Chapter 1
The Problem and Its Background
Rational of the Study
Last 2003, the property management industry in Hong Kong had experienced an economic slump (2003). The unemployment and underemployment rate were on a high end on the industry and this was all because of the outbreak of the deadly disease SARS. However, the president of the Hong Kong Association of Property Management Companies (2003) stated in an issue of the industry’s newsletter that there is still a room for growth in the industry. The president further stated that service skills of front-line staffs should be further upgraded. This task is basically included in the duties that a project manager should perform. The researcher believes that such task can be performed well through proper understanding of property management services, the enactment of new legislation relating to mandatory property maintenance and management, as well as the privatization of public housing management in Hong Kong. Furthermore, in another issue of a newsletter, (2003) stressed the need of the industry to promote its professionalism. With this regard, the researcher believes that IT and legislative practices in Hong Kong can help utilize this objective. Actually, customers are becoming more demanding. Apart from the traditional type of property management, customers today require more services, and access to such services at any time, and at any place. This study investigates environmental issues pertaining to the development of a sustainable property management in Hong Kong markets. Thus, this study is significant because it will investigate the usefulness of information technology if applied to project management and its significant effect to the environment. This will help project management weigh if the utilization of IT can be advantageous to their industry or it is a threat to environment. In addition, this study can compare private sector property management style and public sector property management style in Hong Kong markets, and also examined to investment the new dimension and future development of property management in Hong Kong markets.
Statement of the Problem
The aim of this dissertation is to study the use of Information Technology in Property Management and to analyze appropriateness in business processes. In addition, the discussion regarding legislative and environmental issues regarding the implementation of IT as part of privatization in project management will be given consideration. Furthermore, this study aims to evaluate the cost and benefit of the use of technology and to understand the organization behavior towards such technology. Specifically, the researcher will try to answer the following queries:
1. Is Information Technology widely utilized in property management companies in Hong Kong?
2. What are the advantages that can be acquired from the new legislation relating to mandatory property maintenance and management, as well as the privatization of public housing management in Hong Kong?
3. Are there any advantages and disadvantages that have been or can be acquired from Information technology as part of privatization?
4. Does implementation of IT as part of privatization to property management provide significant effect to environment?
5. Does enactment of new legislation relating to mandatory property maintenance and management, as well as the privatization of public housing management in Hong Kong directly affects the progress of property management business in Hong Kong?
Approach to Investigate the Problem
The dissertation is “investigation based” and exploratory research method is used for data gathering.
Delimitations and Limitations
This study only focuses on the Property Management Industry in Hong Kong and the impact new legislation relating to mandatory property maintenance and management that includes IT development and privatization of public housing management in business. Furthermore, it will only provide conclusions and recommendations based from the results that have been acquired from the research process.
Hypothesis of the Study
The hypothesis of the study is: “Privatisation is an advantage to the Property Management Industry in Hong Kong and has a positive impact to the industry.”
Assumption and Theories
The researcher assumes that IT development as part of privatization practices provides significant effect to the progress of property management industries in Hong Kong. Furthermore, the researcher assumes that most property management companies in Hong Kong view that the privatization is more of an advantage to them than a disadvantage. These assumptions can be based on the theory of structural contingency.
Structural contingency theory suggests that, to be effective, a work group must fit its technology to the structure of its task (2002). Structural contingency theory provides a heuristic framework for analyzing the influence of information technology on work group effectiveness. In its most general form, this theory proposes that, to be effective, an organization must conform to its context (2002). Three types of context have been studied: environment, size and technology. Structural contingency theory can be expressed in terms of the following relationships: between the organization’s technology and its structural characteristics; and the relationship between this fit and the organizations effectiveness ( 2002). Structural contingency theory (relating technology
and structure in order to maximize effectiveness) would predict that information technology and work situations should ovary. Thus, information technology, the positive and negative effects of their use, and the symbolic information conveyed may differ by work situation, work group, department, or firm.
The study can also be based on the theory of media richness. This theory says that rich media are more appropriate for performing communication tasks that are characterized by equivocality while less rich media may be appropriate for tasks that are characterized by uncertainty ( 2002). Uncertainty means absence of information and has been defined as “the difference between the amounts of information already possessed by group.” Furthermore, equivocally means ambiguity and is characterised by multiple and/or conflicting interpretations of the available information. The richness of the medium depends on the medium’s capacity for feedback, the number of cues conveyed, personalization and language variety ( 2002).
The critical mass theory can also be used as a theory for the study. Critical mass theorists are concerned with collective innovations, those that require collaboration among potential adopters, if any adopter is to benefit ( 1982). The adopters of a collective innovation can either be persons or organizations (1979). Work related to collective innovations is known in economics under the labels of the “prisoner’s dilemma” and “demand externalities” ( 1988), and in sociology under the labels of “critical mass theory” (1965), the “logic of collective action” ( 1965), and “threshold models” of collective behavior ( 1978). Critical mass theory has been applied to riot and union demonstrations, participation in community activities, the behavior of cartels and investment groups, and the adoption of communication media ( 1987; 1990).
Critical mass theorists argue that it would be nonrational for actors to
participate in a collective innovation in the absence of a sufficient number of
participants. Thus adoption of collective innovations is often unlikely, even
when potential adopters are convinced of the positive benefits obtainable with
widespread participation. “The concept of threshold, then, is purely behavioral,
connoting nothing about what the actor thinks is the ‘right’ thing to do” (1978). Attitudes toward a collective innovation are thus formed by watching the group (1988). Perceptions shift as more individuals decide to participate (or stop participating), since the benefits for each participant increase (or decrease). If the innovation attracts a critical mass, the innovation achieves legitimacy, triggering the actions of members who have held back thus far.
The property management industry of Hong Kong can be considered as the investment group investing for information technology. Furthermore, information technology can be considered as the communication media adopted by the industry. This theory is related to the study because it argues that actors’ decisions to adopt a collective innovation are based on their perceptions of what others do. Their decision is influenced by how many others have already participated, how much the others have contributed, and/or who has participated ( 1988). In addition, this theory will show that when a critical mass of adopters has been reached, the benefits of adopting become positive for those who have not yet adopted.
The researcher also considers Innovation Diffusion as a valid theory for this dissertation. In this stream of research, “similar” organizations are those that occupy the same economic network position and are comparable in terms of organizational-level characteristics, such as size, technical competence, organizational values, and geographic markets (1982; 1983). According to this theory, innovation adopted starts through discussions with similar adopters, potential adopters acquire the beliefs and evaluations of these adopters, obtaining a normative understanding of the innovation, resolving the uncertainty associated with its adoption. Having formed positive attitudes through answers to questions such as “what will the innovation do for someone like me?” potential adopters are likely to adopt the innovation.
Individuals tend to disbelieve information originating from interested
parties, which is called “change agents.” (1983). Change agents can create awareness of the existence of the innovation and explain the innovation to
potential adopters, thereby achieving “competence credibility.” But, because of
their selfish or even manipulative motives, they lack “safety credibility” and are
not perceived as credible for evaluative information about the innovation. They
are, therefore, bound to fail in their attempt to induce attitude changes and
innovation adoption.
Aims and Objectives
This dissertation has the following objectives:
Ø To study the function of privatization in Property Management
Ø To study the use of Information Technology in Property Management
Ø To analyze appropriateness in business processes.
Ø To evaluate the cost and benefit of the use of technology.
Ø To understand the organization behavior towards such development.
To be able to study the use of privatization and its legislative issues in Property Management, the researcher will gather primary and secondary data. After data gathering, the researcher will analyze the appropriateness of privatization in business process and will evaluate the cost and benefit of the use of information technology as part of privatization practices. Furthermore, the researcher will also conduct observations to further determine the behavior of the respondents toward privatization, aside from those acquired in the survey. This will be the qualitative side of the research.
Chapter 2
Review of Related Literature
According to the Institute of Real Estate Management (Hans, 1995), the first step to take in automating a business or in changing to a new system is to thoroughly understand how your business presently operates. This involves observing the work of one or more employees, soliciting information from accountant, and performing an overall operational audit of the business. Thus, this shows that it is not that easy to implement an Information Technology program. It is widely implemented in many industries because of its timely and in-demand nature. and (2001) stated that more than trillion was spent worldwide in information and communication technology (ICT) industries in the year 2000, and it has been estimated that these expenditures had been growing at about 8% annually during the 1990s, or more than twice the rate of the global economy. With this, and the prediction that IT would soon be highly developed, it would be the “end of geography” according to many, a state of development that would lead to: immediate delivery and superb service to customers in any part of the globe, coordinated by specialized fulfillment companies and virtual service teams; mass customization of products and services, specifically tailored to different cultures or national idiosyncrasies, at no incremental cost relative to standardized mass production; and companies that would increasingly be “born global”, immediately having a global presence and avoiding the long and expensive process of building an international network of affiliates and personnel. (2001), in their investigation based study, concluded that while the ICTs will have a fundamental impact on the world of international business, they will not “change everything overnight” as some observers predicted initially.
In a study conducted by (1996), entitled “The Information Revolution and Its Impact on SME Strategy: The Asia Pacific Economic Cooperative Forum as Model,” it was concluded that as the cost of information technology keeps decreasing and instant worldwide communication becomes increasingly available, even small enterprises can have information and communication resources to participate in world markets. Furthermore, they can join with large company partners-in strategic alliances or other forms of cooperation- as suppliers, or in product development, co-production, distribution, and after-sales service.
(1989) found that managers and professionals associated having a computer in one’s office with being more status conscious, career oriented, dynamic, logical, open-minded, younger, and less conservative. Similarly, the use of computers has been found to signal competence and rationality (1981;1987). Computers have also been noted to appeal to people as entertaining or status-improving technology ( 1988; 1987; 1983;1980; 1989). Furthermore, as the most common tool in IT, Computers have been found to perform a descriptive function transmitting information about an organization. Several researchers have stated that they symbolize modernity and competitiveness among organizations (1990). Computer technology can also be a symbol of power and control at the industry, class, or societal level. The use of computer technology by management has been seen as a form of control over workers (1988).
In general, there have been many studies that examined the relationship between IT and productivity at the economy level. However, most findings have been inconclusive (1995; 2002; 1995). In other study focusing on G7 countries, (2000) examined the contribution of information and communication technologies to gains in productivity in Japan. Those studies concentrated on contribution of IT investments to productivity gains at the economy at-large level, however.
Hong Kong
Hong Kong has emerged from a “barren island” a hundred years ago, to one of the world’s foremost commercial centers. The influence of Hong Kong’s global economy reaches far beyond Hong Kong’s tiny geographical bounds, relatively small population, and limited natural resources. By 1996, Hong Kong’s per capita Gross Domestic Product (hereinafter GDP) had risen to about ,300, only slightly below that of the United States, and its annual GDP growth from 1985-1995 averaged six percent, approximately double that of the United States. ( 1998) Unemployment during this same period has averaged under two percent, ( 2002) well below the average in the United States. Hong Kong confronts the same economic problems as other developed nations, including inflation, underemployment, income inequality, and adherence to a conservative fiscal policy in the face of demand for new social programs. (1998) Nonetheless, Hong Kong’s spectacular economic growth has attracted investment from around the world. Eighty-five of the top 100 banks in the world have operations in Hong Kong; more than 750 corporations have located their regional headquarters in Hong Kong; and over 540 companies are now listed on the Hong Kong stock exchange. ( 2000) In 1995, total assets and liabilities of the Hong Kong banking industry were estimated to be over one trillion dollars and total market capitalization for the 542 public companies listed on the Hong Kong Stock Exchange was over 0 billion. (1998)
Hong Kong’s economy has become inextricably intertwined with that of China since the reunification of the two countries. (2002) Hong Kong is China’s largest trading partner, accounting for approximately one third of China’s foreign exchange earnings. ( 1998) It is estimated that seventy percent of commercial investment in China today either originates in, or flows through, Hong Kong. ( 2000) Hong Kong direct investment in China by the end of 1995 was estimated to be about billion, (1998) while Chinese direct investment in Hong Kong was estimated to be about billion, over billion of which was invested in real estate between 1993 and 1994. Eighteen Chinese banks are registered in Hong Kong, seventeen major Chinese state enterprises are listed on the Hong Kong stock exchange ( 2002) (the so-called “red chip” companies), (1998) and mainland Chinese companies have invested heavily in virtually all of Hong Kong’s major infrastructure projects. ( 1998)
It has been proclaimed Hong Kong as “perhaps the best example of free trade in the world,” and the Heritage Foundation’s 1996 Index of Economic Freedom cited Hong Kong as “`one of the most accessible markets in the world,’ with `very few’ barriers to imports and `virtually no barriers to foreign investors.’” (2002) Hong Kong has unquestionably achieved the economic conditions necessary to sustain substantial future growth. The question is whether Hong Kong can preserve its remarkable economic freedom, and thus continue to grow, while operating under Chinese sovereignty. China is a vast and complex country undergoing profound political, social, and economic changes. Within China, powerful forces (represented primarily by party, government, and military institutions) compete over resources, authority, and policy objectives. ( 1998) China’s relationship with Hong Kong reflects the complexity of this process as well as the very different histories of China and Hong Kong over the past 150 years. Hong Kong’s prosperity and its liberal political and economic institutions have stood in marked contrast to developments in mainland China for most of this century. This disparity has long strained China-Hong Kong relations, and has posed troublesome questions for the Beijing government. British colonial rule of Hong Kong, of course, further complicated the China-Hong Kong relationship. The Sino-British negotiations on the post-reunification status of Hong Kong, which deteriorated progressively in the months leading up to the handover, revealed deep differences and resentments between the parties.
Property Management in Hong Kong
Property management is one of the essential activities of an economy, illustrating a growing industry in Hong Kong. In addition to the constant growth of the property market, property management is also progressing in the country as evidenced by the attention given to it by most companies. Sky Pacific for instance, is an organization established within a group of experts with significant experiences in the property market. The company is able to sustain its management staff through their control system and close monitoring. The center of Sky Pacific is property management. The company is able to provide expertise in single and multi ownership properties, rent, leasing, reviews, budget forecast, accounting as well as strict quality control in landscaping, security, cleaning, maintenance services and administrative support. Sky Pacific is also recognized by the security and grading services associations under license no. 0155 to conduct management services of quality ( 2004).
Huge residential estates, single tower and multi-tower residential properties, industrial buildings, commercial premises, regional shopping centers and parking areas, are among the properties supervised by Sky Pacific. In addition to the company’s property management business, Sky Pacific also involves property investment services. The company’s services include the negotiation of lease renewal and rent review, collection of rental and various charges, processing of tenancy documentation, asset management and capital budgeting as well as cash flow projection. Valuation and estate surveying, property agency, projection, asset consultancy and capital budgeting are also among the many services provided by Sky Pacific (2004).
Aside from the growing interest in property management in Hong Kong as evidenced by the vast services given by Sky Pacific, companies are also employing various ways on hoe to enhance property management in the country. One of these methods is through cost reduction. SUN Hung Kai Properties (SHKP) for example, has invested not more than 0 million in intellineT, an IT-related project aimed at reducing the cost of property management by five percent (1999).
Developed by intellineT Management, a subsidiary of SHKP together with the IT experts of the , intellineT system utilises technology through the internet so as to improve management. According to Raymond Kwok, vice chairman of SHKP, the system is a significant breakthrough in Hong Kong’s estate administration. The implementation of this system will be applied to all residential developments initiated by the company in the future as stated by SHKP’s executive director, Kwong Chun. Through the use of the intellineT system, SHKP was able to obtain cost reduction in property management in the aspects of both energy and human resources (999). Based from these developments both in quality of services and enhanced operations, property management is indeed a growing industry among Hong Kong enterprises.
Hong Kong Information Technology
Hong Kong is undoubtedly one of the quickest developing regions all over the world, especially with its regard for technology. While this country was under the British colonies, it managed to continue with its development and at the same time retain its culture; economics continued to thrive despite its recent handover to China at the end of the term of contract. It has continued to cater to foreign businesses and has expanded especially with the onset of globalisation and the expansion of many corporations from the Western region of the world and into Asia, while other Asian businesses also expanded towards the Western region, and with its great development, economy has certainly progressed ( 1997).
The ready acceptance of information technology in the government implementation and the public sectors in Hong Kong is certainly an indication on the agreement of the officials in realizing the importance of its role in the changing times and thus were able to keep up with the needs of the businesses that are being conducted in their region. Moreover, the citizens of the province have also managed to maintain their confidence in the government over the years as the government has, in turn, used information technology not only to help the businesses within the region but has also used it to offer better services to their workers and their citizens through reaching out to other parts of their province (2001).
Moreover, with the acceptance of information technology in government as well as the uses it has continued to give to the property management businesses, Hong Kong has now moulded its intricate connections to both in an effort to produce a better outcome of their products and their managerial abilities, and thus also contribute to the economy of the province. (1992) has pointed out that with the importance of interconnectivity can be seen through the close workings of the government and the private sectors in an effort to protect the rights of both the businesses and the locals of Hong Kong. Moreover, with the fast-paced requirements of the corporations in that area, government departments must be able to keep up with their needs and as such must also be able to continue with the use of information technology. It was assessed that networking was one of the primary methods used for connecting the government and the businesses in their effort to ensure quick and exact exchange of information. The importance of information technology to the region and its focus on keeping up with the various methods of gathering these data was also echoed in this study, especially with the importance of information exchange between both sectors, and the need for continued development for both sectors to cater to the needs of the consumers and the citizens of the area as well as others who are depending on that region itself.
Technology for Property Management Services
Currently, studies that focus on the information technology with relation to the offered Property Management Services offered little to non-existent information. This poses a problem to the current study being conducted as it does give some viable information that can be referred to by the researcher. In fact, while the idea that information technology affects social living at some point, it is possible that no other researcher has thought to study this possible connection and the phenomenon that it may bring to the rest of the people. It is understandable, however, as many may consider this as a given and may choose to overlook this connection.
Thus, it is with some regret that there are very little studies that can be presented for this literature review that focuses on the relationship of information technology and Property Management Services, much less their relationship with outbound services. Despite this, however, there are some considerable studies and books that found their way into the scrutiny of the researchers, and thus must also be considered, mentioned, and reviewed. Business and residence services are interconnected because of the simultaneous needs of the workers and the competitive routes that the businesses may take, therefore may also engage the workers themselves to ensure that they may be able to continue their access in information regardless of the purpose of the area such as for business, for entertainment, or even for relaxation ( 1997).
As mentioned, information technology has been one of the most influential factors for the expansion of the corporations as well as the living conditions of the workers due to their involvement with these corporations that have use of this technology. Because of this, the influence of information technology can now be seen in several areas, which includes the living conditions that the workers have chosen. With the productivity of a person as well as the importance that a company can give to their own information technology, it may be deduced that a person who is in charge of that area must also be able to access those information. If a company has a great need for the data that can be obtained through information technology, then a person may be judged based on his or her productivity and the contributions that s/he is able to give to the company. Property Management Services that a person is delegated to can be based on the productivity that is being given to the company and through the information technology that they are able to give. With the emphasis on the data than can be acquired through fast and serious connections especially in this new age, the economy highly depends on the ability of the people to make use of these methods. Property Management Services may be either the result of these changes while also may be a contributive factor, as it can also affect the productivity of the company, which may require the information that can be gathered around the clock and from all areas around the world (2002).
However, it must also be remembered that when discussing Property Management Services and the role that computers and information technology plays to heighten their advantage, other issues must also be taken into consideration, which includes the spatial relations that these may have to the locals, the domestic needs that must also be considered alongside with the need for information obtainment, the characters and backgrounds of the people who are to obtain these, as well as the influence that these may have to the residents. In a study that focused on the effects of information technology to the distribution of the residential are (1997) have pointed out that communication has become a great factor for the living area. It was also discussed that with the greater focus on the communication-building and the improvement of the time with regards to communication-exchange, then it has come to affect the way people have managed to observe their actions as well as the consideration for other people. Moreover, it was also pointed out that with the time for communication being cut, there is also the possibility that people may demand that transportation itself become quicker, mostly because of the acceptance for the quicker communication time, and therefore may also be concentrated on transporting. It is stated that dispersion of the people may be the result of the growing population within the area, and with information technology there is the lessening need for the people who are communicating to be within geographical areas, thus freeing them to interact with others. Dispersion of the nature of the citizens is thus shown through the differences in their background, characteristics, and focus.
That information technology has a great effect on the chosen area especially with the social implications of the people is echoed in the study by (2002) that focused on the effects of information technology in a particular area, namely Chicago. The finding of this study, however, was contrary to the suggestions of the previous study that stated information may yield to dispersion; instead, it pointed out through evidence that it may yield centralization, especially for the users. This is because, as it was discussed, that in order to be able to provide the needed technology for information-exchange, there is also the need to centralise the space and be able to ensure that the people within the living quarters are able to receive the necessary resources that are needed from them to be able to gather the information that they need. Infrastructure plays a very important part in the needs that must be considered especially for the people who are to use these methods. It was also pointed out, however, that the finding may not simply regard geographical implications, rather with regards to the groups that are being formed and the knowledge spillage that comes from one group and into the other. Interaction and knowledge requires that the people at least have some connection with those whose information are being shared, and thus there is also the possibility of hierarchy being formed with the knowledge being passed on to those who may be of need. Moreover, it was found that it is the lower-ranked area of the city (e.g. those who belonged to a lower social class) may be more dependent in the intellectual spillover from those who have the knowledge and does not rely on the geographical proximity of the information; meanwhile, those who are in the high-ranked area of the city are the opposite, as they give high regard for the geographical proximity of those from which the information is being given to. It is interesting – and a little disconcerting – that social class continues to play a significant part in the decision of the people with regards to the exchange of information, and thus means that such division continues to exist.
Interestingly enough, the findings are also relevant to the study that has been conducted on the public demands that information technology has yielded in Hong Kong; the study that was conducted is highly significant to this study as they have almost the same theme the focuses on effects of information technology to services in residences with the factor of outbound performances. In this study, (2002) have also realized that computers have had a great impact in the decision of the people with regards to their living condition; digital communication is not anymore limited to the confines of business dealings but also includes the simple information that families may wish to retrieve in the comfort of their homes. It was acknowledged that members of teams that conduct their business may be required to work on their projects despite the time limitation in order to keep up with the continued demands that are being required of them not only by their company itself but also with the fast-paced world market. Efficiency and improvement are some of the emphasized needs of the job, thus it also requires that the workers be able gather and provide their information despite geographical boundaries. In order to give them their needs, Hong Kong, one of the busiest regions in the world when it comes to world market, has catered to the needs of the workers for them to continue to keep up to date with the findings and also be able to give their needed findings. The findings of the study shows that housing types in Hong Kong has also catered to the need for speed decision-making among contracting parties. There is the acknowledged necessity for clients, consultants, and contractors to exchange data at the fastest rate possible, and as such must also be given. Engineering then has come up with several changes over the years in order to provide the needs of the workers and their clients. Strategies with regard to the designs of the housing structure have also been improved to simultaneously cater the physical, social, economical, and technological need of the people. Standardization, however, has become a popular notion for the building owners in an effort to produce cheaper housing units that may continue to provide the people with their needs while at the same time cost less and have less time to be configured. Finally, it was concluded that with the continued development of Hong Kong and the surrounding areas that offer their technological innovation. With the persistent need for innovation, information exchange, and space, then these Property Management Services will also continue to change to keep up with the needs of the people, the corporations, and the economy.
Economic Reviews and Outlook
The growing interest and dependence of several Hong Kong companies on facilities and property management is attributable to the current status of their economy. Based from the results showed in the for 2003-2004, the economy of the country has grown steadily by 4.5% during the 2003’s first quarter. This growth was brought about by main driving forces such as external trade. However during the year’s second quarter, problems started to arise due to SARS issues. During the outbreak in 2003, several organizations had reduced their GDP forecast for Hong Kong. The SARS outbreak had even stressed on the recession of the country’s economy. By April, the country was able to see and feel the impact of the disease as more and more companies at the local and overseas level had lessened, causing unfavorable business environment. While the disease had greatly affected the economy, resulting to a .5% decrease in GDP from the first quarter, the expected reduction was worst than the actual outcome; hence, most organization had revised their GDP forecast for the year. Mainland China had been giving full support to Hong Kong during the SARS outbreak through the provision of financial aids and medical needs. Eventually, the retail market of Hong Kong had grown rapidly. Some retailers had even expanded or planned to expand their retail spaces in major street areas like Mongkok as well as in major shopping malls. This progressing trend had increased dramatically Hong Kong (2004).
Through the existence and help of CEPA or Closer Economic Partnership Arrangement, international investors had started to expand their business in Hong Kong to represent flagships and stepping stones between China and the rest of the world. The SARS outbreak had led to consumer purchasing trends, particularly on health products. Throughout the year, Hong Kong was able to experience continuous growth in the retailing aspect.
There has been a significant improvement in the unemployment rate of the country. This development had resulted to the increased GDP forecast of the Hong Kong government to three percent in comparison to the two percent forecast during the SARS crisis. As the Hong Kong economy started to gain much confidence, the GDP forecast in 2004 has also led to positive impact. However, there are some uncertainties that would have to be addressed in the coming years. The budget deficit for instance, remains high and is predicted to increase continuously for the next two years. The large supply of residential space on top of the railway stations can possibly slow don the Hong Kong economy and pull down the prices. The structural adjustment is also resulting to increased unemployment rate for the elderly and the young people ( 2004).
Government Policy
Due to the continuous increased in budget deficit, new legislation on REITs and the rising property market, the Hong Kong government has grown serious in considering privatization as well as various property divestment approaches for its assets. On the global level, capitalizing on the value from real estate assets owned by the government is no longer a new trend. In 1984, the privatization of British Telecom that resulted to a GBP raise of 7.4 billion had led to the worldwide acceptance of the privatization practice. The government of Hong Kong has conventionally capitalized on value on value from its real estate by means of an extensive land sale program. Although this has led to the generation of significant amount of revenue, the potential to release capital from real estate assets, such as government occupied and owned property, utilities or assets provided socially, has not been addressed (, 2004).
Thus, several initiatives have been performed by the Hong Kong government to address this issue. This has been done through certain government policies. Among the most notable of these efforts is the plan for the REIT-like initial public offering (IPO) of the Housing Authority’s commercial property portfolio and the partial privatization of the Airport Authority ( 2004).
The effort towards privatization is being led by the Hong Kong Housing Authority (HA). At present, the agency is pursuing an initial public offering with REIT-like qualities for its portfolio of car parking and retail facilities. This divestment approach is geared towards the generation of about 3 to 4 billion US dollars in revenue. Another current initiative is the partial privatization of the AAHK or the Airport Authority of Hong Kong of which HKIA or Hong Kong International Airport will form part, with further divestment of the MTRC and a proposed sale of a stake in a number of tunnels and a bridge though bond issues. The consultancy process for the privatization of the airport is well underway and is predicted to generate 4 to 6 billion US dollars through an initial public offering with a listing on the stock exchange at the later part of the year as the final objective (2004).
The political, social or economic benefits Hong Kong will gain out of these government policies and privatization programs, is still not yet proven and seen. In 2004, there has been a significant increase in the amount of initial public offerings being listed in Hong Kong. This in turn has a potential effect on the share values of listed property companies in the country. Currently, Hong Kong has already a high degree of private sector participation within its public services and utilities. Privatization will then result in more concentration on the improvement on the efficiency of assets in terms of cost reduction and increased revenues. The increased capital or margins may be utilized to further develop the core operation of the organization as well as to reduce the costs incurred through the provision of services to the end user ( 2004).
Property Market and Overview
The property market had constantly increased in 2004. Such increasing trend is likely to be carried over in 2005 as shown in the results of for 2003-2004. The following are the summary of the current status of the various aspects of property market in Hong Kong.
Luxury Residential Market. Throughout year 2004, the luxury leasing market of Hong Kong has shown a stable and fair performance in spite of the SIRS outbreak as well as the conventional low season during the Chinese New Year. In comparison to other property types, luxury leasing activity appeared to be the least affected by the SIRS outbreak. In fact, high-end luxury houses and detached houses were apparently in demand after the SIRS outbreak due to the needed higher standard of environmental hygiene and lower site densities. Towards the end of the year, leasing activity has significantly increased with a rapid influx and housing demand from expatriates. In terms of sales activity, luxury sales have resulted to a satisfactory performance partly due to the 24 hour Huanggang Port border-crossing services, which started in January (1999).
Mass Residential Market. The progress in mass residential sales market is brought about by investors in Mainland China and other parts of the world. This again is facilitated by the 24 hour Huanggang Port border-crossing services. Other developments that had led to this progress include the Individual Travel Scheme for Mainland tourists which began in August and the Capital Investment Entrant Scheme, which started in October 2003. Common trend observed under this property market type was that Mainlanders were more into units in the New Territories, the foreigners and immigrants were more interested in high-end mass residential properties. In January 2003, sales in mass residential properties had resulted to significant benefits and positive impact to the nine residential property market of the government. The launch of the West Rail and Tseung Kwan O Rail had increased the secondary sales in estates along the stations, reducing the gap between the primary and secondary prices in the New Territories ( 1999).
Office Market. During the Chinese New Year holiday, the office leasing activity has been normal. During the outbreak of SARS in April, negotiations and conclusions were dragged; rents also went down by 15.73 between March and June. In the latter part of May, prospective tenants had re-emerged as the situation in Hong Kong began to stabilise. Tenants took advantage of the low rentals. They had also relocated from older buildings to office premises of better quality or from decentralized areas to prime locations. Sales activity in the office property market sector had concentrated on en-bloc grade-B transactions throughout the year. A total of 24 towers were traded (comparable with 25 over 2002), of which 32 per cent (eight) were transacted between March and June during the SARS period, and another 32 per cent in November and December, following the introduction of the Capital Investment Entrant Scheme by the Government in October. Scarcity was still observed in terms of sales in strata-title grade-A properties, particularly during the SARS outbreak period and the Iraq War as buyers had been extra cautious over purchasing decisions. Consumers had also grown more hesitant to launch properties for sale with such uncertainties and low price levels (2004)
Conclusion
In conclusion, the above-mentioned review of literatures is related to this study because they all sought the impact of information technology, whether on corporations or small businesses. All of the results presented depicted IT as a positive tool in business. Those results can stand as support to the hypothesis of the study – that IT is an advantage to the Property Management Industry in Hong Kong. As in the structural theory, the relationship between the industry’s information technology and its structural characteristics will be determined to see if it fits to the industry’s effectiveness. The media richness theory can be a basis for determining the efficacy of information technology as a medium for the industry and finally, the critical mass theory can determine if the use of IT in the industry has a chain effect that persuades other companies to adopt it.
Chapter 3
Research Methodology/Research Design
In this study, primary research and secondary research was used. Primary research has been conducted using semi-structured questionnaire surveys to interview the top managements of property management companies in Hong Kong. Through this questionnaire survey, the researcher would get to know the perception on the impact of information technology to their industry.
The questionnaires will be used to collect quantitative data. This will allow the investigation of important new issues in property management in Hong Kong and questions as they have arisen, and will allow the investigator to drop unproductive areas of research from the original research plan.
The questions that will be used in the questionnaires are closed type questions because it is quantitative and numeric in nature. This will ideal for the survey of the study. Closed questions ask for an “on/off” response, or for a selection of choices. The choices are always pre-defined for the respondents in the questionnaire, and respondents simply have to endorse appropriate responses. Furthermore, the researcher wants to guide the respondents in answering the questions. Aside from that, time is very short in completing the dissertation – data should be simple to analyze. In addition, aside from the fact that closed type questions will allow the researcher to acquire factual information, it will also allow the respondents to take a little time to complete the questionnaire.
The questionnaire will be structured questionnaire because it will require less difficulty in analyzing and completion of the task. The researcher originally planned to conduct semi-structured questionnaire because it is more flexible than the structured type. However, semi-structured questionnaires are more difficult and time consuming to complete and to analyze. Because the time available in conducting the dissertation is only limited, the researcher decided to settle to structured questionnaire because it will provide a quick survey process and data gathering.
In the structuring the questionnaire, the researcher will first define the goals of the information collection. Then, the researcher will clarify how those goals can be met by collecting various types of information. Furthermore, variables that need to be measured will be defined. This will then be followed by interviews or group discussions with representatives of the target population, which are top managers in Hong Kong property management companies – use them to discuss your information collection goals, and how those goals can be expressed in an appropriate format. Enclosed with the questionnaire is an accompanying letter that will introduce the researcher and the purpose of the questionnaire. In addition, the information that should be collected will be mentioned as well as the assurance that each of their answers will be confidential. Questionnaires will be distributed via email, fax, personal interview, and through focus group.
The study used quantitative research because it involves counting and measuring the events and performing the statistical analysis of a body of numerical data (1988). It is compatible with the study because it allows the research problem to be conducted in a very specific and set terms (1992). Furthermore, quantitative research clearly and precisely specifies both the independent and the dependent variables under investigation (2002). It also follows firmly the original set of research goals, arriving at more objective conclusions, testing hypothesis, determining the issues of causality and eliminates or minimizes subjectivity of judgment ( 1996). In addition, this method allows for longitudinal measures of subsequent performance of research subjects ( 2002). Finally, it provides achieving high levels of reliability of gathered data due to controlled observations, laboratory experiments, mass surveys, or other form of research manipulations.
Observations were also used in the study to be able to utilize a qualitative element in the research. How the companies operate with the use of information technology has been investigated to determine their attitude into the technology. This study also employs qualitative research method, since this research intends to find and build theories that would explain the relationship of one variable with another variable through qualitative elements in research. These qualitative elements does not have standard measures, rather they are behavior, attitudes, opinions, and beliefs.
This study also employs qualitative research method, since this research intends to find and build theories that would explain the relationship of one variable with another variable through qualitative elements in research. These qualitative elements does not have standard measures, rather they are behavior, attitudes, opinions, and beliefs.
Qualitative research is multimethod in focus, involving an interpretative, naturalistic approach to its subject matter. This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret phenomena in terms of the meanings people bring to them. Accordingly, qualitative researchers deploy a wide range of interconnected methods, hoping always to get a better fix on the subject matter at hand. At the most general level, qualitative research focuses on meaning making by humans and this meaning is seen best through examining the symbols and language. Through language, reality becomes social. Equally, it is through language that reality becomes intersubjective and accessible for analysis. Hence, for the purpose of qualitative research language and other serniotic systems represent both an analytical object and a central tool of analysis. The phenomenon includes a concern about “under what conditions communicative acts occur, how it is that people account for their acts, what versions of the world are proposed and negotiated through communication” (1996). In addition, qualitative researchers show that there are many other viable methods for gathering very rich data. Some methods include focus groups (a form of group interview), ethnography (covert or overt investigations of a sub-culture), action research (projects aimed at mediating a social problem), and unobtrusive measures (examining non-textual artifacts). Phenomenology has made several contributions to “data analysis,” including analysis of the researcher’s attitude. Qualitative research methods can contribute to phenomenological work by adding tools for collecting data that might be better suited for the phenomenon under investigation ( 2003).
The secondary sources of data will be acquired from published articles from journals, books and past data and statistics of a study about the impact of information technology in business.
Data Collection
The data collection instrument will be based on Likert scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement with a statement. By rating scale we mean the scales that are usually used to measure attitudes towards an object, the degree to which an object contains a particular attribute, (Like or dislike), toward some attribute, or the importance attached to an attribute. . The equivalent weights for the answers will be:
Range Interpretation
4.50 – 5.00 Strongly Agree
3.50 – 4.49 Agree
2.50 – 3.49 Uncertain
1.50 – 2.49 Disagree
0.00 – 1.49 Strongly Disagree
However, with the use of Likert Scale, the researcher is also aware of its disadvantages and will elaborate them for clarification. The disadvantages are: the subjects may or may not give an accurate assessment of their beliefs, feelings, attitudes or behaviors. The data is legitimate only to the extent that subjects are completely honest; subjects may answer according to what they feel the correct response should be, not how the subject really feels; a subject may give a higher score out of compassion, or a lower score out of anger; and scale construction is time consuming and takes a great deal of decision making. Some experts recommend up to 100 potential items that will be trimmed down to 10-12.
A number of top managers in selected property management companies in Hong Kong will be surveyed and interviewed as to the realm of this study. They will be sent questionnaires pertaining to the topic. Their cooperation will be fervently sought after. A descriptive analysis (with strictest confidence given to financial aspect) of its organization will be undertaken, form the organizational structure down the most intricate detail permitted. The object is to find out the exact nature of property management and its impact on the community and the industry itself.
For validation purposes, the researcher will initially submit a sample of the set of survey questionnaires and after approval; the survey will be conducted to five respondents. After the questions were answered, the researcher will ask the respondents for any suggestions or any necessary corrections to ensure further improvement and validity of the instrument. The researcher will again examine the content of the interview questions to find out the reliability of the instrument. The researchers will exclude irrelevant questions and will change words that would be deemed difficult by the respondents, too much simpler terms.
The researcher will exclude the five respondents who will be initially used for the validation of the instrument. The researcher will also tally, score and tabulate all the responses in the provided interview questions. Moreover, the interview shall be using a structured interview. It shall consist of a list of specific questions and the interviewer does not deviate from the list or inject any extra remarks into the interview process. The interviewer may encourage the interviewee to clarify vague statements or to further elaborate on brief comments. Otherwise, the interviewer attempts to be objective and tries not to influence the interviewer’s statements. The interviewer does not share his/her own beliefs and opinions. The structured interview is mostly a “question and answer” session.
When the entire survey questionnaire will have been collected, the researcher will use statistics to analyze all the data.
The statistical formulae to be used in the survey questionnaire will be the following:
1. Percentage – to determine the magnitude of the responses to the questionnaire.
n
% = ——– x 100 ; n – number of responses
N N – total number of respondents
2. Weighted Mean
f1x1 + f2x2 + f3x3 + f4x4 + f5x5
x= ——————————————— ;
xt
where: f – weight given to each response
x – number of responses
The researcher will be assisted by the SPSS in coming up with the statistical analysis for this study.
Credit:ivythesis.typepad.com
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