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Functional Areas of Business

Assessment Task 1

Functional Areas of Business

Assessment Task 1

Contents 1 Introduction 2 Findings 3 Sources of Information 5

Within this report it will be explained what factors have affected the structure of tarmac and how, how tarmac takes account of its functional areas, the advantages and disadvantages that their structure has upon the activities of tarmac, tarmac's interaction with its environment and hoe they are able to meet their goals, internal and external stakeholders and the influence that they can have on the formal and informal organization in terms of power, authority and responsibility.


Tarmac have 5 very clear goals and like to make sure that they are clearly defined and easily remembered, they do this by using a mnemonic 'Dream', this stands for Develop markets, Reduce costs, Engage employees, Act responsibly and Manage assets. They work toward meeting these goals by focusing on each goal differently, they work towards developing the markets by working closely with their key customers to ensure that they can do this right they split up the organization into three businesses, this will allow them to develop each area separately with the right people with the right skills in each area which will help them towards achieving their goals.

Tarmac has chosen a matrix structure with the focus being on functional areas and customers, this allows them to focus on their customers properly and give them the attention that they need in the right areas. The size of Tarmac has had a massive part in the effect of how they have decided to split up their business as they have split into 3 businesses (Tarmac Quarry materials, Tarmac building products, International), this is so that they can recruit the right people in the right places and also helps them to keep employees motivated and working together as one team to help them achieve the exceptional and also helps for each area to be fully focused on their own area. Another factor that has affected the structure of Tarmac is the environment as Tarmac are committed to using mineral resources responsibly and sustainably, as well as reducing waste, conserving water and recycling or even using other peoples waste and secondary materials as well as all of this they like to manage the impacts of all their activities on the environment protecting biodiversity, safeguarding our archaeological heritage and restoring sites as an integral part of their operational life cycle, this has had a part in them adding a sustainability framework which identifies the priority issues of most relevance to the businesses stakeholders.

Behavioral Science School (Herzberg and McGregor) this concept focuses on the behavior of people within the organization, what they can contribute to the organization and how can they be motivated to work together as one big team across the organization. This concept is quite relevant within the case study as they talk a lot about how they want to ensure that they have the right people with the right skills in each department, they want them to understand how they are important within the organization by providing a set of business principles that demonstrate their commitment to operating ethically and responsibly which helps them to understand where their role contributes to the overall performance. This allows them to keep focused on all functions of the organization as they aim for all staff to play apart together, they want them all to realize their full potential and bring out the best in all they supports learning and development throughout the whole organization and they have a talent and development team which is part of the HR department.
Systems School (Rice, Katz and Kahn) Recognized how organizations are influenced by their environment (open systems) this is shown in that they are very environmentally conscientious and have a social responsibility program that is implemented throughout the organization.

Three advantages that the structure of tarmac has upon its activities are:
The structure allows them to focus on each business area separately without confusion, this helps them to have the right people in the right places and they can get a clear over view of each business area and how they as getting on.
They have a clear employee structure which is simple and easy to understand this allows for staff to understand their roles properly and helps them to produce the standard of work that is expected of them in terms of authority, responsibility and power.
Each area of the business is clearly outlined making it easy for each separate business area to communicate internally and communication between these departments should be fast and uncomplicated.

Three disadvantages that the structure of tarmac has upon its activities are:
As tarmac is such a large organization and have split into different businesses with each area having 6 different areas communication between different businesses can become difficult and could become garbled causing any work that needs more than one of the business areas to be slow and strenuous.
Three of the main functional areas are situated at head office which can be difficult when operations needs to consult with marketing, HR or finance as there will be little direct communication with them and could become a major problem if they need to contact them urgently.
Although tarmac provide clear lines of control, responsibility and communication within the organization as it is such a complex structure these can start to become unclear for certain departments as not all departments can work the same way it may not be suitable for them.

Internal- Operators
The influence that operators have within tarmac on the formal and informal organization is quite a lot in terms of responsibility as they are responsible for the day to day running of the operations of the business, this function is key to the overall business performance, they also have the responsibility to give across important ideas about how to improve processes and achieve cost savings this is typical of an informal organization. Experienced people within operations will have some authority over graduate trainees and apprentices like giving them specific tasks if they are asked to do so but apart from this there is no authority given to them, the operators have no recognized power over the formal and informal organization but as they have the largest work force out of the 3 and some of the more senior members of operations will have some power in terms of knowing more about the organization and the people, like school janitors or cleaners.
External- Investors
The influence that investors have over the formal and informal organization of tarmac in terms of responsibility is, investors have no ultimate responsibility for the company but it is their responsibility to keep in contact with the company in terms of financial progress, in terms of authority they cannot delegate tasks to anyone but they can ask for financial reports when they want them, in terms of power they can decide to pull out as an investor which could cause major problems with finance if they are investing in on going projects.

Sources of Information

The Case Study
Class slides

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