Project Organizational Structure roles and Responsibility

The economic crisis started with the collapse of the banking and property sector in the United States in 2008. With various governmental stimulus package in the past months, the economy has slowly picked up its pace. Published data showed a stronger Quarter II in several countries (including China, Turkey, Brazil and Japan) but worries about future growth have increased. Most of these relate to the public debt in Euro Zone crisis and the possibility of a double-dip recession. All the macro-economic factors have indeed a strong correlation to the Vietnam economy as Vietnam mainly exports its goods to the major economy like the United States and Europe.  Therefore, crises happen elsewhere will have negative impact on the Vietnam domestic economy and real estate industry in Vietnam is no exception.

Even though the real estate industry in Vietnam has shown some sign of recovering, it has not been that strong across the various types of real estate products such as office, retail, apartment, service apartment, villas and townhouse.

Latest research from Savills Research and Consultancy also showed that in Vietnam, there is over supply and competition is intense right now. The highly competitive property market is creating two important effects that real estate developer must pay attention to, namely high tenant mobility and a flight to quality. As for apartment for sale in Vietnam, though there is rising demand with estimated approximately 50,000 –80,000 dwellings required per year, the buyers in this market is mainly young population with limited saving. As people tend to be more cautious in personal spending, they will be more selective in choosing an appropriate real estate property for purchasing, renting or purely investing.

The competition among different developers to develop the best housings with the lowest price has brought about the urgent need for organizations to evaluate their own organizational structure and management style. Having an appropriate framework and good organization management structure, the organization will enjoy many benefits. The immediate profit will be that the streamlined organizational structure will be more cost effective due to the appropriate use of resources. Next, good organization structure and management provides an extremely useful tool in controlling every stage of the project and prevent many possible risks.  In the recent times, many projects fail due to lack of good organization management and hence the lack of control.

If a project is well organized, it will bring about high satisfaction for customers, which will in turn generate greater revenue and higher return on investment for the developer. Good organization management structure will safeguard the firm’s long-term survival as well. Though some economists have viewed that the recession is over, other strategists still worry about the possibility of a double dip recession. Having a good organization management will help the firm stand strong in terms of crises. Though profits might be affected negatively by the external factors, if the organizations have good internal systems, they can still manage the firm well and keep the cost used at the minimum level to ensure the firm will survive in hard times.

The above compelling reasons are the key rationales to study in depth the subject of organization management.

TRAN DUC QUANG made a case study which objectives was to study the application of Project Organizational Structure Roles and Responsibility in a construction project from Appraisal, Feasibility Decision to completing -handing over phase. 

Conclusion 

The report attempted to explore and study in depth the key concepts of organizational management and appreciate the various organizational structures, which are relevant to the real estate and construction industry.

Given the very complicated nature of construction whereby each constructions project is unique and may involve many stakeholders, the real estate developer needs to consider both vertical and horizontal ways of structuring its organization and project. That is why matrix structure is proven to be very useful. Furthermore, in different stages of the project life cycle, the tasks required are different and hence the need for different structure during different phases of the project. Knowing when to employ which structure is important, as organization structure is a tool for managers to carry out the strategies set forth.

Having the appropriate organizational structure is essential for the real estate developer, as having an appropriate framework and good organization management structure, the organization will enjoy many benefits such as appropriate use of resources and prevention of many possible risks.  The tool will also help to close up the gap in project governance as good structure will allow constant interaction in between different levels. A well-run project will generate both financial benefits and high satisfaction to the stakeholders involved. It will help the firm stand strong in terms of crises and thus safeguard firm’s long-term survival.

Recommendations

The whole rational of organizational management is to facilitate the application of knowledge, skills, tools and techniques to project activities to meet project requirements in terms of Scope, Cost, Time, Quality, Participant satisfaction. In organizational management, the important steps include:

1.       Choosing the right people

2.      Setting up the right organization

3.      Using the right system

The concept of how to choose the right people for the task and how to set up the right organization has been discussed extensively and expressed in detail at previous sections. There are many organization structures and each one of them discussed above has its own application, advantages and drawbacks. Selecting the appropriate structure for an organization will therefore be dependent on the task, the size of the firm, the subordinates, the managers and the environment.  Managers, in choosing the right organizing structure, need to study its vision, mission and its strategic intent and then strive to pick strategies and structures that are congruent. In choosing the right people for the team, managers need to define of what kinds of skills required, what kinds of individuals required in what timeframes and then select the right people.

As discussed in Literature Review and the Case Study of the Hotel, implementing the best organization management system involves a few stages, starting from finding out the right strategies, to matching the project life cycle stages to the correct type of structure. The case study of Marriott Hotel is a very good example that other real estate developers can study and replicate.

Organizational management aspect of project management includes Human Resource Planning, Acquire Project Team, Develop Project Team and Manage Project Team. Therefore, choosing the right people and organization structure alone is not enough. Managers need to be aware of many other factors that can be the crucial success factors in running the organization such as managing culture issues and facilitating good communication channel. Organizational management also includes active management of the employees in the organization. Making sure employees are well motivated is crucial for organizational management. Below are some the examples of how to manage the employees that firm can adopt:

Providing Constant feedback to employees

1.       Progress Reports: Reports providing feedback to the project team about performance against the project plan.

2.      External Feedback: The project team must periodically measure itself against the performance expectations of those outside the project.

3.      Project Performance Appraisal:  Performance appraisal objectives include re-clarification of roles and responsibilities,  development of team member’s training plans and establishment of specific goals for future time periods.

4.      Performance Reviews: Meeting are held to access project status or progress.

Provide various trainings to employees

Other things that a project management team can do are to send employees for courses to increase his skills sets. The courses that a company can consider are:

1.       Management: Successful conflict management results in greater productivity and positive working relationships.

2.      Cultural Management:  With cultural management skills, employees will be more confident in dealing with people from various backgrounds, especially for the large-scale joint venture project.

3.      Trend Analysis: Forecasting project results over time to determine if performance is improving or deteriorating.

Finally, managing an organization is an ongoing process, and managers need to be actively engaged in running their own company. Once the situation changes, managers need to be nimble in adapting to the changing environment by changing the organization structure.

Abstract

This report focuses on various aspects of the main theme - Organization Management, which is a crucial factor for the success for real estate project.

Year 2007 was a booming year for real estate in Vietnam. Many housing development projects were successful built. However, as the financial turmoil started since 2008, the real estate industry globally has encountered one of the worst hit in the recent history. Competition for developing new housing projects with high quality yet low cost in order to win customer base is intense. In order to survive in this tough environment and emerge as winner, there is an urge for real estate developers to re-look in to building up their organizational structure in order to carry out smoothly the projects in accordance with customer’s expectation and international standards. In general, the success or failure of the real estate development project is dependent upon the quality of the employees, the clarity of the operation, the availability of the resources and most importantly, the appropriateness of the structure and the management system adopted.

This study, which refers to different theories and standards, has studied in depth the concept of organization management. The project indentifies the key concepts of various types of organization and its relation with the construction phases. It spells out the core governance tasks in the area of strategy, structure and organizational culture and suggests the best strategy that a real estate developer should adopt in order to cope with the increasing pressure of the internal and external environment. It further elaborates how to exercise authority and allocate power within an organization.

Finally, the real life case study of building the Five Star Marriott Hotel in Nha Trang City, a complex project that involves various team and parties, will demonstrate the key concepts and application of these concepts.