Impact of Diversification on Functional Departments in Uber

This report discusses the impact of diversification on the marketing, human resources, operations management, and finance departments in Uber. It explores how the functional departments will be affected and the changes they need to make in order to support the company's expansion into the real estate sector.

Organizational
Behavior &
Management

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Diversification of business into the real estate sector..................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Every decision requires change in the functional departments of an organization as these
departments has to work and operate according to the prevailing change. The strategies which
are adopted by the organization do bring up the changes in the functional departments also.
Functional departments may include the finance department, human resource department, and
marketing, logistics, and Production department and so on. All these departments has the various
roles and responsibility to play in an organization. For example the production department
concerns in making or manufacturing the goods and services of organization, marketing
department seek focus on educating the targeted market about the products and service which the
organization has to offer, human resource department is concern with hiring and selecting the
talented candidates for the organization and the like. For reference purpose this report has taken
an example of a company, Uber. It is a multinational transportation company which has its
headquarters in San Francisco, California. The company was founded by Travis Kalanick and
Garret Camp. Uber is engaged in the business of providing the convince services to the people. It
has its cab which helps the people to go from one place to another.
This report discuss about the changes which are made by the functional departments marketing,
Human resources, operations management and the finance department when the business plans
to diversify their business into the real estate business.
TASK
Diversification of business into the real estate sector
The Uber company which has engages its business in the transportation sector in which it
provides the convince services to the people along with the freight services, now has planned to
diversify its business in the real estate sector. For this diversification, the company has to add on
its resources into the company accordingly. It also has to change its structure, strategies and
plans which integrates the mission and vision for the organization has a whole. And as the
changes would be made on by the company, the changes in the functional department would be
obvious (De Rosa, McElwee and Smith, 2019). The changes which would be brought up into the
functional departments will be very crucial for growth and development for the company. The
following impact would be bringing into the functional departments:
Marketing department: The marketing department is concern with educating the targeted market
about the products and services which the company has to offer. Through the proper marketing
the customers know about the products, its benefits and the ways that product can help them in
satisfying their needs or wants. Different organization has adopted different strategies through
which they plan and perform their planned strategies. As in the case with Uber cab services the
marketing which is done by the company shows that the Uber provides the first class cab
services which is trust worthy and safe for the customers (Hernández‐Trasobares and Galve‐
Górriz, 2020). Through the advertisement shown by the company, the customer builds up an

image about them that their services would be safe for everybody and the customer can rely upon
them. As in the case provided above, the company Uber is planning to diversify its business in
the real estate sector also, so to educate the market about their diversification they need to plan
and make strategies related to marketing activities also. This will impact the marketing
functional department and that too in following ways:
Planning for marketing activities: The company’s marketing department needs to do planning
for their new diversification sector, real estate also. For this they need to plan for the activities
which they would going to consider in the marketing planning. Activities may include the mode
through which the company will educate the customers about their new diversification for
example they would going to do advertisement through newspapers, television ads, and they will
also do their marketing through building the public relation with customers by organizing an
event, giving sponsorships and the like (Kitisya, 2017). In this case the work for the marketing
department would get increase as they now have to take care for the marketing for the uber can
services and also for the real estate sector.
Setting budget: As the marketing activities for the real estate business got set up, the budget
which would be needed for pursuing such activities will also get to prepare meanwhile. The
marketing department would also get the responsibility for setting the budget for the activities
which they will perform as the marketing. The budget would be set according to the cost which
each activity will going to consume.
More research: As the company would diversify its business in real estate sector also, the
marketing department for setting up the marketing and promotional activities has to perform
more market research to understand the trend and behavior for this particular sector so that they
can make the rational and legitimate marketing planning. This is something which is very time
consuming and also results in increase of burden upon the department.
The critical evaluation about the impact on this diversification upon marketing department can
be:
Positive impact: The marketing department knows very well about the company’s structure,
mission and vision which would help in setting up the further marketing activities for the real
estate sector accordingly. The activities set by the department will integrate the mission and
vision of the company with marketing activities (Mahmood, Chung, and Mitchell, 2017).
Negative impact: The marketing functional department would have to put majorly their time and
focus upon real estate sector’s marketing, due to which they would not able to give proper time
to company’s cab transportation sector. Also it is a very time consuming process as they need to
launch a whole new product for the company for which they need to set a proper and strong base.
Apart from this the department has to carry out the research work to gather the important data or
information to carry out their marketing activities.

Human resource: Human resource is a department which is concern with providing the talented
man force to the organization. The human resource department does this by conducting the
recruitment and selection program in which they invite or send the invitation to the candidates to
which the company believes to have talent. In the recruitment process the department interviews
the candidates and selects the candidates to whom it believed to posses the true knowledge and
skills which are with accordance with the requirement of work. The role and responsibility of HR
department is not only concern with conducting and taking care of recruitment and selection
program but also taking care for the employees. The department is responsible of solving the
issues and the problem which is faced by the employees. The policies and the rules which are
formed for the employees are made up by the HR department only (Pehrsson, 2019). Apart from
this the HR department also takes care promotions, demotions, and training and development
responsibilities under them. As in the case with diversification of the company in real estate
sector, the HR department will have the following impact of that:
Recruitment and selection program: As the company is diversifying its business, it would
need the new employees who can handle the real estate sector. For this purpose the HR
department has to conduct the recruitment and selection program for the company in which their
task will be to select the talented work force for this particular sector. Also the department first
has to make the work force planning which concludes the number of employees the company
would be needing for the work and the skills and knowledge they are looking for in a candidate.
Man power planning: the department has to conduct an analysis about the total man power the
company would need for their new sector. For this they have to bifurcate the tasks and the roles
which need to be undertaken in this sector and accordingly they have to decide for their same.
Accurate man power planning is very much essential as it helps in knowing about the number of
employees would be need by the company; it also helps the company in dividing the roles
performed in the sector so that they would start their hunt accordingly.
Career path planning: The HR department has to also plan for the career paths for the
employees so that any employee who would like to join in the organization should know about
what this organization has to for serve and how he can attain the growth in company. Planning
the career paths for the employees is very hard job as it requires the proper analysis for the
market and the roles which are offered by the company, also the path which has been planned for
the employees should be attractive and motivated for the employees through which he could
work hard to attain his determined goal.
Remunerations: The HR department also has to think about the remunerations which he would
be offering to the employees. The pay which the company will be giving to the employees
should be equal to the type or role of work performed by the employees. For deciding the
remunerations for the employees, The HR department has to perform various market research
methods so that they would know about the remunerations of other companies for the same job
profile and then they match it with the company’s ability to pay (Santi and Septiarti, 2019).

The critical analysis about the impact which would be upon HR department is as follows:
Positive impact: The HR department knows the mission and ultimate goal for the company, they
know the system and the process which are taking place in the organization, therefore according
to it they will make their plans and pursue for the plan accordingly. Also the department would
help the company in attaining the talented work force for their diversification of new real estate
sector.
Negative impact: The man power planning and the proper research for the job roles and
remuneration is a very time taken process as they have to make the full strong base for the
company.
Operation management: The operational management is the process of managing the
operational activities for the company. Operational management is the management of the
humans, resources, raw materials, process taken by the company for converting the inputs into
outputs and so on. The proper management of operations would help the organization in
attaining the optimum utilization for the resources. The operations of the organization are
managed in such a way that every resource should get employed in the process with a major
motive of low cost and high production. As in the case presented where the company has made a
plan to diversify their business in the real estate sector they need to develop their operations from
the starting as the company is just making its entering into the same (Wei, 2018). The operational
management for the company would get impacted from this decision in the following ways:
Setting up the operations: The company’s operations management department has to set up the
base for the operations for real estate sector. As the company is totally new in the sector, the
need to start the things right from the beginning. To set the operations they need to establish the
system in which they can store the data and information about this particular sector and the
employees can able save and share the information with each other. For setting up the operations
the company has to perform planning, organizing, staffing, directing and control systems are the
operations. The operations for the department should be such that it gets clear to bay for data
saving and entering, also the work must be transparent and easy to use for the employees.
5 functions: The department has to perform the five functions of management i.e., planning,
organizing, staffing, monitoring and controlling. They need to make a proper plan for operational
activity about how and what work would going to do done, the organizing activity in which they
need to organize the resources needed, structure and system formation, the identification of roles
and responsibilities, putting the employees on their work position, directing the work force in a
designed direction and making a strong control system for the department (Yang, and et al.,
2019).
Identification of roles and responsibilities: The department has to undertake the
responsibilities for identification of roles and responsibility which the employees for that
department need to undertake. In this they identify the role which they think they would be

needing in the department and the required responsibility so that they can put the required
number of employees in the department for performing the work.
Integration of operational process with goal: Through this diversification of business into
another sector, i.e. real estate business, the operational process need to set up in such a way that
it must integrates with the objectives of the organization.
The critical analysis for the department due to the impact of diversification can be as follows:
Positive impact: The department knows the objectives of business very well and hence will help
them in attaining the same.
Negative impact: This process is very time consuming and to set a base the department needs to
give its major time in this sector. This can hamper the performance for the transportation sector.
Finance department: The finance department is concern with providing the required finances in
the various department of the organization. The department responsibility is to make the finances
available for the company and distribute it among the various department heads. The finance
department handles all the finances for the company, they suggest the business about the sector
in which they should invest or de- invest their funds, the ways about how they can allocate the
finance from other sources and etc. As in the case of Uber diversification into other business, the
company’s finance department would face the following impact:
Plan for finances: The department responsibility will be to plan for the finances to make the
sector operated. For this they will search and analysis the various alternatives for where they can
acquire the finances and then chose the feasible option which they can opt (Yoshida, Yagi, and
Garrod, 2019).
Set budget and allot funds: The department role is also to set budgets for the company. They
collect the budgets which comes from various other departments then they analysis the heads or
the areas where these departments are spending money and then at last they make the
negotiations. After making the proper negotiations with this department they allot the funds to
them so that they can pursue their activities (ZHANG and X U, 2017).
The critical analysis
Positive impact: The finance department would make sure that the finances would not get wasted
in some irrelevant area and allot the funds wisely.
Negative impact: This process would be time taken as they have to perform the negotiation with
other departments which is actually a time taken process.

CONCLUSION
The report presented above, discus about the impact which the company’s department
would face as it has decided to diversify their business at a totally new sector, real estate
business. The functional department such as marketing, human resource, operational
management and finance department would get impacted by that.

REFERENCES
Books and Journals
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performance of Commercial Banks in Kenya (Doctoral dissertation, Strathmore
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in dynamic environments: How types and destinations of political ties affect business
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ZHANG, S., Q U, L. and X U, Y., 2017. Influence of Board Network on Business
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