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BUS 5002: Business Concepts

Module 2 Worksheet: Types of Organizational Structures

101365 – Odunayo Edward Olowe (MBA)

Assignment Instructions

For your graded assignment, read the Case Study: Organizational Structure and Culture of
Virgin Group. Then, complete the following outline:

I.Business Overview
II.Discuss how decisions are made (Centralization vs Decentralization)
III.Draw the Organizational Structure of the Business
IV.Synthesis

You will create a Word document with the four sections above and complete it in full for the
case study. We expect that each section consists of 1-2 paragraphs of at least 5 sentences each.
Please label each section with the correct title so we can identify which section you are
answering.

Please refer to the rubric prior to submitting your assignment to assess the quality of your
assignment in comparison to what is expected.
ARM | Classification: INTERNAL USE
BUS 5002: Business Concepts
Module 2 Worksheet: Types of Organizational Structures

I. Business Overview
Organisation: The Virgin Group
Telephone, retail, music, financial services, travel and leisure, health and
Industries:
wellness, technology
Presence: North America, UIAsia, Africa and Australia.
Started: 1970
Track Record: Established more than 300 companies
Staff size: Around 50000 in 30 countries
Global Revenue: >US$ 18 billion (FY 2009)
Founder & CEO: Richard Branson
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BUS 5002: Business Concepts
Module 2 Worksheet: Types of Organizational Structures

II. How Decisions are Made (Centralization vs Decentralization)

Virgin Group is an organization driven by information and informality. They practice a

decentralized framework that gives employees the flexibility to make decisions, and not follow
normal conventional methods.

Due to the organizational culture promoted by the founder, and because of the bottom-heavy
structure, decision-making is faster, taking responsibility is higher, accountability is largely
encouraged, and bureaucracy is reduced.

The structure also provides an overall flexibility that allows the brand to adjust quickly to changes
in the business environment, and thus stay competitive.

Decentralization can also be observed in the realization that the 300 companies are managed
separately with the founder serving as a shareholder and chairman. Speaking to his position on
decentralization, one of his popular quotes is:

“Surround yourself with people that are smarter than you, give them everything they need to grow,
and your business will thrive.” - Richard Branson

https://www.virgin.com/virgin-companies
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BUS 5002: Business Concepts
Module 2 Worksheet: Types of Organizational Structures

III. Organizational Structure of Virgin Group

The case study reveals that the Virgin Group has a very complex structure, popularly known as
keiretsu framework. A keiretsu is several organizations, each of which owns shares in the other
organizations in the group, and all of which work together to help expand the group's interests.
(Jones, Mills, Weatherbee, & Mills, 2006)

Virgin operates a flat hierarchical structure permitting active decision-making, exhibiting some
complex mixture of departmentalization e.g., across customers, services, products, and
geographical locations. A case in point is Virgin Mobile which operates in countries like the United
Kingdom, Australia, and India, providing different forms of services.

Most of these companies operate as separate functional organizations, owning their property, and
workforce, and providing distinctive goods and services. Furthermore, the Virgin Companies,
unlike the hierarchy arrangement, are considered part of a family group empowered to perform
their own affairs yet get help from the sister companies.

Employees are empowered to make decisions, thus giving them a huge dose of self-confidence,
and initiative to grow the business into new ventures.
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BUS 5002: Business Concepts
Module 2 Worksheet: Types of Organizational Structures

IV. Synthesis

The Management style and culture has been responsible for the thriving of this fun and profitable
brand. The CEO has a set of five criteria incorporated into every joint venture and business at the
start. Every product must meet the following conditions:

1) It must be of high quality.

2) It must be innovative.
3) It must provide good value for the money.
4) It must be challenging to existing alternatives.
5) It must have a sense of fun.

https://www.strategy-business.com/article/13416

The measure of success of the Virgin Group is creating businesses with an unorthodox style or
practice, that has highly motivated and proud staff, with a positive impact on consumers, and the
environment.