Tuffstuff Ltd: Organization Structure, PEST and SWOT Analysis

This report examines the optimal organizational structure for Tuffstuff Ltd., a cement company, focusing on its potential expansion into Rwanda. The report recommends a tall organizational structure, detailing its advantages and disadvantages, particularly in the context of operating in Africa. It then applies a PEST analysis to assess the political, economic, social, technological, legal, and environmental factors influencing Tuffstuff's operations in Rwanda. The analysis considers government regulations, economic stability, social trends, technological advancements, and legal compliance. Furthermore, the report provides an in-depth analysis of the key factors affecting Tuffstuff's operations in Rwanda, including government policies, economic growth, and the construction industry's impact. The report also includes a SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats, providing strategic recommendations for successful market entry and sustainable growth in the African market.

ORGANIZATION
STRUCTURE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASKS.............................................................................................................................................1
i. Appropriate organization structure for organization...........................................................1
ii. PEST analysis as an analytical tool....................................................................................2
iii. Analysing key factors to be considered in relation to the Tuffstuff..................................4
SWOT analysis for the Tuffstuff............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Illustration Index
Illustration 1: Tall organization structure format.............................................................................2
Illustration 2: Rwanda, Africa. Flag with Location.........................................................................5

INTRODUCTION
Organization structure is considered as a process of defining hierarchy within business
enterprise. This structure identifies about the various jobs that employees have to perform and
also the functions to whom he/she needs to report. Further, it is the structure which defines
activities such as task location, coordination and supervision in order to achieve the goals and
objectives of organization. This structure although comprises different types of structures which
organization has to choose in order to have proper and stable functioning. There are majorly
functional, divisional, and matrix structure which organization opts to achieve the long term
goals of the venture (Johnson and Scholes, 2002).
In this context, organization undertaken for the present study is Tuffstuff Ltd which is a
cement company and having its operations in UK as well as in the continental part of Europe.
This present report will focus on choosing the organization structure which will be the most
appropriate for the cited firm. Further, this report will majorly focus on the implementation of
the PEST analysis as mentioned company is planning to set up its new venture in different
countries.
TASKS
i. Appropriate organization structure for organization
Being a cement organization, Tuffstuff Ltd. consists of large number of employees who
are giving their productive services in the different departments of the company in UK. Given
case study strikes that organization wants to set up their manufacturing and distribution
operations in sub- Saharan Africa and most preferably in Rwanda city. However, cited company
does not have any distribution experience but the CEO thinks that level of competition in the
market of Africa is low.
In order to have a successful operation in Africa, cited firm can choose a tall
organizational structure where span of control will be narrow and there will be different
management levels. Along with this, it will generally help cited company to have effective
operation in Africa. This structure is tend to be more complex and might slowly respond to the
market change as all the instructions for the change come from the top managers. Further, in tall
organization structure, there are different layers for the middle management and it develops a
link between top management and employees of the venture (Neely, 2007). Moreover, each and
every layer of management develops its own rules and procedures which employees have to
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perform as per the instructions given by the top managers of organization. On the other side,
employees are in small numbers under the control of managers for a particular layer, therefore
they are able to supervise and guide them more closely and spend more time in giving them
proper training for accomplishing tasks and duties in an efficient and effective manner.
Illustration 1: Tall organization structure format
(Source: Tall Organization Structure - Meaning Diagram
Advantages. 2011)
However, employee’s satisfaction level generally lacks in it because this structure is
bound with many layers of the bureaucracy and as well as some rigid rules too. Further,
employees also have fewer opportunities for taking up the responsibilities of work which are
assigned to them. For Tuffstuff Company, in order to operate in Africa continent, communication
will be clear as this structure possess this quality (Tall Organization Structure - Meaning
Diagram Advantages. 2011). Each manager is able to have a crystal clear communication with
their employees so that there are fewer chances of having mis-communication and company will
be able to achieve their goals and objectives in a well definite manner. However, each and every
layer has some deficiencies that leads to minimize the effectiveness of work performance. Under
this structure, decision making will be slowed down because approval will be required from the
different employees and it will be quite difficult for managers to have a clear decision.
ii. PEST analysis as an analytical tool
Tuffstuff can conduct PEST analysis in order to know the different factors which can
impact the organization performance. PEST analysis is considered as a framework of macro-
environmental factors which is generally used for scanning of environment and also treated as a
component of the strategic management. Before starting of any sort of business operations, all
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the business ventures need to conduct PEST or PESTEL analysis for evaluating the outcome
which they will get in coming time period. Further, in relation to this context, cited firm will be
able to know that whether they will get succeeded in Africa in starting their cement operations
(Simmons and Lovegrove, 2005). Composition of this framework includes 6 major factors and
these are explained below: Political factors: These are the factors which show the intervention of the government in
the economy as well as in the company’s operations. These factors include some major
areas which consist of tax policy, environmental law, trade restrictions, different types of
tariffs and taxes, etc. Further, in relation to it, mentioned company also needs to analyse
that what will be the most likely time-scale where legislative can change their decisions
and whether in coming time period, any political changes will take place or not (Wacker
and Lummus, 2002). Economic factors: Economic factors are the factors which propagate for the welfare of
national economy and include factors like economic growth, changes in the interest rate,
exchange rate as well as inflation rate etc. Moreover, these factors generally come into
play when company starts to operate its business and makes decisions top start up.
Further, mentioned company in relation to it needs to identify some facts regarding the
economic stability of the Africa (Jeppesen, 2007). Tuffstuff must know that how stable is
the economy there as well as it is in growing mode, stagnating or declining level. Firm
needs to give their major attention on the disposable income of the individuals i.e. is it
rising or falling. If, it is in declining stage then, firm will not be able to achieve their
goals and objectives and might turn into losses. Social factors: These factors generally includes the cultural aspects, population growth
rate, career attitude and the individuals needs and demands. High trend in the social
factors will affect the demand of the cement products and Tuffstuff have to take some
relative steps in order to reduce them in significant manner. For instance, the aged labour
in the company will tend to work less and this will certainly increase the cost of labour
and also acts as an expense for the cited firm, Technological factors: These factors for the company relates to the technological aspects
like R&D, innovative machines and equipment, technological incentives and also the rate
of technological change happening in the organization. Mentioned company will face a
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drawback when their competitors have access some new technology to redefine the
product in order to have the competitive advantage (Linn, 2008). Moreover, the shift in
technology will impact the cost, quality and will certainly lead towards innovation.
Further, cited firm have to take some initiative regarding the technological factors and
should implement the best of the technique to produce the cement and concrete so that
less cost is incurred in production and they are able to increase their profits and revenue
from the same. Legal factors: these are the factors which organization have to follow in order to work
smoothly in the new country. For this, organization have to consider acts and laws which
are framed by the Africa government. Some of them relates to discrimination law,
employment and health and safety law. Firm have to consider these efficiently in order to
get the competitive advantage over their major competitors. However, if Tufftuff denied
accepting any of the law or act, then organization will face some major drawbacks and
company will not be able to increase their revenue and sales (Ireland, Hoskisson and Hitt,
2010). Moreover, company have to take precise care of their employees as they are
working in difficult condition to produce the cement. Health and safety issue coming into
force and cited firm have to follow this efficiently and effectively.
 Environment: These factors includes the ecological and environmental aspects which
mentioned company have to consider to have a better operations. This includes factors
like weather, climate and different climatic changes. Further, mentioned company have to
implement a technique to reduce the carbon emulsion from the heavy vehicles for
sustaining the environment (Bryson, 2011).
iii. Analysing key factors to be considered in relation to the Tuffstuff
Mentioned company to start their operations in Rwanda which is the sovereign state in
the central and east Africa. Further, this country is bartered bordered by major other countries
like Uganda, Tanzania, Burundi and the Democratic Republic of the Congo. Further, the
economic position of the country has been raised over the few years because of the good and
healthy performance of the tertiary and the secondary sectors.
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General country information
Population: 11.46 million (2012)
GDP: $7.103 billion (2012)
Income Level: Low
Life Expectancy: 63
Below studied is the Pest analysis of Tuffstuff in Rwanda-
 Political: Price of the cement is generally controlled by the government of Africa and
mentioned government will primarily take care on the following elements:
◦ Cost rates
◦ Tariffs
◦ Freight charges both railway as well as road transportation
◦ Royalty on limestone
◦ Taxes (Excise duty and VAT)
Government on the other side giving their effective contribution in the expansion of cement
industries so that lot more development takes place and mentioned country will grow rapidly in a
coming decade or so. Further, government is also treated as one of the largest consumers of the
cement as they genuinely take different projects under their head relating to the construction and
major development for the roads and bridges (Rowley, 2002). Further, the strict law and order
conditions from the local body will enhance the confidence of individuals living in that particular
states along with organization to invest in that particular state. Moreover, the head of state is the
President of Rwanda, who having authority to make policies along with commanding the forces
and can also declare the state for an emergency war. The population of the state selects the
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Illustration 2: Rwanda, Africa. Flag with Location
(Source: Rwanda. 2015)

President and this process takes place in every 7 years. Moreover, these citizens also selects the
Prime Minister and other legislative members for a particular state. Further, the country having
working individuals who are engaged in different business organizations and giving their best
result in the success of the country growth (Turki, 2011). Along with it, Rwanda is in growing
state and as a result it will be appropriate or advantageous for Tuffstuff in order to establish a
cement company in the mentioned country. This is because country is in growth state and
government will also give opportunities to new organizations to expand their market share. Economic: The future of cement industry in Rwanda is quite strong because as stated in
above point, country is in growing stage and there will be lot more development takes
place in coming time period. Further, currently too there are various government
infrastructure and housing projects are under the construction and this ratio will surely be
increasing in coming time period. Further, growth in the tourism sector will lead towards
the construction of hotel and other apartments and all these things are going to be
constructed with the help of cement only (Simerson, 2011). By seeing all these scenarios,
it is clearly evident that the Tuffstuff having huge opportunities in the future and their
market share will be increasing as company incorporate their operations. However, from
the country point of view, economy of this state is agriculture based and mass population
is engaged in the same. Tea and Coffee is generally the major cultivation and with the
help of it, country get major fund from the export of these materials. Further, as stated
above, tourist is growing rapidly as its natural attracting the individuals from other
countries. Moreover, the competition in the country is very low as there are not much
development till now. With this positive point, mentioned company will be able to cover
the large market share. Further, the economy of this country is strong in terms of per-
capita GDP and organization major products are sold to the countries like United States,
China and Germany (Kambil, 2008). Further, the traditional art and craft are developed
all over the country and this is the only reason for Tuffstuff's growing market. Social: With the growing market, the cement manufacturing process will be spreaded all
over the Rwanda and this will help the country to take major construction step for the
development of the country. With the fewer competitors, Tuffstuff will be able to develop
their brand image and operations and will restrict the comopetitiors to enter in the same
market as company will focus on selling the cements at lower cost. This will further help
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the firm to make loyal customer base for the venture. Further, with the implementation of
the cement plant, firm will be able to give lot more employment opportunity to the people
of Rwanda and they will be able to survive with the best of the advantage in the country
in coming 2-3 years. Now the social environment of the country depend upon the water
flow as the country having adequate water level and government contributing their best
for making proper utilization of the water flow as this will help country to increase the
national budget share. However, if compared with 2005, the safe water assessed by the
population of Rwanda is 55% but in the year 2014 it has raised up to 83%. Mother tongue
of the country is Kinyarwanda which is mostly spoken by the people residing there
(Rwanda. 2015). Moreover, mentioned country is surrounded with mountain which adds
natural beauty to the country. Further, the environmental condition of the country is
subtropical, which includes two dry seasons and two rainy seasons each year. With the
help of it, it is analysed that the social factors of the country is favourable as the resource
are available in abundant. Therefore, Tuffstuff for establishing a cement industry,
mentioned countries environment is the best as for making up of cement organization will
have all the adequate resources and company will start getting the advantage from the
initial time period only.
 Technological: Technological development in the form of cement kiln and furnace will
promote the use of cement kiln for utilization of the waste like tires, which generally help
the venture in reducing the usage of costly fuels like coal as it will generally reduce the
manufacturing cost for the cement. Further, mentioned company will be in need of the
enhanced technology to substitute the coal with the low cost as well as eco-friendly fuels
from the bio mass wastes. Further, finding the suitable location of the limestone reserves
and efficient mining practice will help the Tuffstuff to reduce the per tonne cost of the
limestone. From the countries point of view, Rwanda develop electricity with form
hydroelectric sources and the power stations on lake provides up to 90% electricity for
the country (Immordino, 2009). Moreover, the government of Rwandan also gives free
education to children in order to promote the education level as maximum is engaged in
agriculture. The use of technology is rapidly increasing and supply of electricity is
through hydroelectric sources which has proved to be helpful in providing electricity at
all the parts of the country. Along with it, country having mandatory for applying
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healthcare for all the people from 2008 and since that period they have covered about
90% of the population in 2010 (Howell, 2009).
SWOT analysis for the Tuffstuff
This analysis is helpful for venture in analysing the strength, weakness, opportunities and
threats of a business. Further, this process also helps in evaluating the opportunities which
market of Rwanda have so that company can grow their market without any problem or
hesitation. Further, it also helps the cited firm to know the internal and external factors which
might affect the performance of the venture. However0, in the first stage of preparing the
strategic planning of the venture it is generally necessary for the venture to choose best of the
strategy in making the effective decisions so that company can achieve their goals and objectives
in specific manner (Eshun, 2009). Below given is the SWOT analysis of the cited firm which
will lead them to have competitive advantage over their major competitors in coming time
period.
Analysis Description
Strength
 Tuffstuff having strong leadership
 With effective operations in UK, funds are easily available
 Healthy political support
Weakness
 Impact on the environment
 Expansion is costly
 Establishing can lead towards costly process
Opportunities
 Opportunity of improving the local economy
 Safety improvement
 With proper leadership, firm can boost the organization
capability along economy
Threats
 Delays in time for taking effective operation
 Environmental constraints
 Need to change the plan as per the condition and circumstances
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CONCLUSION
From the above report, it is clearly inferred that the organizational structure plays
significant role in clarifying the tasks and duties which employee have to perform in the
mentioned organization. Further, this report will also focus on establishing new venture in Africa
continent and for this tall structure will be more suitable as a group of employee will be working
under particular managers. Further it has been showcased that mentioned company will conduct
a PEST analysis which will lead them to know the factors which are available for them in
Rwanda country and on the basis of it cited firm will start their operation efficiently and
effectively (Allio, 2006). Moreover, this is also very helpful in coordinating and in providing
proper guidance to the employees. In addition to this, performance of the employees can be
closely examined and improvements can be made so that they perform effectively. This report
also shows the PEST analysis of the country where organization will carry their operations
according to the availability of the resources and sustainability.
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