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.
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.
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.
