Virgin Group
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INTRODUCTION
In the light to the given case, if virgin money take over the RBS branches, it will need to go under a major changes concerning the various stakeholders interests. Before reaching at any conclusion it is very important to look at both the organizations from various perspectives.
Virgin Money
Virgin Money is a UK based bank and financial services company which is owned by Virgin Group and was established in March 19995. Its original name was Virgin Direct. In 2010 the company received the banking license all the way through the acquisition of Church House Trust and is planning to expand in this sector. The main motive of a company is to provide customer satisfaction by providing wide variety of products, making investment easy etc (McCulloch, 2012).
Royal Bank of Scotland
The RBS is one of the retail banking subsidiaries of Royal Bank of Scotland Group plc, which together with NatWest, provides branch banking facilities in UK.RBS has around 700 branches most of them are in Scotland.
The RBS along with Clydesdale Bank and Bank of Scotland still prints its own Bank notes. The UK Government owns a stake of 82% over RBS, but it still remains independent of government. The total group assets of RBS are £1,415 billion (as of June 30, 2012). Net loss: US$ 2.6 billion (2010).
Case Brief
The UK taxpayers may never recover the £66bn which was spent by the government to aid RBS and Lloyds Banking Group at the period of financial crises, a parliamentary committee has warned. The government buys 40% of Lloyds and 82% of RBS in 2008, when the bank was at the risk of subside. Santander UK was primarily anticipated to pay £1.65bn for the branches, which RBS must put on the market because of European Commission Diktat distressing banks which were bailed out in Financial crisis. But the UK limb of the Spanish bank pulled out earlier this month, citing president delays and qualms above IT problems. Virgin Money was approached by RBS and was welcomed for expansion opportunities though Sir Richard (founder of Virgin) had dampened the opportunity of procurement in this case (Wallace, n.d).
ANALYSIS
The Possible Resource Constraints: Resources are the very important part of any organization to establish or to run the existing business. The key resources required by a business are: –
Manpower: – It is one of the main important resources required for any business. Human Resource is the assets of the company. In this case the Human Resource available in RBS is not sufficient in number and are not that much skilled as required by virgin according to its working environment and technology used.
Machine: – It is another possible resource required for an organization to function. The technologies used by Virgin are quite different from that of RBS. It involves the technology and way of working in an organization. It uses updated technologies to accomplish its organizational goal effectively and efficiently.
Capital: – the financial condition of Virgin money is quite strong as compared to RBS. Virgin has acquired Northern Rock plc and added to his existing capital and new shareholders. The RBS financial resources is pathetic, this is one of the most important reason why it is selling its 316 branches in UK.
Management: – The management is another important resource of any organization. In the Virgin money the top management sets overall goal and the lower level management strives to achieve these goals. The management of all the activities in an organization is important for overall development and working of the organization (Pennsylvania state university, 2005).
The Organizations Cultures:
Organization Culture of RBS
Culture is the set of important understandings that members of a community share in common. The organization culture involves: –
Control culture: – In it the senior manager plays an important role to lead an organization. The main aim is to keep everyone under the control and united.
Performance culture: – In it work of individual is assessed with that of organization and strives for the effectiveness of the company.
Relationship culture: – In it the teamwork and open communication is taken into consideration. It defines the relationship of superior and subordinate, superior and superior, subordinate and subordinate.
Responsive culture: – It values the ability to coordinate with external environment, by becoming more competitive and analyzing the opportunities (Alvesson, 2002).
Organizational Culture of Virgin Group
The culture of Virgin group is quite complex one. It maintains a good and very high loyalty level in various industries. This is one of the causes that company is at high level of success in various business ventures. The managers in it use the concept of innovation and invite its employees in decision or contributing to the company at all levels, so that it leads to overall efficiency of the company. The virgin is able to create a style of management that encourages employees to be competitive.
There is a difference between the Leadership and Management within the Virgin. The leadership which is transformational arises from top management and the executives in the company. The top management sets the overall goals of company to achieve. The top management plans the strategies and controls the complete working environment.
The lower level management inclines to give stress on the management side of the company i.e. the operation work or the implementation part of the goals set by the top management. Lower level management performs the task to accomplish the overall goal of the organization. Each and every management function differs in different sections of the company. Managers sets the goals, but the management distributes its work according to the specialization in their field and giving optimum and efficient results in achieving those set goals.
Organizations Stakeholders Who Will Oppose Any Change Proposals and the reason for the same are: Stakeholders are the one who have interest in an organization or project. Stakeholder is a one who gets affected, or can affect organization, strategy or project. Some of them in light of the case are:
Employees: – The Company engages its staff by directly communicating them, the staff engagement surveys, employee road shows, and the team meetings n it, which may be new to the employees of RBS and may resist change because of these new technologies and methods.
Guests: – the company is engaged