Internal Analysis of Tarmac Construction Company

Strategic management and leadership are two basic components of an organization to gain competitive advantages and manage the human resources properly. Strategic management allows an organization to bring the resources and utilize the resources (Moutinho and Vargas-Sanchez 2018). However, manpower, financial marketing, capital and organizational functions are the major components of an organization to meet the organizational goals. On the other hand, leadership plays an important role in strategic management. The main aim of a leader is to bring different groups together. By using the effective communication the leaders are able to manage the people in an organization (Baumgartner and Rauter 2017). This study deals with the stakeholder management and leadership in the context of Tarmac Construction Company.

Tarmac is a CRH company that manufactures and supplies building materials to construction industry. This organization is situated in UK.  However, they have 6900 employees and 27bn Euro turnover. This organization is sustainable in UK construction industry. They offer asphalt, concrete cement, aggregates, ready-mix and other building products (Tarmac.com 2018). Their vision is to be the leading global materials company. Their products are used in various types of construction projects include office, new homes, school, roads, bridge, hospital and flood defenses. To gain sustainability and to build future cities are the major objectives of Tarmac. Their materials are environmentally friendly, which ensures the sustainability of the future cities. Tarmac also provides contracting services besides the building materials. Emma Hines is the senior manager of Tarmac sustainable team. However, Tarmac has 150 years experience and it has the ability to adapt the changes in the global market. This organization keeps a strong track and record of the changing nature of the market. The major strength of this organization is their employees.

In order to carry out the internal analysis of an organization Mckinsey’s 7S model is an effective tool. The first component of this model is the strategy. For an organization, it is important to adopt a competitive strategy to sustain in the global market (Hsu 2014). Tarmac Construction Company carries out a proper market research to understand changing trend of the market. They keep a record of every data to ensure the current position of the market. They focus on feedback survey of the employees to get new ideas for their business. This helps them to gain competitive advantages. On the other hand, they use an effective communication strategy to gather feedback from their employees by using Google community, social media communication, and monthly talking session. However, their sustainable strategy focuses on the development of green building in future cities.

External Analysis of Tarmac Construction Company

Structure of the organization is another component of this model.  Structure of the organization is a basic element to gain success in a global market (Mitchell et al. 2015). Tarmac has a rigid organizational structure with strong human resources. Therefore, they have a high investment in UK construction industry, which ensures their financial stability. Apart from this one of the major drawbacks of this organization is the lack of changes in the existing infrastructure. Shared values focus on the sharing of a core value of the organization. Tarmac shares their business value with their employees and also take feedback from them. Their monthly talking session is a useful aspect to create awareness among the employees about the organizational value. Style of leadership is another internal factor of an organization (Jansson et al. 2017). Tarmac focuses on transformational leadership. However, in Tarmac training is provided to the line managers and other managers. This formal training and development process is known as leadership academy. Both internally and externally session are taken with the universities to improve the leadership. However, all the senior managers and line managers involve in this leadership academy process to learn how to deal with the changes and how to communicate with people. Therefore, this session allows the leader to give instruction to the employee to report them properly. Staff is the basic element of an organization. Tarmac has 7,000 employees, which is the big strength of this organization (Tarmac.com 2018). Skill is another internal factor of an organization. However, in Tarmac the staffs have good technical skill.

External analysis of an industry can be done by using PESTEL strategic tool. Tarmac is situated in UK. Hence, the political factor of UK focuses the stable political environment of UK. UK follows parliamentary system and UK government provides opportunity to the investors to expand their business in this country (Dey 2016). Tarmac can expand their business in UK due to its stable and fair political condition. However, hidden corruption is one of the major drawbacks of UK, which may hamper the construction business. Tarmac may face issues due to hidden corruption while expanding their construction business in various locations of UK. Economic condition of UK is good and they have 5^th highest GDP in global market. However, this strong economy is good for Tarmac to invest more in UK market and it leads them to follow circular economy and resource efficiency technique.  On the other hand, economic recession in 2008 and 2009 left a great impact on UK business industry. In the context of Tarmac it has been seen there was no change in the construction industry for last 50 years. This is a big challenge for this organization to bring change and get sustainable development. However, implementation of change includes financial risk, which may hamper the profit of Tarmac. Social factor of UK focuses on high standard of living. This is a big opportunity for Tarmac to develop their business as high living standard leads the people to buy quality home for them. It has been received that 64 largest cities in UK is made up of 9% of landmass. High living standard of people influences the construction industry to enhance their business (Wolf and Floyd 2017). Technological factor highlights that UK is technology oriented country and there are huge numbers of skilled employees. By using this opportunity Tarmac is able to bring change in their internal structure. They focus on digital transformation. They have used modern data through internet, technical devices and social media to improve their business operation. The legal factors include Anti-Slavery Commission and Immigration Act. Large numbers of immigrant workers are present in construction industry in UK (Sun et al. 2014). Thus, it is essential for an organization to keep human rights in their business. In order to carry out the business in UK Tarmac should focus on those Acts as non-compliance with the legal requirement may force the business to change their operation. Environmental factor refers to the environmental sustainability. Tarmac is construction industry thus; they need to reduce their impact from environment. They aim to develop green building and resource efficient building to achieve environmentally friendly business.

Leadership and Communication in Tarmac Construction Company

Leadership is and communications are two crucial elements of an organization to achieve sustainable growth (Sukcharoensin 2017). In the context of Tarmac it has been received that Tarmac follows transformational leadership to cope up with the new changes in construction industry. The top management and line managers are involved in training and development program by following leadership academy session. This enables the leaders to manage the changes in their organization and guide the employees in a proper way. They follow an effective communication process by using Google Community, feedback survey, monthly talking session and social media. This helps such organization to connect the people globally and promote their business. Tarmac organizational culture includes Zero harm culture. They focus on the promotion of health and safety of the wellbeing in their organization. They target continuous improvement process. Their business value includes providing service to the customers through a right way. Their innovative solution delivers the infrastructure to grow the economy of the country besides creating a sustainable environment. Therefore, the employees of Tarmac should comply with the Anti-Bribery, Anti-corruption and Anti-Fraud policy. These are the major code of ethics of such organization. However, the position of Tarmac is in question mark position as per the BGC matrix. Their market share is low along with high market growth. It has been found that 64 cities of UK are made up from 9% of the land. Therefore, 60% of GDP comes from this share. It highlights that market share is low in the context of Tarmac (Tarmac.com 2018).

The major strength of McKinney’s 7s model is the evaluation of internal strength and weakness of an organization (Albers et al. 2016). However, such model enables Tarmac to identify their internal strength and weakness. This will help this organization to evaluate the possibilities of their success. One of the major limitations of this model is the ignorance of external environment (Lasserre 2017). This model only focuses on the internal environment and cannot explain the organizational effectiveness. On the other hand, PESTEL is used as the strategic management tool for the analysis of the external environment. This tool helps an organization to reduce the impacts of potential threats from their organization. Therefore, this will allow the Tarmac to develop their strategic thinking by evaluating the impacts of external factors. This process is a time-consuming process, which is the major weakness of this tool. On the other hand, often the business owners are restricted to collect external information during their business operation. On the other hand, the client needs from Tarmac is the innovative and modern quality service. They need to provide quality materials for construction to their client.

Strengths and Limitations of McKinsey’s 7S model and PESTEL strategic tool

From the above analysis, it has been found that external and internal environmental analysis is crucial for an organization to understand their strategic position (Miles and Van Clieaf 2017). In the context of Tarmac, it has been found from the internal analysis that employees are their major strength. On the other hand, lack of changes in their organizational structure is a big loophole of such organization. From the external environmental analysis, it has been received that stable political, economic and emerging technology are the major external factors that influence the business operation Tarmac. On the other hand, hidden corruption and impact of economic recession are the major barriers to Tarmac operation. Tarmac needs to address the change management issue and risk associated with external factors. Change of thought process is a big barrier of this organization that needs to be addressed. They need to identify the possible consequences that may take place during the implementation of new changes in their organization.

 In order to deal with the impact of economic recession, Tarmac needs to manage their resources especially the financial resources. They need to set a strategic budgeting plan to reduce the impact of high operation cost. However, according to the external analysis economic recession in UK left a big negative impact on the business industry, which cannot be covered yet. This results in the rising cost of construction materials. Strategic budgeting will help Tarmac to gain long-term improvement in their strategic position by reducing the high cost of raw materials.

Bringing changes in the organizational structure and operation process is necessary for Tarmac as they are considered as the sunset organization for last few years due to lack of changes in the organizational process. On the other hand, changes include high risk. Hence, it will be helpful for Tarmac to involve their employees in change management as this will allow the employees to cope up with changing an environment. For this purpose, adoption of participative leadership will be beneficial for Tarmac as this leadership style will influence the employees to take part in organizational decision making by providing dignity and respect.

Hidden corruption is one of the major political consequences in UK. However, construction industry is associated with various projects at various locations. Thus, they need a green signal from political parties. This often leads them to face corruption. Hence, by following the Anti-corruption law will be helpful for this organization to reduce this challenge for their business.

Financial management is crucial for an organization. However, to manage the financial resources Tarmac needs to review the income and expenses. They need to establish a budget plan to cut the cost. In order to make a strategic budget plan, it is important to set a clear goal regarding the expenses (Mwenda and Wachira 2015). In order to carry out, strategic budgeting Tarmac can follow laissez-faire leadership strategy as this leadership focuses on the economic environment. This leader provides a specific task to the employees based on their capability.

Tarmac needs to calculate their expenses and income including the tax rate. This should be done before creating a budget plan as based on this calculation the budget will be made. Hence, for the strategic management, it is important to link the budget objective directly to the business objectives (Simsek et al. 2015). Therefore, the strategic initiatives should be funded in the budget. Periodic forecast needs to be taken to create a proper budget plan in the context of Tarmac. However, rolling forecast and periodic forecast are the vital areas of strategic management in an organization, which are carried out to set a budget plan. In order to involve the employees in the decision-making process, an organization needs to focus on its leadership style (Palladan et al. 2016). However, participative leadership style or strategy will be helpful for Tarmac to carry out the new changes in an organization. However, Tarmac needs to know the changing trend and the resources that are required to manage this change. However, employee resistance towards the change is a big barrier to managing change in an organization. Hence, participative leadership reduces the employee resistance in Tarmac by involving the employees in the decision-making process.

According to the House’s path-goal theory, leaders play an important role by clarifying the organizational goal to the employees and by reducing obstacle of their performance. However, the perception of the employees is influenced by the leader (Hill et al. 2014). Hence, by following this theory the participative leaders are able to share the organizational goal and to understand employee perception regarding a change. This theory allows the leader to understand the perception of the employees regarding any organizational decision by collecting feedback from them. As a result, the employees take part in the organizational decision-making process. In order to bring change in an organization communicating the vision with the stakeholders is crucial for an organization. This can be done by using talking session and feedback survey for the stakeholders. However, such communication strategies will help Tarmac to reveal the importance of change in front of their stakeholders. However, involvement if the stakeholders by using participative leadership will be helpful to reduce the risk associated with change management.

The main aim of participative leadership is to encourage the employees in organizational change management process. For this reason, the leader needs to build a good relationship with the employees (Pearlson et al. 2016). However, by using open theory participative leaders are able to evaluate the patterns of the workplace and to communicate the vision and mission of the organization. This theory also helps to control the budget of Tarmac. Participative leader can focus on recognition and reward process to influence the employees to accept new changes. The leaders can use formal recognition process for the employees to involve them in organizational change management process by executing their decision. On the other hand, the leader can empower the employees, which also encourage them to take part in the organizational decision-making process. Employee empowerment is a big leadership strategy to involve them decision-making process. By using such employee empowerment process participative leaders can assess the viewpoints of the employees regarding the organizational change. This will allow the employees to give their opinion and obstacle regarding the new changes. Such method gives an opportunity to the leader to change the employee’s perspective and to motivate toward the change.

Implementation of anti-discrimination law needs development of bureaucratic leadership style (Elmes and Barry 2017). However, such type of leadership allows the employees to maintain organizational rules and policy. It is important for Tarmac stakeholders to make a fair business, which needs completely corruption free business. Therefore, to implement this act the bureaucratic leader needs to define the law first. In the next step identification of the need for this act should be done. Hence, bureaucratic leaders need to communicate with the employees regarding the significance of this policy. Next, monitoring process needs to carry out to evaluate the effectiveness of this Act in the context of Tarmac.

The entire study highlights the leadership and strategic management process of Tarmac Construction Company. It has been found that their leadership and strategic management focus on the development program and establishment of effective communication. However, there is no change in the construction industry for last 50 years. On the other hand, Tarmac has started to bring internal changes in their organization. However, any organizational change includes risk, which needs to mitigate by the organization. On the other hand, external challenges include the impact of economic recession and hidden corruption in UK. In order deal with these challenges, Tarmac needs to implement participative leadership style, strategic budgeting, and anti-corruption law in their organization.

Self-reflection is a process through which an individual can express their own viewpoints and learning outcomes. By using Gibbs reflective model an individual is able to reveal their self-reflection (Potter 2015). This model includes 6 stages. Description, feeling, evaluation, analysis, conclusion and action planning are the major elements of Gibbs’ reflective cycle. As a management student, I have attained a workshop in a retail corporate sector. However, this sector wanted to expand their business in UK market. For this reason, current external market analysis and organizational strength and weakness analysis have been done. From this analysis, it has been found that changing consumer demand was the major social factor that may hamper the profit of the business. On the other hand, lack of employee engagement was another internal weakness of such organization. Therefore, I felt that such external and internal challenges may affect the expansion of the business of such organization if necessary actions would not be taken. Based on the leaning and knowledge of this current module I have evaluated that review of the internal and external environmental factors is essential for an organization. This learning helped me to find out the external and internal challenges of this organization where I was an intern.

On the other hand, I have made a sense that internal improvement is necessary for this organization to deal with the external and internal challenges. From the above module, I have gained knowledge that for an organization internal strength that is the employee strength is mandatory to deal with external challenges. To deal with this situation I have tried to communicate with the employees effectively and influence them to make a collaborative work to enhance the strength of this organization. However, if such situation will occur in future then I would like to empower the employees. For this purpose, I will give them equal respect and value, which will increase their confidence and influence them to share ideas to reduce the impact of external factors on business.

Figure 1: Gibbs’ Reflective Model

(Source: Potter 2015)

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