'Using a range of theories from across the HR143 syllabus compare and contrast the management and leadership styles of two major managers or leaders'.

University Degree Business and Administrative studies

HR143 Assignment Tuesday 19th November 2002

‘Using a range of theories from across the HR143 syllabus compare and contrast the management and leadership styles of two major managers or leaders’

The management styles displayed by world leaders, figureheads and company managers are as diverse as they are interesting, with many of these individuals advocating unique management techniques that are aimed at inspiring, motivating and empowering employees. Branson and Maxwell are contemporary examples of managers running highly successful organisations.

Practices adopted by each of these influential businessmen will be compared to theory and ideology that has been presented decades to centuries ago by academics and theorists. However, the fundamental aim is not to state whether Maxwell and Branson conduct their operations by remaining within paradigms of theorists from the past, instead the aim is to provide valid information to show how management styles of the 21st century go far and beyond historical ideals to create the most effective and efficient business environment, which subsequently creates a successful, efficient and productive business.

Although Richard Branson and Robert Maxwell (before his death in 1991) appeared to possess and portray extremely different management styles and techniques, their start in life and progression into the business world was quite similar.

Neither would be considered to have taken a conventional route into management.

Maxwell claimed to be self-educated, he moved into a life of publishing after the war. His move was to Berlin, to start publishing scientific journals and the place in which he founded ‘Permagon Press’ the first branch of the Maxwell Empire, in 1940. Before becoming the owner of Mirror Group Newspapers, the organisation for which he was better known.

Richard Branson was a dyslexic child who was frustrated and confused by an education system, which was not sympathetic enough or responsive to his condition. Branson believed that school was not sufficiently challenging to him and left school at the age of fifteen.

Both Branson and Maxwell entered the corporate world with no practical experience of being managers but their introductions to this world were relatively unproblematic building success upon success. Neither are qualified managers, despite their notable success.

A new initiative set up in the UK (Management Charter Initiative) set about providing widely accepted qualifications confirming a persons competency as a manager, an attempt to combat the increased competency and success of overseas managers compared to British managers.

The Virgin Brand was created in 1969 with the opening of a mail order music shop in Oxford St, which offered consumers the latest in musical entertainment at lower cost than competitors. 1972 saw Branson plough into the recording business, signing talent such as Mike Oldfield and later The Sex Pistols and Janet Jackson. It was with Mike Oldfield’s ‘Tubular Bells’ record that Branson made his first £million.

In his autobiography ‘Losing My Virginity’ (2001), Branson states ‘Success is not a formula, and it doesn’t just happen’. This comment was in response to commentators suggesting that if certain techniques are followed then success will result, of course this could not be further than the truth. He also stated that "To be successful, you have to be out there, you have to hit the ground running, and if you have a good team around you and more than a fair share of luck, you might make something happen. But you certainly can't guarantee it just by following someone else's formula." These points illustrate clearly that management is not as simple as following guidelines, techniques and formulae, being successful is down to creating your own luck, being in the right place at the right time and working and working to make things happen for your business.

Observing from Tannenbaum and Schmidt’s ‘leadership continuum’, the management credentials of Branson and Maxwell can be clearly defined. The continuum ranges from the autocratic to the democratic, and respectively the two styles reflect a ‘boss centred’ and sub-ordinate centred leadership style. The aftermath of Maxwell’s death found him to be an autocratic boss, who was in charge of everything. However, Richard Branson’s extensive media coverage has identified him as a democratic leader who shows a willingness to delegate authority, a true democrat according to Tannenbaum and Schmidt’s theory.

Many different interest groups have long debated what makes ...

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Many different interest groups have long debated what makes Branson and Maxwell excellent managers, with some suggesting the two were ‘born’ managers while others suggest that these managers possess characteristics that command loyalty, can motivate and ‘mould’ employees into a collective way of thinking, ultimately benefit an organisation. Branson and Maxwell are no different, they too can make their employees listen and do as they are asked. The important element to understand here however, is that Branson and Maxwell use enormously diverse approaches to meet their objectives.

Robert Maxwell, a once confident, charismatic leader could have without doubt been described in Mintzberg’s (1973) leadership style theory as an ‘interpersonal’ manager, he acts only as a figurehead of the companies he owns, does very little to eradicate conflict in the workplace and did not compromise or negotiate with employees involving matters of pay or conditions. Maxwell simply disregarded any employee requests and conducted business and behaviour the way he saw fit, he saw himself as a sole decision maker and project co-ordinator, answering to nobody. His approach to business and dealing with his employees was an autocratic one, as Maxwell effectively demonstrated minimal interest in the requests of his employees and managers, simply doing, as he believed best. Maxwell demanded respect, obedience and power all of which he refused to delegate to others.

The senior management style adopted by Richard Branson is one of ‘Management by walking about (MBWA)’; this is an extension of ‘human relations’ theory and provides the model way to increase productivity and success is to express interest on the shop floor, make oneself visible for informal visits and also to invite complaint and ideas, this seems to cut through the complex management structures and communication prospers.

Richard Branson holds a relationship to Mintzberg’s (1973) theory of management styles but is less clear-cut. Branson could be described as possessing interpersonal, informational and decisional qualities. The Virgin founder is an open, honest manager who makes himself publicly visible as a figurehead and leader (interpersonal), but also delegate’s responsibility and workload. Branson leads by example; as he is aware of his limitations as a manager, therefore employ individuals whose skills can compensate for the skills and experience he lacks. In doing so, the business attains highly qualified experts who can bring new ideas and expertise into the company, maintaining the highest quality service and production. Branson is also an ‘informational’ leader has he can successfully monitor the present business environment and make relevant changes to meet the requirements of existing and fledgling markets, in doing so Virgin and Richard Branson can stay one step ahead of its competitors.

Fiedler’s ‘contingency theory’ stated that that you can’t change your style, but time and time again it is evident that Virgin move from strength to strength, penetrating markets and can (contrary to Fiedler’s belief) modify or change within an ‘alien’ situation and make the best of that situation.

As a leader Richard Branson is tough and overt, he is a visible and open manager with strong morals and values. This successful leader is as approachable as he is wealthy and he bestows confidence and in his employees. They know that they can speak to their manager, have their thoughts heard and not face any backlash from speaking out. Virgin employees can also play an active part in the direction Virgin enterprises takes. During the mid 1990’s a Virgin flight attendant approached her employer and suggested that a Virgin cosmetics brand would be a ‘sound’ direction for Virgin to move in, her boss responded by saying ‘Go and do it’ Branson offered her all available expertise and resources, and today ‘Virgin Vie’ cosmetics is a well established and respected cosmetics firm.

In marked contrast Robert Maxwell portrays very different approaches to employee involvement in the company. Maxwell takes charge of all departments of Mirror Group Limited, dealing with expansion, financial matters and moving money around the organisation. Maxwell performs his managerial roles covertly, with only a selected number of easily corrupted and obedient employees by his side. Maxwell successfully buys the silence and loyalty of his close associates on projects and deals that essentially are against morality and ethical principles. His employees did not have freedom of speech as speaking out against Maxwell often resulted in dismissal or being reprimanded. The Mirror boss used intimidation, bullying and humiliation as a means of keeping his employees from speaking out. The company could have been described as having ‘glass ceilings’ in that although employees could see higher positions etc. they could never be reached as Maxwell decided whom would best keep his secrets and employ them into executive positions.

Richard Branson aims to empower his employees, which involves giving them more ‘autonomy, discretion and unsupervised decision making responsibility’ (1999 Buchanan: pg273). He believes the employees are the backbone of the company, he states ‘Successful management of employees is paramount to successfully managing the company’ (Losing My Virginity).

Motivational tools were used by the two esteemed managers, but in extremely dissimilar ways. Maxwell offered some employees a flattering salary to over look certain movements made by their boss, whereas Richard Branson, seemingly following Ritchie and Martin’s (1999) ‘motivational drivers’ theory, in that Virgin receive tangible/monetary rewards, recognition of work and achievement, well formed relationships and self satisfaction. These methods ensure employees have goals and targets to strive towards. The balance struck within Branson’s enterprises is second to none; employees have opportunity to express themselves, progress within a company and to try obtaining new skills and training. Frederick Herzberg (1966; 1968) identified these processes as ‘Job enrichment’ a term meaning an employee could broaden their experience, have their needs provided for and motivation to encourage employees to keep on achieving and determined to further themselves. Although Herzberg’s theory was developed a number of decades ago, his theory and conceptualisation of motivation at work are still used in global organisation’s today, evidenced in the running of Virgin.

Robert Maxwell’s actions as a manager were not effectively obtaining maximum output from his employee’s, but Maxwell like Henry Ford before him, de-humanised the working environment. Both well-respected managers did not believe in job satisfaction, they implemented schemes and plans they believed to be suitable and without any discussion set out to make these plans possible, despite the evident ethical issues of treating employees in such a way.

Maslow's hierarchy of needs

Richard Branson’s styles and techniques as the leader of Virgin can be viewed favourably in accordance to theorist Maslow, who developed motivational theory naming it ‘Hierarchy of needs’ decades ago. ‘Do unto others, as you would like done to yourself’ is a key philosophy of Richard Branson’s and his concept of employee needs reflects such philosophy. Maslow developed a multi tier pyramid that describes, in order of importance the needs of the employee, creating an understanding of the factors affecting productivity.

Branson’s attempt to create one large Virgin family, providing safe working conditions and a comfortable environment satisfies the first three tiers of Maslow’s pyramid. The employees feel they belong to a greater whole, they are safe and they are in sound and comfortable working buildings. Virgin’s employees are some of the most envied in the UK, employees are given responsibility for tasks, decisions and resources, giving them authority, demanding respect of others and creating a great sense of self worth. With reference to the latter tier, Virgin employees are told to suggest and contribute any ideas to their manager who is willing to listen, they are given autonomy and powers to make a positive difference to the company in doing so employees are given opportunity to express themselves more freely and to innovate new ideas, fulfilling levels four and five of Maslow’s model.

Regrettably, it could only be said that Mirror Group Limited provided a safe, comfortable working environment. The control of Robert Maxwell meant employee potential went unnoticed and respect from management was minimal.

Barnard identified ‘Decision making’ and ‘delegation’ as two key elements of management. He believes that a successful organisation has these two as main company techniques. Later writers, such as Herbert Simon advocated the two techniques as ‘core’ principles of management and are essential for corporate prosperity. Robert Maxwell however, the self confessed self-educated social mogul, did not accept any management theory and proceeded to use his own methods of getting things done regardless of the consequences. He can not be said to comply with Simon’s core principles, he is an irrational and selfish man, he does believe in decision making but only he can make the decisions.

With reference to Barnard’s (1938) theory, Maxwell did possess authoritarian and decision making powers, but he kept all the power to himself, he could not be forced to adopt contemporary, rational methods of management. Richard Branson could if he wished, personally decide on what ‘course’ Virgin Enterprises takes, but he generously allows a high degree of employee involvement in decision making, and encourages employees to provide unbiased, constructive criticism and feedback as an effective way for Virgin to evolve and progress, a concept deemed essential by Herbert Simon.

Theorists past and present suggest managerial techniques and strategies, which increase employee motivation, aiding company progression. Solely close reading of a handbook and analysis of all management theory does not create good managers, Branson acknowledges this in his autobiography as quoted earlier.

Branson seems to adopt similar principles to Victor Vroom and Philip Yetton, Mintzberg and Herzberg but these similarities are not an indication of a managers’ style.

As Peter Drucker, (The Practice Of Management 1995) pointed out…. ‘Management by objectives’ is the only effective way of delegating authority in a large company. He believes that the most successful way to manage a company to meeting its needs is to have goals/targets that have been decided upon collectively after discussion and should be decided upon and implemented by all segments of hierarchal echelons of the company.

It should not be assumed that Peter Drucker and Richard Branson advocate a ‘Laissez Faire’ approach to Management; the pair do not believe a lack of management input and a free reign is a sufficient strategy. They both believe greater integration on all levels proves most effective.

Ethics are another element that distinguishes Maxwell and Branson. Branson’s largely a moral figure that is not seen as exploiting others and performs all strategy and decisions legitimately. Profit is not obtained to the cost of the employee. Unfortunately the same cannot be said of Maxwell, his actions before his death in 1991 were in contradiction of all ethical and moral values. Maxwell was ruthless, dishonest and deliberately deceptive, he took money from his employees pension fund in order to finance extrovert and lavish lifestyle as well as funding new ventures. By his death he had took over £400million from his employees, leaving many in doubt over their financial future.

The diverse management styles go far beyond theory; it appears evident that Maxwell lacks compassion and guilt, whereas Richard Branson is well endowed with compassion and morality and behaves in a way that does not make him morally or legally culpable.

Notably Branson and Maxwell have been extremely good managers and leaders, placing themselves in the very heart of the corporations for very different reasons. The analysis of two greater leaders has been an interesting insight into the involvement and role of a manager within a company. The choice of Branson and Maxwell has provided a well-balanced formula for this assignment, clearly there are ways to and not to manage, although they can still prove successful a more humanistic approach provides the most efficient and rewarding outcomes.

It must also be noted that Branson and Maxwell created both Virgin and Mirror Group Limited identities over a number of decades, their techniques no matter how diverse have developed empowerment and obedience from employees, and has ‘keyed’ into the very heart of employee fulfilment to produce a highly productive and efficient workforce. Maxwell and Branson over the years have produced workforces envied by the world and has created similar factions around the world using western management techniques.