CORP2165-2013-Y Contemporary Management and Operations

Assignment 1- Leadership Individual Essay

Date- 26 th November 2012

Name- Sattar Hanif

P Number- P11265347

Tutor- George Kokkinidis

Sattar Hanif- P11265347

Assignment 1 – Contemporary Management and Operations

Utilizing an example of a leader of your choice discuss their leadership style. Demonstrate your understanding of a variety of leadership theory by applying this to your leader and critically analyse the theories that you are using.

Leadership has always been one of the most significant elements of management, the chief difference between a manager and a leader is that managers follow organisational policies and procedures whereas leaders follow their own instinct in developing routes to make the business more efficient. To define leadership is said to be complex because it can mean many different things such as: Leadership is not an end in itself, but a means to bring out the best in people, to inspire and motivate them, to commit their energies, skills and talents to delivering the organization’s vision. It is simply the ability to influence people towards attaining organisational goals. (Daft, Kendrick, Vershina 2010 page 57). The leader being discussed here is Sir Richard Branson, father and founder of the Virgin group. Described as one of the greatest self made British leaders with remarkable entrepreneurial skills and an instinct to spot gaps in the market through which he has achieved great success in business. Branson is a born leader as his history shows; he started his first business at the age of 16 making employees work for fun and not money, this is evidence of a born leader with tremendous potential.

There are many different leadership styles and theories that have developed over the last century, each different, depending on an individual’s character and beliefs which will match either a more modern style or a traditional one. We find many leaders who like all the power to be in their hands, dislike to delegate and making majority of the decisions. These leaders are known as autocratic leaders, an example would be Donald Trump of Trump Organisation (Personal Development 2010 online). On the other hand we also see leaders who like to delegate and leave non-strategic decision making to managers, these leaders are known to be democratic, and an example would be Bill Gates of Microsoft (Leadership (nd) online).

Virgin, a 40 year old company founded by the owner Richard Branson has been established in 34 Countries, employs approximately 50,000 people and Global Revenues in 2011 were around £13 billion (Virgin 2011 online). Branson has said to never have developed strategic objectives which employees are always focused on, he keeps his strategy simple ‘Listen to people and encourage feedback’ (Branson 2012). The basis of this strategy is that people always speak about needs and wants and by listening to them ventures can be formed, business is that simple. The speciality of Branson is, despite owning more than 400 Companies, each company is running individually ensures independency and makes managers feel valued as they are running the company on their own merit; this is highly motivational and

ensures they work beyond expectations. It is difficult to classify Branson into one style of leadership because he is a combination of more than one.

Firstly, he is described to be a transformational leader which is said to be a leader ‘who inspires followers to go beyond their own self-interests and who are capable of having a deep and extra ordinary effect on followers’ (Daft, Kendrick, Vershina 2010 page 584). This style of leadership gives employees a vision to work and a sense of pride not just to earn money. This style of leadership is also said to be highly influential, motivational, intellectually stimulating and considerate. The influence factor ensures leaders are trusted and loved by followers as they are full of life in their leadership actions, previous surveys have shown that Branson is loved by his employees. Where a leader is loved, motivation is not hard, in this situation motivation ensures leaders get their points and objectives to employees and ensure their expectations are understood. Intellectual stimulation provides the leader with capabilities to promote individual abilities such as problem solving, a method used by Branson is delegating as much as possible, this helps develop employees significantly. Individual consideration ensures that the leader can treat each employee personally making them feel more valued in the business. Each element of transformational leadership has a link to Branson; he is very motivational, influential and considerate (Robbins and Judge 2009). This has a connection to another style of leadership, it can also be said that Branson has a few attributes of a charismatic leader who makes employees do more than required due to high levels of commitment and motivation to achieve goals (Daft, Kendrick, Vershina 2010 page 588).

Besides being a transformational leader, Branson is also classified as a level 5 leader; this is the highest level on the hierarchy of manager capabilities. A level 5 leader builds an enduring great organisation through a combination of personal humility and professional resolve according to Jim Collins (Daft, Kendrick, Vershina 2010 page 566). Looking at Branson’s history and success he has undoubtedly turned Virgin into one of the most successful companies on the planet.

Secondly, he is also described as a democratic leader. This kind of style prioritises team participation and each member is motivated to suggest their ideas. There is increased employee satisfaction in this style of leadership. The democratic leader will listen to all the ideas and give them fair consideration, although the ultimate authority for the decision will still rest with him (Cassel 2008) Branson stated that ‘Employees think for themselves, they have good ideas to listen to. What is the point of hiring bright people if you don’t apply their talent’? (Kemble (nd) online) This is evidence that he is a democratic leader and listens to what his employees have in mind. The main drawback of this leadership style is that it cannot be put to use in times of emergency.

Furthermore, Branson is also characterised under a leadership theory. The way in which leaders operate will depend on assumptions they make about people and

attitudes to work. McGregor developed two sets of assumptions known as theory X and Y. Firstly, a theory X leader presumes that people are lazy, dislike work and don’t want responsibility. They prefer close supervision and job security; this theory would suit a more autocratic leader and usually be implemented in smaller organisations where there are few employees. Secondly, theory Y leaders presumes people like work and want to do good a job in order to receive rewards and be recognised for their achievements. They will also exercise self direction and control if they are committed to their success (Daft, Kendrick, Vershina 2010 page 52). This theory would require a more ‘laissez-faire’ style or democratic approach such as Microsoft, therefore Branson is characterised as a theory Y leader because he gives recognition and rewards to all valuable employees. This leadership theory was developed after FW Taylor’s scientific management theory which had a prime motive that money is the only reason people work and classified employees as machines (Daft, Kendrick, Vershina 2010 page 44). In the modern era that theory would not work especially in the first world.

In addition to McGregor there is another theory that links to Branson’s leadership. The theory John Adair’s three circle concept. According to Adair a balance has to be achieved between the three circles to ensure a leader is most effective. The three circles are team maintenance, which involves close monitoring of the teams progress, individual needs which includes an individual’s recognition for contribution and the task at hand which should evaluate the most effective results for the business (Adair 2011). The fact that individual needs and team maintenance are two elements it first of all has to be a democratic leader. Secondly this theory applies to Branson even more due to the fact that he is also a transformational leader who is considerate with individuals and also takes into account everyone’s ideas. Branson stated to be a successful leader you have to listen to people as, ‘there is no monopoly on good ideas or good advice’ (Branson 2012). This theory is highly effective for very innovative organisations and businesses that grow through diversification such as Virgin. It involves more ideas and ensures better results for the business; it would not be a good theory to implement in Businesses like a restaurant.

Branson being a democratic leader has a link to a situational theory as well, the theory of Hersey and Blanchard’s. This theory has 4 elements which are Delegating, Participating, Selling and Telling. The element which classifies Branson is selling; it is based on a high concern for both employees and tasks. In this division the leader explains decisions and gives employees a chance to ask questions and give relevant feedback, also helps the employees in gaining clarity and understanding on the specific task. This situational theory only suits leaders which encourage feedback and ideas from employees as they value additional opinions (Daft, Kendrick, Vershina 2010 page 574). This philosophy outlines Branson’s approach as he likes to hear from his employees and takes them as family.

In conclusion, without any doubt we can say, the way Richard Branson operates the Virgin Group; he is a successful democratic leader. He also has other characteristics making him a level 5 transformational and partial charismatic leader as well. Ways Branson could improve are very minimal as he is close to or at the self actualisation stage one can say. However being a little more laissez faire and less democratic, might help him improve efficiency within the business as he employs a very large amount of people and can still get more out of them by offering more rewards. In terms of the type of theory Branson falls under I think Theory Y and the selling philosophy suit his character considerably. However, Adair’s three circle concept falls identically into the way he operates as a leader and they suit him tremendously well primarily due to the fact that he likes to listen to people and their ideas, get the best out of his employees and praise them for doing a good job as well as enjoy working and not just working because they have to. All his characteristics link to the two implemented theories showing they classify his qualities and personality very effectively.

References

Adair John, Effective Leadership 2010. Branson Richard, Like a Virgin- Secrets they won’t teach you at a

business school. Virgin books 2012. Cassel Russell, Democratic Leadership. Taylor and Francis Online

educational forum 2008. Daft L.Richard, Kendrick M, Vershinina N- Management. Cengage

Learning 2010. Example of Autocratic Leader (2010)

http://www.planetofsuccess.com/blog/2010/how-to-deal-with-autocratic-leadership/ accessed on the 24th of October 2012

Example of Democratic Leader (nd) http://www.leadership-with-you.com/democratic-leadership-style.html accessed on the 24th of October 2012

Griffiths Alan, Wall Stuart- Economics for Business and Management. Third edition, 2011 Financial Times.

Kemble Sasha- Putting employees first helps Richard Branson succeed (nd). http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=c5a87758-5ba2-463f-9953-f3d940567028%40sessionmgr104&vid=14&hid=112 accessed on the 29th of October 2012.

Robins and Judge 2009. Organisational Behaviour, 13th Edition. New Kersey Pearson Prentice Hall.

Virgin History 2011 available from http://www.virgin.com/about-us accessed on the 22nd of October 2012.