Griffith Aviation

(Crunch Base, 2012)

Course Code 7512BPS

Course Title Aviation Leadership and Communication
Assessment Item Number 4
Assessment Title Research Assignment
Due Date 12th October 2012
Student Name Joshua Findley
Student ID Number s2737404
Course Convenor/Tutor Name Barry Sutherland

The Leadership of Richard Branson

Plagiarism Disclaimer

All work enclosed is my own except when a source is identified or contents is of general
knowledge.
 Aviation Leadership and Communication

Table of Contents
Executive Summary ................................................................................................................... 3
1.0 Introduction .......................................................................................................................... 4
1.1 Background of Richard Branson ...................................................................................... 4
2.0 Body ..................................................................................................................................... 4
2.1 Branson‟s Personal Characteristics .................................................................................. 4
2.2 Leaders-followers ............................................................................................................. 5
2.3 Organisational Objectives ................................................................................................ 6
2.4 People ............................................................................................................................... 6
2.5 Change.............................................................................................................................. 8
2.6 Influence ........................................................................................................................... 9
2.7 Comparison of Leaders Style ......................................................................................... 10
3.0 Discussion .......................................................................................................................... 11
4.0 Conclusion ......................................................................................................................... 11
References ................................................................................................................................ 12

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Executive Summary

Richard Branson‟s leadership style will be thoroughly examined through the five elements of
leadership; leaders-followers, organisational objectives, people, change and influence. His
charismatic and transformational attributes will be embedded in the appropriate sections to
show how effective he is as a leader. The importance of ethical practices and corporate social
responsibility initiatives will be discussed and embedded into the leadership framework.

A comparison of Branson‟s leadership style with other significant leaders will be analysed.
This paper will show that his leadership style is fundamentally different from historic and
current leaders, however still highly successful. Both Branson and the leaders he was
compared to are/were successful, which emphasises the legitimacy of the situational
leadership model.

This paper will show that one can be unique and does not need to follow in anyone‟s‟
footsteps to be successful.

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1.0 Introduction
Leadership is defined as an "influencing process of leaders and followers to achieve
organisational objectives through change" (Lussier & Achua, 2010, p. 6). There are many
different definitions of leadership however most definitions include the following elements;
leaders-followers, organisational objectives, people, change and influence (Lussier & Achua,
2010, p. 6). These elements will form the outline of the report. Richard Branson‟s
background and personal characteristics will be discussed followed by a comparison of his
leadership style to other significant leaders. A discussion will then follow analysing the five
elements of a leader, leader comparisons and an ethical analysis. A conclusion will be drawn
on his success as a leader using his attributes and by comparing him to his peers.

1.1 Background of Richard Branson

Branson was born on July 18 1950 in the United Kingdom. He is responsible for more than
four-hundred companies (London Evening Standard, 2010), of which the first business
venture was achieved at the age of sixteen; a magazine called Student (Hawn, 2006). Four
years later he established an audio-record mail-order business, then two years later in 1972 he
opened a chain of record stores called Virgin Records. In 1984 he expanded his business into
the airline industry with Virgin Atlantic Airways.

2.0 Body
2.1 Branson‟s Personal Characteristics
To analyse Branson using the „Big Five‟ leadership personalities (Digman, 1990; Hough,
1992), he would be classed in the „openness‟ category. Openness is defined by three traits;
flexibility, intelligence and locus of control (Lussier & Achua, 2010). Branson is quick to
jump when an idea is raised and is not scared of making big changes when the situation
arises. A former CEO under Branson once said; “He just says yes or no. He doesn‟t spend
valuable time farting about trying to convince a bunch of middle managers it‟s a good idea”
(Gormley, 2010, p. 109). He is highly intelligent and makes sensible decisions to benefit the
company along with strong interpersonal skills to improve team cohesion. He has an internal
locus of control, where he takes responsibility for company endeavours (good or bad) as he
understands that his behaviour directly affects company performance.

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He is said to have brought a “hippie” stigma to the business world with his non-conformist
attitude and informal style (Dearlove, 2010). He has a unique way of doing business which
has proven to be very successful. He has ten secrets; pick on someone bigger than you, do the
hippy shake, haggle, make work fun, do right by your brand, smile for the cameras, don‟t
lead sheep herd cats, move faster than a speeding bullet, size does matter and never lose the
common touch (Dearlove, 2010).

2.2 Leaders-followers
Branson is very respected and well liked amongst his peers. Dyadic theory will be used to
further explain this. Dyadic theory is the relationship between a leader and followers over a
period of time, which can be broken down into three stages of evolution; vertical dyadic
linkage (VDL) Theory, Leader-Member Exchange (LMX) and Team-Member Exchange
(TMX) (Lussier & Achua, 2010).

The VDL theory asserts that the leader will form different relationships with different
followers which will be separated into two groups, the “in-group” and the “out-group”.
Branson aspires to get as many employees as possible in the in-group to develop strong social
ties supporting loyalty, mutual trust, respect and influence (Lussier & Achua, 2010). Out-
group team members perform a task to a required standard however do not attempt to
contribute any more than what their job title entails. By improving VDL linkages, those who
are in the in-group will be increased resulting in strong team cohesion and business
performance.

VDL theory evolved into leader-member exchange theory (LMX) (Lussier & Achua, 2010).
LMX is the quality of exchange between followers and the leader (Erdogan, Liden, &
Kraimer, 2006). This theory acknowledges the limited time and energy the leader has, and the
need to focus resources on individuals where it will be most beneficial (Raymond, Yina, &
Hang-yue, 2009; Cropanzano & Mitchell, 2005; Sparrowe, Soetjipto, & Kraimer, 2006).
Branson does direct his time more towards certain staff; staff with ideas. This can be seen as
favouritism; however fairness should be distributed amongst employees (Graen, Hui, &
Taylor, 2006) in response to their output and motivation.

TMX is routinely used by many organisations today (Mesmer-Magnus & DeChurch, 2009;
Tse, Dasborough, & Ashkanasy, 2008) where a demonstration of teamwork capabilities is

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needed to be displayed before employment (Lussier & Achua, 2010). TMX is defined as the
mutual exchange of ideas between peers (Lussier & Achua, 2010). Branson recognised that
some team members simply want to do their job and nothing more, and are very good at what
they do. He also recognised those who want to facilitate the organisation to improve. Through
differentiated leadership he is able to make better use of his time by working with those who
genuinely want to help the company prosper.

2.3 Organisational Objectives

Effective leaders align their personal objectives with the company‟s vision and goals. "When
followers are influenced to do what is ethical and beneficial for the organisation and
themselves" (Lussier & Achua, 2010, p. 8) effective leadership is attained.

Ethics play an important role in business today (Audi, 2009) as employees, governments and
customers strive to do the right thing by the majority of the population. There is a positive
relationship between ethics and leadership (Veiga, 2004). Spoelstra and Ten Bos (2011)
argue that aesthetics may be the heart of leadership. They argue that leadership needs to
appear ethical in order to exist and that morality is a defining characteristic, as opposed to
management where ethics and morality do not necessarily play a part. Ethical scandals hurt
organisations performance, resources and reputation (Mishina, Dykes, Block, & Pollock,
2010). Unethical practices develop mistrust (Graebner, 2009) and create serious problems for
stakeholders (Lehman & Ramanujam, 2009).

Branson adapts to a competitive approach to ethical business practices, as opposed to a

government controlled approach. The advantage of a competitive approach is that it allows
for true competition of the survival of the fittest (Thiroux & Krasemann, 2009). Since
Australia‟s airline deregulation in 1990, airlines are able to operate freely in the market
without the government restricting their competitive drive. This creates fairness to
businesses, value to customers and takes pressure off governments. Branson does all he can
to push his competitors against a wall by offering very low fares.

2.4 People
“The first method for estimating the intelligence of a ruler is to look at the men he has around
him” (Machiavelli, 1532/2005). A key to effective leadership is helping the members of your
team succeed (Dragoni, Tesluk, Russell, & Oh, 2009). There is a strong link between

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effective leaders and employee empowerment (Likert, 1967; Argyris, 1964; Yukl, 2010).
This is can be further explained in Maslow‟s (1943) Hierarchy of Needs (MHN). Employees
need physiological, safety and social aspects as a basis of general wellbeing, however to
appeal to an individual‟s esteem and self-actualisation needs, more needs to be done. By
stigmatising employee esteem and self-actualisation needs employees are more likely to
contribute and participate more than what their job description entails, which will enhance
organisational success.

Branson has reward systems to encourage innovation, and to retain high performing
employees (Manfred & Vries, 1998). He does this by encouraging employees in any position
to voice their suggestions. Not only does he listen, but he has acted on employee suggestions
in which some have proven to be very beneficial and profitable. He recognises the
importance of keeping intelligent and driven employees and rewards them significantly. He
has made between fifteen and twenty millionaires (Manfred & Vries, 1998) after he
developed their ideas into practice. By rewarding employees and appealing the their esteem
needs and facilitating their self-actualisation needs, Branson will have a better chance
retaining employees and not losing them to competitors or have them start a business and
become a competitor. Another benefit would be that employee contribution would open up
blind spots in Branson‟s Johari Window (Luft & Ingham, 1955). This will make him aware of
any strengths, weaknesses, opportunities or threats he may not have thought of.

Herzberg‟s two-factor theory of motivation (Hines, 1973; White & Leon, 1976) explains why
Branson‟s reward systems are so effective. The hygiene factors are present, and the
motivators are also very visible with financial incentives, promotion and recognition.

Lussier and Achua (2010, p. 8) state that there is little evidence that being a mean tough
manager is associated with leadership success. The famous works of Tzu and Machiavelli is
universally known for their authoritarian leadership styles which are used as a guide by
successful businesses and the military today. Branson may not use the authoritarian approach
however many other successful businessmen do, of which both methods have proven to be
successful.

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2.5 Change
Change is needed to adapt to environmental and customer needs to ensure business success
(Ng, Dyne, & Ang, 2009). Getting employees to comply with change is a very difficult task
and it takes a certain type of leader to break down these barriers of resistance. Branson is a
transformational leader as he highlights current problems and sets a vision of how the
organisation could be after the change (Lussier & Achua, 2010).

Transformational leadership includes four factors; idealised influence, inspirational

motivation, intellectual stimulation and individual consideration (Kendrick, 2011). Branson‟s
influence will be discussed below and his motivational techniques were explained above.
Those who try new things and take risks are most likely to advance in a company (Ng, Dyne,
& Ang, 2009). Intellectual stimulation is about breaking down routine and looking at new
ways of doing things, which Branson is well known for. As mentioned earlier, Branson‟s
time is limited therefore individual consideration needs to be given appropriately.

Change is known to make people feel uncomfortable (Plato, 1997); however Branson‟s
smooth transformational attributes makes the process much easier. Kaizen‟s philosophy on
continuous improvement (Bodek, 2010) emphasises the need for an effective
transformational leader to make the required changes in an efficient manner.
Transformational leadership changes major parts of the way things are run in organisations to
benefit the company in the long term (Tourish & Pinnington, 2002). It is important for
transformational leaders to look at the organisation as a system (Padro, 2009; Pittman &
Russell, 1998; Stevens, 2010; Washbush, 2002; Deming, 2000) where one change may
impact another aspect of the organisation.

Branson has the ability to make change, as his employees trust his judgement and respect
him. He informs his employees of what is changing, when the change will start and end, why
it is changing, how the change will affect them and who is affected (LaMarsh, 2009).
Keeping staff informed improves trust, enhances team cohesion and reduces the barriers of
resistance when the change is implemented. Branson adopts a flatter organisational structure
which is more agile, empowering teams and individuals to make decisions which are
effective for minimising resistance (Lussier & Achua, 2010).

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2.6 Influence
Managers may coerce subordinates to get compliance, however leaders influence
subordinates by gaining their commitment and enthusiasm (Mossholder, Richardson, &
Settoon, 2011). The influence of leaders on followers (and vice-versa) is important in a
business environment (Knapp, 2008). Branson has a “Theory Y” (McGregor, 1966)
developmental attitude where he motivates employees so that they enjoy their work, become
more productive and loyal. There are many benefits of Theory Y workers in an organisation,
another being that they do not need close supervision.

Charismatic leadership is an important aspect of influencing followers. Charismatic

leadership has many similarities with transformational leadership; however their main
difference is one of focus (Yukl, 2010). Transformational leaders want to change an
organisation (and possibly their followers), however a charismatic leader may not want to
change anything. Charismatic leaders could be seen as a shepherd leading the sheep, where
influential people could “rape the minds” of those that follow (Changing Minds, 2012). This
is (arguably) present in religion, and when Hitler was in power. Branson has great respect
from all stakeholders, and when he says something, people listen and comply. As he engages
in ethical practices and possesses charismatic attributes, he will be admired and successful.

His internal locus of control will benefit the company in his absence as he trains staff to
perform the specific roles to keep the organisation going. Branson is well known for starting
up divisions, ensuring they are set up correctly and running smoothly, and then leaving
control to another employee. The way in which he empowers staff to take control will be very
beneficial for when he leaves the organisation. Steve Job‟s unfortunate departure from Apple
saw their share prices drop dramatically after heavy publicity doubting their continued
success. This example highlights the importance of developing a sustaining foundation within
the organisation.

People will be more inclined to follow if the leader appears to be engaging in corporate social
responsibility (CSR) initiatives. Branson has invested in renewable energy research from
biofuels to energy efficiency projects. This is known as the Virgin Green Fund (2012). CSR
seems to work as informal law (Buhmann, 2006) as companies must engage in CSR
initiatives to match (or better) their competitors. Branson adopts the utilitarianism principals,
which achieves “the greatest amount of good for the greatest amount of people” (Crane &

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Matten, 2007, p. 94). A moral framework must be placed around profitability, consumption
and growth (Caruana & Crane, 2008) to ensure high ethical practices while considering
shareholder profits (Banerjee, 2008). As Branson holds 51% of the stake in Virgin (Flinn &
Credeur, 2011), he can control finances and does not have as much pressure stowed upon
him. Businesses that have the majority of shareholders external to the company would
attempt to engage in fewer CSR initiatives as businesses have a responsibility to increase
profits (Friedman, 1970). Studies have shown that CSR initiatives improve employee
retention (Brammer, Millington, & Rayton, 2007), which is another reason Branson engages
his staff in such programs. By using Carroll‟s (1991) Four-Part Model of Corporate Social
Responsibility, it is evident that Branson appeals to every section. That being economic
responsibilities, legal responsibilities, ethical responsibilities, and philanthropic
responsibilities.

2.7 Comparison of Leaders Style

Comparing Richard Branson‟s leadership style with historic leaders proves to be very
interesting (see figure 1). Machiavelli (1532/2005) and Sun Tzu (2002) have very autocratic
leadership styles where they are feared by those who follow them. A consequence of non-
compliance or a mistake would be coercive punishment. Rival Qantas CEO Alan Joyce‟s
leadership practices can also be compared to Machiavelli and Sun Tzu as he is "extremely
ruthless about using his power to get his way” (Priestley, 2012). Branson is the exact opposite
as he encourages employees to try new things through his empowering democratic leadership
style. This could be the key factor in the success of the Virgin Empire.

Figure 1 – Leadership Comparison

(New World
(Crunch Base, 2012) Encyclopedia, 2008)
(Wikipedia, 2012)

Approach Branson Machiavelli Sun Tzu

Leadership Style Democratic Autocratic Autocratic
Compliance Reward Punishment Punishment
Adaptability Present Present Present

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3.0 Discussion
The comparison of leaders‟ styles mentioned above shows that there is no one correct
leadership style that will be successful. Hersey and Blanchard (1969) have labelled this as
situational leadership, previously known as Life Cycle Theory of Leadership (Hersey &
Blanchard, 1969). Effective leaders adopt their leadership style to fit the environment, the
objectives and to the people that are part of the team. We can see that Branson‟s unique mix
of the five leadership qualities (leaders-followers, organisational objectives, people, change
and influence) directly affects the success of the Virgin Empire. With charismatic and
transformational leadership imbedded into the five leadership traits, and Branson fitting those
profiles perfectly, one can see why Virgin are so successful.

4.0 Conclusion
Branson‟s leadership style has been thoroughly examined through the five elements of
leadership; leaders-followers, organisational objectives, people, change and influence. His
charismatic and transformational attributes have been embedded in the appropriate sections to
show how effective he is as a leader. Ethical practices and corporate social responsibility
initiatives have been discussed. Ethical practices are paramount to business success, team
effectiveness and cohesion. A comparison of Branson‟s leadership style to other significant
leaders was given and it was concluded that his leadership style was fundamentally different
from historic and current leaders. Both Branson and the leaders he was compared to are/were
successful, which emphasised the legitimacy of the situational leadership model.

Richard Branson is a highly successful inspirational leader and a role model for future
business people.

2,715 words

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