Virgin Group is one of the biggest and most popular business organizations in the world who have developed a strong work culture over the years. Under Sir Richard Branson’s leadership, Virgin Group has developed several cultural practices that have helped their business grow. By keeping their customer’s happy through empowered employees, Virgin has developed a cultural practice that ensures their work culture remains at the fore of their business philosophy. There are different frameworks that can be evaluated for analyzing the cultural practice of Virgin Group, but Hofstede’s cultural theory has been utilized for analyzing the work culture and practices of Virgin Group. Hofstede’s cultural dimension can help in understanding how Virgin Group measures in terms of their work culture and where they stand on the basis of essential cultural elements. Evaluation of the Virgin’s culture will help in understanding the cause of success on the basis of their cultural practices.
Keywords: Virgin Group, Culture.
Virgin Group is among the most loved and respected business organizations of the 21st century. The group successfully incorporates a large number of businesses in different industries under the brand name Virgin. Their portfolio extends to industries such as travel, telecom, leisure, financial services, music, cosmetics and retail industry. Virgin has been able to expand their business from their home British market to and have sown rapid expansion in other parts of the world. Since its foundation in the 1970s by Sir Richard Branson, the Virgin Group has grown from a mail order record business into one of the most successful multi-industry conglomerate in the global business world. In 2012, the Virgin Group had grown to 50,000 employees throughout the world and a business operational in 50 countries. Also, their turnover reached US$ 24 billion in 2012. Since the conception of the company, Virgin Group has developed more than 300 products in different industries (Virgin, 2012).
Over the years, Sir Branson has always retaliated that doing business must be fun rather than a duty. Sir Branson’s style has managed to build strong Virgin brand, rather than a traditional product developed through traditional means of branding. These days, Virgin brand name is known for quality, money, reliability, fun and innovation. Even after more than decades of its launch, Virgin group resembles the cool culture in the world of business. Sir Branson and his ability to start marketing anywhere, has built him into a promoter of his own business. Perhaps, the most identifiable trait of Sir Branson’s leadership is not forcing his people to follow; rather he strongly endorses freedom to create and liberty to think. Sir Branson’s leadership style focuses on touching employees and customers’ lives. His charismatic personality is summed up with his weekly flights on his commercial aircrafts, where he interacts with the passengers (Niphadkar, 2014).
The brand identity of Virgin Group is based on the characteristics of the charismatic owner Sir Richard Branson and their business philosophy, “if you keep your staff happy then the customer will be happy, and if you keep the customer happy then the shareholders are happy” (McCreadie, 2008, p.3). The underlying beliefs of Sir Richard Branson transcends into every Virgin subsidiary and employee in the form of their organizational culture. The Virgin Group believes that they should make a difference in every customer’s experience by delivering superior quality service that is accomplished through self-motivated and empowered employees.
Their effort enables the business to develop an anti-corporate, informal work environment that is defined by the current pop culture (Grant, 2004, p.16-18).
Virgin’s management carry high expectations from their employees and management as they expect strong commitment levels, long working hours when needed and acceptance of their personal responsibility (Grant, 2004, p.16-18). Financial rewards for most Virgin employees remain modest; the company manages to provide a load of non-monetary benefits that include company-sponsored weekend getaways, social activities and impromptu parties. Their work climate endorses positive relations between customers and organization, and effectively allowing employees at Virgin to develop social networks that embraces the culture. Virgin’s culture demonstrates that developing and maintaining interpersonal relations are relevant practice.
Within the Virgin group, Sir Branson has shown the remarkable holding power that has been made possible through adhering to his carefully honed business values (Rifkin, 1998). Branson is known for grabbing opportunities, and working at record-breaking speeds to make use of it. Several management gurus are in awe of the speed with which a large organization manages to act. Today, the Virgin group has managed to grow organically and has set up several companies. The Virgin group has managed to retain their unique speed and energy through maximizing the spirit of entrepreneurship through its staff and minimizing the bureaucracy level.
The practice of keeping the interest of customer’s first and empowering their employees to deliver on the customer’s expectations through their innovative business environment, is unlike any other organizations. Virgin Group is known as an innovator of a culture where employees are empowered through delegation authority to complete important tasks without much supervision. The Virgin Group has been able to retain their entrepreneurial spirit through their employees striving to achieve their business philosophy. The emergence of strong company culture can be witnessed through the behavior and attitude of employees as they strongly believe in the values and assumptions instilled in the company (Johns & Saks, 2001, p. 288-89).
Argument over Choice
Critique of Choice
The Hofstede’s cultural dimensional theory is widely used method for understanding the national culture in business practice. Hofstede’s cultural dimensions theory helps in developing inter-cultural understanding of business organizations too, as similar dimensions can be used for analyzing the culture of the business organization. The theory helps in identifying the way business is being led and the causes of success of a business organization. Virgin Group’s success is many times credited to their cultural values; therefore, Hosftede’s cultural dimensions have been used in this case for analyzing the culture of Virgin Group (Sperancin, 2010, p. 59-65).
Each dimension adds to the understanding of the cultural intricacies of one of the most honored organizations in the modern world. Power distance helps in understanding how Virgin Group has been utilizing power and relationships in their success. Similarly, dimension of individualism helps in understanding the way to achievement and relationships are practiced at Virgin Group. Similarly, other dimensions help in identifying the how Virgin has become a successful organization through their cultural practices. Overall, the six dimensions provide insights into the means used by the Virgin group in the name of organization culture to grow their business and ensure organizational competitiveness and sustenance (Sperancin, 2010, p. 59-65).
Opposition for other Framework
The other framework that was utilized for testing Virgin organizational culture and their practice of giving utmost importance to customers and empowering employees to serve customers better was Trompenaars' seven dimension of culture. The methodology utilized by Trompenaars and fellow contributor to the theory Charles Hampden-Turner is quite similar to Hofstede’s cultural dimensions theory. The seven dimensions are universalism/particularism, affective/neutral, individualism/communitarianism, specific/diffuse, sequential/synchronic, internal/external control and achievement/ascription. Many of these elements or dimensions are already included in the Hofstede’s theory, but Trompenaars and Hampden-Turner modified the theory. Trompenaars’ work helps in identifying the impact management trends have due the cultural differences. Trompenaars reveals managing complexity is a challenge in the current business environment and business leaders need to understand some added dimensions for ensuring long-term success.
Even though, Trompenaars could have added additional elements to the analysis, Hofstede’s theory was chosen because of its easier relatability with the chosen organization and their cultural practice. Virgin Group’s cultural practice can be evaluated in a better way through the Hofstede’s cultural dimensions with relatable examples and ideas for the organization available for analysis. In addition, the complex nature of the Trompenaars’ theory that could have made the examples of Virgin Group complicated to analyze. Finally, Hofstede’s model already provides all necessary details needed to analyze the situation and cultural practice and gives a better analysis of their situation.
Hofstede’s Cultural Dimensions
Dr. Hofstede’s cultural dimensions help in understanding the culture of a business organization on the basis of factors such as power distance, uncertainty, individualism, masculinity, long-term orientation and indulgence.
Power Distance Index helps in understanding the level of equality between people within the organization. Having low power distance in business organizations means the business de-emphasizes differences between positions and power between employees at different levels. High power distance indicates bureaucracy is practiced in the organization and people at the top resist sharing authority to make decisions (Croucher, 2016, p. 119-121).
Individualism in a business organization pertains to the levels to which individual or collective behavior towards relationships and achievement is practiced. Organizations with high levels of individualism would have employees that prefer working for individual rights and give significantly low importance to relationships. Low individualism (collectivism) would mean that employees give value to relationships and focus on collective goals is more than personal goals (Croucher, 2016, p. 119-121).
Masculinity in case of business organization would mean the level of importance given to male roles in the operation. High masculinity would mean that the business organization has a certain level of gender preferences in senior roles and authoritative positions. On the contrary low masculinity (femininity) would mean that business organization has a low level of discrimination on the basis of gender (Croucher, 2016, p. 119-121).
Uncertainty avoidance in case of business organization would mean the level to which they are willing to take risks and the ability to handle unstructured situations. High uncertainty avoidance would mean the business is unwilling to take risks and have low tolerance for ambiguity. Low uncertainty avoidance would mean that the organization prefers taking risks and accept change and ambiguous situations (Croucher, 2016, p. 119-121).
Long-term orientation measures the organization’s ability to embrace forward thinking or if they remain loyal to traditional thinking. High long term orientation would mean the business organization values historic traditions and commitments through a strong work ethic. Low long-term orientation (short term orientation) would mean that organization accepts change and traditions are not allowed to become impediments to change (Croucher, 2016, p. 119-121).
Indulgence dimension measures the level to which organization allows its employees to work gratification free and allows their human drives to have fun at work. High indulgence means employees get the opportunity to enjoy their work and live their work life without restraints. Low indulgence means the organization suppresses their employee’s gratification and restricts their human drives (Croucher, 2016, p. 119-121).
Analysis of Practice
Power Distance Index
According to their cultural practice, Virgin Group utilizes low power distance in their organizational culture as employees are empowered to serve in the best interest of customers. Virgin Atlantic has always had low power distance with the founder Richard Branson always encouraging feedback from his employees at every level. Empowering employees helps Virgin Group to provide a personalized experience for customers as employees cater to satisfy the customers. In addition, the organization endorses opportunity for all employees as growth is provided at all levels and concentration of power is prohibited. The organization practices equal behavior of all employees and expects the fair treatment through their corporate policy of employees will ensure that their customers are treated fairly by employees. Overall, the corporate philosophy of the organization depends upon fair and equal treatment of employees to ensure they treat customers well and in turn shareholders remain satisfied (Dudovskiy, 2012).
Virgin Group has always been a highly individualistic organization in the mould of its risk-taking, self-promoting and unconventional leader Sir Richard Branson. Virgin has always encouraged its employees to focus on their own career and the customers under their supervision. Virgin Group takes decisions in the best interest of their employees and gives them advantages as an individual rather than a collective. Virgin’s decision to offer its employees limitless holidays, in order to help them control their work hours, assuming their breaks do not affect their output is an interesting policy that highlights the individualism at practice in the business organization. As an individualistic culture promoting business organization, Virgin is able to engender a feeling of trust and autonomy among its employees and create competition at the same time preserving their performance output (Ingwer, 2012, p. 36).
In terms of the cultural dimension of masculinity, Virgin group measures significantly low as they strive for cooperation with customers, quality of life for employees and low level of discrimination in terms of gender preferences. Virgin group has been known to value the wishes of their customers and provide them better services through their employees. Employees work in a positive working environment where they are empowered to make decisions and given enough authority to help the customers assigned to them. Finally, masculinity or preferences on the basis of sex are avoided in the organization as the better performing employees are given the credit and many women are working in senior positions in different businesses ran by the multi-industry conglomerate. One such example is Mary Wittenberg taking over at Virgin Sport (Balakrishnan, 2015).
On the dimension of uncertainty avoidance, Virgin Group scores significantly higher as they adopt innovative approaches to overcome uncertainty in different industries they operate. One such example is in the airline industry as Virgin Airlines has been dealing with several tendencies and ambiguities through innovative approach of affordable pricing with superior services. By providing superior services to customers, Virgin ensures customers remain loyal to their business by charging lower rates and delivering better service than competitors. Their cultural practice of uncertainty avoidance helped Virgin to sustain their businesses even during the recessionary times. By ensuring customer loyalty through superior service quality, Virgin is able to get repeat business from their customers who long for the service quality offered for competitive rates (Croucher, 2016, p. 119-121).
Long Term Orientation
Virgin Group has always been forward thinking in terms of their services and measures to overcome competition. In the past few years, Sir Branson has tied-up with many cash-rich business allies and added value to the Virgin business, without spending much cash from the reserves and entering into new industries such as telecom and space travel. Under the leadership of Sir Richard, Virgin has managed to venture into several businesses - from wedding gowns to condoms, from financial services to airlines - and in this process Virgin has taken on several entrenched industry giants and wrested a large amount of market share from the industry leaders such as British Airways. Mr. Branson has a fascination for daunting challenges; as he considers the impossible ventures and provides value to the customers. Mr. Branson was able to place the Virgin brand on the British Rail business that was decaying for years, with the aim of turning the rundown railroad business into a profitable and sleek business (Rifkin, 1998).
In terms of indulgence, Virgin Group creates an environment where their employees are expected to not just work, but they should enjoy working for the organization. Over the years, Sir Branson has always retaliated that doing business must be fun rather than a duty. Sir Branson’s style has managed to build strong Virgin brand, rather than a traditional product developed through traditional means of branding. Fun is an important part of Virgin’s business policy and has been at the foundation of the business growing into 400 different business organizations. One example of Sir Richard Branson’s personal indulgence has been his decision to start an airline out of Virgin Record’s profits, which was not appreciated by the Virgin Records executives but Sir Branson still went ahead as he thought it would be fun. Such behavior and culture is expected from Virgin employees while they are serving customers; that ensures employees feel the warmth of their service and remain loyal (Feloni, 2015).
Virgin Group is a British multi-industry conglomerate with global presence. Under the charismatic stewardship of Sir Richard Branson, work culture has been at the fore of Virgin’s growth. Virgin’s culture has always been one of the most talked about aspect of the organization and it is considered as the foundation for the immense growth of their business. Over the years, providing their customers with best possible serve and keeping them happy and empowering employees to ensure employees remain happy has been part of their organizational culture. In terms of growth, this cultural practice ends up making the employees, customers and shareholders happy and helps Virgin Group grow organically. According to the Hofstede’s cultural dimensions, Virgin Group displays how cultural practice is supported by their low power distance, high individualism, low masculinity, high uncertainty avoidance, high long term orientation and high indulgence. Overall, these cultural dimensions help Virgin Group to deliver on their philosophy and ensure their employees, customers and shareholders are satisfied to create an environment where the organization thrives.
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