Literature Review and Report
Richard Branson, Virgin Group
Table of Contents
3.2Relay Succession Planning6
Assuring effective succession is considered an issue in all kinds of firms (Miller, 1993; and Reingenum, 1985). The purpose of this report is to discuss that a lack of Chief Executive Officer (CEO) succession planning could be a potential threat to the future efficiency and effectiveness of the Virgin Group, and other businesses who posses’ similar qualities. This report also proposes recommendations, and critically evaluates these proposals, in order to assist businesses globally with the issue of CEO succession planning. A good succession plan is critical to the future of a business; it enables a smooth transition and alleviates the likelihood of disruption to operations. This report will argue that by incorporating succession planning as part of the organisational planning process a business will have the ability to achieve goals and enable the smooth transition of an incoming successor without disruption to operations. 2.0– Problem Identification
Richard Branson is rare among business leaders; he possesses a unique, personal leadership and entrepreneurial business style that which has been determined as the reason the Virgin Group has been so successful. However, in possessing a bold, risk-taking management style it is inevitable that one day Richard Branson will no longer assume the position of CEO, and failing to have an evident succession planning processes in place, it could be argued that Richard Branson and similar CEO’s globally are risking the future of their companies.
There are concerns within businesses globally that they could not continue to maintain operations at the existing standard without their current CEO, as on their exit CEO’s take with them the very thing that made the business special in the first place, their unique leadership style. However, groups must seek to build the brand beyond the personality of their current CEO’s and subsequently consider succession planning as research indicated that CEO succession appears to have an important influence on the way an organization evolves (Miller, 1993).
Although the case study does not identify that the Virgin Group do not have a CEO succession plan in place, it does mention that Richard Branson has only created a team of people that, together with him, are doing the tough job or running the company (Robbins, Bergman, Stagg, & Coulter, 2009). There is no mention of a sole successor who will be responsible for the entire Virgin Group on Richard Branson’s inevitable exit. It is critical that businesses have succession planning in place because there is growing evidence that proves that the supply of CEOs who possess the skill to manage large firms is limited (Himmelberg & Hubbard, 2000).
3.0– Critical Analysis
It is apparent that the Virgin Group has a necessity to undertake critical CEO succession planning in an attempt to ensure that once Richard Branson leaves the Virgin Group the company will continue to profit and operations continue on smoothly. The first proposal to the Virgin Group is to consider the Management by Objectives (MBO) method in the establishment of goals and objectives for succession plans; this method is successful in directing and guiding all business activities and decisions (Latham, 2004). Secondly, an additional method proposed to the Virgin Group is the uptake of a relay succession process in the establishment of a CEO succession plan for the company, which will assist in ensuring the successor is ready to uptake the position of CEO, Virgin Group....