Edexcel Level 7 Extended Diploma in Strategic Management and Leadership

DEVELOPING STRATEGIC MANAGEMENT AND LEADERSHIP SKILLS

Malini Ramakrishna ETOLA 20394

Contents Topic Summary Task 1.1 Task 1.2 Task 1.3 Task 2.1 Task 2.2 Task 3.1 Task 3.2 Task 4.1 Task 4.2 Conclusion Bibliography Page number 3 3 5 6 7 7 8 10 11 12 14 15

Acknowledgements First and foremost I wish to reiterate my thanks to Raheem Shabi, senior lecturer in Ethames Graduate School for his guidance and advices throughout the assignment. All my friends who have helped me a lot in this endeavour are gratefully and lovingly remembered. Summary Virgin Atlantic is the second largest long haul airline in the UK and the third largest European carrier over the North Atlantic (Virgin Atlantic, 2011) founded by Richard Branson in 1984. Lot of lessons can be learnt by studying the management and leadership skills of Virgin Atlantic. The specific business model of the organisation with uncommon practices of traditional business doctrine had made Virgin Atlantic to soar within a short time. The transformational leadership pattern followed by the organisation made the employees to contribute to their level best to walk towards success. Task 1.1 It is undeniable that any organisation towards the path of success should clearly understand how strategic management is influenced by good leadership skills. Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources for carrying out these goals ( Alfred, 1962). P.Porter too has cited that the challenge of developing or re-establishing a clear strategy is often primarily an organizational one and depends on leadership (p. 77) Porter, M. E. 1996(Nirgudka , 2002).Theoretically there are various styles of leaderships as mentioned below.
1.

Autocratic The sole decision making is only on the leaders hand, no discussion is allowed.

2. Democratic-Where every one of the organisation has right to change anything; depend

on the majority and the leaders decision.

3. Bureaucratic Well organised and traditional method followed to avoid corruptions

as in the universities ang governmental organisations. Laissez-Faire(Let it be ) the leadership responsibilities are shared by all.
4. Paternalistic The leader is treated as the father. 5. The people-oriented leader (Fiedler, 1967) ultimate goalof this is to increase the job

satisfaction, with supporting and training etc

6. The task-oriented leader (Fiedler, 1967) A goal is set and focus is on the task.

There is a mixture of different leaderships followed in Virgin Atlantic, the concept which gives enough freedom to each employee and giving room for their suggestion too, says it has a democratic style, the controlled management of leadership when it comes to monitor whether everything is happening well, which is towards Autocratic..The Founder Richard Branson who treats the staff first and best, saying Staff first, then customers and shareholders is able to get the work he desires from the employees saying, he has people oriented leadership (Grant, 2004). Virgin has minimal management layers, no bureaucracy .The company is considered as the part of a family than a hierarchy, helping each other with shared value to reach the companys goals together (Nickols). There are different theories of leadership as listed below 1. Transformational Leadership -Transformational Leadership is created based on a change and has a vision and energy to transform the organisation 2. Transactional- This is based on an exchange , something is done for the sake of gaining personnel values e.g. Promotion 3. Charismatic-A leader having good charisma
4. Conger and Kanungo CL (Conger & Kanungo (1998) Combination of charismatic and

transformational leader , trying to take more risk

5. Contingency Theories Flexible leadership ,where different leadership methods are

handled in different situation..

6. Situational Leadership-The theory suggests the key contingency factor affecting

leaders' choice of leadership style is the task-related maturity of the subordinates. Classifies leader behaviours into the two broad classes of task-oriented and relationship-oriented behaviours. Considering the leadership theory Virgin Atlantic has got a charismatic leader with transformational leadership .The correct link between leadership style works well on the strategy of the organisation to lead it towards the path of success. Task 1.2 Different management and leadership styles have different impacts on Virgin Atlantics strategic decisions; which can be related to the vision of Virgin Atlantic to grow a profitable airline where people love to fly, and where people love to work (virginAtlantic, 2011). If it is an autocratic style definitely the company would have not achieved what is has achieved now. Because it is a very strict management with the rules, there is no any friendly environment to exchange ideas, no motivation to make the employees to think that it is their organisation, they just work since the work is given. The autocratic leader rarely listens to others ideas, giving no room for discussion. It is obvious that rarely any innovative idea emerges if there is no room for discussion. But it is said that Virgin Atlantic Airway' success highly depends on the founders principles to provide the highest quality innovative service at excellent value for money for all classes of air travellers (http://ivythesis.typepad.com/term_paper_topics/2010/07/case-study-richardbranson-and-the-virgin-group-of-companies-.html, 2010). So if it had followed an autocratic style of leadership it would not have found the secret of successful leadership management styles. If it had followed the bureaucratic style too it would have not achieved its goals; expansion into the international market, utilisation of new technology, loyalty among the customers, and joint ventures with other companies (http://ivythesis.typepad.com/term_paper_topics/2010/07/case-study-richard-bransonand-the-virgin-group-of-companies-.html, 2010). Because to achieve these company should have minimum layers of management, but in bureaucratic leadership style there are many layers and a certain pattern of regulations that should be followed.
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The Paternalistic leadership style would have got a further positive impact on the organisation. Because it gives the employees that Virgin Atlantic is their own company, i.e. they would have felt they are the next generation to handle everything in the company once the leader takes rest, since they have been delegated properly. But to be so the leader should have more emotional quotient (EQ) than intelligent quotient (IQ), being an ideal man where humanity and honesty comes first, and conservation of business ethics have been maintained .This policy never let the employees to leave the company or to share its secrets with others since they feel it is theirs, which would have taken Virgin Atlantic a step further. Task 1.3 One of the reasons why an organisation faces challenges is to manage a change implemented in the organisation properly. Change is the only constant in the world so when the world changes it is a must for an organisation to have the pace of change, to anticipate a success ahead. Virgin Atlantic has undergone many changes as the case in 1999 49% of Virgin Atlantics stake was sold to Singapore Airlines to have a partnership. (virginatlanbtic, 2010) and there was another change in 2008 where Virgin Atlantic started to use bio fuel instead of jet fuel(Virgin Atlantic,2011).When the organization faces challenges like these different situations, leadership styles can adapted to address the challenge. When Virgin Atlantic sold its 49% of stake to Singapore Airlines, it made the following challenges of merging, because now Virgin Atlantic is not fully authorized to change issues of it, it had to rely on Singapore Airlines too, so it cant adapt an autocratic or bureaucratic leadership style, it should adapt the democratic where each partys opinion is considered in the process of Virgin Atlantic. Since Richard Branson is a charismatic leader (Grant, 2004). He can easily adapt to any leadership style as it is required by the joint venture. In the case of bio fuel usage too the condition is the same. Being democratic the leader listens to the opinions from others too when there is an issue and can tell them the importance of change for an instance the bio fuel usage reduces green house gas emission in the environment, so it is an environmentally friendly activity. Task 2.1 Virgin Atlantic is one of the successful products of The virgin Group whose organisational culture is quite complex, because this specific organisation has got more than 100 companies with often completely unrelated products. The Virgin Atlantic was
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too launched to expand the brand value of The Virgin Group, so having an understanding about The Virgin Group tells what kind of organisational strategy is followed in the Virgin Atlantic. It tries to create the loyalty of the customers; the innovative management inspires the employees to be actively engaged in the organisation (http://ivythesis.typepad.com/term_paper_topics/2010/07/case-study-richard-bransonand-the-virgin-group-of-companies-.html, 2010). Many leadership theories have influence over such organisational strategy of Virgin Atlantic. The transformational leadership can have positive impact on the development of the organisation. The possibility of having transformational leadership is assured where all united together as an organisation with sense of commitment (Naughtin), since Virgin Atlantic has a team work with the involvement of each employee, this leaderships favours the health of its organisational strategy, because here the group works under a common goal like increasing the image of Virgin Group in the world, which definitely increases the overall efficiency. Transactional leadership is something different from transformational, in transactional leadership personal performance of leadership is mainly concerned ,which can lead to greed and lack of team work. According to the organisational behaviour pattern of Virgin Atlantic this leadership theory wont work well because, although the chairman is Richard Branson, he is not one, but million ones together who has the interest on Virgin Atlantic. So this style rarely helps to increase the performance of Virgin Atlantic. Task 2.2 As stated above the vision of Virgin Atlantic is to grow a profitable airline where people love to fly, and where people love to work. Virgin Group has gone far in achieving this, but to be the one of the leading worlds airline, the organisation should have a realistic strategy with many features, that supports the direction of the organisation. Being a transformational and charismatic leader (Richard Branson) is the best to navigate Virgin Atlantic in the path of success (Virgin Atlantic, 2011). The first feature is, it should have the proper delegation, because being the leading airline in the world is not a short term objective and the chairman might not have enough energy when that time is close by, to drive it in the correct path. So first of all Richard Branson

should find someone who can resemble his nature and should try to invest his skills to him. Although the risk taking behaviour of Richard Branson has supported a lot for its development, he had failed in some attempts, like the case of Virgin Rail (Grant, 2004) so if Virgin Atlantic should escape to this trap, he should invest lots of time and money in the research and should be more careful in merging or acquiring with any organisation. Often doing SWOT analysis and trying to overcome the weaknesses and threats of any issue with the strengths and opportunities will be appreciated. People with lot of EQ in addition to IQ should be found and a team should be formed to produce innovative ideas that can transform the leadership style so the world can see an advanced Virgin Atlantic. As having a great leader is an outstanding feature of Virgin Atlantic enhancing the strength of good relationship with the followers will never fail to increase its performance further. Leaders can really work well if the followers too work well with their heart and soul. The followers should be very much familiar with everything and should have the real thirst to support the organisation. The best strategy for this is to start a school in the field of aviation, where some of the intellectual students can be educated freely so that they can be the greater milestones in the future, because loyalty will be automatically added. So to be the leading airline Virgin Atlantic should maintain the current leadership it has now with some further enhancement to make this strategy sustainable. Task 3.1 The characteristic feature the vocal and flamboyant leader Richard Bransons current leadership requirements can be reviewed by the means as follows Formal learning These are the educational bodies where leadership is taught. Self help and developmental activities, self directed learning and reading article This refers to how one can land himself with leadership skills by reading the literature and biographies of great leaders and by others means.
Mentoring 8

This method refers to the, how the future leaders can be advised to be really potential, with the help of experience and knowledge of present leaders. Coaching This is usually done by one to one session plan, to address specific development and personal development plan. This method enhances the special requirements to lead the business and the communication skill specifically can be effective. Assessment Centres,
Action learning,

Companies own universities This is one of the best ways for the leaders to be developed. It refers to the educational bodies those are owned by the organisation itself, by this method the company can educate and land the leadership skills more effectively, as the loyalty and the good followership is already invested. For an example, the bible colleges those run by the churches, although this is apart from the business scenario, by this the church gets the new priests by developing ones within the organisation not by getting someone out of the organisation. Considering Virgin Atlantic the best way to review the leadership skills are the mixture of all mentioned above with different proportion. As already stated it is an organisation with a unique organisational culture, so the formal ways like reading articles and self development approaches on help a little in reviewing. On the other hand the method of reviewing should easily land, the highest EQ, treating business like family, venturesome and other ways the business ethics conserved of Richard Branson. Because he just not go global but thing global. In addition since Virgin Atlantic is vast, having 9000 employees and 4.5 million passengers a year (scribd, http://www.scribd.com/doc/48348385/Virgin-Atlantic, stereotypes. So as I mentioned above the formal strategy of leadership development is comparatively ineffective to, not only the informal culture of Virgin Atlantic but also to the other institutions. Currently, 85% of respondents are pursuing leadership development activities and 52% have a formal strategy for the development of leaders 2007), successful and multicultural organisation, specially there shouldnt be having bias nature or

(http://www.cipd.co.uk/NR/rdonlyres/271CD424-507C-4E4A-99B61FAD80573E4A/0/traindevtsurvrept05.pdf, 2005) So in Virgin Atlantic the leadership should be reviewed specially having its own college of leadership where the students should be taught the history of Virgin Atlantic besides the school curriculum. Because this will help the students to be exposed many years to the organisation where the familiarity will be found and if really the ones with inborn intelligence and EQ are found, they can be easily captured to lead the major positions in the organisation. But this should be handled with care because the competitive companies can easily get the secrets of success, because it is an open school, as this risk in unavoidable in any field of concern, this is the best way to review to sustain the great organisation Virgin Atlantic in the future with the quality it has now or with improved quality, because for anything there is a room for development and improvement.

Task 3.2 The future strategies of the Virgin Atlantic are

Expanding Virgin Atlantic in Asia Increase the aircraft fleet Forming global partnerships with other organisations which can be future threat.

Continue to be innovative Have good relationship ,specially with upper class customers Globalise the virgin brand further (scribd, http://www.scribd.com/search? query=Virgin+Atlantic+++, 2011)

To be successful in this future strategy Virgin Atlantic should develop an adequate leadership plan. First of all it should start to delegate the potential energy to someone who can uphold the organisation in the future.

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To have the aggressive expansion in Asia, the company can recruit some of the expertise from Asia, and lead them carefully so they can contribute to establish a business firm in their respective countries .It can be either by merging or acquisition. The present transformational and charismatic leadership style what Richard Branson has will support it, but the familiarity with Asia should increase. To be innovative and form alliance to develop the Virgin Atlantic, further researches should be conducted to find in which ways the leadership nature of Richard Branson can be enhanced, a good feed beck should be taken after the implementation of these research studies are implemented to identify the worthiness of change in strategic plans. Young teams should be formed with some innovative and fresh ideas. These teams can be given tasks like how to impress the people towards Virgin Atlantic specially the upper class ones. Task 4.1 The development of leadership for the succession of its future leaders can be effectively planned. The idea of the leadership team entered into Virgin Atlantic after the problem it faced in 2009. It was unable to meet the expectation of the world, due to the reputed awareness of Virgin Brand; with its young management team comparatively. So it sent 120 managers to leadership workshops which increased the profit by 7%. The guidelines for the leadership skills are mentioned below 1. Have a clear idea about the sector in which it is operating and comprehensively understand, the present and future context of the organisation 2. Know what you are going to require of your leaders in the future, thus focus on potential performance. 3. None of the leadership programme should be ties with the other organisations. It should have its unique way within the 4. Get the idea what will be the current and future leadership challenges from present leaders.

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5.

Use many mechanisms to land leadership skills; these might include

group sessions and one-to-one work, experiential and paper-based activities, company projects, feedback and coaching. 6. Develop set of principles for leadership, and have a frame work. 7. In any developed programme reflect the culture of the company, make full use of the available resources. 8. Give participants the opportunity to voice their career aspirations. 9. Let the top layer of management to involve during or at the end or at the beginning of the programme, whenever possible. 10. When the programme is being carried out, build personal developing programme too, because after the completion of the programme , individuals rarely focus on their personal development 11. Have good evaluation throughout the programme. In any future plans of leadership, to be transformed into the future leaders, all the above steps should be considered. It can be planned by having meetings, discussion, presentations etc. Frequent meetings should be arranged in group wise from bottom layer to the topmost layer so that the requirements can easily reach to Richard Branson, rewards should be given to the best ideas, because the employees should be treated well and given dignity for their ideas, because this can induce themselves to be customers and will encourage their family and friends to be the customers. Customers should be given enough chances to share their positive and negative experiences and comments about Virgin Atlantic. The negative ideas should be the most welcomed and rewarded for the time spent because it says the gap that should be reached further. In planning the leadership to delegate, the top most layer of team should visit their industries to have presentations and to capture the potential leaders. Task 4.2

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There are lot of usefulness by the methods adopted in planning the development of leadership in Virgin Atlantic. Because when it is planned there is more assurance of the good leadership expected. Having the meetings and. other means to plan helps in getting the feedback, so the weaknesses and threats can be easily identified. These methods will help in monitoring the future strategy too. There are certain guidelines to develop future leadership plan to virgin Atlantic. The second concept of the guidelines of leadership is telling to know what we require from the potential leader, identification of this should be planned and there should be spontaneous assessments too. Getting the ideas from the current leaders shouldnt be forgotten in planning the method to develop the leadership skills. The experience and skills of current leaders are one of the valuable pillars which support Virgin Atlantic. Methods to help in getting their ideas, like having presentations from them help Virgin Atlantic to anticipate correctly. Variety of leadership development mechanism should be used in developing leadership skills, such as: group sessions and one-to-one work, experiential and paper-based activities, company projects, feedback and coaching. By one to one work the real characteristic feature of any can be understood comparatively than the group discussion. But in group discussion lot of ideas can be exchanged so there is always a chance for new idea compared to the one to one discussion. Experimental and paper base activities will help in understanding the IQ and EQ of future leader; this says how far the leader will be able to solve the given problem alone. Because being a leader he should have the energy of changing the whole organisation according to his thought. Company projects do help in findings of current changes and feed backs. It is sort of research activity, by this method the threats and weaknesses of the organisation can be learnt, by studying the competitive companies like British Airways and those can be overcome by the strengths. Leadership skills can be developed by coaching too. Which gives the motivational message to the follower to have a good leader and follower relationship. Furthermore it helps in delegating the leadership qualities too.
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Conclusion Although Virgin Atlantic was started in 1984, it has gone far in success comparatively. It is mainly due to the charismatic and transformational leadership qualities it observes, especially by the founder, Richard Branson. If this nature of the leader delegated properly, no one can deny that it will be the best in the future

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Martindale, N. (2007). http://www.scribd.com/doc/48348385/Virgin-Atlantic. Retrieved 04 19, 2011, from http://www.scribd.com: http://www.scribd.com/doc/48348385/Virgin-Atlantic Naughtin. (n.d.). http://www.metricationmatters.com/docs/LeadingChangeKotter.pdf. Retrieved 04 02, 2011, from http://www.metricationmatters.com: http://www.metricationmatters.com/docs/LeadingChangeKotter.pdf Nirgudka. (2002). Porter, M. E. 1996. What is a strategy? . Harward Business Review . scribd. (2007). http://www.scribd.com/doc/48348385/Virgin-Atlantic. Retrieved 04 19, 2011, from http://www.scribd.com: http://www.scribd.com/doc/48348385/Virgin-Atlantic scribd. (2011). http://www.scribd.com/search?query=Virgin+Atlantic+++. Retrieved 04 04, 2011, from http://www.scribd.com: http://www.scribd.com/search?query=Virgin+Atlantic+++ virginatlanbtic. (2010). http://www.virginatlantic.com/en/gb/allaboutus/ourstory/forstudents.jsp. Retrieved 04 01, 2011, from http://www.virgin-atlantic.com: http://www.virginatlantic.com/en/gb/allaboutus/ourstory/forstudents.jsp

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