflected by watchword
‘Our people come first’ this slogan is also supported by the Branson wordings as mentioned
in (Case Study, pg 1) “Our first priority should be the people who work for the companies,
then the customers, then the shareholders”.

According to (Drennan, 1992) “Culture is how the things done around here” which means
you have to be follow the set pattern but the Virgin believes in Innovation and Fun so this
definition is dissonance with Virgin culture because they give liberty to their people to think
differently.

Furnham and Gunter (1993) describe the culture as ‘social glue’ and we feelings, which is
totally in favour of Virgin because they took their employee as first priority and allow them
to come up with the new ideas.

5
In a critical sense it’s not possible for the big group like Virgin having a more than 200
companies carrying a single culture, due to its diverse business nature they are having
subcultures under the espouse.

Virgin declare ‘People priority’ but as per the (Case Study, Pg3) when stock market was
crashed he took the company private again in 1988 through management buyout, restructured
his companies and sold out 25% of his Virgin Music group for $170 millions, but he totally
ignored people (worker) just for the sack of his money.

Virgin claimed that its strong core values fun, innovation and team work, but actually when
they hired and reward their employees the core values are totally neglected.

Below fig show the relation between different HR aspects with culture.

Fig 1.0 Culture and HR aspects

(Course Work 29-11-2010)

Above fig describe the relation between culture and four business aspects (Strategy,
Structure, Pay/Rewards and Leadership); first we look into the relation Strategy with Culture.

According to Johnson and Scholes (1993) Strategy is a long term planning with best
utilization of resources and competencies to achieve their goals.

Virgin Strategy is to make joint ventures and build their internationalisation business scope;
they prefer to make joint ventures with those who rarely survive because they want to impose
their culture on it and when business grow then separated into different units, virgin strategy
varies as per the business requirements, which is reflect their rolling strategy.
6
Let’s look into an example of brand extension failure (Virgin Cola)”Different companies fail
when they jump into unsuitable business, one renowned motor bike company (Harley
Davidson) move into perfume business and failed to perform, the virgin case is slightly
different whatever business he joined make it successful, an article written in Uk newspaper
the observer at 27-Aug-2000 regarding Virgin popularity among people, Virgin Radio use for
wake up, virgin cloths, cosmetics are in regular usage, at weekends you can enjoy through
virgin mobile and internet services, you can travel through virgin airline and you will served
by the Virgin wine.

In the mid 90s the goal of the virgin group was cleared that he wanted a well reputed
organization like a Coca Cola, he decided to join force with a Canadian soda maker company
and launch a new product with Virgin name as “Virgin Cola”, he wanted to launch it with full
of potential but the time of launching was not good because in July the winter season at time
in Florida people prefer to make a snowman rather to buy a Coke or Pepsi, observed by a US
trade publisher, but Branson was crazy to launch his product with stunning style, like to put
his 40 foot Virgin Cola hooding right above the Time Square Virgin Megastore.

He launched the product with cheaper price in comparison with two big brands but failed to
capture the market because Coke and Pepsi gave it a crucial time to even get the space in
supermarket shelf. In the meantime Coke increased its marketing and promotion budget,
Coke USA spokesman said, we took all the rivalries acutely.

Eventually the two big companies hold on the market and proven themselves to be a market
giants and Virgin Cola badly failed and put a severe indentation in their worldwide sale.

Learnt from Virgin Cola Failure:

Big brands took advantages from competitors weaknesses, once Branson said we jump into
the business where people are getting poor deal and where the challengers is satisfied,
however Pepsi and Coke are anything but unworried.

Delivery is vital, if you can’t get yourself into shelves you can’t through out your
competitors.

http://brandfailures.blogspot.com/2006/11/brand-extension-failures-virgin-cola.html(22-01-
2011)
7
In a critical sense virgin’s culture best fit in venture than joint ventures because in a joint
venture they fail to impose their culture, which is also mentioned in a (Case study, pg 9)
“Branson also admitted that their Greenfield ventures found easier to instil the virgin culture
as compared to instance where the founder has acquired an existing player and tried to instil
the virgin culture”.

Structure gives an idea about the company how’s it operate. Virgin’s group is carrying a flat
structure which is also mentioned in (Case Study, Pg 4) “Virgin has minimal management
layers, no bureaucracy a small board of directors and no massive global headquarters”.

Virgin Flat Organisational structure also shown in a below Fig

Fig 2.0 Flat Structure:

(Course Work, 29-11-201)

Virgin group is consist of more than 200 companies which is fully empowered to handle their
business and also connected with each other, one company fully support to other, which
shows their equal partner networking as well.

In a critical view flat structure is a de motivational factor for their employees because of its
minimal management layers and employees get fewer chances to promote, that’s why they
spent a lot on employee engagement to motivate their employees which is also written in a

8
(Case Study, pg 5)”Branson stressed on employee engagement to ensure that the employees
believes in what they did“.

Pay/Reward is a hygiene factors for an employee and describe by the (Hertzberg, 1995) it
mean that the absence of this can create a dissatisfaction in employees.

Virgin is having a team based culture mean we feeling, and also supported by the words in
(Case Study, pg 3) “Naturally rewards and remuneration could be used to provide incentives
for certain behaviour and the incorporation of the brand values with HR policies and
processes was essential”

But in a critical aspect Virgin doesn’t follow its culture in terms of rewarding their
employees, they claimed team based culture but they reward their employees on individual
basis which is also mentioned in (Case Study, pg 6) he heavily relied on his hand picked
management team and empowered them in terms of their companies and also offered high
value performance based incentives.

Leadership is an attempt to persuade on individual behaviour and it provides the vision for
their followers to achieve their goals.

Virgin leadership is not only depending on Richard Branson but there is an important role of
their hand picked executives and mangers as well, they are fully empowered to run their
authorised projects and also allowed to take decision in terms of their concern companies.

Branson believe that their people/management should be empowered to handle their projects
in a right manner, which is fully support its culture theme.

3.0 Recruitment:
Recruitment defined as “it is the most critical HR function for organization survival or
success”

(Taylor and Collins, 2000, pg 30)

9
3.1 Virgin’s Recruitment:
Virgin is a diverse and fast growing organisation which doesn’t have a set personality profile
for candidates, they just pick the right one who fit with their culture and core values, as per
the (Case Study, pg 7) “Virgin invited people to apply even when there were no vacancy
advertised, the group was constantly looking for people who fit the profile of Virgin Person”.
Due to dynamic environment they find someone who will be creative thinker, having
potential to deal with crisis situation and also ready for the responsibilities.

Virgin look someone who think creatively and ready to take responsibilities but reality is
different they choose the one who fit with the culture, as per the (Case Study, pg 3) “if it
hired people whose natural behaviour and values fit closely with the company brand then
brand culture was automatically created”.

Some broad principles are followed by the Virgin group with some modifications as per their
projects/companies requirements for recruitment, in the (Case Study, pg 3) Virgin’s Salway
also mentioned, “we always having a right people on board, we ask lots of questions that are
not traditional, to judge the person likeness we choose the best one from crowd with good
sense of humour and also having a capacity to cope up with pressure”.

Lets look into an example which is mentioned in (Case Study, pg 7)”Virgin Blue even cabin
crew went through a five stage recruitment process to ensure that the staff were absolutely
perfectionist, in terms of customer service ability” one of the key factor in five stage model is
behavioural test which reflect the virgin blue personality template.

In an interview people are asked why they want to join us, if the answer will be like that I am
fun and funky or I am coming for a good time so it will not be a proper reply, company will
recruit the one who is respectful, motivated and avoid from politics and vicious behaviour.

In a critical view virgin state that they hire people who are fun loving and humorous attitude
but the reality is totally changed because when someone asked why once join the organisation
and if they reply with that I am fun and funky then they will be rejected, this point is also
mentioned in the ( Case Study, pg 7) “People were asked why they wanted to work for Virgin
Blue, it was not good enough for them to say , well I am fun and funky or I am coming to
Virgin to have a good time, the company looked for answer that would help them recruit a
group of people who were committed, respectful of one another and who are motivated to see
others develop and avoided the politics and those sorts of destructive behaviour”.
10
4.0 Training:
The training purpose is becoming a gradually more important component of organizational
and individual employee success, there are lots of definitions for training but Manpower
Service Commission’s (1981, pg 62) Glossary of training term which defines as.

“A Planned process to modify attitude, knowledge or skill behaviour through learning

experience to achieve effective performance in an activity or range of activities, its purpose,
in the work situation, is also to develop the abilities of the individual and to satisfy the current
and future needs of organization”.

Training plays an important role in HR development. It is essential and beneficial for all
categories workers and helps them out to perform their jobs more efficiently and it also
facilitates self development as well as career development of employees, in a dynamic world
training is a catchphrase.

One key aspect of employee motivation and retention is the opportunity employees want to
continue to develop and build up job and career enhancing skills. Although, this prospect to
continue to grow and develop through training and development is one of the most vital
factors in employee motivation.

4.1 Virgin’s Training:

Virgin is a customer driven organization which emphasis on strong customer service and
given training to their employees continuously, they exercise informal and formal ways to
train their employees like (workshops, rallies, online training even picnic).

In a Critical sense diverse organisation like Virgin expect from employees to provide best
customer service in all conditions by controlling their emotions, this term is introduced by
Hochschild (1983) as ‘Emotional Labour‘ to describe emotion management with a profit
motive slipped under it.

Virgin hires their employees who think differently but if they have different thinking then it
is not possible for the Virgin to design an individual training module for each person.

11
5.0 Leadership:
Leadership is an extremely required and extremely valued commodity, there are numerous
definitions for Leadership, and one of them is defined as,

“The influence increment over and above mechanical compliance with the routine directives
of the organisation”

(Kaz & Kahn, 1978, pg 528)

Many people believe that leadership is a way to improve their personal, social and
professional lives. Companies try to find out someone with strong leadership abilities because
they believe they bring extraordinary talent to the organizations and eventually improve the
bottom line.

5.1 Leadership – Richard Branson:

Richard Branson to be known as entrepreneur and some words generally linked with him like
creativity, fun, opportunistic, and risk taker, according the (Case Study, pg 6) “he encouraged
his employees for creative thinking and risk taking without the fear of failure, you fail if you
don’t try things, if you run a company based on fear, then you are not going to get the best of
people. They won’t make bold decisions, they won’t make any decision, he stated”

He likes dangerous stunts and breaking world records but along this wild personality he is a
driving force of more than 200 companies, he started his business in his adolescence and then
he becomes a millionaire at the age of 29 and he clearly knew what he wanted.

Virgin’s leadership not just depend on Branson but his Hand Picked Executives also play a
most important role in success. The selection of his management team is also a key area of
success for the context of need and business change, he recognised that his hand picked team
would compliment on his strength and also give the feedback on weakness as leader; he
selected them as per the business requirement and needed the expertise, according to recent
research the upper management teams can have a thoughtful impact on the strategic direction
and performance of organisation (Zaccaro, 2001).

This fig shows the leadership execution at Virgin.

12
 Fig 3.0 Leadership Execution at Virgin

(Course Work 10-01-2011)

Above fig gives us an idea about Branson is not only leader in Virgin but his Hand Picked
Executives are also play an important role in decision making and strategy planning, he relied
a lot on Hand picked executives and allow them to take decision in their division with less
intrusion and also offered them extremely valued incentives on individual basis.

In critical aspects this minimal management layers and individual incentives cause a de
motivation for his employees and that’s why he spent lots of on employee engagement to
motivate their employees.

What particular leadership style he has? There are many approaches to explain the leadership
style. People adopted different styles according to the situation and individuals they are
dealing with.

One thing that is clear that the culture which Branson created through his unique leadership
style, was one that is strong by his personality and style.

13
When considering his leadership style and success, the trade approach to leadership is one
that is critical, for example he was not having a more social interaction in a school age, he
made himself the face of Virgin, getting involved in contemptible publicity stunts to get
attention. He is extraordinarily reserved and shy person yet he is a man who builds a world
wide image out of publicity and performing for the TV cameras (Fox, 2004).

The concept of Transformational leadership was firstly defined by Burns (1978), and
according to him Transformational leadership that leads to positive changes for followers.
They are active, keen and passionate and also focused on helping every individual of the
group for success.

Bass (1985) given more lengthened and filter model of Transformation leaders are often
associated with those who acclimatize quickly changes. Branson clearly showed his
suppleness and success in acclimatizing to changing organisational cultures as he bought new
ventures and moved into new sectors, bringing his people with him.

According to Weber (1947) Charisma is a term which says that somebody has a natural
power that make once a leader.

Richard Branson is a less transformational then charismatic due to his innovative thinking
and success, the expert opine him as transformational leader because due to a strong
marketing showman, but actual it’s a Charismatic leader because he loves to take risk and
always encouraged their employees to do that.

The word ‘democratic’ is reflect into Branson leadership style because he delegate his
authority to their managers which is also mentioned in (Case Study, pg 6) ” Branson
delegated authority and allowed their managers to take control of the projects that he had
conceived and started”. But actual his leadership style is ‘Laissez Fair’ this term is defined by
the Kurt Lewin (1939) as to provide the full liberty to their employees to take decision,
authority of power and set goals, this term is also named as ‘hands-off style’.

According to ( Case Study, pg 7) he valued his time management skills and as a chairman of
large group he spent about a third of his time on trouble shooting, another third on new
projects and last third on promoting an talking about the businesses he had set up.

14
But actually, it’s not possible because an organization like Virgin having more than 200
companies, Branson can not cater the issues of each company within 6 min in a week.

The entire publicity and brand image is just because of polished publicity machine which
sketch them as what they want.

6.0 Recommendations:
This project gives us a clear view regarding virgin’s management functions but there are
always room of improvements, here are some recommendations for virgin group for its
successful performance.

Less Diversification:
Virgin should be less diverse because everything is not a brand name, you can be failed to
perform just like happen with Virgin Cola, people are fully aware of corporate strategies its
given time, Virgin as a corporate collaborator can add possible values to its ventures by
investing and developing real potential, try to be less risk because its a knife with sharp both
sides, one side is inevitably and other sent out contradictory signals to customers.

Change in Strategy:
The Virgin also need to look into their policy to make independent and joint ventures upon
short time period just for the sake of money, let go the rolling strategy so that vital revenue
producing Virgin Atlantic can be bailed out in bad time, debts can paid in a short term project
in peak season. Thoughts and policies should be such that can strategically changed in a
dynamic environment.

Change in Structure:
Virgin group should change its structure from flat to big hierarchal, because it’s not suitable
for a big group like Virgin having more than 200 companies, large structure have more layers
and more chances for promotions and employee retention, with big hierarchical structure to
make sure that employees got further promotions.

Pay & Reward:

They need to look into his pay and reward system as well because they believe in team work
but paid their employees on individual basis, 15
this create a negative impact on other
employees if you have set your values as team work environment then you should have same
procedure for every one, change into this will leads towards the better productivity.

7.0 Conclusion:
In order to put all the discussion in a single nutshell that we come across lots of interesting
facts of Virgin group regarding its Culture’s relation with different HR aspects, the
organizational culture of virgin reflects a distinctive drift in comparison with other
organisation, they are have a catchwords like Innovate and fun to attract the people to be a
part of that organization.

Then Culture relation with HR functions (Strategy, Structure, Pay/Rewards) there are some
clashes between these business aspect with culture because what they say actually not
implemented, they are having a flat structure which create job dissatisfaction between
employees, and they are having a team base culture but rewarded their management on
individual basis.

Virgin claimed fun and innovation as a core values and picked a best one from crowd who is
ready for new challenges and having creative thinking but when they recruit people their core
values are beneath, when someone say I am coming to virgin to have a good time, once
simply rejected because they said we are looking different reply.

Virgin is a customer driven organization and always prefer to train their employees on regular
basis and these training consist of Formal and Informal like (Workshops, rallies, online
training and picnic).

Virgin leadership as a whole not just depend on Richard Branson but their Hand Picked
Executives and managers play a vital role in virgin success and Richard Branson strongly rely
on his expert team and they actively participate in decision making process and he also paid
on their individual performances, Branson always loves to be a part of advertisement that’s
why he has a market catcher personality.

Virgin needs some amendments in their management functions and structure to accomplish
their milestone.

16
8.0 References:
http://brandfailures.blogspot.com/2006/11/brand-extension-failures-virgin-cola.html(22-01-
2011)

 Burns, J. M., 1978. Leadership, New York, Harper and Row.

 Bass, B.M. (1985), Leadership and performance beyond expectation. New York : Free
Press.
17
 (Course Work, 29-11-201)
 (Course Work 10-01-2011)
 Cited in steer et al, 1996, motivation and leadership at work, 6th ed, McGraw – hill,
Singapore; katz, D and kahn, R.L. the social psychology of organization, 2 nd ed, new
York, john Wiley, 1978
 Drennan, D., 1992. Cited in Senior, B. 1997. Organizational Change, (p.101),
London: Pitman Publishing.
 Fox, Catherine. (2004). the reluctant guru. Financial review. Boss.
 Furnham, A. and Gunter,B. (1993) 'the Psychology and Behaviour at Work: The
Individual in the Organization'. The Psychology Press: Taylor and Francis Group.
 Herzberg, F. (1959) the Motivation to Work, New York: Wiley, J. and Sons.
 Hochschild, A. R., 2003, the managed heart: commercialization of human feelings,
University of California Press.
 Johnson, G and Scholes, K (1993) Exploring Corporate Strategy, Prentice Hall,
Hemel Hempsted
 Lewin.K (1951), Field theory in social science, New York: Harper & Row. Cited in
(Campbell & Craig.T (2005), Organisations and the business environment, 2nd edition,
Oxford, Elsevier Butterworth-Heinemann
 Louis, M.R.1980, ‘Organizations as culture-bearing milieux,’ in L.R. Poudy et
al. (eds.) Organisational Symbolism, Greenwich, Conn.: JAI; quoted in M.R.
Louis (1985), ‘An Investigator’s Guide to Workplace Culture,’ in P.J. Frost,
L.F. Moore, M.R. Louis, C.C. Lundberg & J. Martin (eds.), Organizational
Culture, Newbury Park, Calif.: Sage, pp169-85 as cited in Brown, A. op cit.
 Manpower Service Commission, 1981. Glossary of Training term. 3rd ed. London;
HMSO
 Taylor, M.S. and Collins, C.J. (2000) ‘organizational recruitment: enhancing the
intersection of theory and practice’, in C.L. Cooper and E.A. Locke (eds), Industrial
and Organizational Psychology: Linking Theory and Practice, Oxford: Blackwell,
pp.304-34.
 Weber, M., 1947. The theory of social and economic organisations, New York: Free
Press.
 Zaccaro, S. (2001). The nature of executive leadership. Washington, DC: American
Psychological Association.
18
19
20
21
22