Celebrity Crisis Management 101

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"If you made a big mistake, you got to come out and just be contrite, be honest, and just tell the public `I was wrong`."
Tiger Woods (2007)

The fall of Tiger Woods, the world`s most highest paid athlete, is a classic example of bad crisis management. His many affairs have dominated the headlines since the scandal first broke in November 2009, when he crashed his car and refused to talk to the investigating police, clearly admitting he had something to hide from the public. But silence isn`t golden in all cases, particularly when it comes to crisis management. In every crisis, there comes a moment where you have two choices: Either come out of the closet and honestly answer all questions the media asks, or letting your lawyers and spin doctors deal with it, hoping you can control the crisis until the public interest dies down - the latter being almost certainly doomed to failure.
Tiger Woods clearly chose door no. 2. While his countless mistresses - sniffing the chance of 15 minutes of fame - were more than happy to talk to the media, Tiger remained silent and watched his career rapidly falling apart. Sponsors like AT&T, Gilette and Accenture turned away from him and the glossies milked the scandal with relish, as more and more details were revealed. By not commenting, Tiger gave them material for months instead of ending it with a comprehensive statement. John Eckel, CEO of Alliance, a sports and entertainment marketing company, says: "There are two courts - a legal court and the court of public opinion, and they ignored the court of public opinion. He has been in free fall with his endorsements and had he gotten out in front, some of that may have been preventable." Tiger has let his crisis manage him, instead of the other way around.

Earlier in 2009, US late night king David Letterman found himself in a very similar scandal, but chose a whole different way of managing it. TV host who has been with his wife for over 20 years, admitted that he had sexual relationships with female employees, after one of them tried to extort $ 2 million from him over the affairs. He reacted quickly and acknowledged the affairs live on his show, before the media even had a chance to report on it. Therefore he was able to take control of the scandal and totally stole the media`s thunder. Watch his monologue here:



He approached the topic in a comical way and unlike Tiger, he managed to maintain his reputation and he didn`t lose any of his major advertisers, which include Toyota Lexus and Direct TV Group Inc. He later apologizes to his wife and his staff on the show as well. A couple of weeks later, he even found himself in a position to make fun of Tiger Wood`s scandal ("Stop calling me for advise") - that`s how quickly he was forgiven, just by telling the public the truth right away.

So after a couple of months, Tiger Woods finally got some good advise and held a press conference where he admitted his affairs and apologized to his family, his sponsors and the public. But it was too little too late. Tiger`s reputation is deeply damaged and the echo of this scandal will now follow his career for a long time.

So what do we learn from this in terms of crisis management? 3 simple rules:
  • Don`t wait. The media will find its way to get to information, and rumours will start to shape the story. Even worse, you lose control of the coverage.
  • Don`t run from the truth. When Tiger first addressed the issue, he described "many false, unfounded and malicious rumors circulating about my family and me". He tried to play the scandal down and left the impression that the allegations weren`t true - but they were.
  • Don`t hide. Tiger stopped making public appearances since the scandal broke, he hid from cameras and later moved to a rehab clinic. The only human faces on the story where the many women who claimed they had sex with him. It took him a long time until he finally decided to appear in front of a camera for his press conference.
Those three simple rules form the keystones of every crisis management practice. It`s all about transparancy, honesty and speed - no matter if the crisis is about celebrities, CEOs or corporations. They are all brands and the same rules apply to them.




Bibliography:
Dezenhall, E. & Weber, J. (2007): Damage Control. Why everything you know about Crisis Management is wrong. New York: Portfolio Trade.

Celebrity Social Responsibility

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"With so many Hollywood actors, British rock stars and American talk show hosts beating a path to Africa - building schools, visiting refugee children, raising awareness on AIDS and the fighting in Darfur - it`s a wonder the entertainment industry can still function."
Scott Baldauf

In recent years celebrities have taken an active interest in world politics, donating significant sums of money, adopting children from developing countries, visiting refugee camps - the number of activities is endless. Some, like U2 singer Bono, have become well-recognized global activists. In 2006, Time Magazine declared him their "person of the year" for having "persuaded the world´s leaders to take on global poverty".
Celebrity involvement in politics is not a new phenomenon, just think of Bob Dylan or John Lennon´s songs in the 1960s. Then, in the 1980s projects like Bob Geldof`s LiveAid or Michael Jackson`s USA for Africa we
re brought into being in order to raise awareness for the suffering in third world countries.
But what really drives celebrity activism for global issues? Is it all good will and conscience or are they - much like corporations - merely window dressing?

We probably have to distinguish between two types of celebrities. The ones who really care and have a genuine interest and the ones who do it solely for reasons of self-promotion.

First of all, celebrity philanthropy can really make a difference. The United Nations have been actively approaching celebrities to become spokespeople of the organization, since Kofi Annan became Secretary General. On their website they say:
"Fame has some clear benefits in certain roles (...). Celebrities attract attention, so they are in a position to focus the world`s eye on the needs of children, both in their own countries by visiting field projects and emergency programmes abroad. They can make direct representations to those with the power to effect change. They ca use their talents and fame to fundraise and advocate for children and support UNICEF`s mision to ensure every child´s right to health, education, equality and protection."
The UN confirms that the use of celebrities has proved particularly effective both in raising awareness and in fundraising for the organization`s agencies.
Many NGOs, such as Oxfam rely heavily on celebrity ambassadors, since they reach people in a way an organization can`t.
So it is definitely the right thing to do. If you are an opinion leader and if you have the power to convince people to change their behaviour or simply to listen, then you should use it. There`s nothing wrong about it. There`s also no question that social causes do a great deal for the brand identity of the stars and the sponsors who embrace them.

But it seems like this has been taken to a new level. Nowadays, every celebrity has to attempt to save the world, even if they have no interest in doing so. They do it in order to remain celebrities. Howard Bragman, author of "Where`s my fifteen minutes?" says:
"You`ve got to have something for People magazine to shoot you at. You can`t just get $20 million a picture, you`ve got to serve turkey to the poor, too."


We live in a world were fame cannot be retained without continuous publicity. Celebrity activism is used to create positive press coverage and distract the public attention from past scandals (again, much like corporations use CSR). Angelina Jolie, once known as a drug abusive bad girl, totally repositioned herself through her work as a UN ambassador.
And then there´s the ones who just jump on the bandwagon. Madonna learned the hard way how fake commitment can backfire. Her adoption of a Malawian baby with procedures of dubious legality was a lesson learned for other celebrities. Lots of celebrities commit themselves to environmental issues without really knowing what they`re doing. This includes the story of Paul McCartney, who was given a hybrid car from Lexus. The car was specially flown in from Japan, therefore creating several hundred times more emission than it could ever save.

So some celebrities have an official capacity like the UN, some do it out of good will and some just for the publicity - but does it matter, as long as it works?
There is some serious criticism on celebrity activism. Some commentators, especially in Europe not only consider celebrity philanthropy non-genuine but criticize them for doing damage to Africa and other third world countries. In the Guardian, Nathalie Rothschild accuses Bono and the Live8 campaign for "perpetuating the undignified stereotype of Africans as poor, helpless and hapless. It was a campaign, not for global equality and modern development, but for miserably low aspirations." Celebrities are often accused of naivety, they tend to describe things in simplistic terms of good versus evil and black versus white.

In general, there`s nothing wrong about celebrities working for a good cause. Not matter what their true agenda is, they raise awareness, money and might eventually help the world to become a better place. But for the sake of their own reputation they should follow the same basic rules that apply to corporations when participating in CSR: be honest, be genuine and if you don´t care about the cause it might be better not to do it at all.

British comedian Sascha Baron Cohen addressed the issue in his movie Brüno, where the main character desperately tries to become famous and eventually records this charity song with Elton John, Bono, Sting and others:


Bibliography:

CSR: Business for a greater good?

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"There is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits."
Milton Friedman, Nobel-prize winning economist

The concept of Corporate Social Responsibility describes the relationship between business and the larger society. While some argue that business exists to serve the greater community as well as direct beneficiaries of the company`s operations and that it`s a business`obligation to use its resources in ways that benefit society, others say that business shouldn`t do anything but increasing profits - by legal means. When Henry Ford first tried to invest some of his profit in implementing his social plans in 1919, he actually got sued by his shareholders and was forced to pay them a dividend instead.

Today companies can buy, invest, produce and sell anywhere on the planet. But with globalization came the global players that learned to take advantage of it by exploiting the third world and therefore maximizing their profit. But they weren`t willing to take social responsiblity for the places they operate in and the gap between rich and poor grew. The consequences were environmental damage and the disregard of human rights in developing countries. That`s when NGOs came to life, naming and shaming some of the world`s biggest companies` racketeering - Shell, Nestle and Nike, just to name a few.

When companies realized how much their reputation actually suffered from that, they decided to take the bull by the horns and established the concept of CSR. Thus they were able to restore their image and release the pressure built up by NGOs and governments - because there is another reason why companies seam so eager to help the world: through globalization, national companies turned into transnational conglomerats and therefore went beyond the national scope - national economical regulations wouldn`t apply anymore. On a global level, there simply were no employment or environmental laws, no trade practice rules or a standardized fiscal system. And since companies benefit from that lack of regulations, they used CSR to keep governments and supranational organizations from setting some up. They basically regulated themselves before they were regulated and therefore managed to keep a certain leeway.
That`s were terms like "window dressing" and "green washing" come in. Businesses pretend to care about their environment because they are expected to, when really, most of them never go through with it. They set up funds, print green labels on their products or give money to charities, but what are they really doing? The gas company BP invested $200 million in solar energy, but at the same time they spent $8.5 billion on exploring new oilfields in environmentally sensitive areas. A local water project, supported by Shell, failed because the water tower they built was never actually connected to the water supply mains. If you make your profits out of nuclear power, don`t act like you care for the environment.
Banerjee (2007) concludes: "All the theories and concepts of CSR and corporate citizenship suffer from a fundamental limitation: the absence of a clear political and legal framework for coordinating citizenship rights and responsibilities."

In my opinion, real Corporate Social Responsibility is not about pretending to save the world. It`s about honestly engaging in some simple groundrules, like producing safe goods, securing jobs and paying socially acceptable wages. If a company just sticks to that, it would really make a difference. The practice of CSR is usually regarded as a PR function, because it`s where the organization meets the public outside of the usual stakeholders (mainly producers and customers). So PR practitioners can use CSR as just another element in the creation/engineering of public opinion, to make an organization look good and polish its reputation - or they could realise the idea that PR can actually act in the public interest (like Grunig (1989) suggested) by making genuine attempts to discover the requirements of stakeholders and help companies to be more responsive to social needs.


Bibliography:
Banerjee, S. (2007): Corporate Social Responsibility - The Good, the Bad and the Ugly. Cheltenham: Edward Elgar Publishing.
Theaker, A. (2001): The Public Relations Handbook. New York: Routledge.
Snider, J., Hill, R. & Martin, D. (2003): Corporate Social Responsibilty in the 21st Century: A Vire from the World`s Most Successful Firms. Journal of Business Ethics 48/2003.

Think global, act local? Not anymore.

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In "International Public Relations in Practice" Angela Heylin (1991) says: "Cultural, regulatory, financial media and government relations all vary from one country to the next and public relations practice has to adapt to these local needs and conditions." She`s one of the many supporters of the popular guideline "Think global, act local". But that was 20 years ago, and today, fewer organizations have a totally domestic perspective, even when they aren`t operating outside of their own national borders. That`s because the issues that are concerning people often have a relevance around the world. That is particularly applicable when it comes to European countries which share similar beliefs and agendas, and are stronger connected than ever before. In my opinion, thinking global without actually implementing an international strategy isn`t enough anymore, especially when it comes to corporate communications.
















When you think of global PR disasters, most case studies focus on big culture clashs, like Pepsodent Toothpaste (who advertised white teeth in Southeast Asia, when actually Natives found black teeth more attractive) or Ford who launched the "Pinto" in Brazil (not knowing that it translated to "small male genitals"). Cross cultural differences can make or break a PR campaign. This is especially important for big international conglomerats who communicate globally. However, international PR disasters don`t always evolve from cultural missunderstanding, but also when PR is badly planned and the international perspective is left out. That was the case when Shell UK planned to dump the redundant oil storage plattform Brent Spar in the North Sea in 1995. Shell had followed all British and international laws, but wasn`t considering the geography that gave neighbouring countries a stake in the decision. Greenpeace on the other hand, was well organized on an international level and was therefore able to seriously harm Shell. Greenpeace managed to trigger antagonism to Shell in Germany, which considered the North Sea a "German Sea". It ended up getting huge media coverage and Shell gas stations were boycotted, later some were even fire-bombed.
First, the media attention in Germany was only limited to the northern (costal) areas, but since Greenpeace activists occupied the Brent Spar for three weeks the media coverage exploded and celebrities, politicians and even the church took part in the discussion. Germany, Denmark, the Netherlands, Iceland and Norway got involved in the discussion, because they all felt concerned about the North Sea area and somehow responsible for it. In Germany, the issue got very political, politicians of the Green Party pressured Chancellor Helmut Kohl to stop the dumping process - in fact, he begged British PM John Major to withdraw the dumping permit.

But the real disaster was that German Shell barely got any informaton from Shell UK to begin with. And when the scandal began, they had no idea what was going on, because no one had felt the need to inform them. When the crisis emerged, a fast reaction was crucial. But Shell UK hadn`t thought about translating any of their reports or material into other languages. So Shell Germany had to hand out English leaflets at gas stations in order to inform customers about their point of view. They completely failed to gain the European public`s support because their thinking was limited to a local angle. Greenpeace, on the other hand, was well prepared and provided information for citizens of every involved country. Shell`s sales dropped by 30% in Germany. Intracompany warfare ensued between Shell UK and Shell Germany. Shell UK had made a huge mistake by not taking its European neighbours into account.

Shell eventually gave in and stopped the dumping process. Since then, they have learnt their lesson. They came up with an extensive and global Corporate Identity program intended to highlight their commitment to sustainable development and promote a positive image in the 140 countries in which they operate. Shell started to implement a communication strategy based on the principles of dialogue and transparency and therefore was able to regain most of its old reputation.

This example shows how important international consultation is when it comes to PR. Europe is growing together and the internet makes it even easier to tear down the walls between nations. Since we`re on our way to become one European nation, there is no "local" anymore.

Bibliography:
Nally, M. (1991): International Public Relations in Practice. London: Kogan Page Limited.
Morley, M. (2002): How to manage your global reputation. London: Palgrave.

Same, same, but different: Cultural Dimensions.

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"Diversity may be the hardest thing for a society to live with, and perhaps the most dangerous thing for a society to live without."
William Sloane Coffin, Jr.

The Dutch cultural psychologist and sociologist Geert Hofstede connects culture with a "mental software": culture is the "collective programming of mind, that differentiates members of one group or one category of humans of another." Every human has a "mental programming" which he`s been tought since he was born. The source of this programming is our social surrounding, where we grow up and collect our life experiences. Most of it is acquired during early childhood. Hofstede refers to one of the most extensive empirical studies about cultural differences ever conducted. In 1968 and 1972 he interviewed 116.000 IBM employees in 53 countries. The results showed common problems in different countries, however the solutions differed from country to country. These could be summarized in what Hofstede calls "Cultural Dimensions". They are a good instrument to win a group-related "cultural overview". Here are the 5 dimensions:
  • Low vs. high power distance: This dimension measures how much the less powerful members of organizations expect and accept that power is distributed unequally.
  • Collectivism vs. individualism: This dimension measures how much members of a culture define themselces apart from their group memberships.
  • Masculinity vs. femininity: This dimension measures the value placed on traditionally male (i.e. competitiveness, ambition) or female (i.e. relationships, quality of life) values.
  • Low vs. high uncertainty avoidance: This dimension measures how many members of a society attempt to cope with anxiety by minimizing uncertainty. If cultures have a high uncertainty avoidance, people prefer explicit rules rather than flexible guidelines.
  • Long vs. short term orientation: This dimension describes a society`s "time horizon", or the importance attached to the future vs. the past and present. It tries to distinguish the difference in thinking between the East and the West.
Hofstede`s work can be criticized as too trivialized and simplifying. It`s also limited to certain branches and social classes of society and the way his questions were phrased is very "western". This system clearly bears the risk of declaring nations, developing stereotypes and therefore leading to prejudices of certain cultures and people. Thus a crucial factor for the tenability of those dimensions is to apply them in a critical, reflective way. One should always be aware of cultural change and the constraints of Hofstede`s concept.

On his website, Hofstede published the data for every nation he examinde. Here`s what he found out about my homecountry, Germany.


Power distance: Compared to Arab countries, which have a very high power distance, Germany is somewhat in the middle. Like in most other western European countries, the gap between rich and poor is not too big and there`s a broad middle-class. Germans have a strong belief in equality, but also in the opportunity to rise in society.

Individualism: Germany can be considered as a very individualistic country. People stress on personal achievements and individual rights. Group work is important, but everyone has the right to stress his own opinion and is expected to reflect it. That may be related to Eastern Germany being a socialist country for over 40 years. Growing up in a system that strongly oppresses any kind of individualism and stresses collectivism makes people value the right to make their own decissions even more.

Masculinity: Germany is rather masculine than feminin, the index of 66 is exactly as high as the UK`s. Masculine traits include assertiveness, material success, power, strength and individual achievements. I agree with the fact that ambition is a very common German attribute. Also, female values like relationships and family are still decreasing. People turn away from marriage, the average number of children per couple is 1.3.

Uncertainty Avoidance: The German Uncertainty Avoidance Index is rather high. Germans don`t like uncertainty, but they love to make plans and organize in advance in order to avoid it. Germans rely heavily on rules, law and regulations. This relates to the international stereotype of the inflexible, well-organized German who never dares to break a rule.

I`m trying to relate his findings to the other German-speaking countries, Austria and Switzerland. These three cultures, especially Germany and Austria are traditionally perceived as being more or less the same, since they share a common language, history, religion and customs. But the graphics clearly show that there are substantial differences between those countries, althought they appear to be so similar.


For example, the power distance index in Austria is much lower than in Switzerland and Germany, and the masculinity index is a lot higher. According to this, material prosperty is a lot more important than the maintenance of relationships in Austria. People have distinct conceptions of what a man or a woman should be like, interferences are not wanted. The higher power distance index shows that there are lower expectations of equality in Germany and Switzerland than in Austria. Hofstede`s results are making a very important point: We are similar, but not the same.

Bibliography:
Hofstede, G., Hofstede, G. & Minkov, M. (2010): Cultures and Organizations: Software of the Mind. New York: McGraw-Hill.

It`s the network, stupid! Social media in election campaigns.

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"Were it not for the Internet, Barack Obama would not be president. Were it not for the Internet, Barack Obama would not have been the nominee."
Ariana Huffington

Barack Obama`s 2008 election campaign was the first one ever to embrace the power of social media. In fact, his online campaign was seen as a major part of his success. Obama`s election was one in which the world felt involved. He was using a simple bottom up strategy, heavily relying on the millions of small donations he got online instead of getting funded by traditional party elites (like Hillary Clinton). Thus he was able to raise the record sum of $ 270 Million for the campaign. Obama`s team startet building up mailinglists of supporters at a very early stage, lists they could later come back to. They built a database of 3 million mobile numbers by promising that in return, supporters would get campaign news before the media. Obama didn`t use the new media as an addition to his traditional campaign, he made it core. He was particularly relying on social media networks like facebook, myspace, twitter and youtube. Eventually he had over 800.000 followers on facebook (McCain: 130.000) and 13.000 youtube-subscribers (McCain: 5.000). He had and even came up with his own network, mybarackobama.com, using a neighbour-to-neighbour tool, empowering individuals by enabling them to find out where to canvass and encourage voters. This resulted in a whole new level of engagement, volunteer participation and feedback. It made Obama supporters feel like a strong, tight-knit community. He also understood the power of viral videos and brought the element of fun into political campaigning. For example, the "I got a crush on Obama" song has been watched by 16 million people.


Since Obama`s striking campaign, everyone tries to copy it, but not always with good results. During the German general elections in 2009, Chancellor Angela Merkel made a fool out of herself producing a vidcast, where everyone could see how uncomfortable she was. The online activities where planned poorly and not much in advance, thus they completely backfired. Something very similar could happen during the UK elections. Watch this video of Gordon Brown introducing the Liberal`s youtube channel.



He clearly has no idea what he`s talking about and has been fed every word of this announcement. However, Gordon Brown is not the attacker in this election. It`s Tory candidate David Cameron who really needs to mobilize people to vote for him. Social media might be Cameron`s biggest chance to distance himself from Gordon Brown. He`s younger and might therefore be more appealing to young voters, that`s why he needs to approach them where they spend their time - online. Facebook has 23 million British users - half of all eligible voters are social networkers, sharing and seeking recommendations among peers rather than trusting broadcast messages. So far, Tory candidate David Cameron seems pretty comfortable with new media. MyConservatives.com is an example of the Tories using social media to galvanise activists, very similar to the way Obama did. Cameron has also reached out to niche websites such as Mumsnet. The Conservatives need the social web to help create a positive, reassuring buzz around them.

On the other hand, the internet`s hard to control. Especially when it comes to elections, poisonous negative campaigns can downgrade a candidate`s image. When you google David Cameron, one of the first results to appear is mydavidcameron.com, a website that shows nothing but spoofs on a Conservative poster campaign featuring an apparently airbrushed David Cameron. However, candidates need to embrace new media in general, not only the beneficial parts. For believers of the theorie "All PR is good PR", the huge amount of traffic going on on the site may actually be positive for Cameron, because it provides him with extra coverage. In the end, it`s the viral concept, the element of fun, where European politicians can really learn from Obama.
One way or another, social media is the future of political campaigning. It gives politicians the unique opportunity to directly address their voters, truly engage them and get immediate feedback.

Bibliography:
Plouffe, David (2009): The Audacity to Win. The inside story and lessons of Barack Obama`s historic victory. New York: Viking Adult.

Virgin: A corporate branding fairytale.

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"A brand that captures your mind gains behaviour. A brand that captures your heart gains commitment."
Scott Talgo, brand strategist




The webcast above is my presentation for the Corporate Communications module. It shows how Virgin, one of the most highly branded companies in the world, manages its corporate identity.

Virgin is synonymous with its CEO Richard Branson. It`s his charismatic style, his striking personality and his understanding of business that makes the company unique. The Virgin brand is recognized by 96% of UK consumers, it`s associated with fun, innovation, success and trust.

The name and brand logo of "Virgin" can be seen as the Holy Grail of this empire. Althought more than 200 totally different businesses gather under the Virgin name, Virgin has been able to sustain its identity, using a mono brand strategy. Whether it`s airplanes, mobile phones, softdrinks, bridal wear, or fitness centres, the Virgin name is always affixed to it. Therefore, the corporation is able to use different kinds of synergies: Virgin is able to enter new areas of business and new markets very easily because of the existing brand value. Customers trust and accept new Virgin products based on their experience with Virgin in general.
But an even bigger source of synergy is probably the focusing of their marketing efforts. Virgin is able to enjoy the benefits of both smaller enterprizes and large conglomerates without the associated problems of bureaucracy and brand conflict that can often occur in diversified corporations.

But why is Richard Branson so successful in keeping his business together? Virgin focuses on long term loyalty rather than short term profit. Virgin products are known to be of a certain standard, but still affordable.

But even more importantly, Richard Branson understood the value and power of PR. As he mentions in the video, having the media talk about you is much more effective than paid advertisement. Branson himself never fails to create a buzz when it comes to a new product launch. He puts himself out there, and the newspapers are glad they have a quirky story to write about.
That eventually shows how effective PR can be when it`s executed from a management level. Branson totally embraces public relations as a major part of Virgin`s brand strategy, he values it even more than advertisement. His success is, of course, ground-breaking.

The downside of this strategy is obvious: If a brand is as identified with its CEO as Virgin is, its future is uncertain. Richard Branson it not (yet) immortal and without him, an invaluable part of the Virgin identity would be missing. When Steve Jobs, CEO of Apple was rumoured to have cancer in 2008, Apple shares dropped significantly, because the rise of the Apple brand was so strongly connected to his personal efforts. Thus, Richard Branson should probably start thinking of a heir to his empire rather sooner than later and build him (or her) up strategically, so that Virgin can smoothly move on to the next generation.


Bibliography:

Hansen, Flemming & Christensen, Lars (2002): Branding and Advertising. Copenhagen: CBS Press.
Anon. (1998): Behind Branson, The Economist, 21 February 1998, 81-86.