Virgin Group and Coca Cola Management Strategies Essay

2960 Words12 Pages
Background Information and Challenges of the Virgin Group From 1968 to 2007, Richard Branson leads the Virgin group to become a conglomerate of more than 200 companies with business in music, airlines, rail transport, soft drinks, radio broadcasting and etc. (Grant 2005a:309) The Virgin Group followed many other companies during the 1950 to1980 period in adopting diversification as a mean for corporate growth. The boom of unrelated diversification of the early 1960s and 1970s was halted abruptly however by the failure of many large diversified companies (Grant 2005b:447). The simple action of bringing various businesses together under a single ownership itself was clearly not sufficient in creating shareholder value. The following years…show more content…
The lack of a corporate headquarters and the small size of most of the Virgin operating companies were intended to foster teamwork and a strong entrepreneurial spirit. (Grant 2005a:325) Branson envisions that Virgin group has a responsibility to the employees and it develops a better understanding of the human factor. (Davidson and Griffin 2006: 40) Branson extracts some guidelines from Fayol to scientific management, such as the Equity (Managers should be kind and fair when dealing with subordinates), Initiative (Subordinates should have the freedom to take initiative) and Esprit de corps management issues (Teamwork, team spirits and a sense of unity and togetherness should be fostered and maintained). (Davidson and Griffin 2006:41) Finally, he follows Henry Gantt by employing a system that give people rewards for completing their jobs in less than allowed standard time. Branson’s management strategy and the success of Virgin Group were founded on the ideology of “the Business of Trust”. First of all, Branson recognized that large companies were more likely to be mistrusted by their employees, whereas smaller companies often have the loyalty of staff because of the culture of collaboration. Productivity, performance and retention rates suffered in low-trust firms. While managing in smaller companies in a flattened organizational hierarchical way would facilitate the communications and interactions between the managers and employees.
Get Access