Foundations of Organisational Behaviour - Case Study Example

Executive Summary

Organisational management is a topic that has been the subject of countless studies every year, with different scholars coming up with divergent views on what is the most appropriate method of managing an organisation. From political leaders from history such as Adolf Hitler to religious leaders such as Moses and Mohammed and now leaders from multinational corporations in the world, everyone practices a unique style of management to get results. One of these leaders is Richard Branson who has been a household name in the UK. He is an individual who is well respected within the business community. Richard Branson is closely associated with the Virgin Group, a consortium of approximately 360 companies known for airlines, record labels, cellular phones, space exploration, magazines and print media, as well as many other business establishments. His leadership style has caused many poorly-performing CEO's the best way to manage an organisation. This report highlights the leadership style of Richard Branson, one of the richest men in the world. It will highlight the various theories that define leaders and their management methods.

1.0 Introduction

In the past 30 years, Richard Branson has been a household name in the UK. He is an individual who is well respected within the business community. Richard Branson is closely associated with the Virgin Group, a consortium of approximately 360 companies known for airlines, record labels, cellular phones, space exploration, magazines and print media, as well as many other business establishments. Richard Branson is valued to be worth £3.32 billion, according to the Forbes Magazine. Richard Branson is renowned for his leadership styles and outspoken character, a brave and daring man who does not shy away from taking risks (sometimes uncalculated) and believes that his success is a sum of many factors, mainly built on the foundation of having a great team (Sheff 1997).

Richard's leadership style is inclined more towards democratic leadership. He understands and constantly claims that every single day is a learning day, and ideas come from people. He strongly feels that listening to other people and getting their input are important aspects towards becoming successful, and over the years, he has made this one of his fundamental core values (Finkle 2011).

2.0 Richard Branson's Business Philosophy

2.1 Organisational Theory

Unlike the practice as recommended by Frederick Taylor (1917) in his scientific management theory under the Classical Organisation Theory, where workers are highly specialised and closely supervised by their managers for maximum output, Richard Branson has chosen to focus more on managing the company's employees, constantly advocating for more flexibility and freedom of expression to deliver top results. His style of organisational leadership is closely related to the human relations management theory as posited by Professor Elton Mayo, who advocated for companies to show the importance for people to improve productivity and not machines.

The human relations management theory asserts that individuals wish to be components of a supportive team, which promotes growth and development. Thus, is staff members are encouraged to participate while receiving special attention, they perceive their jobs as important to the organisation, and are thus motivated to produce more output, leading to high-quality level work (Ford 2010).

2.2 Organisational Structure

As noted earlier, Richard Branson prefers an organisational structure that is bottom heavy then tightly knit by top managers. This structure is indicative of a philosophy that is not heavily structured at the top. Unlike in the mechanistic structure, where activities are formalised and centralised, Richard Branson operates a rather liberal contingency approach, where the management's effectiveness is linked to two elements: relation motivation or task motivation and circumstances. Branson's open philosophy is also synonymous with some bits of the organic structure of management. With the service industry being constantly on the move as a result of technological changes taking place nearly every day, the management systems put in place by the charismatic leader must be dynamic enough to leave enough room for adjustment.

2.3 Postmodern Organisation

A post-modern organisation can be defined as an organisation typified by an intertwined set of self-controlled, self-managed and diverse teams with many centres (poly-centres) of cooperation that unfold and fold according to the needs of the purpose or the tasks (Robbins 2013). Similarly, the post-modern organisation structured teams operate in a flat design, where staff members are involved and highly empowered in the tasks, continuous improvement is stressed, and there is a free flow of information.

3.0 Richard Branson's Leadership

3.1 Trait Theory

The trait theory of leadership recognises the particular personality trait that separates leaders from non-leaders. The trait(s) are founded on the perception that leaders are "born" and not "made" as is commonly believed. The theory thus holds that leadership is largely intrinsic and not developed as is widely believed (Derue et al 2016). Consistent with the trait theory of leadership, one of the biggest strength of Richard Branson is motivation. He is a highly motivated individual purposed to attain results and has an achievement drive. It means that he is highly motivated with extra energy and initiative, ambitious, and commits to putting much effort.

In addition, Richard has leadership motivation, which denotes that he derives joy in leading others and getting results. This is evident with how he is passionate about his employees and the value he ascribes to them, placing them in the top tier of the client list. He has also demonstrated his cognitive capabilities, which means that he can exercise good judgment, which he is conceptually skilled and has strong analytical abilities.

3.1.1 Limitations of the Trait Theory of Leadership

• Trait theory is very complex
• With this theory, there is bound by instances of subjective judgment in the determination of individuals regarded as "successful" or "good" leaders
• The descriptions are generalities. They are contained in lists that are too long

3.2 Behavioural Theory

The behavioural theory is a direct response to trait theory. It asserts that contrary to the claims of trait theory that leaders are born, it posits that any individual can be made a leader through being taught the most fitting behavioural response for different situations. Consistent with behavioural theories, Branson can be categorised as a people-oriented leader. This is according to the studies by the Ohio State University (the 1940s), where they described the people oriented leaders as encouraging, observing, mentoring and coaching and listening (Miller et al. 2014).

3.2.1 Weaknesses of the Behavioural Theory

One of the biggest weaknesses is that there are no guarantees that after learning and going through the behavioural course that one will become a good leader. Learning is the easy part; implementation is harder to effect. Becoming accustomed and skilled in these practices can also be a challenge. The other issue relates to adaptableness. There exists a knowledge gap about how behaviour can be applied in different cultural situations and settings. Behaviour that is very successful in one culture can be a total failure in a different culture.

3.3 Situational Theory

The situational theory belongs to the family of the contingency theories of leadership. These theories postulate that leader’s effectiveness is associated with the leader's behaviours or traits about varying situational elements. This theory affirms that a leader's effectiveness is dependent on his capacity to change his management conduct to the level of his subjects' sophistication or maturity. Branson's companies are engaged in the service industry, and although he allows flexibility within the company, the company is held by structures that have set a very high expectation standard in its service industries.

4.0 Comparison with other Business Leaders

Just like many other billionaires in his generation, Branson is a high school dropout. His strategy of enhancing the workplace environment through open dialogue and team building efforts is a unique way, though not new. Many leaders will want to be on top of things at all time; to keep that distance between subordinates and top management. However, transformational leaders such as Richard Branson engage employees at all levels of the organisational hierarchy, always seeking to improve organisational performance by focusing on the well-being of these employees.

Richard Branson’s leadership style can be compared to the CEO of Semler & Company (Semco) which is Ricardo Semler. Ricardo Semler’s leadership style is as revolutionary as Branson’s leadership style and a class by itself.

4.1 Semler’s leadership style compared to Branson

Branson’s leadership style can be generally described as democratic leadership where he provides more latitude to his employees so that they could be more productive and creative. He does away with the classical leadership as proposed by Taylor where leaders have to closely monitor and supervise their employees. Instead of focusing in close supervision, Branson instead motivate his employees through the socialization process as proposed by Elton Mayo. The more pronounced version of Branson’s democratic leadership is Ricardo Semler’s corporate democracy where he allows his employees “to design their own jobs, select their supervisors, and define pay levels” (TED Talk 2015).  Ultimately, Semler intends to create a business organization that could function on its own and without the need of a CEO as contained in his corporate democracy leadership style.

Semler’s corporate leadership may sound ridiculous as intends to create a business organization that could function without a CEO and let them design their own job and pay and even select their own supervisor but this is actually similar to Branson’s reputation of taking ridiculous and sometimes uncalculated risks. Embarking on such a leadership style is very risky but just like Branson, Semler did it anyway believing as a leader that it will work well in his company Semco.

4.2 Leadership theories used by both leaders

Richard Branson may have been known to take uncalculated risk in his business decision but certainly not an informed one. This also works on his leadership style where his democratic leadership is grounded on the management theory of Elton Mayo who proposed socialization as a tool to motivate employees. Semler just like Branson also borrowed and expanded the idea of a prominent management theorist Douglas McGregor who is a pioneer and lead proponent of participative management. Unlike Elton Mayo who proposed socialization to motivate employees, Douglas McGregor said that it would be better for organizations to trust their employees to apply their “creativity and ingenuity in service of the whole enterprise, and to make important decisions close to the flow of work, conceivably including the selection and election of their bosses” (MIT Sloan 2005).

5.0 Conclusion

Richard Branson is an individual who is well respected within the business community. Richard Branson is closely associated with the Virgin Group, a consortium of approximately 360 companies known for airlines, record labels, cellular phones, space exploration, magazines and print media, as well as many other business establishments. Richard Branson distinct style of management also defines why his companies have been rated among the best performing companies in different markets in which they venture. He has also demonstrated his cognitive capabilities, which means that he can exercise good judgment, which he is conceptually skilled and has strong analytical abilities. Branson’s democratic leadership style is comparable to Ricardo Semler’s corporate democracy leadership style where he trust his employees to be creative in finding solution to make the enterprise better. Both based their leadership styles to prominent management theorists where Brandon based his democratic leadership style to Elton Mayo’s socialization while Semler’s corporate democratic style to Douglas McGregor’s participative management.

6.0 Recommendation

Richard Branson has taught us success does not have to follow certain structured way rooted in history. According Branson, it all starts with one big idea, passion and drive to get things started. However, he has also demonstrated that having a capable and committed team is an important factor. He is a transformational leader, who has showed us the importance of taking care of employees and putting their interests first to in turn derive the best that they have to offer. Employees form the backbone of good performing service industries. Well harnessed talent pool can increase a company’s overall productivity, but a motivated workforce can give exemplary results over the long-run.