Virgin Atlantic Airline Case Study

Edexcel Level 7

Extended Diploma in Strategic Management and Leadership

DEVELOPING STRATEGIC MANAGEMENT AND LEADERSHIP SKILLS

Malini Ramakrishna

ETOLA 20394

Contents

Topic Page number

Summary 3

Task 1.1 3

Task 1.2 5

Task 1.3 6

Task 2.1 7

Task 2.2 7

Task 3.1 8

Task 3.2 10

Task 4.1 11

Task 4.2 12

Conclusion 14

Bibliography 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 leader's 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 company's 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 Atlantic's 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" (virgin-Atlantic, 2011).

If it is an autocratic style definitely the company would have