Internal Branding in Virgin Group - Case Study Example

Virgin Group Virgin Group Introduction Sir Richard Branson founded virgin group in the year 1970. The company operates across many industries. Virgin Group has its headquarter in London UK. The major business areas of Virgin Group are travel, hospitality, lifestyle and entertainment (Virgin.com, 2013). The company also manages ventures in health care, transport, financial services, telecommunications and food and drinks. The Virgin Group business is made up of more than 400 companies, which are located in many regions around the world. According to Buhalis & Law (2012), the company had about 50000 employees by the end of the financial year 2012. On the same year, the company had total revenue amounting to £ 15 billion. Virgin Company functions as the holding company for more than 100 subsidiaries that include Virgin America, Virgin Atlantic Airways, Virgin Holidays, Virgin Money and Virgin Radio in France (Davenport, 2013). Internal Branding in Virgin Group Virgin brand is highly associated with the enormous achievement of the company. In order to attain internal branding, the company has employed a very diverse group of employees. The company acquires employees with different competencies and set of skills and knowledge from the labour market (IBS Research Centre, 2009). The human resource department at the Virgin Group ensures that all the employees subordinate their interest to the common interest of the company. This helps the company in attaining its mission, vision and objectives. The diversity of the companys employees, assures that its internal branding is achieved as they can work in multi-sectors in which the company has businesses (Abdul, 2003). The company promotes innovation and differentiation as a way of differentiating itself from the competitors in the market. Branson, as the founder of the company, is always at the forefront to instil a culture of innovation among the employees in all business be it in transport and airline, beverage or other areas. In order to enhance differentiation of its products, the company starts by differentiating its employees (Abdul, 2003). The company employs very versatile employees who can work best in different sectors and who can work from the heart. The internal branding of Virgin Group is revolves around differentiation and innovation. Two problems at Virgin Company and how they affect Employees a) Break down of the Company into Smaller companies Virgin group has broken down its various companies into smaller companies. The company breaks down these companies as they grow and develop into bigger companies. This made the companies weaker rather than functioning as one entity, which would have given them synergy. When the company is broken, each smaller company formulates its own objective and mission thereby leading to the loss of the general objective of the Virgin Group. According to Johansen (2012), when a company breaks down, it becomes difficult to make a decision as the management hierarchy becomes distorted. Break down of the company’s subsidiaries into many smaller companies disintegrates the overriding values and culture of the holding company. The move by the company to break down its subsidiaries demotivates the employees. When the company functions as one unit, employees are motivated by working for a big company. After breaking down, employees render their loyalty to the smaller company and do not feel as a part of the bigger group. Virgin Group seeks employees who will work with the companys interest at heart and who will feel a loss if the company fails to achieve its target. Breaking down the company, makes the employees not to feel as part of the set targets of the Group. Therefore, the performance of the group does not have an impact on the employees. b) Making Promises That Seem either Impossible Or Not Sustainable Virgin Group has been issuing promises that it cannot fulfil. Branson is very quick to make promises which raise the expectations of the people on the company, whereas there are neither long-lasting nor sustainable. For example, Branson promised the public ‘Virgin Galactic’s space mission’. This is a promise that there will be a flight to the space by the company. This promise raises a lot of questions on the manner of making decisions within the company (James, 2011). The mission raises concerns on the security of the passengers who will be taken to space, the licensing of the trip and the manner in which it shall be executed. According to Monsen & Horn (2008), achieving the company’s promise motivates the employees and gives them a sense of accomplishment. The employees of the Virgin Group are very innovative. They usually come up with various types of ideas. When Branson sends the ideas to the world, it leads to a lot of pressure being directed to the employees in order to full fill it. If the ideas will not be achieved, employees will feel demotivated; as they cannot meet the expectation of the public on them. This also destroys the company’s reputation. Therefore, the move by Branson to broadcast every huge idea that comes along, can lead to demotivation of the Virgin Group employees. Herzberg Theory and Maslow Theories Herzberg Theory The theory identifies two types of factors i.e. hygiene and motivational factors. The hygiene factors are essential for working, but they do not motivate employees. Motivating factors motivate employees to increase performance. The hygiene factors are such factors as rate of payment, the working conditions, the personal life, quality supervision and the company policies (Northouse, 2010). On the other hand, the motivational factors include job interest, achievement, responsibility and recognition. The theory proposes that these factors can also lead to dissatisfaction, no dissatisfaction and positive satisfaction. Herzberg’s theory can be used as a way of overcoming the demotivation in the Virgin Group of Company. The theory can be used to overcome the problem of breaking down into smaller companies. Herzberg’s theory states both hygiene and motivational factors. The hygiene factors within the company should be in such a way that they encourage employees to love their working environment. The company should have a streamlined quality management style and policies, good working conditions in all the subsidiaries. All employees within the virgin Group should be given a chance to enter the line of operation that they like and the one in which they have a passion. Virgin Group has performed well in terms of hygiene factors. For example, they offer competitive pay rates, provide freedom in making decisions and provide a job security to its employee. One of the motivating factors is responsibility. When employees are given a chance to make decisions and are rewarded when they make innovative ideas they become motivated. Virgin Group can improve its employee motivation by rewarding the employees who come up with a great idea. The company should not announce the generated ideas without assessing the impact on the employees’ morale. Announcing the ideas by Branson acts as the demotivating factory when they are not attained. Therefore, Virgin Group can use Herzberg theory to overcome both company break down and making promises that are not sustainable. Maslow Motivational Theory According to Northouse (2010), Maslow theory presents a hierarchy of needs that can be used to motivate employees within the company. The theory presents the needs starting from the lowest basic needs, followed by safety needs, belonging, self-esteem and self-actualization. Maslow & Stephens (2000) contend that the theory posits that when the need of the lower degree is achieved, an employee can be motivated by been given a reward that will meet the need of the higher degree. Maslow’s theory can be used to overcome the major problems that characterize many organizations that are brought about management-employee friction. Virgin Group has ensured that it has sustainable way of attaining all needs that are stipulated in the Maslow theory. Virgin Company provides physiological needs by ensuring that they offer competitive payment rates. The company attracts the best talents by offering competitive remuneration and working conditions. Virgin Company enters into a contract with employees when commencing work. This ensures that job security is given. To ensure a sense of belonging, the company treats its employees as part of the big family. Branson promotes a culture of socialization and trust among the employees. Recognition and promotion are also used as a way of meeting both the self-esteem and self-actualization with the Virgin Group. By encouraging innovation within the company, Virgin Group meets the self-esteem need of its employees. Branson should recognize the employee behind every idea that he sent to the world. This will lead to motivation within the company as the employees will attain self-actualization. By using the Maslow theory, Virgin Company can be able to overcome the major problems that are leading to poor financial performance. Solutions to the Problems Virgin Group can overcome the breakdown by becoming less diverse. Virgin group operates in many sectors. This denies the company market specialization. Market specialization would give Virgin group a wide knowledge about its market. Breaking down to many companies makes the operations of the company unmanageable in a centralized way. Therefore, to overcome this, company by should merge some of its companies. In order to overcome the problem of making promises that are not long lasting, the company should not issue statements until they are very sure that they can meet its requirement. Conclusion Virgin company has been a strong brand over many years. Over the years, it has used staff motivation and good treatment as an anchor to its success. The company has well set culture, mission and vision that guide its operations. In the past few years, the company has been performing poorly financially. This is attributed to various problems that include failure to embrace technology, poor strategy and Promises that it cannot meet. Virgin Group can overcome its challenges through good treatment of its employees and moving with the market trends. References Abdul, R. (2003). Virgin corporate strategy Case Study. Retrieved from: http://www.robabdul.com/the-virgin-group-case-study.asp Buhalis, D., & Law, R. (2008). Virgin Group. Background 29(4), 609-623. Davenport, T. H. (2013). UK Companies and progress. New York: Harvard Business Press. IBS Research Centre (2009). Internal Branding and HRM at Virgin. London: Sage. James, E. (2011). Richard Branson champions employment of ex-offenders. Retrieved from: http://www.theguardian.com/society/2011/nov/15/richard-branson-champions-employment-ex-offenders Johansen, R. (2012). Company Strategy. San Francisco, Calif: Berrett-Koehler Publishers. Monsen, E. & Horn, L. (2008). UK-Virgin Group. Chicago: American Dietetic Association. Maslow, A. H., & Stephens, D. C. (2000). The Maslow business reader. New York [u.a.: Wiley Northouse, P. (2010). Maslow theory and theory of motivation. Thousand Oaks: Sage Publications. Virgin.com. (2013).] Virgin-Discover Virgin. Retrieved from: http://www.virgin.com/discover-virgin Read More