Organization and Environment
Client’s Needs and External Environment
According to the data available from the interview, the Tarmac is a brand that aims at adopting innovation in the construction industry. However, the structure of the business described by Emma Hines involves a diverse range of specialists in different fields, some of which are only marginally connected to each other. In addition, the construction business as a whole is relatively traditional and, as a result, does not allow for an effortless upgrade. It is also worth mentioning that numerous aspects of construction and building materials production processes rely significantly on equipment.
This fact adds another barrier in the form of significant expenses to the process of updating a business. Therefore, it would be reasonable to conclude that the client needs to facilitate a consistent and steady change process across the multiple facets of the company that would overcome the internal as well as external resistance.
In order to better understand the factors that influence the process of change, it is necessary to first analyze the external environment. One of the techniques that are suitable for such assessment is PESTLE – the tool that gives a comprehensive overview of the most relevant factors that drive the principles of operation within the industry (Kelly 2009). The following segment provides the key factors in the environment by category.
The most significant impact from the political domain is the ongoing withdrawal of the UK from the European Union. According to the expert opinion, two outcomes can be associated with the event. First, the cease of free movement between the UK and other European countries will likely diminish the available labor force. Currently, both the volume (roughly 10 percent of jobs in the country) and the diversity of skilled and non-skilled roles in the industry are successfully met by the freedom of movement of labor (Wilson et al. n.d.).
Second, a significant portion of the multitude of resources necessary for the construction process is supplied by the members of the Union, which means that after the withdrawal, a significant shortage might be observed. The latter is especially relevant for the companies aiming at sustainable building design due to the specific requirements of the components and materials.
The current economic climate is relatively unfavorable. Specifically, the effects of the recession of the late 1990s are still observable in the industry and impact the decisions of the financial institutions involved. Most prominently, the majority of entities responsible for investment are still reluctant to provide funding for the construction projects, which inhibits the development of the industry (Economy Committee 2013). The innovative projects are especially susceptible to the factor since their potential is countered by the uncertainty and the lack of proof.
The expected annual decrease in the cost of rent by one percent introduces an important social factor (Hanna 2015). Despite its evident benefits for tenants, it can result in the decline of demand for new housing projects and, by extension, compromise the company’s profitability.
The technological advancements have a two-pronged effect on the segment. First, the introduction of smart technologies offers new possibilities for the company in terms of safety, efficiency, and sustainability. Second, it raises expectations of the stakeholders and thus puts additional pressure on the players that fail to keep up the pace of change (Chaffe 2016).
From a legal standpoint, the situation in the construction industry is uneven. On the one hand, the current changes in legislature aim at a transparent and less complicated process of obtaining a permit and complying with the requirements. On the other hand, reports indicate a persistently high level of Corruption in the industry (CIOB 2013a). Such discrepancy obfuscates the legal procedures and undermines the flexibility of operations.
The recent development of environmental regulations has created a setting where sustainability and energy-efficiency are favored and supported, making the goals of Tarmac easily aligned with the direction taken by the policymakers (CIOB 2013b). Therefore, the environmental aspect can be considered the least concerning the client’s needs.
Organization and its Internal Environment
According to the information on the company’s website, Tarmac’s vision is to become the provider of choice in the solutions for sustainable construction (Tarmac n.d.). In other words, the company aims at becoming a leader of the sustainable construction segment. Some of the values reflect this goal, such as the commitment to consistently deliver value to the customers and the determination to exceed the set goals (Tarmac n.d.).
Other values are internally-oriented, such as the priority of health and safety, as well as striving towards flexibility and timeliness. The values also indicate the principles of the team-oriented workplace culture and the reliance on trust and respect within the company. While the website does not specify the methods of communication, the statements made by Emma Hines in the interview suggest that it is established via a variety of IT-based means including social media and a proprietary online hub.
Therefore, it would be reasonable to assert that the strategic leadership styles used in the organization are participative in nature. Such style involves the input of the employees and peers while the responsibility for the final decision resting on the participative leader. The emphasis on communication also suggests the use of transformational leadership. However, it would be necessary to confirm the presence of the delegation process to confirm this allegation.
Tarmac possesses many advantages. It operates in more than fifty countries and is one of the world’s leaders in the cement industry. It has a strong supply chain, which makes its operation effective. However, the main strength of the company is its innovative approach. Particularly, Tarmac has done significant innovations in the sphere of construction and made landmark monuments in such countries as South Korea, Greece, and so on.
As far as the weaknesses are concerned, only two of them are significant. First, Tarmac faces strong competition, which means that it is market share growth is limited. Second, instances of alleged violations and legal cases took place in the company, which spoils the brand name (Tarmac n.d.).
Regarding the opportunities, the acquisition of other smaller companies would make the brand stronger. Moreover, the company can benefit from targeting the customer base of one of its competitors. Additionally, strategic advertising and marketing would help increase credibility and brand recall further.
Concerning the threats, the most conspicuous of them is the potential challenges of post-merger operations. One more threat is the increase in the costs of operations along with the strong competition (Tarmac n.d.).
Analysis and Recommendations to the Organization
Analysis of Findings
Considering the information compiled in the previous section, it would be reasonable to conclude that the external environment is challenging rather than supportive for the construction companies aiming at innovation and sustainability. Two of the factors whose influence can be considered positive are environmental and technological areas. Both domains display strong alignment with the company’s outlined goals and can be potentially used to gain a competitive advantage later in the course of development.
However, they can also create the risk of pressure in the short term in the case where Tarmac fails to demonstrate the ability to innovate. Four other factors are generally unfavorable for the direction taken by the company. Specifically, the reluctance of the financial organizations to invest in unproven technologies and approaches will severely limit the availability of options for the company, whereas the obscurity of the legal landscape will discourage the participation of innovation-oriented partners.
Finally, the political and social changes in the country are expected to introduce additional challenges in the form of limited labor and physical resources, as well as the decreased demand for buildings. As can be seen, the PESTLE analysis is appropriate for this type of analysis since it provides essential information from the most relevant areas. While it does not allow to determine the relative weight of each factor, such approximation is acceptable considering the strategic scope of the task at hand as well as a relatively long time frame (Kelly 2009). The long-term perspective of the goals adopted by the management, as well as the encompassing approach necessary for its implementation, makes it possible to downplay minor details in favor of eventual excellence.
Another important conclusion is the alignment of the company’s internal strategic leadership styles with the identified needs. The orientation towards the reliable two-way communication between the employees and the management is the most significant indicator of the possibility to successfully implement change. The construction industry is a domain with strong hierarchical structures required due to its complexity and diversity of the involved entities.
Therefore, it would be unreasonable to expect fully democratic decision-making to occur. Nevertheless, the ability of the employees to participate in the transformation can have a positive effect both on the process and on its perceived outcomes. In its current state, the well-established communication channels can be considered an asset that can contribute to the seamless transition towards sustainability of operations and the resulting products.
Finally, it is worth pointing out that the company acknowledges the participation of important stakeholders. The most prominent example is community involvement. The company is strongly oriented towards collaboration with people impacted by the projects through the transparency of the information and the incorporation of feedback in the decision-making process. The intention to minimize the negative impact while at the same time ensure the presence of benefits for the local communities is consistent with the concept of sustainability and energy-efficiency as well as affordability of housing and its alignment with the needs of society as a whole.
Based on this information, it is possible to conclude that the stakeholders that need to be involved in the construction of the future cities are the construction companies, the entities that provide related auxiliary services (possible partners), the local community, the activist groups, and organizations with relevant goals and missions, the state and local policymakers, the suppliers of resources and equipment, and the potential employees.
By extension, the management and leadership of these entities can be approached using a participative principle. Such an approach would allow negotiating the most favorable outcome for all parties, formulating the acceptable strategies, and outlining the mutually agreeable objectives (Johnson et al. 2017). In addition, it can rely upon the available communication network possessed by the company and adjust it to incorporate the increased number of parties, thus employing the communication proficiencies of the management.
Recommendations
Based on the findings from the analysis, several recommendations can be formulated. Due to the encompassing nature of the goals of sustainable construction as well as the number of entities involved, most of the recommendations will be long-term. The most apparent goal is thus the realignment of all components of the company towards the sustainability principles. More specifically, in addition to the building process, several related activities, such as transportation, natural resource management, land restoration, and environmental research, need to be updated in order to align with the sustainability. Another important area that needs to be addressed is the availability of labor force and materials.
As was mentioned in the previous section, it is possible to expect the decline in the supply of both following the changes in the political segment. Therefore, it would be necessary to evaluate the possible implications of the phenomenon for the company and secure the steady income of the workforce and resources.
The latter can be achieved through proactive outreach towards the potentially untapped market segments and establishing the communication channels with the potential partners, which is possible through several short-term milestones. Finally, the financial side of the issue should be tackled by seeking the investors oriented towards innovation and long-term benefits rather than the immediately apparent profits. This recommendation is also achievable through the communication of the vision and values to the right audience.
On the basis of the SWOT analysis of Tarmac, the primary recommendation for the company would be to focus on its strength, particularly on the further development of innovative methods in the construction industry. Additionally, it is important for the company to consider the possibility of acquisition of smaller companies to develop a stronger brand.
At this point, the distinction should be provided between strategic management and leadership. Since there is no single definition of either, and both concepts incorporate a broad range of meanings, the most common and relevant characteristics of both will be outlined. Strategic management is a subset of management that operates the skills and resources of the organization with the overall direction in mind (Langford & Male 2008).
It utilizes overall goals rather than short-term objectives and keeps the focus on long-term revenues. In this regard, leadership can be considered a method of successful strategic management that shares the vision among the employees and ensures internal commitment and a unified direction. However, unlike management, which can be passive in some settings, leadership is an active process. Finally, leadership is not restricted to strategic goals and can target short-term objectives.
Implementation
The broad scope of the recommended change makes it possible to adopt several strategies that rely on the participative principle. However, taking into consideration the available proficiencies and the corporate culture, it is reasonable to suggest a strategy based on Kotter’s eight-step model. Such a strategy would have two advantages. First, it would allow utilizing the communication resources already available within the company. Second, several steps necessary for the implementation of the strategy are at least partially completed.
For instance, Emma Hines explicitly states in her interview that the construction industry as a whole is fairly conservative and is thus not ready to embrace the principles of sustainability. It is, therefore, likely that such awareness is common to all company employees, which eliminates the need for the creation of urgency (the first step). The second step – the formation of a coalition – is at least partially achieved, considering the prioritization of teamwork in the company’s values.
While it does not necessarily involve the inclusion of community, it is possible to expect the collaboration on their part as the principles of green construction are attractive for the consumers and will be readily adopted once appropriately communicated, and the established presence on social media networks makes it possible to facilitate the required level of communication. Once this is achieved, the next step would be to create a vision that is attractive to all involved stakeholders.
Such a vision needs to be based on values that are relevant for the community and the potential partners as well as the organization. After this, the vision should be communicated to the audience, a step that would require increased media presence. In this way, the public awareness of the issues pertaining to sustainable construction could be enhanced, and, as a result, a broader commitment would be reached.
The next step would involve the elimination of obstacles (in this case – the financial, resource, and labor restrictions) and would necessitate specific strategies and quantifiable performance indicators, such as the volumes of the funds secured by approaching new investors and the number of new partners ready to collaborate. Some of these indicators can be used to create short-term wins – the feasible outcomes reachable in the short term. For instance, reaching out to new partners can be achieved relatively easily, conveys a strong sense of unity with the outlined goals and values, and can serve as a confirmation of the viability of the selected direction.
At this step, it is also important to conceive the potential benefits of succeeding with the objective and allocating resources to incentivize the team members responsible for the success. This element would improve the motivation of the involved stakeholders, persuade the critics of the change process, and, by extension, reduce the likely resistance to change within the organization. In addition, once reported, the completion of such objectives can improve the company’s public image and convince more organizations in the feasibility of the vision. Additionally, as it was mentioned above, the company should start from the acquisition of smaller companies specialized in the sphere of construction in order to strengthen the brand name and introduce new technologies that would help improve its business.
As was mentioned above, sustainability and energy-efficiency in the construction industry are only attainable in the long run. Therefore, the ultimate success of the proposed change can only be confirmed after a consecutive streak of accomplishments. Thus, the next step would be working towards continuous improvement using a suitable philosophy such as kaizen. This step is evidently strategic in nature and would thus require further breakdown into smaller objectives to keep track of the achievements and help communicate the sense of progression to the participants. It is important to understand that the broad nature of the formulated goals will make it possible to misinterpret a number of small-scale achievements as a confirmation of the ultimate success.
To avoid this, it would be necessary to assess the overall effect of each of the objectives on the implementation of sustainable operations and thus estimate the degree of meeting the final goal. Finally, due to the fact that sustainable construction is a concept that is still in its early stage of development, it would be reasonable to expect the emergence of other needs requiring adaptation later in the course of its life cycle. Therefore, the ability of the organization to facilitate change can also become an important asset and should be preserved through the step of incorporating the experience into the corporate culture. In this way, the company will retain the necessary level of flexibility and would require fewer resources for facilitating change in the future.
Aside from the possible emergence of unforeseen requirements, it is reasonable to expect other changes in direction. For instance, it is possible that at some point, the newly introduced regulations will render some of the values irrelevant. In this scenario, the strategy would require adjustments in steps three, five, and six. Simply put, the adopted vision would be revised, the components incompatible with new conditions would be adjusted, and the new vision would be delivered to the stakeholders along with the rationale for change. While such a move will likely raise concerns from some of the involved parties, it will provide the opportunity to maintain the momentum of change without the need for major allocation of resources.
The communication of vision in the process will be primarily within the leaders’ responsibility. There are several reasons for this. First, the leaders are directly involved with the employees through communication, resolution of issues, and management. Second, the leaders’ task to resolve conflicts within the organization generally puts them in a position of trust and serves as an additional advantage in the process of passing the information. Third, leaders have access to multiple modes of communication, are usually proficient in their effective utilization, and familiar with the audience of each media platform.
The combination of these factors, as well as the fact that leaders usually have access to employees on different levels, including one-on-one conversations, suggest the necessity to assign leadership the primary role in communicating the vision pertinent to the recommendations at hand.
Reference List
Chaffe, P 2016, How technology is changing the construction industry. Web.
CIOB 2013a, Corruption in the UK construction industry. Web.
CIOB 2013b, Environmental legislation and incentives in the UK. Web.
Economy Committee 2013, Challenges facing the construction industry in London. Web.
Hanna K 2015, ‘Will Osborne’s social housing rent rises for high-earners discourage work?‘, The Guardian. Web.
Johnson, G, Whittington, R, Scholes, R, Angwin, D & Regner, P 2017, Exploring strategy: text and cases, 11th edn., Pearson Education Limited, Edinburgh.
Kelly, P 2009, International business and management, Cengage Learning EMEA, Hampshire.
Langford, D & Male, S 2008, Strategic management in construction, John Wiley & Sons, Hoboken.
Tarmac n.d., Our company. Web.
Wilson, R, Hill, A, O’Donovan, J, Wood, J, Ainscough, M & Slowikowska, M n.d., How could Brexit affect the UK’s construction industry. Web.