As Robert J.
Mockler (1968, as sited in Johnson, 1976) mentioned, managerial control can be demarcated as the role of a system that adjusts operations as needed to achieve the plan or to “maintain alterations from system objectives within allowable limits”. The degree to which the manager’s control interacts with the operations depends on the nature of the organization and its objectives. Controlling keeps an organization stable, giving it the ability to maintain a pattern of output without wide fluctuations.
The control’s rapidity pertains to the speed with which a manager can correct variations and return to expected output.There are three approaches to control systems: being market control, bureaucratic control and clan control. Market control utilizes external market mechanisms, like economic and political factors etc, in order to set-up control standards. A manager’s bureaucratic control on the other hand depends on rules, regulations, policies and procedures, where as the clan control approach allows for the organization’s culture to control employee behaviour and general operations (Robbins et al., 2009, p.
697).Richard Branson used a clan approach when it came to controlling Virgin Atlantic. As he did not know the market, he let Virgin’s clan culture regulate the employee behaviour rather than being there himself. He thought, just like the rest of his companies, that it would just “run itself with just a little push like a mother bird pushing its baby out of the nest” (Branson, 2006, p. 463). This may have been the wrong choice as the airline was still a new company and did not know its competition like British Airways and birds do not always fly the first time that they are pushed.
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A bureaucratic approach to control should have been used at the time; continuously regulating the operations of the company, setting policies and procedures to follow, and monitoring the financial performance. This is mainly due to the fact that an airline is far more demanding to control than the typical music label and cannot be allowed to run freely. This way Branson may have kept the company close nipped and prevented it from losing track, or he could have noticed problems and resolved them then and there.With reference to the financial performance of the airline, a market approach should have been utilized by Branson as there is a considerable amount of price and market competition in the airline business stream like American Airways, Singapore Airline and of course their biggest competition being British Airways. He should have been focussed at making profits in the initiation of the airline, rather than just trying to be different, just to provide a stable foundation for the brand.
Once that was done, then Sir Richard Branson could have utilized his more typical and unique clan culture in the management process to maintain his competitive edge.a. Measuring Actual Performance As illustrated in figure 2 above, to implement this more ethical bureaucratic approach in operations and market approach in finance, a process is required. The manager should measure Virgin Atlantics’ performance with statistical, oral, and written reports together with his own personal observations (Robbins et al, 2009, p. 700). This is where a bureaucratic and even market approach to management and control is beneficial.If Branson used statistical reports for Virgin Atlantic it would have been simple to illustrate and visualize where the airline is having problems – in this case they were unethically selling tickets far above the market price, and had many delays and late arrivals in plane flights, resulting in very few sales and massive losses (Branson, Victory, 2006, p. 463) – and it would have been effective at exemplifying relationships against his competition and even the different functions (marketing, finance, operations, sales, etc).
Branson could have also employed his remarkable human skills in personally acquiring oral reports of his airline. Through this channel, he could have retrieved information very rapidly; catching the problem before it worsens. This way he could also have gotten verbal and non-verbal feedback from his employees and even his customers to understand where the exact problems lie and how people want them to be fixed.Even written reports, which are not even Branson’s forte as he is dyslexic (Branson, 2006, p. 45), could have been used. As explained by Robbins et al (2009, p.
700) they are very formal, comprehensive and easy to file and retrieve. They also make the company seem more ethical and provide a paper-trail that makes the organization seem above-board. This way Richard Branson could have hired people who are good at reading these reports and make decisions based on these detailed descriptions.Going back to his excellent human skills, the best way that he could have measured his company’s performance would have been through using personal observations by attaining firsthand knowledge and unfiltered information from the people who actually make up Virgin Atlantic. He could have implemented himself into its operations – like he used to when he was running his small record label by himself – and acquired detailed and intense coverage of the working activities and been able to understand all the problems that were taking place.Comparing Actual Performance Against Standard Branson should have then used the information attained from measuring the performance to set a standard for his airline to meet (acquired from other airlines etc) and then compare its actual performance to this standard. Once looking for market standards, Branson should have established an “acceptable range of variation” (Robbins et al, 2009, p.
701) ranged between lower and upper limits that the airline should perform within in each function of the organization. Once these unique standards are in place, it must be seen if the airline over or under performs within these standardsTaking Managerial Action After that, he must finally take managerial action to try and correct Virgin Atlantic’s poor performance in areas that it performed below the set standard. In this case this would have been in the sale of tickets and the poor arrival and departure times. If Branson understood these problems, he could have lowered the prices to the industrial norms and revamped the areas that made his airline run on continuous delays.This way the operations of Virgin Atlantic would have performed more ethically and cared about the welfare of their customers. Sales would have increased and he may never have needed to sell his record company and retrench all those employees. After this, Branson should revise the standards.
If the company still could not meet them, he should lower the standards slightly and if the airline did meet them he should raise the goals in order to push his company even further and then later re-implement his clan culture into the airline to inkeep with the uniqueness of the Virgin brand and improve customer relations.Through following this procedure, he may have managed the company far better together with the valuable assets. His customers would have felt more valued and rewarded the airline with their customer loyalty. Worst of all as mentioned earlier in the report, his entire Virgin brand suffered as it lost much of its reputation because of his airline (Branson, 2006, p. 461). If these procedures were followed, the impact of the airline on his organization may have been beneficial to the brand’s reputation.
Measures and Tools for Controlling Virgin Atlantics’ Performance There are many ways in which Sir Richard Branson can control Virgin Atlantic. He could have looked at the productivity of his airline, together with its industry rankings against its competition, and even the effectiveness of its operations to control its performance (Robbins et al, 2009, pp. 707-709). The types of control tools like feedforward controls (input), concurrent controls (process) and feedback controls (output) can be used for controlling Branson’s Virgin Airlines.An input control that can be utilized are policies and procedures “to guide behaviours” within the organization. Policies help ensure that behaviours in the workplace conform to the laws that an airline must follow, and also to expectations of his organization. Policies are often applied to specified situations in the form of procedures.
Personnel policies and procedures help ensure that employee rules are followed and minimize the “likelihood of costly litigation.” A procedure is a step-by-step list of activities required to conduct a certain task. Procedures ensure that routine tasks of Virgin Atlantic are carried out in an effective and efficient fashion (McNamara, 2008). These feedforward controls are implemented to anticipate problems and prevent them from occurring, but rely on the process and output controls to ensure they are followed.A process type of control like delegation is a tool to get things done, in concurrence with other employees. This is where Branson probably failed in his control function as a manager as he did not delegate the correct jobs to the right people who would fix in occurring problems.
Delegation is often viewed as a major means of influence and therefore is categorized as an activity in leading (rather than controlling/coordinating).Delegation generally includes assigning responsibility to an employee to complete a task, granting the employee sufficient authority to gain the resources to do the task and letting the employee decide how that task will be carried out. Typically, the person assigning the task shares accountability with the employee for ensuring the task is completed (McNamara, 2008).
This is a form of concurrent control that can correct problems as they occur by delegating people to do so. If this is done correctly, then maybe the other ways and tools of control would have fallen into place.Lastly, to complete the control process, a feedback control is needed at the output of the airlines performance.
Evaluation is a great tool that Branson can utilize. It can be used for carefully collecting and analyzing information in order to make decisions. There are many types of evaluations in organizations, for example, evaluation of marketing efforts, evaluation of employee performance, program evaluations, etc.
Evaluations can focus on many aspects of an organization and its processes, for example, its goals, processes, outcomes, etc (McNamara, 2008). This should be used by Branson to keep is entity on track in all functions of its performance.At the base of his controls, he should implement traditional financial controls to keep track of the airlines exact cash flows and debt control. Once the organization has establish goals and associated strategies (or ways to reach the goals), funds are set aside for the resources and labour to the accomplish goals and tasks. As the money is spent, statements are changed to reflect what was spent, how it was spent and what it obtained.
Review of financial statements is one of the more common methods to monitor the progress of programs and plans. Financial audits must be conducted regularly to ensure that financial management practices follow generally accepted standards, as well (McNamara, 2008). This way he can keep the company operating profitably until the position has stabilized. Once he has become used to this market, his clan approach can be re-engaged and maintain its unique Virgin appeal.
ConclusionIt is evident that the managerial functions of planning and controlling can lead Richard Branson’s enterprise in a forward direction for ethical success. The two problems that occurred in the organization were discussed. Ethical planning and controlling functions are the best methods to fixing or preventing such situations from occurring in the future, but still allowing Virgin to maintain their social responsibility and have this system improved at the same time. The rational decision making process is the most important process that Richard Branson should use in the planning for future situations within the airline. All he should do with controlling is following the control process as mention in the report to ensure that his airline never faces the financial problems that occurred in 1992.
