Video Case Study with Emma Hines, Tarmac
Tarmac is UK’s leading sustainable building materials and construction solution company with 150 years’ experience within the industry. Their primary business is producing of aggregates, asphalt, ready-mix, concrete, cement and other building products; however, their activity is wider so they provide contracting services as well. Their products are used in broad range of the construction projects. Tarmac is well established company with almost 7,000 employees which gives them wide diversity within the company. Nevertheless, they were acquired by global construction materials company CRH which led them to the global market. In the last few years, company’s primary focus is on the sustainability of processes and materials by caused of increased awareness of the effects from climate change. Furthermore, they developed and launched sustainable strategy which allowed them to manage the whole life cycle of products in more sustainable and effective way.
• Strategic position of Tarmac
In this section, we will provide strategic position of the company to define strategic choices which need to be made and implemented. To understand its strategic position, it is necessary to use analytical tools and techniques adequate for determination of external environment, strategic capabilities in terms of resources and competences and cultural and ethical values as well as the stakeholder influence.
2.1 External environment
External environment is divided into macro environment for which we will use PEST analysis and industry and sector environment for which Porter’s five force analysis can be used.
2.1.1 PEST analysis – macro environment
In regulations from UK government it is clearly stated that the government pushing companies to provide less expensive houses within public and private sector. From this we can see that political issue can be raised in terms of affordable prices.
As the construction industry in the UK is very large in terms of revenue reproduction and employment, UK government can’t allow to itself to not be emphatic toward the industry.
In the most of housing projects UK government is involved through PEI or private partnerships. This is the key factor to get financing, building and operating for those projects so government have political implications like choosing partners or selecting projects.
As we mentioned before, the construction industry is high profile industry which is constantly under regulations from the government which implicate to delay of projects because of planning permissions.
As we see from the table, construction industry has 103 B pounds turnover in 2014 and it exponential increases, so we can conclude that Tarmac will in the future have even bigger scope.
In last few years there are technological regulations which affect the construction industry, especially buildings. Increased demand for better energy efficiency within the buildings leads to major investments R;D for the Tarmac.
As technological progress constantly increase, demand for faster process of developing buildings and infrastructure is risen. The construction companies need again make investment in new methods of developing to satisfy customers.
PEST analysis is powerful tool; however, external factors are changing over the time and they need constant attention. These factors are based on people perception and assumptions, so they present barrier to the clarity of analysis. PEST analysis sometimes isn’t enough because environment factors also can affect the company.
SWOT analysis of Tarmac
We can see company’s internal and external environment. SWOT analysis can have limitation if preparation for analysis isn’t conduct within the company. Results from analysis in this paper can’t be 100 % credible as data are gathered only from company’s website and video case with Emma Hines. Personally, I have doubts about strengths of the company. After research of the competitors I realized that most of them have long term experience in the industry and big number of employees which mean diversity within the company. They also have financial investments, so I would say that some listed strengths cannot be taken for granted.
• Company’s culture and needs
Tarmac have sustainable strategy that lead the company direction. The strategy defines the main four themes in which the company wants to transform their business: people, planet, performance and solutions and clearly states the vision of the company “To be our customers’ preferred choice for sustainable construction solutions”. Tarmac stated in the “Code of conduct” their position about company’s diversity and relationship with their stakeholders and defined values which need to be followed.
we always put safety and health first
Commitment to our customers:
we commit to delivering value for our customers every day.
Passionate about business:
We are passionate about our business, set ambitious targets and drive to exceed them.
Fast and flexible:
We act with an appropriate balance of speed and rigor.
We are all one team.
Trust and respect:
We extend and earn trust and respect.
From my point of view, Culture within Tarmac is “Role culture” 6, which display certainty and stability and have great strength in terms of continuity. The biggest weakness is adapting to change what is stated in the video case where people within company need time to adopt to culture of bigger company (CRH).
According to the company’s website and video case they take leadership seriously. They have main managing directors for each region and for each department. External associates lead their Leadership academy in which all employees from line managers to senior managers learn how to adopt to new situation, change, and support people. As Warren Bennis and Burt Nanus pointed in their article “Strategies for taking change” – “Managers are people who do things right and leaders are people who do the right thing. The difference may be summarized as activities of vision and judgment – effectiveness versus activities of mastering routines –efficiency”. Emma Hines is leader. Firstly, she has recommendations of lot of people who are mentioning her effectiveness and secondly, her answer in the video case “I am part of team for sustainability” gives more value for mentioned contention. I think company have transformational style of leadership according to their “code of conduct” and how they threat the people within the company. Nevertheless, their leadership style is intellectual stimulation as well as from Emma Hines what can be seen from video case and her background where one of directors said, “she added value to our project” what is usually connected to transformational leadership style 7.
For communication within the company they use emails, social media and online networks for sharing stories and it is very motivating atmosphere where anyone can share their ideas according to the video case. Furthermore, they have feedback services and monthly talking sessions where employees can hear how business is going. For future, they stated employee’s surveys as fundamental method for sharing opinions. External communication is happening through monthly basic newsletter from the CRH company and global network for employees which answers on questions like “who is who and who is doing what in the business?”.
Moreover, company invests in different sustainable projects to be more competitive in the market, however, they have concern about sustainable future cities. Therefore, this paper will have focus to propose the solution for the asked question:
‘What stakeholders will need to be involved in the infrastructure construction of sustainable future cities and how should their leadership and management be approached. How will future cities look like, how will people use that city, how we will operate within it and change and transform our business to be able to provide solutions in that future city module with all factors of growing population, needs of resource etc’.
In this section, recommendations for identified issues need to be set. These recommendations will provide necessary information for determination of strategic choices.
After combining the results from analytic tools, I have developed the following recommendations.
• Affordable housing – Swot analysis shows that Heidelberg company develop cost leadership strategy and PEST analysis shows that UK government pushing companies to provide less expensive housing which lead to conclusion that Tarmac need to use government preferences shown in PEST and focus on providing affordable housing. To develop such strategy changes in leadership style, need to exist. Company need to change approach to their employees with focus to cut cost in every aspect of development process.
• Customised sustainable housing – As government has introduced sustainable strategy and social factors shows that community starting to live green and moreover, R&D research are tax free, Tarmac need to pursue that idea. This idea will give them not only advantage contrary to competition but also it will increase entry barrier for new entrants and increase sympathy from their customers and thus prevent new substitutes to change their products. As this strategy will probably involve communication with elite costumers, company need to change their leadership style in some segments.
• Sustainable future cities – This is also concern of the company. I would recommend to Tarmac to pursue this idea further. As the company is famous brand in the UK, community will surely follow them. As this project will involve a lot of external shareholders they will need become a great leader as a company. Previous recommendation also can use as one direction for future cities and how they will look like in terms of housing. As government encourages companies for exploitation of PEI and pushing sustainability strategy, Tarmac need to use these resources. They are on good way of providing sustainability for whole life cycle of products as prevention against need for resources in the future, but more changes need to be done. R&D department will play big role in innovations and providing solutions for faster house and infrastructure construction, like 3D printing, to fight with growth population. Technology is rising exponential and it will continue, so they obligation in future cities will be to use more technology to provide more faster and upgraded solutions as it can be seen from SWOT analysis.
1. Affordable housing
Suitable strategy is focus cost strategy. As we mentioned, one of the competition company has introduced the cost leadership strategy. In the hypercompetitive environment, it is very important for companies to follow competition and answer to their strategies with counter-attacks. Strategy will allow Tarmac to answer to the competition and increase market share. For successful strategy one of three factors need to be satisfied: distinct segment need, distinct segment value chain or viable segment economics 8. Tarmac can satisfy two factors, distinct segment need as they can provide fast, sustainable housing and distinct segment value chain as they can provide different process of manufacturing (3D printing). Company already introduced circular economy based on which they can provide sustainable materials and they have already invest in exploring of 3D printing that can low the price of development and accelerate the speed of the construction. Proposed strategy will have impact on organisation direction because they need to change the way of approach to the business processes.
2. Customised sustainable housing – Focus differentiation strategy can be implemented for this case. Strategy has the same factors for success which we previously mentioned. The difference is that with this strategy Tarmac will put focus on targeted customers to who can provide premium price for the product. Indeed, product will be premium as will have sustainable materials and costumed design based on customer preferences. This strategy will also have small impact on company direction as demands uniqueness. Although Servant theory has a lot of disadvantages, it is the most appropriate for this situation. By W. Edwards Deming, “the most valuable currency of any organization is the initiative and creativity of its members”. Leaders in the Servant theory are more people focus and they serve them and inspire them. As customers will be more involved in the process, leader of team can have more time to communicate with customers and team members will need to be innovative and experienced. As this approach involves team members to be more innovative and self-guiding, it is important that every manager have weekend meetings with members of team in which team show former progress and related issues. Managers have opportunity at these meetings support team and inspire them. Political stakeholders will receive company annual report with clearly stated objectives which company wants to accomplish in the next five years. Economic stakeholders will receive financial statement based on analysis of market and how this strategy will influent company’s financial situation. Community stakeholders will be notified through social media.
With this on the mind distributed leadership seems like right approach for the future cities. Not only will follow strategy model, but also will involve more collaboration between company and stakeholders which is future factor for success and exercising “Non Solus” according to Shell CEO Ben van Beurden 10. As everyone will be involved in the project company will need to create platform for sharing ideas. This platform will also use as a tool of communication to the community. Economic stakeholders will again receive financial statement and employees will communicate through existing channels. The idea is that Tarmac will be first construction company which involves everyone in shared network to access more innovation ideas. This will help against growth population in the future cities because they will faster develop innovations and the products will be based on customers preferences. They will also need to share vision of circular economy to the stakeholders and more people will be involved in sustainability which can resolve problem with resources. Tarmac will be presented as a company that connect bridges between community and share everyone concern for climate change.
E-commerce – This project can be part of international strategy because it will allow company to change market. It also can be implemented under related diversification strategy because company will sell the same products but in the different way. It can help company to gain more financial incomes and it will allow company to enter different markets without issues of logistic. After some time when company gain customers in different markets, it can start with hybrid strategy to enter that market (physical) with already gained customers. Leadership style and communication doesn’t need to be changed as this strategy will have more focus on upgrading the IT system of the company. Importance is to promote technology innovation within the company culture.
4. Critical reflection
I realised what fortune I have with allowed access to this page. My brain was processing information and conclude that this module has very big similarity with my course and my direction in the career. I started to connect things from this module to others and it helped me to see different picture in some situations. This module provided me this book “Johnson, G., et al., (2017). Exploring Strategy; Text and Cases, 11th ed., Pearson Education Limited, Edinburgh” and workshops from which I gained the most of knowledge. As I mentioned at the beginning I didn’t saw connection but after things started to make sense I understood importance of the module. I learned how to make report based on strategic position and investigate and evaluate company’s culture, leadership and ethics. It also opened my eyes in aspect of things which previously I didn’t imagine that company need to take care of it. This module happened for the reason for me because I gained extra knowledge about strategies and leadership within the company which have importance to my course. If I can compare, this module will give me competitive advantage in hypercompetitive market of the graduates, the same as companies gained competitive advantage in their markets. Module taught me also valuable lesson about leadership and communication and how big impact these factors have on company success and strategy. If I come to similar situation, my first approach will be different because I realised that it is unnecessary to create thoughts based on the first impression. I could be more focus from the begging then and maybe take more knowledge from the experience.
1 International construction, Mark Mawhinney, Sustainable Cities Research Institute University of Northumbria at Newcastle and School of Science and Technology University of Teesside, 2001
3 Briefing paper number 01432, 6 October 2015, construction industry: statistics and policy by Chris Rhodes
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6 Understanding organisations, Charles Handy, Harmondsworth: Penguin Books, 1993
7 Transformational leadership, 2nd ed., Bernard M Bass and Ronald E Riggio Mahwah NJ: Lawrence Erlbaum Associates, 2006
8 Johnson, G., et al., (2017). Exploring Strategy; Text and Cases, 11th ed., Pearson Education Limited, Edinburgh
9 Daniel Goleman’s Leadership That Gets Results, a landmark 2000 Harvard Business Review study