Richard Branson set up the first Virgin music store in 1971 and is well known for his entrepreneurial approach. The Virgin group now includes many different organisations, such as an airline, a train company and a mobile phone business. To what extent will the performance of a business such as Virgin inevitably decline after the retirement of its founder? Justify your answer with reference to Virgin and/or other organisations that you know. [40 marks]

A founder is an entrepreneur who starts a business. If multiple entrepreneurs were involved in the creation of the company, they are referred to as the founders. Founders provide the vision that takes the business forward. They take difficult decisions and bring about the difficult change. Retiring leaders or leaders that pass away can have a huge impact on the performance of a business in both negative and positive ways. For example when Wal-Mart’s leader passed away the business completely transformed into decline but after the Steve Jobs’ death the company has continued to prosper.

Firstly, it can be argued that business performance can inevitably decline after their founder leaves. This is evident in Wal-Mart’s case. Wal-Mart lost a figurehead to the business when Sam Walton, the folksy co-founder of Wal-Mart Stores, died in 1992. Mr. Walton turned the business into one of the planets largest retailers with his almost religious devotion to retailing which spawned a unique culture. However after the founders’ death sales growth has slowed and there are fewer spots to build new stores, Wal-Mart in the past decade has shifted away from "every day low prices" toward more sales gimmicks, and embarked on expensive store remodeling that raised costs. Wal-Mart is now trying to reverse an unprecedented nine consecutive quarters of sales declines at U.S. stores open at least a year by returning to ideas Mr. Walton