This organising people case study examines how organisational structure and departmental functions all contribute to the achievement of business objectives.
Tarmac was formed in 1903 as TarMacadam Syndicate Limited. The original name came from the developer of the modern road construction system John MacAdam. It is now part of Anglo American plc. In 2005 the Anglo American group had sales of around £21 billion worldwide and 195,000 employees in 50 countries.
Tarmac forms 90% of Anglo American's Industrial Minerals division. Its sales in 2005 were around £210 million and it employed 13,000 staff. A mistaken belief is that Tarmac only mends our roads.
Tarmac's mission statement
All organisations have a purpose and this can be shown in the form of a mission statement. Tarmac's is: 'To be the first choice for building materials and services that meet the essential needs for the development of the world in which we live.'
From this we know:
- Tarmac wants to be the first name a person thinks of when considering building materials.
- Its products are essential for building.
- It is an organisation that behaves responsibly with sustainability in mind.
A mission statement can be used as the starting point for corporate planning, budgeting and corporate governancerules. Tarmac also uses its mission statement for setting such things as corporate values or culture as well as human resource principles.
Tarmac's corporate values are to be: reliable, responsive, understanding, straightforward.
Tarmac expands on its mission statement by stressing four key corporate values. These are being:
Elements at Tarmac
The diagram shows how the company is organised and the various support functions that are needed.
Tarmac operates both aggregate and building product operations internationally. It works in a wide variety of countries, including the UK, Poland, Spain, Romania, Turkey, Belgium, Germany, the Czech Republic, France and the Middle East.
Important functions within Tarmac
In general, Tarmac's operations are:
- managing the utilisation of raw materials and the production process
- aligning production to market and customer needs
- gathering ideas to share across the company thus improving efficiency
- managing Health, Safety and the environment
- implementing sustainable projects e.g. restoring quarries after use
- supply chain management including transport and logistics.
Tarmac's 'operations' can be split into two groups:
- Production operation and operations management staff are involved with producing the wide product range that Tarmac offers its clients, for projects such as road construction, and sports pitches.
- Engineering Department - this department is concerned with developing and maintaining the plant and infrastructure needed to make the products. It is its aim to continue to produce the products more effectively at a lower cost.
Tarmac invested £110 million in its cement plant in Buxton (Derbyshire) trebling its output. This site now produces 43% more than expected when the new operation was first planned.
Operating improvements and growth do not happen by accident. Tarmac encourages employees to come up with good ideas, so these can be discussed, adapted and implemented throughout the business. Because of this:
- last year 92% of sites were free from time lost through injuries
- in 2005 Tarmac won the Quarry Products Association's Best Practice Award for Occupational Health.
Tarmac is aware of the long-term effects of quarrying sand and gravel. Working with organisations such as the Royal Society for the Protection of Birds (RSPB) it has restored reed beds so the Bittern can return to the area. 'Working with the RSPB, we restore and prepare previously excavated land ready for the planting of reeds. The RSPB then manages and monitors the land and the wildlife it attracts.'
Tarmac has earned international environmental certification for 73% of its industrial sites and aims to push that to 100% by 2007. By working in a responsible way, Tarmac is making itself and its environment more sustainable.
- solve technical issues raised by operations and commercial departments
- liaise with technical support functions and customers
- ensure that the products sold to customers meet national and international standards interms of quality.
For example an individual from operations could find a way to reduce the size of the average grain of sand before it goes into a concrete mixer. Technical operators, scientists, engineers and systems engineers would all work together so that the process could be used company-wide.
It is not unusual to find that technical staff earn patents for their organisations. For example, the Tarmac Porous Pavement technology to be used in housing developments, retail and business parks, and car parks is ´the first to the UK market after successful trials in Wolverhampton and Bristol, working with the Transport Research Laboratory´. In order for Tarmac to achieve such results, it needs to look at safety, health and the environment.
The commercial aspect of Tarmac's organisation is part of the tertiary sector work it does. This includes:
- dealing with customers 'Customer First' programme
- feeding into the marketing department
- liaising with suppliers.
Tarmac regards good service as vital. Tarmac deals with businesses, non-profit-making organisations and government bodies. Service is just as important to these customers as it is to high street consumers.
However, Tarmac regards good service as vital. It asks its customers what they think of the ways in which it works for them. It strives to improve by:
- understanding customer needs
- providing on-time deliveries
- giving timely notification of delivery delays
- effectively handling complaints.
This process is more efficient if the company and its customers communicate well because then customers will inform Tarmac of their needs.
One way of communicating the 'Customer First' approach is through the marketing team. Representatives constantly meet customers. They learn useful information while getting sales orders. It might be gossip for the customer but it is business intelligence for Tarmac.
Working with suppliers
Suppliers are now seen as strategic partners. Tarmac is concerned, therefore, with building long-term relationships with organisations which are important to its future success. Working with suppliers needs as much effort as working with customers because their input is vital to the efficient delivery of a product.
Tarmac has high standards and expects the same from its suppliers. These include:
- regarding safety as paramount
- competitive prices and terms of supply
- innovation and research
- ethical working practices.
Tarmac's Human Resources (HR) department focuses on the following areas:
- Organisational Development including managing change, training and development
- HR Operations including recruitment, selection and employee life cycle
- Compensation and Benefits
- HR Administration.
It aims to ensure that:
- the Tarmac values are shared across the company
- employee satisfaction is increased which in turn can drive customer satisfaction and business performance.
One area in which HR is involved is recruitment. When a company recruits someone, selection will be done by HR and the employing department working together. Induction and training are the next steps. These are also managed by HR and the employing department.
HR ensures that, once recruited, staff remain. Moreover, as people need to develop and maintain skills, HR is usually responsible for staff development. It also monitors incentives and bonuses. A company recruits the best and it must reward staff properly in order to retain them.
Tarmac has its own website for graduate trainees. This is designed to show that Tarmac is the place to work.
Tarmac's HR strategy ensures that its corporate values are shared and maintained across the company. Staff are expected to follow its four key corporate values.
Tarmac sees these values as essential for 'helping us to carry out our work day in, day out; they guide us in our dealings with each other and with our customers; ultimately, they are the bedrock of the culture of the company.'
Strategy, Marketing and Technical
In business terms, strategy is a relatively new concept. Strategy, strategic development and strategic management are key roles in their own right. Additionally, various managers and levels of management are involved in many different ways.
The management team undertakes a review with the aim to improve returns on investment and to identify parts of the company not performing as well as others.
Tarmac's marketing team is involved in four key activities to help it achieve its mission statement:
- gaining insight into markets and customers' needs
- applying this knowledge to inform strategy development and marketing plans, and identify new product ideas and services
- managing the Tarmac brand image and external communications through a broad range of communication channels including public relations, advertising, website development, e-marketing, brochures and exhibitions
- leading internal communications through the company magazine, newsletters, intranet and conferences.
Through its technical team, Tarmac constantly looks for new and innovative solutions, for example FoamMaster. This combines proven foamed bitumen technology with cold mix production and paving. The result is a cost-effective and environmentally friendly alternative to hot asphalt materials.
No business can survive without cash or some form of credit, so to ensure it does not run out of money, it needs to manage its finances properly. Any company with sales in the region of £210 million is a big business and therefore relatively complex.
The finance function of any large business includes:
- credit control
- management accounting
A global business such as Tarmac also requires financial expertise in:
- foreign exchange
- export credit guarantees
- hedging of foreign exchange and interest payments.
Organisations like Tarmac are no longer mere factories or large scale projects. They are organisations that have serious objectives tied to a commitment to achieving them. Tarmac is also dedicated to operating as ethically as possible.
Working in a multinational and multi-functional environment like Tarmac is varied. There are many departments that work together, e.g. an accountant working with an engineer, who in turn works with a production controller.