CORPORATE SOCIAL RESPONSIBILITY OF DEVELOPERS
IN PRODUCT PERSPECTIVE. CASE STUDY: JOHOR BAHRU
TAN SAN SAN
UNIVERSITI TEKNOLOGI MALAYSIA
PSZ 19:16 (Pind. 1/97)
UNIVERSITI TEKNOLOGI MALAYSIA
BORANG PENGESAHAN STATUS TESIS
JUDUL:
CORPORATE SOCIAL RESPONSIBILITY OF DEVELOPERS
IN PRODUCT PERSPECTIVE. CASE STUDY: JOHOR BAHRU
SESI PENGAJIAN: 2005 / 2006
Saya
TAN SAN SAN
(HURUF BESAR)
mengaku membenarkan tesis (PSM/ Sarjana/ Doktor Falsafah)* ini disimpan di Perpustakaan
Universiti Teknologi Malaysia dengan syarat-syarat kegunaan seperti beikut:
1.
2.
3.
4.
Tesis adalah hakmilik Universiti Teknologi Malaysia.
Perpustakaan Universiti Teknologi Malaysia dibenarkan membuat salinan untuk tujuan
pengajian sahaja.
Perpustakaan dibenarkan membuat salinan tesis ini sebagai bahan pertukaran
antara institusi pengajian tinggi.
**Sila tandakan ( )
(Mengandungi maklumat yang berdarjah keselamatan atau
kepentingan Malaysia seperti yang termaktub di dalam
AKTA RAHSIA RASMI 1972)
SULIT
TERHAD
(Mengandungi maklumat TERHAD yang telah ditentukan oleh
organisasi/ badan di mana penyelidikan dijalankan)
TIDAK TERHAD
Disahkan oleh
_____________________________
(TANDATANGAN)
_______________________________
(TANDATANGAN PENYELIA)
Alamat Tetap:
No. 2, Jalan Klinik
82300 Kukup
Johor
DR. HAJJAH ASIAH OTHMAN
Nama Penyelia
Tarikh:
MEI 2006
Tarikh:
CATATAN:
*
**
x
MEI 2006
Potong yang tidak berkenaan.
Jika tesis ini SULIT atau TERHAD, sila lampirkan surat
daripada pihak berkuasa / organisasi berkenaan dengan menyatakan sekali
sebab dan tempoh tesis ini perlu
Tesis dimaksudkan sebagai tesis bagi Ijazah Doktor Falsafah dan Sarjana
secara penyelidikan, atau disertasi bagi pengajian secar kerja kursus dan
penyelidikan, atau Loporan Projek Sarjana Muda (PSM).
ii
DECLARATION
“I hereby declare that this thesis is my own piece of work except otherwise mentioned
the sources.”
Signature
:
……………………
Name
:
TAN SAN SAN
Date
:
MAY 10, 2006
iii
CERTIFICATION
“I/ We* admit that I have read this piece of work and on my/ our* opinion this piece
of work is enough in terms of scope and quality for the purpose of awarding the
Degree in Master of Science (Land Administration and Development)”
Signature
:
…………………………….
Name of First Panel :
Dr. Hajjah Asiah Othman
Date
…………………………….
:
iv
DEDICATION
Dedicated to my beloved hubby Richard, daughter Xin Ru,
parents, brothers and sisters.
v
ACKNOWLEDGEMENT
I wish to take this opportunity to extend my warmest and heartfelt gratitude to
my supervisor of this study, Dr. Hajjah Asiah Othman for her valuable support,
guidance and ideas throughout the entire journey of supervision. Her encouragement
and constructive opinions are very much appreciated. I am so indebted to her for
spending her precious time for guidance and offering suggestions for improvement of
this study.
A special word of thank must go for Real Estate and Housing Developers’
Association Malaysia (REHDA), especially the secretary Ms. Kit Chan for generously
providing me the property developers information which are vital to this study.
Besides that, I would like to convey my appreciation and indebtedness to all
the developers who have participated in this study. Thank you once again.
I would like to express my sincere thanks to my friends and ex-college
especially to YP Foo, LS Lau, CL Loo, Nora, Louis, Racheal Soong, Megan Lee,
Tracy Wong, Eliau Yiau and Lyn Teoh.
Last but not least, I appreciate the encouragement and moral support given by
my family, lecturers, friends, ex-college, coursemates and everyone who has lend me
a hand for the accomplishment of this study. Thank you very much.
vi
ABSTRACT
This study deals with the implementation of Corporate Social Responsibility
(CSR) in product perspective among the developers in the study area, Johor Bahru.
For turning in good profits, the quality issues are inevitably sacrificed by most of
developers as they rush to build and complete houses. Furthermore, there are over
supply of unsold stock of completed properties in the housing market after economy
recession. Today, developers are often at cross roads about the hard infrastructure
they need to provide to satisfy the needs and wants of home buyers such as parks,
garden and open space. Since there are remaining unsolved issues, more drastic
action needs to be taken on critical housing projects and public awareness
programmes especially to promote CSR among developers. Therefore, the objective
of this study is to examine the implementation of CSR in product perspective by the
developers and their impacts towards the township developments in Johor Bahru. In
this study, four methodologies were employed: Questionnaire, the Customer
Perspective of Balanced Scorecard Strategy Map, frequency approach and cross
tabulation analysis. The questionnaire is designed by the measurement of Customer
Perspective in Balanced Scorecard Strategy Map. The data collected are based on
primary and secondary sources. In the process of the study, literature review is
carried out by referring to the secondary sources of data that were be obtained and
concluded from the previous studies, existing scholars work, journals, research papers
and other sources such as property market report and published information from
housing organization such as REHDA and House Buyers Associates (HBA). While,
primary data will be derived from the interview with developers who have registered
under REHDA based on random sampling method whereby 19 respondents will be
taken from the total 50 developers located in Johor Bahru. The data collected will be
analyzed through frequency approach and cross tabulation. Result of analysis tend to
confirm the primary evidence from questionnaire survey whereby the effectiveness of
CSR in product perspective implemented by developers by offering variety in product
attributes to the community through the provision of security concept, well planned
facilities and amenities have eventually shaped the township developments in Johor
Bahru. Not all developers are affordable to complement CSR as company policy.
Even, not all product attributes are contributed to CSR because it required a very
strong financial capital to achieve CSR in product perspective. For those companies
who have successfully implemented CSR in product perspective are those who have a
very strong sales revenue recorded track and at the same time they have many on
going sites projects development through the country. Usually these companies are
belongs to public listed.
vii
ABSTRAK
Kajian ini berkait dengan pelancaran Tanggungjawab Social Korporat (CSR)
dalam pembangunan perumahan di kalangan pemaju perumahan di Johor Bahru.
Demi mencapai keuntungan tinggi, kualiti merupakan satu isu yang sering diabaikan
oleh kebanyakan pemaju semasa menyiapkan perumahan. Selain itu, terdapat
kelebihan penawaran rumah siap di pasaran selepas keruntuhan ekonomi. Para
pemaju perumahan sekarang juga menghadapi kesulitan dalam menawarkan corak
perumahan selaras dengan memenuhi kepuasan pembeli-pembeli dari segi penyediaan
taman bunga dan kawasan lapang. Memandangkan masih banyak isu perumahan
yang belum diselesaikan, langkah-langkah drastik perlu diambil segera untuk
menangani masalah projek perumahn di samping menganjurkan program-program
untuk meningkat keprihatinan dalam masyarakat terutamanya dalam mengalakkan
CSR di kalangan pemaju. Dengan itu, matlamat kajian ini adalah untuk mangkaji
pencapaian para pemaju dalam CSR berasaskan produk yang bakal membawa
perubahan dalam projek pembangunannya. Terdapat empat kaedah yang akan
digunapakai dalam menjalankan kajian ini, iaitu soal selidik, “Customer Perspective
of Balanced Scorecard Strategy Map”, pendekatan kekerapan dan perdekatan
perbandingan. Pada permulaannya, soal selidik akan direka berasaskan ukuran yang
terkandung dalam “Customer Perspective in Balanced Scorecard Strategy Map”.
Pengumpulan data boleh didapati menerusi data primari and data sekunder. Dalam
proses meyiapkan kajian ini, kaji selidik dalam data sekunder juga dilakukan melalui
kajian lepas, kertas kerja siswazah, kertas kerja pembentangan dan lain-lain rujukan
serta cetakan yang berkenaan dengan perumahan dari REHDA dan HBA. Selain itu,
data primari boleh diperolehi melalui kaedah temuduga dan soal selidik kepada para
pemaju yang berdaftar di bawah REHDA di mana persampelan secara mudah rawak
akan digunakan, iaitu seramai 19 orang pemaju telah diambil daripada jumlah 50
keping soal selidik yang diedarkan di pasaran Johor Bahru. Kemudian, pendekatan
kekerapan dan perbandingan akan digunakan untuk membuat analisa mengenai data
yang dikumpulkan. Keputusan daripada kajian soal selidik didapati bahawa
pelancaran CSR oleh pemaju-pemaju dalam penawaran produknya kepada masyarakat
dengan mengambilkira konsep keselamatan, dan kemudahan sosial telah membawa
perubahan yang efektif dalam projek pembangunan di Johor Bahru. Dengan itu, tidak
semua pemaju berupaya menjadikan CSR sebagai polisi syarikat. Begitu juga
bukannya semua ciri-ciri produk dapat menyumbang kepada CSR kerana ini
memerlukan keupayaan kewangan yang tinggi. Lazimnya, para pemaju yang berjaya
menjalankan CSR dalam aspek produk adalah terdiri daripada syarikat yang besar
dengan pencapaian jualan yang tinggi dan mempunyai pelbagai projek pembangunan
di seluruh negara.
xiii
LIST OF TABLES
TABLE NO.
TITLE
PAGE
2.1
Most Desired Township Concept
33
2.2
Most Desired Features In New Township
34
2.3
Top Five Most Desired Public Amenities
34
3.1
Top Six Most Important Purchase Factors Other Than
Price and Location
58
4.1
Summary of Developers’ Profile
68
4.2
Range of Price Offered According to Housing Type
73
4.3
Factors Determine Price and Exercise Lower Price
74
4.4
Accessibility of Township
76
4.5
Infrastructure
77
4.6
Public Amenities and Recreational Facilities
79
4.7
Security Features and Services
Charging Maintenance Fee
4.8
Type of Township Development
Offered
Without
80
82
xiv
4.9
Business Hour
83
4.10
Retaining Strategies
85
4.11
Rectification of Defects and Installation of Loose Fittings
86
4.12
Categories of Complaint
87
4.13
Action Taken Upon Vacant Possession
89
4.14
Social Responsibility Towards Society
92
xv
LIST OF FIGURES
FIGURE NO.
TITLE
PAGE
1.1
Methodology of the Study
12
3.1
The Balanced Scorecard Strategy Map
40
3.2
The Customer Perspective of Balanced Scorecard
Strategy Map
46
xvi
LIST OF ABBREVIATIONS
BLR
Base Lending Rate
CCTV
Closed Circuit Television
CFO
Certificate of fitness for Occupation
CSR
Corporate Social Responsibility
HBA
House Buyers Associates
REHDA
Real Estate and Housing Developers’ Association Malaysia
R&D
Research and Development
SEE
Social, Ethical and Environmental
SPA
Sale and Purchase Agreement
SPSS
Package for Social Science Research
SRI
Socially Responsible Investing
UK
United Kingdom
US
United State
VP
Vacant Possession
xvii
LIST OF APPENDICES
Appendix 1
Schedule G of Housing Development (Control and Licensing
Regulations)
Clause 29 Stamp and Registration Fee
Schedule H of Housing Development (Control and Licensing
Regulations)
Clause 33 Stamp and Registration Fee
Appendix 2
Clause 19 (2) Payment of Service Charges
Schedule H of Housing Development (Control and Licensing
Regulations)
Appendix 3
Schedule G and H of Housing Development (Control and
Licensing Regulations)
Clause 9 (1) Interest on Late Payment
Appendix 4
Schedule G of Housing Development (Control and Licensing
Regulations)
Clause 24 (3) Manner of Deliver of Vacant Possession
Clause 25 Vendor to Obtain the Certificate of Fitness for
Occupation
Clause 26 (1) Defect Liability Period
Schedule H of Housing Development (Control and Licensing
Regulations)
Clause 27 (3) Manner of Deliver of Vacant Possession
Clause 29 Vendor to Obtain the Certificate of Fitness for
Occupation
Clause 30 (1) Defect Liability Period
Appendix 5
Schedule H of Housing Development (Control and Licensing)
Regulations
Clause 28 (1) Completion of Common Facilities
xviii
Appendix 6
Schedule G of Housing Development (Control and Licensing)
Regulations
Clause 19 Maintenance of Services
Appendix 7
Schedule G of Housing Development (Control and Licensing)
Regulations
Clause 18 Payment of Outgoings
Schedule H of Housing Development (Control and Licensing)
Regulations
Clause 22 Payment of Outgoings
Appendix 8
Questionnaire
CHAPTER 1
CHAPTER 1
INTRODUCTION
1.1 Introduction
Changing lifestyles and escalating costs of real estate, as well as the
innovative application of new technologies and new materials are some of the forces
shaping new residential environments.
In the local context, we are witnessing
changes in demographic and household formations. This is affecting what is being
built and where it is built. Creative knowledge workers who are well educated, finally
comfortable and highly mobile are increasingly driving the economy. From careerdriven urban singles to suburban families, people are leading multitasked lives that
demand customized residences. As the lines between work and play blur, more and
more building are built with greater regard to their surroundings and enhance the
environment (Lim Lay Ying, Property Times, 11 June 2005, pp 11).
Embracing Corporate Social Responsibility (CSR) would be one way practice
for development and construction companies to achieve the goal in providing
residents with all the conveniences and amenities and offering an appealing quality of
2
life in a safe environment. The selection CSR criteria includes the examination of the
company on: the philosophy of company towards social responsibility, commitment
to health and safety, protection of the environment, fairness in working conditions,
reputation of company as a role model in the housing and construction industry in
Malaysia, community development, contribution to charity and the strength of
company brand (G. Umakanthan, Property Times, 6 August 2005, pp 4).
The rewards from CSR would be manifold. For instance, developers that take
these steps would create a brand name for their projects, built a reputation for
themselves and be accepted as responsible corporate citizens. Taking a cue from the
Government’s efforts to promote CSR, estate agency SK Brothers Realty Sdn Bhd has
been pushing for CSR and awarded six property and construction companies with
“CSR Certificates” during the Grand Raya – Xmas Home Ownership Campaign 2004
(HOC 2004). Mah Sing Properties Sdn Bhd with its objective to provide its buyers
with quality products through “uncomprising commitment towards total customer
satisfaction” is one of these companies has seen the benefits of good CSR practice by
exceeding sales performance targets for its projects in the Klang Valley and Johor.
Besides, Guthrie Property Development Holding was recognized for its Bukit
Jelutong development in Shah Alam, Selangor which won numerous awards,
including ‘Best Planned Township’ from the Malaysian Institute of Town Planners in
year 1997 and ‘Best Neighbourhood Landscape’ from the State Government in year
2001. Other developers had been awarded of Certificate of CSR included PECD
Group (Peremba Jaya Holdings Sdn Bhd), Glenmarie Cove Development Sdn Bhd,
Putrajaya Holdings Sdn Bhd and Hicom – Gamuda Development Sdn Bhd were also
3
named as socially responsible corporate citizens and issued with the CSR certificates
as well (Property Times, 11 December 2004, pp 6).
Today, the housing industry market posses a whole range of products started
from affordable homes to high-end properties. Government of Malaysia has to step
up effort to promote awareness of CSR in the property sector. Such effort will bring
about greater acceptance of its principles and quality management as well as the
value-add impact on various areas in society. The CSR awards to developers, who
adopted the principles of good governance and contributed to society through their
infrastructure development, will continue to fuel competition among developers to
build not only largest and profitable township, but also the best and healthy
environments for the residents.
1.2 Problem Statement
Referring to the monitoring and enforcement by Division of the Ministry of
Housing and Local Government, complaints and grievances of house buyers have
been classified under three broad categories – technical, non-technical and violations
of the Housing Development Act and Regulations. Since the defective workmanship
and late delivery of housing units topped the list of complaints received in 2000 –
2005 by the Division of the Ministry of Housing and Local Government, more drastic
action needs to be taken on critical housing projects and public awareness
programmes (Loo Pik Kwan, The Sun, 14 December 2005, pp 16). For turning in
good profits, the quality issues are inevitably sacrificed by most of developers as they
rush to build and complete houses.
4
In fact, as property developers expanding their businesses and scramble for
market share, the consistency in product quality is possess a growing challenge
especially when buyers are getting more discerning. In order to manage the business
operation successfully, developers have to take into consideration the interest of
purchasers and property needs through CSR. They have to ensure quality of the
houses in good condition upon delivery of vacant possession (VP). This will bring
them a good reputation.
Having established a good reputation and maintained
excellent relationship with customers in terms of quality products provided, the sales
revenue will increase promptly by the potential buyers who assess for the developer’s
reputation and track record. At the end, developer would have converted CSR into a
product perspective offered to public. Thus, CSR in product perspective can be
acknowledged as a good instrument to be adopted by developers in order to identify
the complaints made by house buyers and resolve the house buyers’ grievances.
Property purchased is an investment can also be used to live in or passed on to
future generations. In the past, developers hardly considered the requirement for open
space in their projects.
Developers are often at cross roads about the hard
infrastructure they need to provide to satisfy the needs and requirement of home
buyers.
When the property market becomes more competitive, understanding the
shape and form of future consumer market is crucial for housing developers.
Consumer choices and needs have changed, and therefore developers are learning to
provide homes according to consumer demands in addition to household structure,
education and occupation profiles, as well as income levels. Today, consumers are
drawn to the newer townships that feature on the major valued concepts featuring
5
park, garden and open space. They are looking for homes and willing to pay for
living in a community that offers good quality of life and fosters personal fulfillment.
With comparative established price range, every developer has the fair share
on their segment market by way of offering more choice in terms of products from
affordable homes to high-end lifestyle properties. Apart from price attributes such as
cost, location, and sizes of houses are main indicators to effect on the housing prices,
developers have to provide value-added features and green environments in their
township developments. Developers have discovered that to achieve competitive
advantage in housing industry, a new and innovative use of the open space need to be
created through implementation of CSR. Moreover, with the creative application of
new materials, innovative designs and new technology, successful developers have
offered a wide array of amenities and infrastructure to attract the homebuyers. This is
a challenge to the real estate industry as how the developers through implementation
of CSR in product perspective have eventually affected the township developments.
1.3 Aim of Study
The study is aimed at the effectiveness of CSR in product perspective
implemented by developers and its affects towards the township developments in
District of Johor Bahru, State of Johor.
6
1.4 Objectives of Study
The objectives of the study are as follows:
1.
To review the CSR in product perspective within the property development;
2.
To identify the criteria and attributes contributing to the CSR in product
perspective which have been practiced by the developers located in District of
Johor Bahru, State of Johor; and
3.
To examine the implementation of CSR in product perspective by the
developers and their impacts towards the township developments in District of
Johor Bahru, State of Johor.
1.5 Scope of Study
There is growing perception within the corporate and shareholder
communities that companies can perform well in the social, ethical and environmental
arena and also perform well financially.
Innovest Strategic Value Advisors, an
organization that rates companies in more than 50 industries according to a wide
spectrum of social, environmental and corporate governance issues have provided
evidence that companies with better corporate governance, superior social and
environmental ratings also have the best performing shares as well.
In the academic literature there are a number of reasons given for a possible
positive relationship between CSR and corporate financial performance. Alexander
and Buchholz (1978) has found that if company management act in socially
responsible manner they are more likely to possess the skills to run a company well,
7
improving its financial performance and making it an attractive investment (Jill
Solomon and Aris Solomon, 2004, pp 191 – 193).
In Malaysia context, Government through estate agency SK Brothers Realty
Sdn Bhd has been pushing for CSR. The awarded six property and construction
companies with “CSR Certificates” during the Grand Raya HOC 2004 would create a
brand name for their projects, built a reputation for themselves and be accepted as
responsible corporate citizens.
Thus, the focus of study will encompasses the criteria contributing to the CSR
in product perspective which have been practiced by the developers who registered
under Real Estate and Housing Developers’ Association Malaysia (REHDA) located
in District of Johor Bahru, State of Johor.
Product perspective is refer to single property such as single storey terrace
house or range of properties being developed under one particular project in one
particular place.
The major components of product in a project development
comprised of residential (landed property and strata property), commercial (shop,
shopping complex, market), recreational (park, lake, club house) and public amenities
(transport terminal, education institution). In addition, product can also be considered
as service. The property sector creates or provides tangible services and facilities
such as parks, resorts, recreation sites and public facilities (Abdul Hamid Mar Iman,
2002, pp 152 - 153).
8
In this case, the measurement of product perspective shown in Figure 2.2
Customer Perspective of Balanced Scorecard Strategy Map that consists of product or
service attributes, relationship and image. The product or service attributes comprised
of property type and price, accessibility of township, infrastructure, public amenities
and recreational facilities, security features and services towards the overall township
developments. These product criteria provided by developers which contribute to
CSR will affect the township development.
Meanwhile, other elements of CSR on product within customer perspective
exercised by the developers include sales services and post sales activities carried out
by developers are maintaining the rapport relationship with the homebuyers. To
enhance the image of company, contribution of social responsibility will strengthen
the reputation of company.
Henceforth, the study examines the product attributes
that contribute to CSR and its impact on township developments.
1.6 Significance of Study
The study offers developers, homebuyers and bankers a comprehensive
framework of CSR in product perspective. The study will help the developers to
anticipate the property market pertaining to customers’ behaviour.
They can
determine the right profile such as demographics and psychographics of a market,
preferences, tastes and purchase motivations. Developers would be more aware that
the sales performance is not achieved by implementing the marketing strategies alone.
9
In fact, making CSR in product perspective by developers into company
policy is also important to create reputation and brand name of developers. With
focusing on a strong presence, strong branding and a track record through CSR, the
CSR developers will outperform the rest and lead to the increment of sales value.
With identification of the product attributes of CSR in project developments, this
study will strengthen the awareness among the developers to ensure the housing
projects are smooth-going and deliver in time to homebuyers. Meanwhile, embarking
CSR in product perspective by developers could therefore enable them to plan, build
and manage a well-maintained development township which is beneficial to everyone.
Mindsets and practices of developers need to be change. Upon rapid changing
lifestyle emerged in the housing industry tremendous opportunities for developers to
benefit by putting CSR efforts especially in product perspective. The Malaysian
lifestyle has become more discerning and demanding. Buyers prefer unique features,
innovate architectural and structural designs together with better landscaping and
quality finishing. People with greater wealth will look for more values and greater
lifestyle properties. For as long as the economy grows, developers have to look for
niche areas to develop by taking into consideration factors such as lifestyle and
security.
In order to continue attracting buyers, developers have to offer better human
values on houses for the masses by embarking value-added features and green
environments in their township developments. For homebuyers, they will always
looking for the township developments comprised of elements of CSR. This will
illustrated the developers’ commitment to implement CSR as a strategic tool to drive
10
competitiveness and achieve highly sales value in long term. The study stepped into
more acute perspective on the consumer behaviour and patterns which brings the
impacts toward township developments.
This study will examine the variety of
product that have been offered by developers, which have embarked on CSR and
responded to the change of human needs and values which has effected to the
township developments.
Although our economy continues prosperous and competition becomes more
intense, product’s quality still remains an issue affecting housing industry. Quality is
a key area that developers should look into in order to make projects development
more appealing. Innovation and quality improvement will lure buyers and investors
into acquiring more than one property, either for their families or investment. Such
improvement should be used as a platform to attract local and foreign investment.
This can prevent a mismatch between supply of product and consumer demand and
help to reduce property overhang. Thus, the success of quality issue will depend on
developers converting CSR in their product offered to the property market.
Therefore, the study will emphasize on CSR in product perspective urging developers
to implement the best practices of CSR in developing homes in order to compete and
sustain in the local real estate market.
The growth of population together with upgrade society’s value has led to
economic and business expansion and even greater demand for properties.
The
homebuyers are now looking beyond home features and high quality construction for
their homes. It is thus obvious that there are tremendous opportunities for developers
to integrate CSR into their new townships. Thus, study on CSR is one of they key
11
factor in solving supply-demand mismatch. To avoid a mismatch between the supply
of products and consumer demand, the study is providing developers an idea that CSR
is the sole responsibility of developers to implement it in housing industry.
CSR becomes the most essential function of the company for long term
strategic perspective in property market because it can influence demand and supply
as well as property market performance. When CSR becomes the most prominent
drivers of value in property market, the market will not respond if the project has not
integrated on CSR concept. Eventually, this will cause developers to integrate CSR
into their product perspective in order to ultimately ensure their success. Certainly,
this will compromise the developers’ financial status to obtain a bridging loan offered
by financial institution. The bankers, then, will not hesitate to reject financing loan
for developers who have not incorporated CSR in their business’s philosophy and
operation.
1.7 Research Methodology
Methodology of study is illustrated in Figure 1.1. Problem is first identified
followed by the formation of objectives and scope of study in order to outline a few
primary steps to resolve the problem.
In the process of the study, literature review is carried out by referring to the
definitions, concept and secondary sources of data that were conducted and concluded
in the previous studies, for example composition of books, newspapers and so forth
relating to the study topic.
12
Figure 1.1 Methodology of the Study
Problem Statement
Chapter 1
Formation of Objectives
Determination of Scope of Study
Literature Review
Definitions and Concept
Secondary Data
Research Methodology
Primary Data
Chapter 3
Balanced Scorecard Strategy Map
Frequency Approach
Cross Tabulation Analysis
Chapter 4
Developers’ Profile
Implementation of CSR
Analysis of Data and Findings
Chapter 5
Conclusion and Recommendation
14
In the subsequent stage of data collection, the primary data would be obtained
by conducting an interview with distributed questionnaires to the developers who
have registered under REHDA based on simple random sampling method.
The
research data relates to the companies’ profile and current issue pertaining to CSR in
product perspective.
The next step is to proceed the analysis of data. The data derived from
questionnaires would be looked into using Balanced Scorecard Strategy Map to
identify the CSR in product attributes offered by developers. On the other hand,
frequency approach is used to find out the willingness of developers to implement
CSR strategies in product perspective. In addition, cross tabulation analysis applied
to show the comparison between the public listed development companies and private
limited development companies in the way they practice CSR in product perspective.
Result of analysis would be summarized and henceforth making some
recommendation for the possible improvement of current study and suggestion for
further study.
1.7.1 Data Collection
The data collected are based on primary and secondary sources. Primary data
will be derived from the interview and questionnaire to developers who have
registered under REHDA, located in District of Johor Bahru, State of Johor. The
questionnaire is designed from the Customer Perspective of Balanced Scorecard
Strategy Map. For the sampling technique, simple random sampling method will be
15
adopted whereby 19 respondents will be taken from the total questionnaires
distributed to 50 developers in property developments in Johor Bahru.
In the process of the study, literature review is carried out by referring to the
secondary sources of data that were be obtained and concluded from the previous
studies, existing scholars work, periodicals, journals, research papers, composition of
books, newspapers, magazines and reference in library. While the other sources such
as property market report and published information from housing organization such
as REHDA and House Buyers Associates (HBA).
1.7.2 Data Analysis
In order to process the data collection, primary data would be obtained by
conducting interview and questionnaires through simple random sampling method
whereby the 19 respondents will be selected from 50 housing developers who have
registered under the REHDA, located in District of Johor Bahru, State of Johor.
To analysis data, the Customer Perspective of Balanced Scorecard Strategy
Map is used to identify the CSR in product attributes offered by developers. At the
same time, the frequency approach is used to find out the willingness of developers to
implement CSR strategies in product perspective. Findings and results of analysis
would be summarized and presented in the table with percentage. In addition, the
cross tabulation analysis would be applied in the study.
The comparison show
between the public listed development companies and private limited development
companies in the way they practice CSR in product perspective.
Henceforth,
16
conclusion will be made and some recommendation for the possible improvement of
current study and suggestion for further study would be provided.
1.8 Chapters Layout
Several approaches will be applied upon the completion of the study. The
methodology of study is illustrated in Figure 1.1. Firstly, the introduction to the study
was elaborated in Chapter One. Then the subject of the study was followed by a write
up on problem statement, aim of study, objectives and scope of study. Chapter Two
deals with definitions, concept, research on secondary sources of data, up-to-date case
studies and literature review on the CSR of housing developers. Subsequently, four
types of research methodologies will be employed in Chapter Three: questionnaire,
model ‘Balanced Scorecard Strategy Map’, frequency approach and cross tabulation
analysis. The questionnaire is designed from Customer Perspective of Balanced
Scorecard Strategy Map to determine the product attributes which contributing to
CSR. Frequency approach is used to identify frequency of developers to implement
CSR. At the same time, cross tabulation analysis is used to compare in between the
public listed development companies and private limited development companies in
the way they practice CSR and their impact towards township developments in Johor
Bahru.
Primary data collection and data analysis are included in Chapter Four.
Primary data will derived from interview through questionnaire distributed to 50
developers in Johor Bahru. Following by result analysis from 19 respondents relates
to the developers’ profile and CSR in product issue will be presented in table with
percentage. Finally, conclusion will be made in Chapter Five. Meanwhile, limitation
and suggestion for further studies will offers at this stage as well.
CHAPTER 2
CHAPTER 2
LITERATURE REVIEW ON CORPORATE SOCIAL RESPONSIBILITY:
DEFINITIONS AND CONCEPT
2.1 Introduction
Corporate social responsibility (CSR) has been existing for some time. Indeed,
ever since the Industrial Revolution in Britain in the 18th century there has been a
growing consciousness of the harm that irresponsible corporate behaviour can bring.
The terrible living and working conditions of people involved in early
industrialization moved many members of the “higher classes” to write extensively on
the evils of industry. According to Boatright (1999) in Solomon and Solomon (2004),
CSR as a discipline in its own right (and the terminology surrounding it) originated in
the 1950s. The consciousness of CSR has grown continuously since the first roots of
industrialization in England to the gradual growth of business around the world. The
larger the companies have become, the greater their potential impact (good or bad) on
society and therefore, the greater the need for them to act in a socially responsible
way.
17
CSR has come to top of the agenda for businesses in the west countries over
the last decade. Consumers have become very aware and will not hesitate to reject
products of companies that are deemed not socially responsible or those that cause
damage to the environment. Malaysia has seen a lot of creative property development
over the years, but is less than recognition of housing developers for their corporate
and social achievement. To streamline the profession and ethic in local real estate
industry, Government plays an important role to recommend, promote and award
CSR for the developers who adopted the principles of good governance and
contributed to society through their infrastructure development.
Through the
presentation of CSR awards, developers will continue fuel in competition to build not
only largest and profitable township, but also the best and healthy environments for
the masses.
Promoting awareness of CSR is all about how companies should manage their
business processes to produce an overall positive impact on society. It will bring
about greater acceptance of its principles and enhance the quality of company’s
management as well as the quality of its impact on various areas of society.
Malaysia has to step up effort to promote CSR in the private sector and even
provide education on it in order to improve the quality of life of the people as well as
encourage greater transparency and corporate governance among business.
In
addition, Malaysian companies incorporate CSR into its corporate governance agenda
not only to develop good corporate citizens in the Malaysian housing industry and
also to increase the tool to enhance the recognition and profile of corporate domestic
18
companies who can gain better recognition from the perspective of international and
domestic institutional investors.
As Malaysia step in the new millennium and come closer to the year 2020, the
push towards CSR is also important to be consistent with the overall national agenda
particularly in achieving Vision 2020, meeting the objectives of the National Integrity
Plan and as a tool for generating greater economic and capital market growth.
2.2 Definitions
In this section, definitions of the main terms that relate to this study will be
given.
2.2.1 Corporate/ Corporation
The term “corporate” is derived from the Latin word “corpus”. It is known as
a non-human legal person called corporation. Cheah (1999) has treated the corporate
as the concept of a company being an artificially created entity having its own
personality and capable to sue and be sued is well established in corporate law.
Generally, companies among other types incorporated under the Malaysian
Companies Act 1965 are the most commonly used economic entities for carrying out
businesses nationally or internationally, and having great influence on governments
globally. This is because the company differs from sole proprietorship or partnership
business in that it is an artificially created entity capable of entering into contract. In
19
law, a company has its own distinct and separate legal personality distinct from its
members. Indeed, a company can sue and be sued by its own members. It can own
property in its own right and name.
Most importantly, the capacity to exit in
perpetuity apart from its owners and directors who run the business. The members of
a company enjoy limited liability for the company’s debts and liabilities which the
members cannot be required to contribute towards the company’s debt and liabilities
beyond the amounts of their shares in the company (CCH Asia Law, 1995, pp 59).
In ‘Guide to Company Law in Malaysia and Singapore’, corporation in
Malaysia means any body corporate formed or incorporated or existing within
Malaysia or outside Malaysia and includes any foreign company but does not includes:
-
Any body corporate that is incorporated within Malaysia and is by notice of
the Minister published in the Gazette declared to be a public authority or an
instrumentality or agency of the Government of Malaysia or of any State or to
be a body corporate which is not incorporated for commercial purposes;
-
Any corporation sole;
-
Any society registered under any written law relating to co-operative societies;
or
-
Any trade union registered under any written law as a trade union.
A corporation is an entity which is independent of the individuals who
constitute it.
It is an artificial person and it enjoys perpetual succession.
The
perpetual succession means the existence of a corporation is ordinarily unlimited in
time and is not affected by the death of a shareholder. This enables a group of
persons to own and deal with the company’s land together from time to time without
20
having to suffer the trouble and expenses of a series of conveyances as the members
change and fluctuate from time to time (CCH Asia Law, 1995, pp 59 – 61).
Furthermore, Cheah (1999) stated that a corporate being an artificial entity
behaves just like an individual in society. Corporate or corporations have economic
responsibilities to produce goods and services and to provide jobs and good wages to
the work force while coming to a profit. These also include obligations to discover
raw materials, new resources, technological improvement and to develop new product.
By taking up these roles, corporations will increase the economic well-being of
society, ensure the survival and growth of the organization.
In addition, corporations have certain legal responsibilities to act as a fiduciary,
managing the assets of a corporation in the interest of shareholders and distributing
profits to them as dividends.
Corporations also have legal responsibilities to
employees, customers, suppliers etc. The legal responsibilities of corporations which
are created by legislatures, regulatory agencies and the courts are constantly
increasing, largely in response to greater societal expectations.
2.2.2 Social
The term “social” is derived from the Latin word “socius”, which as a noun
means “an associate, ally, companion, business partner or comrade”. In the adjectival
form “socialis” refers to “a bond between people” (such as marriage) or to their
collective or connected existence.
21
The adjective ”social” implies that the verb or noun to which it is applied is
somehow more communicative, cooperative and moderated by contact with human
beings. In one broad meaning, social refers only to society as “a system of common
life”. In contemporary society, social often refers to the redistributive policies of the
government which aim to apply resources in the public interest, for example, social
security (Social. http://www.answers.com/topic/social).
2.2.3 Responsibility
Responsibility means the obligation to answer for one’s actions which often
answering to authority. Responsibility is also loosely used as the recognition that in
order to achieve one’s purposes, one must act oneself (take responsibility) rather than
expecting others to do something (compare initiative).
In ethics, moral responsibility is primarily the responsibility related to actions
and their consequences in social relations. It generally concerns the harm caused to
an individual, a group of the entire society by the actions or inactions of another
individual, group or entire society. This is the mechanism by which blame can be
placed and influenced many important social constructs such as prosecution under
legal system.
The term often refers to a system of principles and judgments shared by
cultural, religious and philosophical concepts and beliefs, by which human
subjectively determine whether given actions are right or wrong. These concepts and
beliefs are often generalized and codified by a culture or group, and thus serve to
22
regulate the behaviour of its members. Conformity to such codification may also be
called morality and the group may depend on widespread conformity to such codes
for
its
continued
existence
(Responsibility.
http://en.wikipedia.org/wiki/
Responsibility)
2.2.4 Corporate Social Responsibility
The notion of CSR encompasses a wide spectrum of issues which range from
business ethics, corporate governance and socially responsible investing (SRI) to
environmental sustainable and community investment. CSR is a concept envisages
the ideal that enterprises should integrate social and environmental concerns in their
business operations and their interaction with their stakeholder usually on a voluntary
basis. It is the behaviour of business over and above what is ordinarily required by
regulatory bodies and legal requirements and more on voluntarily practiced basis due
to their long term interest in business (Corporate Governance. http://www.sc.
com.my/eng/html/eg/ esr.html).
CSR is about maintaining an enterprise’s ‘License to Operate’. This concept
whereby the society in which a business operates frames their view on how the
activities and the offerings of the business affect them. Their subsequent appraisal of
the impact will then determine their reaction to the business in terms of “allowing” the
business to operate in the manner that they have been and hence the concept of
“license to operate”.
CSR is also about the contribution of business towards
sustainable development (Corporate Governance. http://www.sc.com.my/eng/html/eg/
esr.html).
23
Thus, CSR is a natural progression of ongoing work in relation to the
development of a strong frame work for good corporate governance which companies
should look beyond shareholder value alone by taking into account the wider interests
of other stakeholders such as employees, creditors and the society at large.
Companies that have embraced CSR have found real and significant competitive
advantages in the form of improved financial performance, enhanced brand image and
reputation, an increased ability to attract and retain quality workforce, more effective
risk management, reduced long term cost and attractiveness to increasingly
sophisticated institutional investors (Corporate Governance. http://www.sc.com.my/
eng/html/eg/ esr.html).
One important aspect of corporate performance in areas of social concern is
the responsiveness of corporations, i.e. the ability of corporations to respond in a
socially responsible manner to new challenges.
This refers to the readiness of
corporations to respond to social pressures when such needs arise. Corporations are
expected to anticipate social issues, develop policies, programmes and other means of
dealing with them. All of these should be integrated into the strategic planning
process rather than as an ad hoc to a crisis.
Cannon in Cheah (1999) stated that CSR as the responsibility of business to
tackle social problems, social issues, social and political goals. Business should
become keeper of the society’s conscience and solver of society’s problems.
CSR is often seen as the voluntary assumption of responsibilities that go
beyond the economic and legal responsibilities of business firms. This lies in the
24
ethical responsibilities which are not codified in the law but are expected of
corporations to conform (Cheah Foo Seong, 1999, pp 112 – 113).
In housing industry, CSR is an expression used to describe a housing
development company’s obligation to be sensitive to the needs of all its stakeholders
in its business operations. A company’s stakeholders are all those who are influenced
by and/ or can influences a company’s decision and action, both locally and globally.
These include (but are not limited to): employees, customers, suppliers, community
organizations, subsidiaries and affiliates, joint venture partners, local neighborhoods,
investors and shareholders (or a sole owner). The principle is closely linked with the
imperative of ensuring that these operations are “sustainable” i.e. which is necessary
to take account not only of the financial/ economic dimension in decision making, but
also include the social and environmental consequences “Sustainable Development”
(Corporate Social Responsibility.
http://en.wikipedia.org/wiki/Corporate_social_
responsibility).
Obviously, CSR can be treated as discretionary responsibilities and purely
voluntary. Furthermore, the decision to assume them is guided by the desire to
engage in social roles not mandated, not required by law, and not even generally
expected of business in ethical sense.
2.2.5 Product
Product is anything that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or need. It consists of anything that can
25
be marketed, including physical objects, services, persons, places, organisations and
idea.
In real estate context, property product is a general term used to describe
landed property. It includes vacant land, land and building, housing, commercial and
industrial buildings, agriculture (vacant, cultivated, developed to include buildings
and
machinery)
and
forestry
(forest
plantation,
recreation,
park,
resort).
Improvements such as roads, irrigation and other fixtures are also regarded as part of
landed property (Abdul Hamid Mar Iman, 2002, pp 152).
Property product can refer to single property such as single storey terrace
house or range of properties being developed under one particular project in one
particular place. Most property development projects are based on multi-product
concept where the whole project may be viewed as a package of products or line of
products. The major components of product in a project development comprised of
residential (landed property and strata property), commercial (shop, shopping
complex, market), recreational (park, lake, club house) and public amenities (transport
terminal, education institution) (Abdul Hamid Mar Iman, 2002, pp 153).
In addition, property can also be considered as service. The property sector
creates or provides tangible services and facilities such as parks, resorts, recreation
sites and public facilities (Abdul Hamid Mar Iman, 2002, pp 152).
26
2.3 Corporate Social Responsibility: The Concept
According to Solomon and Solomon (2004), there are also numerous
empirical studies viewed that the company management would wish to concern
themselves with social, ethical and environmental (SEE) issues in the case where their
financial performance could be negatively affected by socially irresponsible
behaviour.
A free market economist, Milton Friedman believed that the only
responsibility a company had to society was to maximize returns to its shareholders
which may be achieved through CSR. He adopted a purely agency theory perspective
of the company, believing that any attempts by companies to spend money on
charitable donations, or attempts to satisfy stakeholders other than shareholders, were
at best misguided. A full discussion of Friedman’s viewpoints may be found in
Lozano (2000). Similarly, the work of Sternberg (1998) derived CSR and echoed
Friedman’s sentiments.
Both of them have proved that a positive relationship
between corporate social/ environmental performance and financial performance.
Friedman and Sternberg’s theories have been supported by the Financial and
Customer Perspectives of Balanced Scorecard Strategy Map.
The Financial
Perspective of Balanced Scorecard Strategy Map describe the long term shareholder
value of company can be achieved through revenue growth and productivity
improvements.
In order to increase the growth for sales and productivity
performances, the company needs to increase company’s share in consumer market
through customer acquisition, satisfaction, retention, loyalty and growth which are
27
consist in Customer Perspective. If the customer value is consistent with quality,
innovation and timely delivery, these will produce and deliver the quality products
and services are highly valuable to the company. This is the creation of sustained
growth in shareholder value.
For instance of Sunrise Bhd, a public listed development company with strong
financial who has created a lifestyle hub in the suburbs of Mont’ Kiara, succeeded in
building strong brand names for Sunrise as a corporation and Mont’ Kiara as a
residential suburb. Both of them represent quality, prestige, innovation and service
excellence. As long as a brand to offer customers superior perceived value, the sales
revenue will increase which in turn achieves the growth of shareholder value. Thus,
adopting CSR will leads the developers to explore an additional niche market for
quality homes in property developments such as garden living homes and gated and
guarded community.
In fact, those companies who have integrated CSR to the
consumers’ changing lifestyle needs and preferences, are the one who will succeed.
Usually for those developers who have successfully implemented CSR are from
public listed companies, who have a very strong sales revenue recorded track and
many on going sites projects development through the country.
There is growing perception within the corporate and shareholder
communities that companies can perform well in the social, ethical and environmental
arena and also perform well financially.
Innovest Strategic Value Advisors, an
organization that rates companies in more than 50 industries according to a wide
spectrum of social, environmental and corporate governance issues has provided
28
evidence that companies with better corporate governance, superior social and
environmental ratings also have the best performing shares as well.
In the academic literature there are a number of reasons given for a possible
positive relationship between CSR and corporate financial performance. Alexander
and Buchholz (1978) has found that if company’s management act in socially
responsible manner they are more likely to possess the skills to run a company well,
improving its financial performance and making it an attractive investment. Based on
extensive interview and questionnaire evidence, Solomon and Solomon (2002) has
certainly shown that the United Kingdom (UK) institutional investment community
view SEE management as an important indicator of quality management (Jill
Solomon and Aris Solomon, 2004, pp 191 – 193).
According to Moskowitz (1972) in Solomon and Solomon (2004), there is a
positive link between corporate social performance and financial performance. He
found that the share returns of a small sample of United State (US) listed companies
which he deemed were socially responsible had increased at a higher rate than major
market indices. There are many more studies from last 30 years that have found
evidence of positive relationship between CSR and financial performance done by
Bowman and Haire (1975), Belkaoui (1976) and Johnson and Greening (1994) in
Solomon and Solomon (2004).
Findings from recent studies show that top-notch educational institutions are
creating competition in the housing market. Even more, research conducted in more
developed nations reveals that the quality of educational facility has a direct and
29
positive influence on residential property values. It’s astonishing what impact a
simple education facility can have on the value of properties, to the point people are
even willing to pay considerable premiums for a home nearby. Houses nearby topperforming institutions either sell for higher prices than those near the poorperforming ones, or are constantly in demand.
According to Lim Lay Ying in Property Times dated 21 May 2005, T. Bogart,
together with A. Cromwell in their joint research paper in 2000 entitled ‘How Much
Is A Neighbourhood Schools Worth ?, as well as David N. Figlio of the University of
Florida’s Department of Economics in 2002 his report ‘What’s In A Grade ? Schools
Report Cards and House Prices confirm that the impact from a top-performing
institution can measure in the thousands of dollars and increase values as much as
fourteen (14) per cent. In a separate study with Maurice E. Lucas in 2001 for the
United States based National Bureau of Economic Research, Figlio implied similar
conclusions in their findings that for “average-sized” homes, an “A” school increase
values by more than seven per cent over a “B” school. The over all implication is
again that homebuyers are willing to pay a premium to live near a good quality
educational facility.
In Malaysia context, it must be for this reason that Sunway City Berhad
(SunCity) is keen to expand on its proven Sunway University College in its township
of Bandar Sunway in Petaling Jaya, Selangor, by setting aside twenty (20) acres of
land in its new Southern Precinct for the expansion of the college’s facilities which
will be the form of the new Monash Univerisity Malaysia (MUM) campus.
30
SunCity, a member of the Sunway Group and listed on the main board of
Bursa Malaysia since 1986, built its brand name while developing the 800 – acres
Bandar Sunway. So far, it has completed some seven (7) million square feet of
residential, office, retail, leisure, hospitality, healthcare, education and light industrial
properties. At least 30,000 people live, work, play and learn in the award – wining
integrated resort township that contains the Sunway Lagoon Theme Park, Sunway
Lagoon Resort Hotel, Sunway Pyramid, Sunway University College and Sunway
Medical Centre. SunCity’s inclusion of educational institutions into its developments
has reaped visible rewards, not only in terms of its education business and its effort to
build communities, but also on the demand and values of real estate for its purchasers
(Lim Lay Ying, New Strait Times – Property Times, 21 May 2005, pp 10)
2.4 Characteristic of Corporate Social Responsibility
According to Cheah (1999), the Committee for Economic Development, New
York has issued a report that characterized CSR as consisting of three concentric
circles:
1. Inner Circle – Basic responsibilities for the efficient execution of the
economic function – products, jobs and economic growth.
2. Intermediate Circle – Responsibility to exercise the economic function with a
sensitive awareness of changing social values and priorities, e.g.
environmental conservation, hiring and relations with employees, more
rigorous, expectation of customers for information, fair treatment and
protection from injury.
31
3. Outer Circle – Newly emerging and still amorphous responsibilities that
business should assume to become more broadly involved in actively
improving the social environment. Society is beginning to turn to corporations
for help with major social problems such as poverty and urban blight. This is
not so much because the public considers business singularly responsible for
creating these problems, but because it feels large corporations possess
considerable resources and skills that could make a critical difference in
solving these problems.
The characteristics of CSR which were given by Cheah (1999) are follows: 1. Choosing to operate on an ethical level that is higher than what the law
requires.
2. Making contributions to civic and charitable organizations and non-profit
institutions.
3. Providing benefits for employees and improving the quality of life in the
workplace beyond economic and legal requirements.
4. Taking advantage of an economic opportunity that is judged to be less
profitable but more socially desirable than some alternatives.
5. Using corporate resources to operate a programme that addresses some major
social problems.
2.5 Corporate Social Responsibility of Developers In Product Perspective
CSR demands that development companies should integrate the above
characteristics in housing products.
This is particularly important for housing
32
development industry, since they will face widely differing situations in their various
geographical locations and profile of living style.
CSR is bringing developers’
behaviour up to a level to understand the social norms, values and expectations of
performance especially in product perspective in order to achieve the sustainable
development.
In recognition and appreciation of their obligations to client, customers, the
public and each other, developers should also recognize that the interest of the nation
and its citizens require the highest and best use of the land and the widest distribution
of land ownership. They require the creation of adequate, affordable and quality
housing, the building of functioning cities, the development of productive industries
and farms and the preservation of a healthful environment. It is believed that the
integration CSR into housing products not only helps the government achieve its
policy-orientated goods, such integration will also strengthen financial bottom lines of
developers, as can be seen below.
In a recent survey from middle to upper-middle income homebuyers,
suggested that buyers are now looking beyond home features and high quality
construction of their homes. They are drawn to the newer townships that feature on
the major valued concepts featuring park, garden and open space as per Table 2.1.
Therefore, the development companies could get involved in CSR by:
1. Giving maximum consideration to protection of the environment when
carrying out their development;
2. Providing social amenities in their projects for children, young people and
senior citizens with safety and healthcare looked into;
33
3. Providing public reading areas, such as a library; establishing sports and
recreational facilities such as a fitness centre, swimming pool and games
courts;
4. Ensuring facilities for people to practice their religious beliefs; and
5. Giving every development project the feel of a “kampong on its own”
meaning a community where social interaction is made easy with all the
facilities required (New Strait Times – Property Times, 11 December 2004, pp
6).
Table 2.1 Most Desired Township Concepts
Township Concepts
1 Country lifestyle
2 Resort living
3 Garden city
4 Botanic/ riverrine park
5 Gated & guarded community
6 Intelligent city/ Smart Homes
7 Golf residential estate
8 Commercial-based township
9 Conventional
10 No preference
No.
31
31
24
21
15
14
12
11
10
31
200
Percentage (%)
15.5
15.5
12.0
10.5
7.5
7.0
6.0
5.5
5.0
15.5
100.0
Source: Research Inc (Asia) Sdn Bhd from Lim Lay Ying (2003). Building Value
Through Parks, Property Times. June 14, Kuala Lumpur, New Strait Times, pp 2.
As shown by Table 2.2 and Table 2.3, schools are among the most desirable
public amenities in a new township, garnering more than 70 percent of the votes.
This was much more than 24-hour security services, central parks, open spaces or
even broadband facilities.
34
Table 2.2 Most Desired Features In New Township
Desired Features
Public amenities (such as school, shops and parks)
Quiet and low traffic
24-hour security services
Main road located away from residential areas
Wide streets with covered drains and utilities
Lots of natural open space/ parks
Central parks and landscaped gardens
Bright street lighting
Paved sidewalks and cycling paths along all streets
Broadband facilities
Voting
76
72
55
46
36
35
25
24
19
12
Source: Research Inc (Asia) Sdn Bhd from Lim Lay Ying (2004). The ‘E’ Factor.
Property Times. November 6, Kuala Lumpur, New Strait Times, pp 9
Table 2.3 Top Five Most Desired Public Amenities
Public Amenities
Public schools (primary and secondary)
Hospital/ medical centres/ clinics
Police stations
Banks
Wet market/ pasar
Voting
72
71
68
62
38
Source: Research Inc (Asia) Sdn Bhd from Lim Lay Ying (2004). The ‘E’ Factor.
Property Times. November 6, Kuala Lumpur, New Strait Times, pp 9
In any development, provision of public amenities and facilities such as
schools, playgrounds, parks, multi-purpose halls, markets and even police booths take
away about 50 to 60 percent of the land area, leaving the net saleable land for physical
construction of houses only about 40 percent of total land area for the project
(Dialogue on Proposed Goods and Services, REHDA, 17 August 2005). Indeed, there
are lots of reserved land for these public amenities and facilities by developers as
required by local authority. But for developers who are concerned for CSR will
provided these public amenities and facilities to their residents.
Even, some of
35
developers are willing to put these public amenities and facilities under their own
maintenance and not handed over to local authority after completion.
Clearly, developers who adopted CSR in product perspective have
encompassed their operation and business management orientated the sense of ethical
that higher than the law and legal requirements to anticipate social matters.
Also, there are developers who invest and built infrastructure first prior to
build their houses. The Pelangi Group Bhd for instance has built the Jalan Sutera
Utama first before starting to build the houses in Taman Sutera Utama. Subsequently,
Jalan Sutera Utama has become the main entrance which link to the creation and
expansion of the surrounding existing neighbourhood and infrastructure such as
Taman Bukit Indah, Taman Nusa Bestari, Taman Timur, Taman Nusa Villa, Taman
Jaya Mas and Bandar Selesa Jaya. Developers who provide adequate infrastructure,
amenities and facilities are not only fulfilling the obligations imposed by local council
but also their social responsibilities to society and commendable as good corporate
citizen.
2.6 Conclusion
Developers who have incorporated CSR into their company philosophy will
operate on an ethical level that is higher than what the law requires in their business
operation. CSR is bringing developers’ behaviour up to a level to understand the
social norms, values and expectations of performance especially in product
perspective in order to achieve the sustainable development.
36
Since the consumers are more discerning, demanding resident-friendly
environments, open areas and greenery, CSR is a necessity that has gained acceptance
among Malaysian companies especially in a high competitive real estate industry
When CSR moves up property agenda, the homebuyers will not respond if the
property development has not integrated on CSR concept. For homebuyers, they will
always looking for the township developments comprised of elements of CSR.
Therefore, developers have to offer variety of product by embarking value-added
features and green environments in their township developments.
Adopting CSR to the consumers’ changing lifestyle needs and preferences,
will leads the developers to explore an additional niche market for quality homes in
property developments. The path to getting there has already been mapped out by the
recognition that buyers come first and developers who are attending to their desires
are among the beneficiaries. Many new housing launches are incorporating CSR by
developers, much to the pressure of house buyers. Among the highlights of the
current crop of new projects are the location of utility services underground, the
provision of gated and guarded facilities, greater emphasis on landscaping, better
planned layouts and improved quality of fittings.
Having discussed CSR in broadest definitions and concept, next chapter will
look into the research methodology conducted in this study. The model “Customer
Perspective of Balanced Scorecard Strategy Map” is used to identify the product
attributes. Further details for product attributes relates with CSR which have been
practiced in Johor Bahru property market will be explored in Chapter Three as well.
CHAPTER 3
CHAPTER 3
RESEARCH METHODOLOGY
3.1 Introduction
The chapter deals with the data collection and analysis data. To obtain the
primary data, the questionnaire is designed based on the Customer Perspective of
Balanced Scorecard Strategy Map. An interview has been conducted on 30 percent of
housing developers who registered under REHDA through a simple random sampling
method whereby 19 respondents will be taken from the total questionnaires
distributed to 50 developers in property developments in Johor Bahru.
Several approaches will be use to process and analysis the data, i.e. frequency
approach, cross tabulation analysis and the Balanced Scorecard Strategy Map. These
methods are bringing together to work systematically to analyze the elements in the
Customer Perspective of Balanced Scorecard Strategy Map. It would contribute to
the developers to identify and customize the product attributes through a particular set
of strategic objectives. Comparison will been made to describe the CSR strategies
between the public listed development companies and private limited development
38
companies. This chapter will discuss on the how the developers implementing and
managing the Balance Scorecard Strategy Map in order to offer their customers
important elements of an attractive value proposition for the product from view of
CSR.
3.2 Frequency Approach and Cross Tabulation Analysis
Primary data will be collected through interview and questionnaires fact
finding method. Based on a simple random sampling method collected the sampling
consist of approximately 30 percent respondents taken from 50 total housing
developers who registered under the REHDA, located in District of Johor Bahru, State
of Johor.
Subsequently, the analysis result by frequency approach would be
summarized and presented in the table with percentage.
In addition, the cross
tabulation analysis would be applied in the study. The comparison show between the
public listed development companies and private limited development companies in
the way they practice CSR in product perspective.
3.3 The Balanced Scorecard Strategy Map
According to S. Kaplan and P. Norton (2004), the Balanced Scorecard initially
proposed to improve the measurement of an organization’s intangible assets, can be a
powerful tool for describing and implementing an organization strategy. The fourperspective model for describing an organization’s value-creating strategy provides a
language that executive teams can use to discuss the direction and priorities of their
enterprise. They can view their strategic measures, not as performance indicators in
39
four independent perspectives, but as a series of cause-and-effect linkages among
objectives in the four perspective of Balanced Scorecard Strategy Map. To design the
questionnaire and analysis data, the Balanced Scorecard Strategy Map is used to
identify the CSR in product attributes offered by developers.
The Balanced Scorecard Strategy Map provides a framework to illustrate how
strategy links intangible assets to value-creating processes. As shown in Figure 3.1,
the general strategy map evolved from the simple four perspective model of the
Balanced Scorecard, which provides a uniform and consistent way to describe that
strategy, so that objectives and measures can be established and managed. The
strategy map provides the missing link between strategy formulation and strategy
execution.
The strategy map is a visual representation of the cause-and-effect
relationships among the components of an organization’s strategy which provides a
normative checklist for a strategy’s components and interrelationships.
The objectives in the four perspectives are linked together by cause-and-effect
relationship. Starting from the top is the hypothesis that financial outcomes can be
achieved only if targeted customers are satisfied. The customer value proposition
describes how to generate sales and loyalty from targeted customers. The internal
processes create and deliver the customer value proposition. While the intangible
assets to support the internal processes would provide the foundation for the strategy
and aligning objectives in these four perspectives is the key to value creation which
would focused into a consistent strategy internally. The Balanced Scorecard Strategy
Map is based on several principles on the four model perspective as follows:
Quality
Functionally
Availability
Increase Asset
Utilization
Culture
Operations
Management
Process
- Supply
- Production
- Distribution
- Risk Management
Human
Capital
Information
Capital
Selection
Long Term
Shareholder
Value
Alignment
Teamwork
- Environment
- Safety and Health
- Employment
- Community
- Opportunity ID
- R&D Portfolio
- Design/ Develop
- Launch
Image
Brand
Regulatory and
Social Processes
Organization
Capital
Service
Enhance Customer
Value
Innovation
Process
Relationship
Partnership
Expand Revenue
Opportunities
Growth
Strategy
Clustering of Assets and Activities
Defines the intangible assets that
must be aligned and integrated to
create the value
Value-Creating Processes
Defines the processes that will
transform intangible assets into
customer and financial outcomes
Customer Value Proposition
Clarifies the conditions that will create
value for the customer
Cause and Effect Relationship
Defines the chain of logic by which
intangible assets will be transformed
to tangible value
Source: Robert S. Kaplan and David P. Norton (2004). Strategy Maps: Converting Intangible Assets Into Tangible Outcomes . Boston: Harvard Business School Publishing Corporation, pp 11 and 31
Leadership
Customer
Management
Process
- Selection
- Acquisition
- Retention
- Growth
Product/ Service Attributes
Price
Improve Cost
Structure
Productivity
Strategy
* Only coloured boxes are within scope of study
Learning and
Growth
Perspective
Internal
Perspective
Customer
Perspective
Financial
Perspective
Figure 3.1 The Balanced Scorecard Strategy Map
41
3.3.1 The Financial Perspective
The financial perspective describes the tangible outcomes of the strategy in
traditional financial terms. Measures such as shareholder value, profitability, revenue
growth and cost per unit are the lag indicators that show whether the organization’s
strategy is succeeding or failing.
Investing in intangible assets for long term revenue growth usually conflicts
with cutting costs for short term financial performance. The dominant objective for
private sector organizations is the creation of sustained growth in shareholder value
and this implies a long term commitment. At the same time, the organization must
show improved results in the short term. Short term results can always be achieved
by sacrificing long term investments, frequently in an invisible way.
Thus, the
starting point in describing the strategy is to balance and articulate the short term
financial objective for cost reduction and productivity improvements with the long
term objective for profitable revenue growth.
3.3.2 The Customer Perspective
The customer perspective defines the value proposition for targeted customers.
The value proposition provides the context for the intangible assets to create value. If
customers value consistent quality and timely delivery, then the skills, systems and
processes that produce and deliver quality products and services are highly valuable to
the organization. If the customer values innovation and high performance, then the
skills, systems and processes that create new products and services with superior
42
functionality take on high value. Consistent alignment of actions and capabilities
with the customer value proposition is the core of strategy execution.
Satisfying customers is the source of sustainable value creation. The customer
value proposition for each developer is based on products and service attributes: price,
quality, availability, selection and functionality; relationship: service and partnership;
and image: brand.
Strategy requires a clear articulation of targeted customer
segments and the value proposition required to please a differentiated customer.
3.3.3 The Internal Perspective
The internal process perspective identifies the critical few processes that are
expected to have the greatest impact on the strategy. For example, one organization
may increase its internal Research and Development (R&D) investments and
reengineer its product development processes so that it can develop high-performance
and innovative products for its customers. Another organization attempting to deliver
the same value proposition, might choose to develop new products through jointventure products partnership.
Effective and aligned internal processes determine how value gets created and
sustained. Companies must focus on the critical few internal processes such as
deliver the differentiating value proposition, enhancing productivity and maintaining
the organization’s franchise to operate. The taxonomy of internal processes can be
classifies into four clusters:
43
1. Operation management: Producing and delivering products and services to
customers;
2. Customer management: Establishing and leveraging relationships with
customers;
3. Innovation: Developing new products, services, processes and relationship;
and
4. Regulatory and social: Conforming to regulations and societal expectations
and building stronger communities.
Each of these clusters can have literally hundreds of sub-processes that create
value in some way. Executives practicing the art of strategy must identify the critical
strategic themes which are the most important for creating and delivering the
differentiating customer value proposition.
Each cluster of internal processes delivers benefits at different points in time.
Improvements in operational processes generally deliver short term results through
cost savings and quality enhancements.
Benefits from an enhanced customer
relationship started after the initial improvement in customer management processes.
Innovation processes generally take even longer to produce higher customer revenues
and operating margins. The benefits from enhanced regulatory and social processes
can occur further in the future as companies avoid litigation and enhance their
reputations in the community. Strategies should be balanced, incorporating at least
one strategic theme from each of the four internal clusters. By having strategic
themes for enhancing processes in all four internal clusters, the organization is
benefits by generating sustainable growth in shareholder value.
44
3.3.4 The Learning and Growth Perspective
The learning and growth perspective identifies the intangible assets that are
most important to the strategy. The objectives in this perspective identify which jobs
(the human capital), which systems (the information capital) and what kind of climate
(the organization capital) are required to support the value-creating internal processes.
These assets must be bundled together and aligned to the critical internal processes.
The fourth perspective of the Balanced Scorecard strategy map, learning and
growth, describe the organization’s intangible assets and their role in the strategy.
Intangible assets can be classified into three categories:
1. Human capital: Employees’ skills, talent and knowledge
2. Information capital: Database, information systems, networks and technology
infrastructure
3. Organization capital: Culture, leadership, employee alignment, teamwork and
knowledge management
3.4 Corporate Social Responsibility In Product From Customer Perspective
The Customer’s Perspective in the Balanced Scorecard Strategy Map
describes the strategy how to identify a targeted customer based on a differentiated
value proposition. The revenue growth strategy requires a specific value proposition
that describes how the organization will create differentiated and sustainable value to
targeted segments. In the customer perspective of the strategy map, managers identify
the targeted customer segments in which the business unit competes and the measures
45
of the business unit’s performance for customers in these targeted segments. Refer to
the Figure 3.2, the customer perspective typically includes several common measures
of the successful outcomes from a well-formulated and implemented strategy as
follows:
-
Customer satisfaction
-
Customer retention
-
Customer acquisition
-
Customer profitability
-
Market share
-
Account share
These common customer outcome measures can be viewed in cause-and-effect
relationships.
For example, customer satisfaction generally leads to customer
retention through word of mouth and the acquisition of new customers. By retaining
customers, the company can increase the share of business with offers the account
share to its loyal customers. Combining customer acquisition and increased business
done with existing customers, the company should increase its overall market share
with targeted customers. Finally, retention of customers should lead to increase in
customer profitability, since retaining a customer typically costs much less than
acquiring new or replacement customers.
Overall, the objectives and measures for a particular value proposition define
an organization’s strategy. By developing objectives and measures that are specific to
its value proposition, the organization translates its strategy into tangible measures
that all employees can understand and work toward improving.
Price
Availability
Product/ Service Attributes
Selection
- Account Share
- Customer Satisfaction
Quality
- Market Share
- Customer Profitability
Functionality
Partnership
Relationship
Service
- Customer Acquisition
Image
Brand
-Customer
Retention
Source: Robert S. Kaplan and David P. Norton (2004). Strategy Maps: Converting Intangible Assets Into Tangible Outcomes. Boston: Harvard Business School Publishing Corporation, pp 39.
Customer
Perspective
Figure 3.2 The Customer Perspective of Balanced Scorecard Strategy Map
47
3.4.1 Product/ Service Attributes
In real estate context, property product is a general term used to describe
landed property. It includes vacant land, land and building, housing, commercial and
industrial buildings, agriculture (vacant, cultivated, developed to include buildings
and
machinery)
and
forestry
(forest
plantation,
recreation,
park,
resort).
Improvements such as roads, irrigation and other fixtures are also regarded as part of
landed property (Abdul Hamid Mar Iman, 2002, pp 152).
Property product can refer to single property such as single storey terrace
house or range of properties being developed under one particular project in one
particular place. Most property development projects are based on multi-product
concept where the whole project may be viewed as a package of products or line of
products. The major components of product in a project development comprised of
residential (landed property and strata property), commercial (shop, shopping
complex, market), recreational (park, lake, club house) and public amenities (transport
terminal, education institution) (Abdul Hamid Mar Iman, 2002, pp 153).
In addition, property can also be considered as service. The property sector
creates or provides tangible services and facilities such as parks, resorts, recreation
sites and public facilities (Abdul Hamid Mar Iman, 2002, pp 152).
In any development, provision of public amenities and facilities such as
schools, playgrounds, parks, multi-purpose halls, markets and even police booths take
away about 50 to 60 percent of the land area, leaving the net saleable land for physical
48
construction of houses only about 40 percent of total land area for the project
(Dialogue on Proposed Goods and Services, REHDA, 17 August 2005). Indeed, there
are lots of reserved land for these public amenities and facilities by developers as
required by local authority. But for developers who are concerned for CSR will
provided these public amenities and facilities to their residents.
Even, some of
developers are willing to put these public amenities and facilities under their own
maintenance and not handed over to local authority after completion.
As show in Figure 3.2, Customer Perspective of Balanced Scorecard Strategy
Map that consists of product or service attributes, relationship and image.
The
product or service attributes comprised of property type and price, accessibility of
township, infrastructure, public amenities and recreational facilities, security features
and services towards the overall township developments.
These product criteria
provided by developers which contribute to CSR will affect the township
development.
3.4.1.1 Price
There are two main pricing approaches in a property market: the high price
approach and the low price approach. Since many property developments have a mix
of products with different sets of nature or characteristics, both approaches may be
integrated. For instance, the high price approach may be adopted for high-ends
properties while the low price approach may be adopted for low to medium cost
residential units. In practice, Cravens (1997) and Hamid (1997) in Hamid (2002)
49
suggests that several pricing strategies for property products are an expansion of these
two main approaches (Abdul Hamid Mar Iman, 2002, pp 203).
There are two pricing structures have been used to set prices in the properties
industry, i.e. cost-based pricing and competition-based pricing. In cost-based pricing,
a company determine expenses from raw materials and labor adds amounts or
percentages for overhead and profit and thereby arrives at the price (Price = Direct +
Overhead Costs + Profit Margin). Using knowledge of the costs of the components of
the service (including the raw materials (such as lumber), labor (including both
professional and unskilled) and profit margin, the developers may estimated their
products’ prices (Valarie A. Zeithaml and Mary Jo Bitner, 1996, pp 491 – 496).
Competition-based pricing will focuses on the prices charged by other
developers in the housing industry. Competition-based pricing is a price competition
which relies solely on the manipulation of product prices. It is always related to
whether developers use a higher, lower or equal price.
Price competition may
succeed if the competitors cannot easily match the price of a particular product. This
technique depends on the supply-demand conditions and competition in the property
market. The developer also compares the cost of production of its product against
similar, competing products in the market. Then, developer will set the per unit cost
of production of its product not exceeding the average market price of such products
to enable comparable pricing (Abdul Hamid Mar Iman, 2002, pp 202 and 208).
50
3.4.1.2 Quality
Quality stands for the ability of a product to perform its functions. It includes
the product’s overall durability and reliability, precision, ease of operation and repair
and other valued attributes. Some of those attributes can be measured objectively.
However, quality should be measures in terms of buyers’ perception from customer’s
point of view. For instance, evaluation by customers on workmanship of houses they
purchased.
Quality is not simply a problem to be solved.
It is competitive
opportunity that attracting stronger interest among consumers and companies.
To some developers, improving quality means using better quality control to
reduce defects that annoy consumers. But strategic quality management means more
than this. It means gaining an edge over competitors by offering products that better
serve consumers’ needs and preferences for quality. Developers must do more than
simply build quality into their products.
The product’s look and feel should
communicate its quality level. Quality is also communicated through other elements
of the marketing mix. A high price usually signals a premium quality product. The
product’s brand name, packaging, distribution and promotion also announce its
quality. All those elements must work together to communicate and support the
brand’s image. This leap to the conclusion that the developer does not always design
the highest quality possible because not all customers want or can afford the high
levels of quality offered such as bungalows or semi-detached houses. The developers
must choose a quality level that matches to target market needs and quality levels of
competing products (Philip Kotler and Gary Armstrong, 1991, pp 257 – 259).
51
3.4.1.3 Availability
Responsiveness and access are important aspects of service quality. Being
able to reach a person who can help immediately or who can confirm a time by which
help will arrive can be comforting to customers, particularly when they are
experiencing service interruptions (Valarie A. Zeithaml and Mary Jo Bitner, 1996, pp
460).
3.4.1.4 Selection
Developers know that they cannot satisfy all consumer in a given market, at
least not all consumers in the same way. There are too many different kinds of
consumers with too many different kinds of needs. Some developers are in a better
position to serve certain segments of the market. Each developer must study the total
market and choose the segments it can profitably serve better than its competitors can.
This involves four steps: demand measurement and forecasting, market segmentation,
market targeting and market positioning (Philip Kotler and Gary Armstrong, 1991, pp
42 – 44).
1. Demand Measurement and Forecasting
Developers want to enter markets that show strong growth prospects. Growth
potential may depend on the growth rate of certain age, income or nationality
groups that favor the product.
Growth may also be related to larger
developments in the environment such as economic conditions, the crime rate
and lifestyle changes. For example, future market for properties development
is strongly related to current demographic and economic climax. Forecasting
52
the effects of these environmental forces is difficult, but it must be done in
order to make decisions about the market.
2. Market Segmentation
The market consists of many types of customers, products and needs and the
developer’s task is to determine which segments offer the best chance to
achieve company objectives. Market segmentation is a process of classifying
customers into groups with different needs, characteristics or behavior.
Consumers can be grouped in various ways based on geographic factors
(regions, cities), demographic factors (sex, age, income, education),
psychographic factors (social classes, lifestyles) and behavioral factors
(purchase occasions, benefits sought, usage rates). Developers are wise to
focus their efforts on meeting the distinct needs of one or more market
segments. Thus, they study the geographic, demographic, behavioral and
other characteristics of each market segment to evaluate its attractiveness as a
marketing opportunity.
3. Market Targeting
After a developer has evaluated market segments, it can enter one or many
segments of a given market. A developer with limited skills or resources
might decide to serve only one or a few special segments. Or a developer
might choose to serve several related segments, perhaps those that have
different kinds of customers but with the same basic wants.
Or a large
developer might decide to offer a complete range of products to serve all the
market segments.
53
4. Market Positioning
Once a company has decided which market segments to enter, it must decide
what “position” it wants to occupy in those segments. A product’s position is
the place the product occupies in consumers’ mind relative to competitors.
Market positioning is arranging for a product to occupy a clear, distinctive and
desirable place relative to competing products in the minds of target
consumers. Thus, developers plan positions that distinguish their products
from competing products and that give them the greatest strategic advantages
in their target markets. For instance, SP Setia Group Bhd is positioned on
lifestyle as “modern lifestyle home”, “the ultimate lifestyle” and “… where
style and comfort matters”.
Such deceptive simple statements form the
backbone of a product’s marketing strategy.
3.4.1.5 Functionality
Generally, spatial layout and functionality of the physical surroundings are
particularly important for service environments exist to fulfill specific purposes or
needs of customers. Spatial layout refers to the ways in which machinery, equipment
and furnishings are arranged, the size and shape of the items included car parking,
facilities, amenities, open spaces, landscape and the spatial relationship among
themselves. Functionality refers to the ability of the same items to facilitate the
accomplishment of customer and employee goals (Valarie A. Zeithaml and Mary Jo
Bitner, 1996, pp 535). Both of them must be completed under time pressure such as
deliver vacant possession according to Sale and Purchase Agreement (SPA).
54
3.4.2 Relationship
Relationship is a philosophy of doing business and a strategic orientation that
focuses on keeping and improving current customers, rather than on acquiring new
customers. The philosophy assumes that homebuyers prefer to have an ongoing
relationship with one developer than to switch continually among development
companies in their search for value. Building on this assumption in fact is usually
much cheaper to keep a current customer than to attract a new one
(Valarie A.
Zeithaml and Mary Jo Bitner, 1996, pp 171 – 173). For instance, a successful
development township with CSR implemented normally is encourages the existing
buyers to upgrade their properties with the same development company and this is an
effective strategies for retaining customers.
The primary goal of relationship is to build and maintain base of committed
customers who are profitable for the organization. To achieve this goal, the company
will focus on the attraction, retention and enhancement of customer relationship. First,
the company will seek to attract customers who are likely to become long term
relationship customers. Through market segmentation based CSR, the company can
come to understand the best target markets for building lasting customer relationships.
As the number of these relationships grows, the loyal customers themselves will
frequently help to acquire new customers through word and mouth. Once they are
attracted to begin a relationship with the company, customers will be more likely to
stay in the relationship when they are consistently provided with good quality and
value in products and services. They are less likely to be pulled away by competitors
if they feel the company understands their changing needs and seems willing to invest
55
in the relationship by constantly improving and evolving its products services mix.
Finally, the goal of customer enhancement suggests that loyal customers can be even
better customers if they buy more products from the company. Loyal customers not
only provide a solid base for the organization, they may represent growth potential
(Valarie A. Zeithaml and Mary Jo Bitner, 1996, pp 172 – 173). In recent year, many
developers have aspired to be the exclusive supplier of a particular product or service
for their customers. Over time these enhanced relationship can increase market share
and profit for the organization. The development companies such as Country View
Bhd, Renew Group Bhd and SP Setia Group Bhd are the examples of public listed
companies.
Historically, developers have been concerned with acquisition of customers,
so shift to the relationship strategy often represents changes in mindset, organizational
culture, employee and customer reward system. The sale incentive systems in many
development companies are set to reward whether employees or buyers for bringing
in new customers. For instance, introduction a platinum privilege programme and
website by SP Setia Group Bhd enables the buyers or members to earn redemption
points for recommendation sale on the developer’s properties in differentiated
township development. The cumulative redemption points can used to redeem the
furniture and electronic appliances. In this case, sellers or developers will offer and
expose their products and services to the largest number of potential buyers. In long
term, only one or two big companies will tend to create large barriers to entry for
other competitors and become the dominated suppliers of the housing industry.
56
3.4.2.1 Service
The entire service is represented to the client through problem analysis
activities, meetings with the client, follow up calls and reporting – a series of deeds,
processes and performances. Service include all economic activities whose output is
not a physical products or construction. Generally, service consumed at the time it is
produced and provides added value in form such as convenience, amusement,
timeliness, comfort or health to customers (Valarie A. Zeithaml and Mary Jo Bitner,
1996, pp 5 – 6). For example, developers offer service after sale and extend their
business hours to their purchasers.
In this case, the measurement of product perspective shown in Figure 3.2 of
Balanced Scorecard Strategy Map within customer perspective exercised by the
developers include sales services and post sales activities carried out by developers
are maintaining the rapport relationship with the homebuyers.
3.4.2.2 Partnership
The group of strategies with the highest potential for effectiveness involves
partnering with intermediaries to learn together about end-customers, set
specifications, improve delivery and communication.
One way to organize the
delivering service through intermediaries is to describe the primary channels of
service distribution. Service can be distributed to the end-customer through electronic
channels, agents and brokers (Valarie A. Zeithaml and Mary Jo Bitner, 1996, pp 359).
57
This approach capitalizes on the skills and strengths of both principal and
intermediary a sense of trust that improves the relationship since they have individual
goals to achieve. The principal makes a point of consulting intermediaries and asking
for their opinion and views before establishing policy. (Valarie A. Zeithaml and
Mary Jo Bitner, 1996, pp 359).
For instance, participation of consultants end
engineers by giving opinion and suggestion for planning development can influence
developers in decision-making process. In the real estate context, some appointed real
estate and agency companies acting as exclusive agents are representatives who
distribute and sell the products to increase the sale revenues in favour of developers.
In common terminology, an agent is an intermediary who acts on behalf of a service
principal (such as developers) and is authorized to make agreements between
customers and those principles. They have legal authority to market services as well
as to perform other marketing functions.
Electronic channels are the only service distributors that do not require direct
human interaction. It is a media include all forms of service provision through
television, telephone, interactive multimedia and computer are transported directly to
customers for information, sound and full motion video that is delivered on a switched
basis. Today, the developers are making possible through the website to provide
company news, housing information, banking and financial service to their customers.
Also, the customers are welcome to give any comments, suggestion or complaints to
the developers through the internet.
The more services relied on technology or
equipment for service production and the less it relies on face-to-face contact with
service providers, the less the service is characterized by inseparability and nonstandardization.
58
3.4.3 Image
Image is not just name, term, symbol, design or combinations of these,
although it is true to say that such things can and differentiate certain products and
companies from others. The additional ingredient that makes a successful image is
personality and reputation. Today’s leading brands are setting images in their own
right and are well known in all societies and cultures. The secret to successful brand
is to influence the way in which people perceive the company’s image or product’s
image can effects the mind of customers by appealing to those mind-thinking,
sensation, feeling and institution or combinations of them.
Table 3.1 Top Six Most Important Purchase Factors Other Than
Price and Location
Top 6 Most Important Purchase Factors Other Than Price & Location
Developer’s reputation
Type of building materials (interior and exterior)
Interior layout or floor plan
Built-up/ Floor area
Attractive house façade
Profile of residents in the surrounding neighbourhood
* Note: the ‘Security’ factor was tested separately
Rating (%)
64
62
55
49
46
41
Source: Research Inc (Asia) Sdn Bhd from Lim Lay Ying (2004). Beyong Product
and Service. Property Times. September 26, Kuala Lumpur, New Strait Times, pp 2.
Property Times, New Straits Times, 26 September 2004.
In property residential development, the homebuyers getting more sensitive
and knowledgeable are able projecting a positive brand perception on product value
and quality. The developers’ image and reputation often occupy unique positions in
the customer’s mind’s eye. . To enhance the image of company, contribution of
social responsibility will strengthen the reputation of company. Market surveys have
59
often revealed that other than price and location, the majority of homebuyers rated
“Developer’s Reputation” as the most important purchase factor as outline by Table
3.1.
Research shows that the real driving force behind market leadership is
perceived value, but not price or inherent product attributes. As long as a brand to
offer customers superior perceived value, then good market performance will follow
which makes consistency a highly important features of image.
A company’s
advertising, promotion, changes in name, new logo design or other activities will not
successfully build an image unless there are certain well-defined values which are
consistently communicated and demonstrated by the company which are recognized
and appreciated by customers. Once brand values have been identified, they should
drive all other activities impacting on customers and used to achieve consistency,
which is so meaningful to consumers. All communications should reflect the brand
values as should company employees in demonstrating those values in their behaviour
to customers. Based on these experiences, customers can rely on chosen brands to
guarantee standards of quality which reduces the risk of failure in purchase (The
Power of Brands: How to Enhance Your Brand in Asia. http://www.orientpacific.
com/brands.html).
In this age of intense competitive pressure, image is the best way to
differentiate an organization in the minds of the real estate consumer. Image can play
an important role by providing simplicity and reassurance to the uninitiated, offering a
quick, clear guide to a variety of competitive products and helping consumers reach
better, quicker decisions. Successful images have discovered the advantage of brand
60
creation, brand positioning and brand management to compete, survive and thrive. .
(Beyond Product & Service. http://www.reserchic.com.my/articles/260903.html).
Corporate branding is encompasses image and identity building an activity of
company. Real estate development has pioneered branding as a way to reinforce the
identity and image of a project, either as a shopping destination, a resort/ hotel
development, a new township etc – each doing so in order to distinguish it from its
competitors With corporate branding the company uses one brand – usually the
company name for all its products and services as in the case of Sunrise Bhd, a public
listed company who foresaw in the potential of creating a lifestyle hub in the suburbs
of Mont’Kiara, succeeded in building strong brand names for both the company and
the locale.
The brands of both Sunrise as a corporation and Mont’Kiara as a
residential suburb, represent quality, prestige, innovation and service excellence. The
management which inherited the brands did an excellent job in leveraging on the
brand equity by effectively managing the brand through all aspects of communication
(Successful Brand Leveraging. http://www.reseachinc.com.my/articles/161004.html).
3.4.3.1 Brand
Building a brand is a corporate strategic issue and not a short term tactical
activity or exclusive domain of consumer products only. Brand loyalty means that
companies achieve a greater consistency of demand through customer retention. Over
time, good brand strategies generate the production volume which gives the
economies of scale necessary to have a favourable impact in unit costs. In turn, this
allows companies to achieve higher margins and putting them in a winning situation
61
(The Power of Brands: How to Enhance Your Brand in Asia.
http://www.
orientpacific.com/brands.html).
Brand resilience can help companies ride out stormy weather. We can witness
that there have many developers still survive in housing industry after economy
downturn by 1997.
Developers are becoming more and more aware of the
implications, benefits and the power of a successful brand. They now know that
being good at what they do – building and selling real estate is no longer enough.
Their competitors may be running their business as well as they do, but for as long as
they do not capitalize on building and leveraging their brand, they will stand to lose
out from the property market. Hopes of pricing in the “brand equity” factor to
command that extra premium would be a long shot.
Successful brands allow
companies to charge premium prices for their product, which of course generate
higher profits. Surveys indicate that brand leaders can return a margin four to six
times that of the closest competitors.
Consumers view a brand as an important part of the product. Branding can
add value to the product and become a major issue in product strategy. On one hand,
developing a branded product requires a great deal of long term marketing investment
especially for advertising, promotion and packaging.
Powerful brand name has
consumer franchise with commanded strong consumer loyalty. A sufficient number
of customers demand these brands and refuse substitutes, even if the substitutes are
offered at lower prices. Companies that develop brands with a strong consumer
franchise are insulated from competitors’ promotional strategies.
62
A brand is a name, term, sign, symbol, design or combination of these
intended to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors. A brand name is that part of a brand
which can be vocalized such as SP Setia Group Bhd, Pelangi Group Bhd
and
UMLand Bhd .
Branding helps buyers in many ways. Brand names tell the buyer something
about product quality. Buyers who always buy the same brand know that they will
get the same quality each time they buy. Brand names also increase the purchaser’s
efficiency. Imagine a homebuyer intends to purchase a house and finding several
housing projects in the Johor Bahru area.
Thus, brand names help call the
homebuyer’s attention to the brand preference for product’ location, features and
quality. For instance, SP Setia Bhd Group has three township developments in
Tebrau Sri Kota Johor (Taman Setia Indah by Setia Indah Sdn Bhd), Kempas (Taman
Setia Tropika by Setia Indah Sdn Bhd) and Skudai (Taman Bukit Indah by Bukit
Indah Johor Sdn Bhd). Finally, branding of SP Setia Bhd Group increases buyer
efficiency because it provides much more information about products and where to
find them.
Branding lets the seller attract a loyal and profitable set of customers.
Branding has benefits society as a whole. Those favoring branding suggest that
branding leads to higher and more consistent product quality. Branding also increase
innovation by giving developers an incentive to look for new features that can be
protected against imitating competitors.
Thus, branding results in more product
63
variety and choice for consumers. (Philip Kotler and Gary Armstrong, 1991, pp 259 –
263).
Generally, developers who brand their product based on family brand decision and
face several further choices (Philip Kotler and Gary Armstrong, 1991, pp 264 – 265).
At least four brand name strategies are used:
1. Individual brand name, example:
Company
Name
Township
Development
Project Name
BSJ Properties
Sdn Bhd
Bandar Selesa Jaya
BSJ Highland
Sdn Bhd
Bandar Selesa Jaya
Emas Jaya Properties
Sdn Bhd
Bandar Selesa Jaya
Sri Awana Townhouse
Green Park
Apartment
Rainbow Height
Serviced Apartment
2. A blanket family name for all products, example:
Company Name
Township
Development
3.
Khoo Soon Lee Realty Sdn Bhd
Taman Nusa
Taman Kempas
Taman Bestari
Bentari
Indah
Indah
Separate family names for all products, example:
Company Name
Product
Southern Gateway (M) Sdn Bhd
Township Development
J. C. Chang Group
Plantation
4. Company trade name combined with individual products name, example:
Company Name
Subsidiary
Company
Township
Development
SP Setia Bhd Group
Setia Indah Sdn Bhd
Taman Setia
Indah
Taman Setia
Tropika
Bukit Indah Johor Sdn Bhd
Taman Bukit Indah
64
3.5 Conclusion
The Balanced Scorecard Strategy Map describes the logic of the strategy,
showing clearly the objectives for the critical internal processes that create value and
the intangible assets required to support them.
The financial and customer
perspectives in Balanced Scorecard Strategy Maps describe the outcomes that
achieved by the organization; increase in shareholder value through revenue growth
and productivity improvements; increase in the company’s share of customers’
spending through customer acquisition, satisfaction, retention, loyalty and growth.
Processes in the internal and learning and growth perspectives describe how the
organization will implement its strategy. None of these intangible assets has value
that can be measured separately or independently. The value of these intangible
assets derives from their ability to help the organization implement its strategy.
Despite to this study which focuses on product perspective, the Customer
Perspective of Balanced Scorecard Strategy Map is used to examine product
perspective contribute to CSR which have been practiced by developers in Johor
Bahru. The questionnaires survey is designed from view of customer of Balanced
Scorecard Strategy Map to obtain primary data through interview with developers.
The elements of the CSR will be customized and translated into the product attributes
offered by developers. Henceforth, frequency approach and cross tabulation are used
to analyze the research data.
Result of survey will describe the how the
implementation of CSR strategies
drive performance enhancements to the
organization’s internal processes that have the maximum leverage for delivering value
to customers, shareholders and communities.
65
However, the developers must launch a set of action programmes that will
enable the targets for all the measures to be achieved in order to meet the companies
objectives. As competition gets hotter in the real estate industry, establishing CSR in
product perspective is one way to guarantee long term sustainable profits.
For
developers, embarking CSR is a key to customer loyalty, long term survival and
growth. CSR has become a vital strategic issue for development companies that will
deliver long term success for the nation through good and bad times.
CHAPTER 4
CHAPTER 4
ANALYSIS OF DATA AND FINDINGS
4.1 Introduction
This chapter reveals the analysis data result from the survey conducted.
Interview has been conducted on 50 developers are registered under REHDA in
District of Johor Bahru, State of Johor through a simple random sampling method.
Out of these 50 developers, 19 respondents are willing to participate in the interview.
As from the survey result, 10 out of these 19 respondents are under public listed
company while the rest are private limited companies. In order to analyze the data,
the Balanced Scorecard Strategy Map is used to identify the CSR in product attributes
offered by developers. In addition, frequency approach and cross tabulation analysis
will be applied in this case. Obviously, through the analysis comparison among those
selected developers show that recognizes the effort on CSR in perspective of
customers by offering variety in product attributes to the community through the
provision of well planned facilities and amenities in the development township. This
section displays the result of analysis and findings for the questionnaire survey.
67
4.2 Background of Developers
A set of questionnaire was designed for data collection (refer to Appendix 8).
From the questionnaires distributed to total of 50 developers who registered under
REHDA, 19 developers responded to the questionnaires with completed answers. Out
of 19 respondents, 10 respondents are wholly-owned subsidiary company under their
respective public listed parent company while the remaining are from private limited
companies where six respondents are subsidiary companies which not yet listed.
Khoo Soon Realty Sdn Bhd and Mah Sing Properties Sdn Bhd are the public
listed companies, established in 1981 and 1997 under Khoo Soon Lee Holding Bhd
and Mah Sing Group Bhd respectively. Both companies achieved average sales
revenue up to RM 200 million per year. There are three public listed development
companies achieved sales revenue in between RM101 – 150 million, i.e. Country
View Resources Sdn Bhd, Bukit Indah Johor Sdn Bhd and Setia Indah Sdn Bhd.
Despite to the sales performance below RM 1 – 50 million, there are four
public listed development companies and eight private limited development
companies under this category.
The public listed companies are from Atlantic
Dynamic Sdn Bhd, Global Earnest Sdn Bhd, Jayaplus Sdn Bhd, and Plenitude Sdn
Bhd. The private limited companies are from BSJ Properties Sdn Bhd, Glamour Sdn
Bhd, Hartaplus Realty Sdn Bhd, Lender Land Sdn Bhd, Maha Builders Sdn Bhd,
Masai Utama Sdn Bhd, Mayland Sdn Bhd and Scudai Development Sdn Bhd. The
developers’ profile, location, total land area of township development and annual
sales revenues are illustrated in Table 4.1.
* Not within the study areas
19 Scudai Development Sdn Bhd
18 Mayland Sdn Bhd
Plenitude Holdings Sdn Bhd
BSJ Properties Sdn Bhd
Glamour Sdn Bhd
Hartaplus Realty Sdn Bhd
Lender Land Sdn Bhd
Maha Builders Sdn Bhd
Masai Utama Sdn Bhd
1997
Private Limited
Public Listed
Public Listed
Public Listed
Private Limited
Public Listed
Private Limited
1972
1990
1998
Public Listed
2003
6
7
8
2001
Public Listed
Public Listed
Public Listed
Private Limited
Private Limited
Private Limited
Private Limited
Private Limited
Private Limited
Yukong Development Private Limited
Oxbridge Height Sdn Bhd
Atlantic Dynamic Sdn Bhd
5
1997
1980-s
Public Listed
1995
1980
1981
1990
2003
2001
2003
Setia Indah Sdn Bhd
3
4
1997
11
12
13
14
15
16
17
Bukit Indah Johor Sdn Bhd
Country View Resources Sdn Bhd
2
1989
Mah Sing Properties Sdn Bhd
1
Year of
Company Type
Establish
1981
Public Listed
9 Global Earnest Sdn Bhd
10 Jayaplus Sdn Bhd
Company Name
Khoo Soon Lee Realty Sdn Bhd
-
-
Plenitude Bhd
PC Holding Bhd
Foh Chong Group Bhd
Renew Group Bhd
Kean Leng Group
Kean Leng Group
BCB Management Bhd
Binaik Equity Bhd
Pelangi Group Bhd
Renew Group Bhd
Daiman Group Bhd
SP Setia Bhd Group
SP Setia Bhd Group
Country View Bhd
Mah Sing Group Bhd
Khoo Soon Lee Holding Bhd
Parent Company
Table 4.1 Summary of Developers ' Profile
Taman Nusa Bestari
Taman Nusa Bestari 2
Taman Kempas Indah
Taman Bestari Indah
Taman Pulai Perdana
Austin Perdana
Taman Bukit Indah
Taman Nusa Bestari Jaya
Taman Nusa Indah
Taman Setia Indah
Taman Setia Tropika
Taman Pelangi Indah
Jaya Putra Perdana
Taman Gaya
Taman Daiman Jaya *
Taman Pulai Utama
Taman Jaya Mas
Taman Pulai Flora
Taman Kota Mas *
Taman Desa Tebrau
Bandar Selesa Jaya
Taman Seri Orkid
Bandar Pulai Jaya
Embassy Suite
Skudai Villa
Taman Masai Utama
Prima Regency Serviced
Apartment
Austin Boulevard Double
Storey Terrace Houses
Taman Skudai Indah
Taman Nusa Damai Harmoni
Taman Bukit Senang *
Township Development
69 Acres
35 Acres
35 Acres
35 Acres
56,723 square metres
Total Land Area
139.504 Acres
1,231.59 Acres
1,237.845 Acres
355.9205 Hectares
307 Acres
169 Acres
1,518 Acres
290.32 acres
53.547 Hectares
888 Acres
740 Acres
1,000 Acres
500 Hectares
400 Acres
3,000 Acres
350 Acres
4.584 Acres
102 Acres
18.59 Acres
940 Acres
317 Acres
154 Acres
64.71 Hectares
1 Acres
3 Acres
25 Acres
1 - 50 million
50 - 100 million
101 - 150 million
Above 200 million
Sales Revenue
(RM)
69
Among the 9 respondents from the private limited company, eight respondents
achieve their annual sales revenue RM 1 – 50 million except for Oxbridge Height Sdn
Bhd is established in 1990 under Renew Group Bhd achieve RM50 – 100 million
sales value yearly.
Yukong Development Private Limited, a wholly-subsidiary
company from Pelangi Group Bhd established in 1972 also included in this category
as well.
4.3 Data Analysis
The data derived from the survey among 19 respondents in Johor Bahru is
analyzed by frequency approach and the Balanced Scorecard Strategy Map. The
Balanced Scorecard initially proposed to improve the measurement of an
organization’s intangible assets which can be a powerful tool for describing and
implementing an organization strategy. It provides a framework to illustrate how
strategy links intangible assets to value-creating processes.
Meanwhile, the
Customer’s Perspective in the Balanced Scorecard Strategy map describes the strategy
how to identify a targeted customer based on a differentiated value proposition. The
revenue growth strategy requires a specific value proposition that describes how the
organization will create differentiated and sustainable value to targeted segments.
Overall, the objectives and measures for a particular value proposition define an
organization’s strategy. The dimensions of CSR on product offered by developers in
customer perspective are measured by product or service attribute, relationship and
image as illustrated in Figure 3.2 in Chapter Three. By build and deliver houses to the
masses, the developers have translated CSR into their business strategies and policy
that bring impacts to the township developments.
70
4.4 Analysis of CSR from Customer Perspective
The buyers are now more cautions when purchasing products as they look for
prime locations, perfectly close to they work place, quality designs and innovative
products at reasonable prices. Overall, developers with strong innovative lifestyle
products will have their fair share of the market. While those with less desirable
locations, standard products and poorly finished properties will have less competitive
advantage. The recipe for success will depend on the ability of developers to find the
right balance of CSR in the product perspective they offered.
Element of CSR on product within customer perspective exercised by the
developers can be measured through the product or service attributes, relationship and
image.
The product or service attributes consists of property type and price,
accessibility of township, infrastructure, public amenities and recreational facilities,
security features and services towards the overall township developments. These
product criteria provided by developers which contribute to CSR will affect the
township development.
Meanwhile, sales services and post sales activities carried out by developers
are maintaining the rapport relationship with the homebuyers. To enhance the image
of company, contribution of social responsibility will strengthen the reputation of
company. Therefore, emphasis on CSR from customer perspective based on service
attributes will contribute to efficiency of CSR adopted by developers.
71
The following section will analyzed and highlighted the product attributes,
sales service and post sales activities contributed to CSR from customer view which
have been practiced by the developers and their impacts towards the township
developments in District of Johor Bahru, State of Johor.
4.4.1 Property Type and Pricing
By providing variety of product is an universal business strategy employed by
companies throughout the world, including the real estate industry. This can be done
by offering a range of products from affordable houses to high-end properties and low
medium cost flat to high-rise properties. Placing ceiling prices from low to medium
cost until to premium prices on housing by developers will ensure they would be
accessible to their targeted segment. The increased volume of house ownership has
given reflection to the success of establishing CSR among the developers.
In Johor Bahru, the housing industry is one that Government has always
looked to carry out its social agenda. From subsiding low cost and low medium cost
housing to promote racial harmony through equitable distribution of houses to
provision social facilities, the developers have always obliged to fulfill these
responsibilities. In this respect, every developer is required to allocate a minimum of
30 percent quota of the developments for low cost and low medium cost houses as
part of the key implementer of the Government’s social programmes.
Providing low medium cost properties in category prices between RM25,000,
RM50,000 and RM80,000 is the mandatory requirement impose by Government to
72
developers. These properties are heavily subsidized by other higher priced properties.
The low medium cost property can be build as landed property held under Individual
Title. When the low medium cost properties are held under Master Title or Strata
Title, automatically it becomes the strata properties or high-rise properties. In fact,
the landed low medium cost properties are more popular and preferred by house
buyers.
With the subdivided of title, the value for low medium cost double storey
terrace (landed property) is higher than low medium cost flats (strata property) that
are not yet subdivided. Therefore, low medium cost double storey terrace at selling
price RM80,000 is seldom done by other developers because this type of landed
property is not profitable. The more houses need to build, the more land requisition
and therefore land cost impose in the projects development. This is made possible
only through cross-subsidy from sales of other types of housing. Therefore, most of
the developers choose to build a stratified property such as flat because more unit
houses can be build in a smaller size piece of land although it taking long time for
subdivision of title.
As illustrated in Table 4.2, there is only one developer willing to offer the
selling price at RM80,000 for low medium cost double storey which is held under
Individual Title in compared with the low medium cost flats from the seven
developers with selling price between RM25,000 to RM80,000 which having
properties under Master Title. According to Ms. Sharmin, a sales administration
executive from Glamour Sdn Bhd, her company is carried out part of the social
73
responsibility to provide the low medium cost double storey terrace (landed property)
targeted to the low and medium income groups, especially for Bumiputera buyers.
Table 4.2 Range of Price Offered According to Housing Type
Price Range
(RM’000)
Property Type
Flat
Apartment
Shop
Apartment
Serviced
Apartment
Condominium
Townhouse
Single Storey
Terrace
Double
Storey
Terrace
SemiDetached
Bungalow
Bungalow
Linked House
Below
50
81
–
130
1
-
131
–
150
-
151
–
180
2
-
181
–
200
-
201
–
230
-
231
–
250
-
251
–
280
-
281
–
300
-
Above
300
5
-
50
–
80
2
1
-
3
1
-
-
1
1
-
-
-
-
-
-
1
1
1
3
4
1
-
-
-
-
-
-
1
-
2
1
6
4
-
-
1
-
-
-
-
-
-
-
-
-
-
1
6
-
-
-
-
-
-
-
-
-
-
4
2
-
(Source: Survey by author)
Meanwhile, there are six developers fix the selling price in between
RM181,000 to RM200,000 for double storey terrace house. Other landed properties
such as single storey terrace house, only one developer is willing to offer the selling
price at RM81,000 to RM130,000 compared to four developers fix at RM151,000 to
RM180,000 as selling price . For the serviced apartment, there are three developers
determine the lower price in between RM50,000 to RM80,000 compared with the
other developers. For the high-end properties such as semi-detached, bungalow and
bungalow linked house, the dominant price are above RM300,000 by the most of the
developers.
74
Overall, location and size of house are main indicators to influence the price.
The prices of the properties type offered in Johor Bahru property market are focusing
on affordable houses for the masses. Most of the developers are going back to basic
by tailoring its product for first-time-buyers of properties costing RM180,000 and
below. However, landed properties in preference location with competitive price will
continue to perform well. With the increase in costs incurred by developers, there are
two scenarios that are imminent. House prices will go up especially for areas where
location is in greater demand while for areas that are in lesser demand, the developers
will have to absorb the cost.
In the Table 4.3, all the developers agreed that cost is the most important
factor to determine the price. There are 68.42 percent respondent determine their
price based on competition by surrounding projects by other developer. About 89.47
percent developers will lower their price during promotion and 31.58 percent will
lower their price after taking competition into their consideration. Only 10.53 percent
respondent will exercise the lower price during recession.
Table 4.3 Factors Determine Price and Exercise Lower Price
Factor Determine Price (%)
Cost
Competition
100
68.42
Exercise Lower Price (%)
Economy Recession
Competition
Promotion
10.53
31.58
89.47
(Source: Survey by author)
The increase in raw material prices will lead to an increase in cost of
construction. The housing market is robust with the all types of housing witnessing
rising prices, resulting largely from the rise in cost components such as fuel, steel,
75
cement and aluminium which constitute about five to 10 percent of overall building
cost. Depending on market and consumer reactions, the developer can either absorb
such increases or protect its profit margin by increasing the selling price.
The recent increase in interest rates has translated into 0.25 percent increase in
the Base Lending Rate (BLR). This increase would not have a major impact towards
housing demand, prospect from the property division look promising as the demand
for housing is ever growing. Overall, the developers determine the price based on
cost included land cost and construction cost. They do not taking CSR into accounts
in price decision-making. Most of them will exercise lower price during promotion to
increase their sales revenue.
4.4.2 Accessibility
In choosing the right home, the overall township planning and the location are
major concerns of consideration. Accessibility almost becomes the main indicator
and criterion for homebuyers to assess a purchase of house. As the population in
Johor Bahru areas grew, so did the shopping complex and well-respected higher
learning institutions. These have lead to economic and business expansion and even
greater demand for properties. With high fuel cost and scarcity of time becoming
important factors to consider when purchasing property today, more buyers now
prefer to put their money into developments that allow them to walk to work or study,
the shops or the neighbourhood park.
76
As illustrated by Table 4.4, it is thus obvious all the township developments
have access to shopping complex and education hub. Other than that, only 10.53
percent township developments are access to Government amenities. Although the
accessibility is part of issue for the marketing strategy to attract the homebuyers, but a
thoughtful developer will always develops a township whereby convenience and easy
access to certain areas for their residents. From the Table 4.3, there are 52.63 percent
of township development from public listed companies compared with 21.05 percent
township developed private limited companies are access to highway interchange.
The land nearby the highway possess higher land price compared with the estate land
and mostly the public listed developers are afford to buy it.
Table 4.4 Accessibility of Township
Township
Access to public transport/ terminal
Access to leisure facilities
Access to shopping complex
Access to highway interchange
Access to education hub
Access to medical centres
Access to Government amenities
Public
Listed
10.53
52.63
52.63
52.63
52.63
31.58
5.26
Developer (%)
Private
Limited
5.26
36.84
47.37
21.05
47.37
21.05
5.26
Total
15.79
89.47
100
73.68
100
52.63
10.53
(Source: Survey by author)
4.4.3 Infrastructure
Focus on sculptured streetscapes, and property facades also another valueadded features which emphasis by developments companies. Refer to the Table 4.5,
there are 68.42 percent of respondents have provided infrastructure such as quiet and
low traffic with control and limit the access, utility cabling and drainage with
77
concealed underground and wide street with bright street lighting to their the residents.
The CSR in infrastructure means that developers consider some safety precaution in
designing the layout which could reduce the accident rates. Other than that, only
21.05 percent developers have provided natural open space or parks. As illustrated by
Table 4.4, 21.05 percent from public listed development companies put more attention
on safety precaution for children, old folks and women in infrastructure especially in
providing open space and wide streets with bright street lighting.
Table 4.5 Infrastructure
Infrastructure
Quiet and low traffic
Underground/ covered drains and utilities
Lot of natural open space/ parks
Wide street with bright street lighting
Paved sidewalk and cycling paths along all streets
Public
Listed
36.84
36.84
21.05
47.37
26.32
Developer (%)
Private
Total
Limited
31.58
68.42
31.58
68.42
0
21.05
21.05
68.42
10.53
36.84
(Source: Survey by author)
4.4.4 Public Amenities and Recreational Facilities
Consumers are now a lot more discerning and demanding resident-friendly
environments, open areas and greenery.
In any development, provision of public
amenities and facilities such as schools, playgrounds, parks, multi-purpose halls,
markets and even police booths takes away about 50 to 60 percent of the land area,
leaving the net saleable land for physical construction of houses to only about 40
percent of total land area for the project.
78
In fact, there are lots of reserved land for these public amenities and facilities
by developers as required by local authority. But for developers who are concerned
for CSR will provided these public amenities and facilities to their residents. Even,
some of developers are willing to put these public amenities and facilities under their
own maintenance and not handed over to local authority after completion. The
various strategies that have been employed by developers to attract buyers include
offering a wide array of amenities, value-added features and green environments.
This can be done by providing higher quality of living environment to house buyers
including provision of schools, public amenities, playground, parks and multi-purpose
halls.
Among the steps that have been taken by developers to create developments
that are safer for children and elderly, 84.21 percent respondent who have provided
playground and landscaped gardens and handed over to local authority after six
months of completion. For the mosque, there are 10.53 respondents provided mosque
and handed over to “Majlis Agama Johor” after completion.
As illustrated by Table 4.6, there are 36.84 percent respondents provide central
park, 10.53 percent respondents have provided lake and fitness and recreational club
to their residents and all of them put these facilities under their self-maintenance and
not handed over to the local authority. 10.53 percent of respondents have provided
market, only 5.26 percent respondents will still manage and maintain the market.
These respondents are the award-winning projects and renowned developers who
successfully implemented CSR in their public amenities and recreational facilities.
79
Table 4.6 Public Amenities and Recreational Facilities
Public Amenities and
Recreational Facilities
Playground
Market
Mosque
Landscaped Garden
Central Park
Lake
Fitness and recreational club
Condominium/
common
facilities
Provided by Developer
(%)
Public
Listed
52.63
10.53
10.53
52.63
31.58
10.53
5.26
0
Private
Limited
31.58
0
0
31.58
5.26
0
5.26
15.79
Under Developer’ s
Maintenance and Not
Handed Over to
Local Authority
Total
84.21
10.53
10.53
84.21
36.84
10.53
10.53
15.79
Total (%)
0
5.26
0
0
36.84
10.53
10.53
15.79
(Source: Survey by author)
From the Table 4.6, only 5.26 percent of private limited development
company which is known as Hartaplus Realty Sdn Bhd, builds and put the central
park and fitness and recreational centre under company’s maintenance without handed
over to local authority compared with 31.58 percent of public listed companies in
providing central parks. This has shown that the public listed companies with strong
financial capacity afford to self-maintain these public amenities and facilities
especially market, central park, lake, fitness and recreational centres upon completion
and not handed over to local authority after six month completion.
In high-rise building, 15.79 percent respondents are responsible for their
maintenance for the condominium or common facilities and not handed to local
authority since they are collecting maintenance fee from the residents.
80
4.4.5 Security Features and Services
Besides providing facilities for children, more greenery and open areas for
recreation, more attention should be given to curbing crime in residential areas.
Security features and services have been offered in many developments today
especially high-ends and landed properties.
Planned on the gated and guarded
concept, various layers of protection will be incorporated on gated and guarded homes.
But without charging maintenance fees to residents, 21.05 percent respondents
provided 24 hour security guard posts at the forefront, security patrols in the
neighbourhood and perimeter fencing respectively to enhance safety of residents from
criminal elements as per Table 4.7. Only 10.53 percent respondents willing provided
intercom and closed circuit television (CCTV) at guard house without charging
maintenance fee on residents. From the result of study, there are 15.79 percent of
well-known public listed development companies are willing to put security concern
as their long term commitment to the residents compared with 5.26 percent of private
limited development company.
Table 4.7 Security Features and Services Offered Without Charging
Maintenance Fee
Security Features and Services
24 hour security guard posts
Security patrols in the neighbourhood
Perimeter fencing
Intercom linked to guard house
CCTV monitoring
(Source: Survey by author)
Public Listed
15.79
15.79
15.79
10.53
10.53
Developer (%)
Private Limited
5.26
5.26
5.26
0
0
Total
21.05
21.05
21.05
10.53
10.53
81
From the Table 4.7, only one developer or 5.26 percent from private limited
development company willing to offer 24 hour security guard posts, security patrols
in the neighbourhood and perimeter fencing. This company is known as Hartaplus
Realty Sdn Bhd, a wholly-owned subsidiary by Renew Group Bhd but not yet listed.
4.4.6 Type of Township Developments
As competition in property market increase, so did the number of value-added
features offering by developers to enhance homebuyers’ investment and convenience.
Developers would compete by offering unique and attractive products which
emphasis on value-added features include concept, themed landscaping, sculptured
streetscapes, property facades, amenities and even product labels.
Surprisingly, the conventional housing still remains dominant in Johor Bahru
market as there 52.63 percent of developers are focused on it. According to the
respondents, homebuyers in Johor Bahru market are still conservative and they did
not desire for a modern and stylized contemporary design township yet. Out of the 19
respondent, 31.58 percent from private limited development companies still focus on
conventional township developments. This has shown that the private limited
development companies are less supportive to provide lifestyle townships which need
more financial commitment.
Demand in homes within a quality environment will be sustained.
Homebuyers will continue to seek better lifestyle, new living concept and investment
opportunities. As shown in Table 4.8 (refer to Table 4.6 and Table 4.7 as well), the
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growing awareness of the environment has brought lifestyle benefits in properties in
the form of green amenities such as parks and gardens. Such awareness is more
apparent in places where lots of developments are taking place and sights of greens
are rapidly disappearing.
Table 4.8 Type of Township Development
Type of Township Development
Garden Park Home
Lake Living Home
Gated and Guarded Community
High-rise Lifestyle
Conventional
Public Listed
31.58
10.53
15.79
0
21.05
Developer (%)
Private Limited
5.26
0
5.26
15.79
31.58
Total
36.84
10.53
21.05
15.79
52.63
(Source: Survey by author)
According to Mr. LS Lau, a Credit Admin Executive from Mah Sing
Properties Sdn Bhd, property buyers today have grown to appreciate green amenities
so much and even willing to pay premiums for them. To this ends, the developers
especially from public listed company have strengthen CSR in their company policy.
There are 36.84 percent garden living homes and 10.53 percent lake living homes
have been developed by the developers whereby they have capitalized on scenic
views on landscaped central parks and landscaped water features such as lakes
respectively.
Without being handed over to the local authority, these landscaped
features require the developers to provide well maintenance and management and
only public listed development companies are able to afford these long term efforts to
their residents.
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The security issue has become even more prominent lately, as a result of the
unfortunate rise in crime. Therefore, gated and guarded community is a one solution
for a crime preventive environment which has been developed by 21.05 percent
respondents who are offering these value-added features by creating a barrier gate and
guarded house with regular security patrols at strategic points, bright lighting,
perimeter fencing and CCTV cameras at the entrance without charging maintenance
fees to their residents. These CSR developers are from public listed companies with
strong financial capacity afford to pay for long term security commitment to the
homebuyers.
Until lately, there is no developer courageous enough to attempt contemporary
style and only 15.79 percent high-rise lifestyle township been built in Johor Bahru
property market with facilities include swimming and wading pools, gymnasium,
tennis court, squash courts, function rooms, barbecue area, playroom and playground.
4.4.7 Sales Services
As mentioned in chapter Two, product consists of anything that can be
marketed, including services. In this study, sales services and post sales activities can
be considered as product attributes in property developments.
Table 4.9 Business Hours
Weekdays (%)
9 a.m. – 5:15 p.m. 5:15 p.m. – 9 p.m.
100
10.53
(Source: Survey by author)
Weekends (%)
10 a.m. – 6 p.m.
89.47
Public Holidays (%)
10 a.m. – 6 p.m.
57.90
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Anticipating everyday needs of customers’ services in anytime is more
important for sales service. Thus, the intensive of competition will encourage the
developers to extend hour for their sales service in order to spearhead growth of the
property market. Refer to Table 4.9, there are 89.47 percent respondent are opening
their sales office on weekends to enhance their service quality since the housing
industry is part of the service line. For extension of weekdays business hours from 9
a.m. to 9 p.m., there 10.53 percent of respondents from subsidiaries companies under
SP Setia Group explain that extended their business hours until 9 p.m. is for
customers’ convenience to visit their showhouse and make payment on weekdays
since the government sectors and banking industry have change to five working days.
Retaining strategies is a long term strategic to build and maintain relationship
between the developers and customers. In the Table 4.10, all the developers prefer to
give incentive packages such as free professional legal fees and free stamp duty on
transfer subject to the panel lawyers. This is against the Regulation 29 Schedule G
and Regulation 33 Schedule H of Housing Development (Control and Licensing) Act
(refer to the Appendix 1). According to the interview with the Sales Executive from
Plenitude Holdings Sdn Bhd, Mr Jeffery said that nowadays seldom developers would
lower price during economy recession. When the property market is becomes more
competitive and building cost increase, the developers need to offer incentives. These
costs will be absorbed by the developers in order to achieve their sales target.
Meanwhile, this will provide an opportunity for buyer to find the best choice of
property suited to their needs.
85
Table 4.10 Retaining Strategies
Retaining Strategies
Cash reward system
Redemption point system
Discount/ rebate
Gift vouchers
Cash vouchers
Incentive packages
Percentage (%)
21.05
10.53
84.21
15.79
10.53
100
(Source: Survey by author)
Redemption point system has been exercised by 10.53 percent respondents
who are subsidiary companies under SP Setia Bhd Group. Interview with Ms YP Foo,
a Assistant Sales and Marketing Manager from Setia Indah Sdn Bhd, introduction a
platinum privilege programme by awarding points to existing buyers who can earn
redemption points for recommendation sale on the developer’s properties in
differentiated township developments. The more they introduced, the more points
will be cumulative for them to redeem their desired items.
The cumulative
redemption points can used to redeem the furniture and electronic appliances. In this
case, sellers or developers will offers and expose their products and services to the
largest number of potential buyers. Like other direct sales companies with wide
networking, only one or two big companies will tend to create large barriers to entry
for other competitors and become the dominated suppliers of the housing industry in
long term. For the cash vouchers, 10.53 respondents will give to customers when
they buy properties from them.
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4.4.8 Post Sales Activities
Post sales activities included the action and service upon VP. Efficiency in
customers’ service especially in handling defects as a tool to determine the customers’
satisfaction. From the Table 4.11, time been taken to rectify defects within two weeks
have been practiced by 73.68 percent developers.
The rest of 26.32 percent
developers from public listed companies are more efficient and only take one week
time to rectify the defects.
For the installation of loose fittings (kitchen sink, tap, wash basin, sitting
covers for WC, shower heads), 42.11 percent respondents will carry out the
installation service upon VP. To protect interest for purchaser from prevent theft,
damage or vandalism, considerable developers will carry out the installation of loose
fittings when purchasers intend to move in the house.
As such, 31.58 percent
developers will install loose fittings upon appointment of keys collection and 26.32
percent developers will install loose fittings upon customers’ notification.
Table 4.11 Rectification of Defects and Installation of Loose Fittings
Time of Rectify Defects
Within one week
Within two weeks
Installation of Loose Fittings
Upon vacant possession
Upon appointment of keys collection
Upon customers’ notification
(Source: Survey by author)
Public Listed
26.32
26.32
Developer (%)
Private Limited
0
47.37
Developer (%)
Public Listed
Private Limited
15.79
26.32
21.05
10.53
15.79
10.53
Total
26.32
73.68
Total
42.11
31.58
26.32
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It is a norm in property development where lots of complaint received by
developers upon VP. The greater attention need to pay to quality issue when the
nation becomes more industrialized and people become more educated.
Many
homebuyer complaints and grievances have risen as a result of this issue. As shown
in Table 4.12, poor workmanship complaint has remained the biggest problem faced
by house buyers and all the developers in Johor Bahru, followed by the 89.47 percent
complaint of interest.
Table 4.12 Categories of Complaint
Categories of Complaint
Poor workmanship
Delay in handing over house
Certificate of Fitness
Interest
Infrastructure
Payment
Title
Public Listed
52.63
5.26
15.79
52.63
5.26
5.26
5.26
Developer (%)
Private Limited
47.37
15.79
15.79
36.84
5.26
5.26
0
Total
100
21.05
31.58
89.47
10.53
10.53
5.26
(Source: Survey by author)
There are 31.58 percent complaints for CFO is not handed together upon VP.
Although the Federal Government has displayed seriousness in improving efficiency
in the public delivery system through the reduction of bureaucracy, but there is not
being fully practiced done by all the developers in Johor Bahru. Many people have
already pointed out this root cause of the problem that developers have been able to
make use of buyers’ monies before their houses are delivered with CFO. This mainly
happened in high-rise properties because owners have started to pay the installment of
house to financial institutes and maintenance fees to developers upon VP while
owners are unable to occupy the properties.
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The house delivery system has been enhanced because only 21.05 percent
complaint of delay in handing over house which happened in developers’ first project
due to their inexperience.
There are 10.53 percent of complaints received by
respondent for widening their roads and 10.53 percent dissatisfaction of the
homebuyers complain about progressive payment should not be collected by
respondent upon commencement of construction work instead of completion of
construction work although the projects and maintenance fee collection by developers
upon VP which does not bid by the Regulation of 19 (2) Schedule H Housing
Development (Control and Licensing) Regulations (refer to Appendix 2) due to held
under commercial title.
The Government has further contributed to the development of the industry
through quick issuance of titles which there are only 5.26 percent on complaints of
title which the one small-scale size of developer has not obtained strata title for its
low cost flat project over 20 years due to the cost and expenses and there are
numerous caveats on the Master Title.
Building and delivery quality homes should be commitment to every
developer. Conducting building pre-VP inspection or building audits internally by
developers can ultimately ensure their product quality before handing over to the
homebuyers.
Refer to the Table 4.13, all the developers have adopted quality
checking at all stages of construction, site from construction, test and commissioned
utility suppliers, clear and clean individual units and construction site from
construction debris, ensure the existing roads are kept clean regularly from
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construction activities if there are complaints example cracks, landslide, flood causing
by surrounding areas or existing neighbouring projects are under construction.
Table 4.13 Action Taken Upon Vacant Possession
Actions Upon Vacant Possession
Adopt quality check at all stages of construction,
site from construction, test and commissioned
utility suppliers
Clear and clean individual units and construction
site from construction debris
Ensure Certificate of Fitness for Occupation
handed together upon vacant possession
Extend the mandatory defects liability of 18
months
Carry out the solid waste disposal by own cost
before local authorities taking over
Ensure the existing roads are kept clean regularly
from construction activities if there are
complaints example cracks, landslide, flood
causing by surrounding areas or existing
neighbouring projects are under construction
Waive interest for purchasers upon their request/
company policy/ goodwill
Pay quit rent to the local authority by own cost if
the property still under Master Title and handed
over vacant possession
Provide warranty of certificate of treatment
termites
Maintain and update the purchasers’ database
Developer (%)
Public
Private
Total
Listed
Limited
52.63
47.37
100
52.63
47.37
100
36.84
31.58
68.42
15.79
0
15.79
36.84
5.26
42.11
52.63
47.37
100
52.63
47.37
100
31.58
0
31.58
21.05
15.79
36.84
52.63
47.37
100
(Source: Survey by author)
Interest waiver adopted by all developers whereby the interest incurred by late
payment on progressive claim whether form to purchaser portion or financial portion
which there is 10 percent per annum chargeable on total late amount. From the
interview conducted, all the developers are willing to waive the interest for purchasers
upon their request, company policy or goodwill. This is contradicts to the Regulation
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9 (1) Schedule G and H of Housing Development (Control and Licensing) Act (refer
to Appendix 3). These can bring to maintain and retain long term relationship with
customers.
On the issuance of CFO, it is the time for developers to adopt the concept of
delivery of VP together with CFO. As illustrated by Table 4.13, there are 68.42
percent developers will ensure the CFO has handed together upon VP. For the
housebuyers, taking VP without CFO is meaningless and detrimental to them since
they will not be able to move into their homes but 18 months defect liability period
will start to run down as stated in Regulation of 24 (3), 25 and 26 (1) Schedule G and
Regulation 27 (3), 29 and 30 (1) Schedule H of Housing Development (Control and
Licensing) Act (refer to Appendix 4). In Regulation of 28 (1) Schedule H of Housing
Development (Control and Licensing ) Act (refer to Appendix 5) also needed to be
issued with CFO are common facilities found in stratified residential projects such as
swimming pool, playgrounds and gyms in order to prove they are completed and
certified fit for use.
From Table 4.13, 36.84 percent public listed development companies
compared with 5.26 percent private limited development company will carry out the
solid waste disposal by own cost upon vacant possession and before local authorities
taking over which is contradicts to the Regulation 19 Schedule G of Housing
Development (Control and Licensing) Act (refer to Appendix 6). Unlike the rest of
developers, most of them will impose infra upkeep charges to the purchasers upon
vacant possession to cover their maintenance cost. Other than that, there are 36.84
percent developers will provided certificates of treatment termites. Despite with other
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projects development, purchasers need to pay for treatment termites after occupy the
house.
There are 31.58 percent respondent from public listed companies willing to
pay quit rent to local authority by own cost if the property still under Master Title and
has handed over VP.
This is contradicts to the Regulation 18 Schedule G and
Regulation 22 Schedule H of Housing Development (Control and Licensing) Act
(refer to Appendix 7).
Only 15.79 percent developers from public listed companies will extend the
mandatory defect liability of 18 months and this will depend by case to case basis but
not in written agreements. According to the two respondents are wholly-owned by
subsidiary of SP Setia Bhd Group, the total of 36 months worth of defect liability
period. The first batch of homes that will be handed over in another subsidiary
company, Setia Alam development in Shah Alam will enjoy an additional 18 months
defect liability period on top of the usual 18 months. This will be the future practice
for all homes for SP Setia Group Bhd that they are building across the country which
is against the Regulation 26 (1) Schedule G and Regulation 30 (1) Schedule H of
Housing Development Control and Licensing) Act (refer to Appendix 4).
4.4.9 Social Responsibility Towards Society
While builds and delivers quality homes, contribution to society is also part of
obligation of developers. Carry out the social responsibility through contributing
monies and participating in social activities can build up and strengthen the
92
company’s reputation in the society. In the social responsibility shown by Table 4.10,
there are 52.63 percent respondents have contributed monies to charity. Only 5.26
percent respondents from public listed companies will take care of disables’
convenience with provided walking path and washrooms at office for them.
Table 4.14 Social Responsibility Towards Society
Social Responsibility
Reserved car parks for disables
Playgrounds corner for children
Washrooms for disables
Walking path for disables
Contribute monies for charity
Form resident community and eventually
pass to house owners to manage and
maintain
Participate in disables groups/ old folks/
representative groups’ activities
Public
Listed
10.53
10.53
5.26
5.26
31.58
21.05
Developer (%)
Private
Limited
5.26
0
0
0
21.05
0
15.79
10.53
5.26
5.26
52.63
21.05
15.79
15.79
21.05
Total
(Source: Survey by author)
4.5 Conclusion
Housing investments require a stable political climate, progressive economic
environment, a hard-working population and creative property development. The
property market prospects are generally associated with the economy. Overall, places
like Johor Bahru will continue to face tight competition but niche markets will still be
a draw to buyers. The recent hike in oil prices will further aggravate the pricing of
materials and transportation costs which will pose a challenge to developers. With
increasing number of new properties development embark into the Johor Bahru
market, superior product attributes and services quality will be the crucial factors in
93
determining the price and demand.
Apart from location, investors will also be
selective and focusing on company with a strong presence, strong branding and track
record in Johor Bahru.
The intense competition will leads the developers with good reputation and
records track to be outperform the rest. Therefore, developers who have incorporated
and integrated CSR into their company’s philosophy will become the company
strategy of exploring an additional niche market for quality homes in Johor Bahru.
Anyway, not all developers are affordable to contribute CSR in all product attributes
because it required a very strong financial capital to achieve CSR in product
perspective. Those can stay ahead by emphasis CSR to adopt consumers’ changing
lifestyle needs and preferences are the ones who will succeed. For those companies
who have successfully implemented CSR in product perspective are majority from
public listed who have a very strong sales revenue recorded track and at the same time
they have many on going sites projects development through the country.
CHAPTER 5
CHAPTER 5
CONCLUSION AND RECOMMENDATION
5.1 Introduction
This chapter include conclusion of study and review to the extent that the
objectives are achieved. The fact findings with results have been summarized to
conclude on the analysis results and problem statements. In this chapter, problem and
limitation for the use of findings in the study are outlined.
Meanwhile,
recommendation is given for the improvement of similar topic of research.
5.2 Summary of the Findings
This section provides an insight into the findings of the study to point out the
extent to which the preset objectives as mentioned in Chapter 1 are attained
throughout the study.
First objective is accomplished in Chapter 2 whereby the definition and
concept of CSR, products and services have been given in broadest sense. Then, the
95
author has discussed intensively with respect to the criteria of CSR by referring to the
previous empirical studies. In addition, the criteria of CSR in products and services
have been measured by the Balanced Scorecard Strategy Map in customer perspective
which that suit to housing industry are displayed in Chapter 3 as well.
Second objective and third objective are fulfilled in Chapter 4. This chapter
reveals the analysis data result from interview conducted on 19 respondents from 50
developers registered under REHDA in District of Johor Bahru, State of Johor
through a simple random sampling method.
In order to analyze the data, four
methodologies were employed: questionnaire, the Customer Perspective of Balanced
Scorecard Strategy Map, frequency approach and cross tabulation analysis. The result
of analysis and findings from questionnaire survey will emphasis on product attributes,
sales service and post sales activities contributed to CSR from customer view which
have been practiced by the developers and their impacts towards the township
developments in District of Johor Bahru, State of Johor.
Providing low medium cost properties in category prices between RM25,000,
RM50,000 and RM80,000 is the mandatory requirement impose by Government to
developers. These properties are heavily subsidized by other higher priced properties.
The low medium cost property can be build as landed property held under Individual
Title. When the low medium cost properties are held under Master Title or Strata
Title, automatically it becomes the strata properties or high-rise properties. In fact,
the landed low medium cost properties are more popular and preferred by house
buyers.
96
With the subdivided of title, the value for low medium cost double storey
terrace (landed property) is higher than low medium cost flats (strata property) that
are not yet subdivided. Therefore, low medium cost double storey terrace at selling
price RM80,000 is seldom done by other developers because this type of landed
property is not profitable. The more houses need to build, the more land requisition
and therefore land cost impose in the projects development. This is made possible
only through cross-subsidy from sales of other types of housing. Therefore, most of
the developers are choose to build a stratified property such as flat because more unit
houses can be build in a smaller size piece of land although it taking long time for
subdivision of title.
For the property type and pricing, we found that only one developer willing to
offer the selling price for low medium cost of double storey terrace house at
RM80,000. The company is carry out part of the social responsibility to provide the
low medium cost double storey targeted to the low and medium income groups,
especially for Bumiputera buyers.
Overall, location and size of house are main indicators to influence the price.
The prices of the properties type offered in Johor Bahru property market are focusing
on affordable houses costing RM180,000 and below. However, landed properties in
preference location with competitive price will continue to perform well.
The increase in raw material prices will lead to an increase in cost of
construction. Depending on market and consumer reactions, the developer can either
absorb such increases or protect its profit margin by increasing the selling price. The
97
developers determine the price based on cost included land cost and construction cost.
They do not taking CSR into accounts in price decision-making. Most of them will
exercise lower price during promotion to increase their sales revenue.
As the population in Johor Bahru areas grew, so did the shopping complex and
well-respected higher learning institutions. In the result of study, it is obvious all the
township developments have access to shopping complex and education hub.
Although the accessibility is part of issue for the marketing strategy to attract the
homebuyers, but a thoughtful developer will always develops a township whereby
convenience and easy access to certain areas for their residents.
There are 68.42 percent of respondents and mostly from public listed
development companies will consider some safety precaution in designing the layout
which could reduce the accident rates for children, old folks and women. They have
provided infrastructure such as quiet and low traffic with control and limit the access,
utility cabling and drainage with concealed underground and wide street with bright
street lighting to their the residents.
For the public amenities and recreational facilities, there are 36.84 percent
respondents provide central park. There are 10.53 percent respondents have provided
lake and fitness and recreational club respectively to their residents. All of them are
put these facilities under their self-maintenance and not handed over to the local
authority.
These respondents are the award-winning projects and renowned
developers who successfully implemented CSR in their public amenities and
98
recreational facilities. Only these public listed companies afford to put these facilities
under self-maintenance upon completion.
For security features and services offered without charging maintenance fees
to residents, 21.05 percent respondent provided 24 hour security guard posts at the
forefront, security patrols in the neighbourhood and perimeter fencing respectively to
enhance safety of residents from criminal elements. Only 10.53 percent respondents
are willing to provide intercom and CCTV at guard house without charging
maintenance fees to residents. From the result of study, there are 15.79 percent of
well-known public listed development companies are willing to put security concern
as their long term commitment to the residents compared with 5.26 percent of private
limited development company.
From the interview been conducted, only 5.26 percent of private limited
development companies willing to offer security features such 24 hour security guard
posts, security patrols in the neighbourhood and perimeter fencing without charging
maintenance fee to residents. For the public amenities and recreational facilities, it
also provided central park and fitness and recreational centre under company‘s
maintenance and without handed over to local authority. This company is known as
Hartaplus Realty Sdn Bhd, a wholly-owned subsidiary by Renew Group Bhd which
not yet listed.
For the sales service, the intensive of competition will encourage the
developers to extend hour for their sales service in order to spearhead growth of the
property market. There are 89.47 percent respondent are opening their sales office on
99
weekends to enhance their service quality since the housing industry is part of the
service line.
In order to achieve sales target, all the developers prefer to give incentive
packages such as free professional legal fees and free stamp duty on transfer subject
to the panel lawyers. This is against the Regulation 29 Schedule G and Regulation 33
Schedule H of Housing Development (Control and Licensing) Act (refer to the
Appendix 1).
Post sales activities included the action and service upon VP. Efficiency in
customers’ service especially in handling defects is a tool to determine the customers’
satisfaction. 26.32 percent developers from public listed company are more efficient
and only take one week time to rectify the defects. To protect interest for purchaser
from prevent theft, damage or vandalism, considerable developers will carry out the
installation of loose fittings (kitchen sink, tap, wash basin, sitting covers for WC,
shower heads) when purchasers intend to move in the house. As such, 31.58 percent
developers will install loose fittings upon appointment of keys collection and 26.32
percent developers will install loose fittings upon customers’ notification.
From the findings, the poor workmanship complaint has remained the biggest
problem faced by house buyers and all the developers in Johor Bahru although they
have conducted building pre-VP inspection or building audits internally by developers
can ultimately ensure their product quality before handing over to the homebuyers.
This included quality checking at all stages of construction, site from construction,
test and commissioned utility suppliers, clear and clean individual units and
100
construction site from construction debris, ensure the existing roads are kept clean
regularly from construction activities if there are complaints example cracks,
landslide, flood causing by surrounding areas or existing neighbouring projects are
under construction.
For the interest waiver, all developers are willing to waive interest for
purchasers upon their request in order to maintain long term relationship with
customers. This is contradicts to the Regulation 9 (1) Schedule G and H of Housing
Development (Control and Licensing) Act (refer to Appendix 3).
For contribution of social responsibility towards society, 52.63 percent
developers have contributed monies to charity.
As three objectives of the study are achieved satisfactorily, the aim of the
study, no doubt, is attained: that is we found that the effectiveness of CSR in product
perspective implemented by developers and have affected towards the township
developments in District of Johor Bahru, State of Johor accordingly. The developers
especially from public listed companies manage to implement CSR by providing
variety of product attributes to the community through the provision of build
extensive green lungs, well planned facilities and amenities in the township
developments.
The growing awareness of the environment and changing human value have
brought lifestyle benefits in properties in the form of green amenities such as parks
and gardens and eventually shaped the township development.
There are 36.84
101
percent garden living homes and 10.53 percent lake living homes have been
developed by the developers whereby they have capitalized on scenic views on
landscaped central parks and landscaped water features such as lakes respectively.
To form a crime preventive environment as a result of the unfortunate rise in
crime,
there are 21.05 percent is gated and guarded community developed by
developers which offering these security features by creating a barrier gate and
guarded house with regular security patrols at strategic points, bright lighting,
perimeter fencing and CCTV cameras at the entrance without charging maintenance
fees to their resident.
To provide well maintenance, management, good services in the public
amenities, recreational facilities and security services to homebuyers, requires a long
term commitment from CSR developers.
Not all developers are affordable to
incorporate CSR as company policy. Even, not all product attributes are contributed
to CSR because it required a very strong financial capital to achieve CSR in product
perspective.
For those companies who have successfully implemented CSR in
product perspective are those who have a very strong sales revenue recorded track and
at the same time they have many on going sites projects development through the
country. Usually these companies are belongs to public listed.
5.3 Problem and Limitation
Although the Balanced Scorecard Strategy Map consists of financial
perspective, customer perspective, internal perspective and learning and growth
102
perspective, but only customer perspective has been used for the theoretical
framework in the study. The difficulties to adopt the financial perspective, internal
perspective and learning and growth perspective included financial and costing
statistic, internal supports such as project planning and implement, human resources
pertaining to the remuneration packages, computer software, management information
system, detailed policy manual and other matters are more private and confidential
information which might not be explored by developers.
From the primary data given by developers, author feels that there is a
possibility that the figure doest not represent the realistic scenario of the company size
in relation with the sales value. Besides that, some of the developers also does cover
the truth regard their breach or violate to the Housing Development Act and
Regulations such as commence projects without housing developer’ license, sales and
advertising permit and not honouring to homebuyer’s claims. All these factors will
result of research analysis does not show the real picture of CSR adopted by
developers in the study.
In conducting the survey of CSR, there are lots of difficulties to make
difference between the marketing strategies and CSR strategies.
The strategies
implemented by developers are orientated on company’s objectives that prior to the
profit-making which contribute towards sales performance. Thus, these efforts done
by developers to increase their sales value may be treated as marketing strategies
rather than CSR strategies.
For example, the incentive packages such as free
professional legal fees and free stamp duty on transfer subject to the panel lawyers
have been offered by developers which can be considered as one of the marketing
103
strategy in order to achieve their sales value. But despite to the Regulation 29
Schedule G and Regulation 33 Schedule H of Housing Development (Control and
Licensing) Act (refer to the Appendix A), this will provide an opportunity for buyer to
find the best choice of property suited to their needs from the view of CSR.
Pertaining to the pricing strategies in property market, the study is unable to
carry out a truthful analysis relate prices with CSR contribution. This problem arises
from the prices of property have been strategize by value-added, early bird prices and
promotional prices during launching or promotion. Furthermore, it is difficult to
identify whether the developers have integrated CSR in their pricing strategies
because the developers do not reveal the value-added prices and actual prices.
With respect of contribution of CSR in product perspective, the study cannot
totally carry out a truthful analysis relationship between company size-scale and sales
performance achievement. The frequency approach has been used to analyze the data
and was unable to prove the linkages between implementation of CSR by developers
have positive relationship between their company size-scale and sale performance
achievement in the study. For example, frequency approach was unable to analyze
whether developers who implemented CSR in product perspective have increased
their sales value in compared with those developers who do not implemented CSR in
product perspective.
104
5.4 Recommendation for Further Study
Emphasis on CSR in product perspective by developers in this study is unable
to show the overall picture for they are implementing CSR as a company’s policy and
philosophy. In fact, CSR is a strong frame work for good corporate governance
where companies should look beyond shareholder value alone by taking into account
the wider interests of other stakeholders such as employees, creditors and the society
at large. Thus, other aspects including workforce and other stakeholders would be
another area that required to study.
It will be wonderful if can be further enhanced
for others perspective in the same industry as well.
The measurements in criteria of CSR are based on Balanced Scorecard
Strategy Map as illustrated in Figure 3.1 which comprised of financial perspective,
customer perspective, internal perspective and learning and growth perspective. The
objectives in the four perspectives are linked together by cause-and-effect relationship.
The financial and customer perspectives in Balanced Scorecard Strategy Maps
describe the outcomes that achieved by the organization; increase in shareholder value
through revenue growth and productivity improvements; increase in the company’s
share of customers’ spending through customer acquisition, satisfaction, retention,
loyalty and growth. Processes in the internal and learning and growth perspectives
describe how the organization will implement its strategy. Thus, it is recommended
to carry out the similar studies in a few specific subject perspectives since the study
only focus to customer perspective which is a part of the Balanced Scorecard Strategy
Map.
The financial perspective, internal perspective and also learning and growth
perspective are encourage been conducted as well for those who wish to further the
105
study because the development companies that have embraced CSR have found real
and significant competitive advantages in the form of improved financial performance,
enhanced brand image and reputation, an increased ability to attract and retain quality
workforce, more effective risk management, reduced long term cost and attractiveness
to increasingly sophisticated institutional investors.
As the thesis cannot totally carry out a truthful analysis relationship between
company size-scale, sales performance achievement with respect of contribution of
CSR in product perspective, other software packages such as Package for Social
Science (SPSS) application is an another alternative can be uses to analysis and
measure the relationships between implementation of CSR with the sales performance
achievement, size-scale of company and implication towards township developments.
5.5 Conclusion
The study manages to examine the effectiveness of CSR in product
perspective which has been implemented by developers and its affects towards the
township developments in District of Johor Bahru, State of Johor. Some developers
who adopted CSR have offered variety of product attributes to the community through
the provision of build extensive green lungs, well planned facilities and amenities in
the township developments. Such effort eventually shaped the township development
in the forms of green amenities, landscaped water features and gated and guarded
community.
106
Not all developers are affordable to implement CSR as company policy. Even,
not all product attributes are contributed to CSR because it required a very strong
financial capital to integrate CSR in product perspective. For those companies who
have successfully implemented CSR in product perspective are majority from public
listed who have a very strong sales revenue recorded track and at the same time they
have many on going sites projects development through the country.
The implementation of CSR on product criteria in perspective customer has
been practiced by developers in Johor Bahru over the years. But the popularity of
CSR becomes an issue in property market is less and has not successfully created
awareness among developers. Developers are more focus on marketing strategies and
competitive advantages in order to compete in the housing industry. In fact, a plenty
of marketing strategies which implemented by developers have comprised of the
elements of CSR such as gated and guarded homes concept, interest waiver for three
month upon SPA, free maintenance fee for 5 years upon CFO and free legal fees.
CSR is a necessity but not made compulsory to all housing developers yet.
There are certain areas still in need of protection by Government and tied down by
numerous regulations and enforcement from HBA and Housing and Local
Government Ministry. This time around, Government should encourages and offers
incentives for the developers who have embraced CSR in their planning, buildings
and management. When the developers are fully practicing CSR in property market,
more legislation may not be necessary mandated by Government. This will make
developers realize that adopting the CSR will free them from over-regulation. It will
be a win-win situation for all: the industry, the citizen and the Government.
BIBLIOGRAPHY
107
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APPENDIX 1
Appendix 1
Schedule G of Housing Development (Control and Licensing) Regulations
Stamp and Registration Fee
29. The stamp and registration fee for this Agreement and the subsequent transfer of
the said Property referred to in subclause 11 (2) hereof shall be borne and paid by the
Purchaser but each party shall bear its own solicitor’s cost”.
Schedule H of Housing Development (Control and Licensing) Regulations
Stamp and Registration Fee
33. The stamp and registration fee for this Agreement and the subsequent transfer of
the said Property referred to in subclause 11 (2) hereof shall be borne and paid by the
Purchaser but each party shall bear its own solicitor’s cost”.
APPENDIX 2
Appendix 2
Schedule H of Housing Development (Control and Licensing) Regulations
Payment of Service Charges
19. (2). From the date the Purchaser takes vacant possession of the said Parcel, the
Purchaser shall pay a fair and justifiable proportion of the costs and expenses for the
maintenance and management of the common property and for the services provided.
Such amount payable shall be determines according to the provisional share units
assigned to the said Parcel by the Vendor’s licensed land surveyors. The amount
determined shall be the amount sufficient for the actual maintenance and management
of the common property. The Purchaser shall pay one (1) month’s deposit and three
(3) month’s advance in respect of the service charges and any payment thereafter shall
be payable monthly in advance.
APPENDIX 3
Appendix 3
Schedule G and H of Housing Development (Control and Licensing) Regulations
Interest on Late Payments
9. (1) Without prejudice to the Vendor’s right under clause 10 hereof, if any of the
instalments set out in the Third Schedule hereto shall remain unpaid by the Purchaser
at the expiration of the said period of twenty (21) working days, interest on such
unpaid instalment or instalments shall commerce immediately thereafter and be
payable by the Purchaser, such interest to be calculated from day to day at the rate of
ten per centum (10%) per annum.
APPENDIX 4
Appendix 4
Schedule G of Housing Development (Control and Licensing) Regulations
Manner of Deliver of Vacant Possession
24. (3) Such possession shall not gibe the Purchaser the right to occupy and the
Purchaser shall not occupy the said Property until such time as the Certificate of
Fitness for Occupation for the said building is issued.
Vendor to Obtain the Certificate of Fitness for Occupation
25. The Vendor shall, pursuant to the application for the Certificate of Fitness for
Occupation under subclause 24(1), at its own cost and expenses, duly comply with all
the requirements of the Appropriate Authority which are necessary for the issuance of
the Certificate of Fitness for Occupation in respect of the said Buidling.
Defect Liability Period
26. (1) Any defects, shrinkage or other faults in the said Building which shall become
apparent within a period of eighteen (18) calendar months after the date the Purchaser
takes vacant possession of the said Building to which water and electricity supply are
ready for connection to the said Building, and which are due to defective
workmanship or materials or the said Building not having been constructed in
accordance with the plans and description as specified in the Second and Fourth
Schedule as approved or amended by the Appropriate Authority, shall be repaired and
made good by the Vendor at its own cost and expenses within thirty (30) days of its
having received written notice thereof from the Purchaser and if the said defect,
shrinkage or other faults in the said Building have not been made good by the Vendor,
the Purchaser shall be entitled to recover from the Vendor the costs of repairing and
making good the same and the Purchaser may deduct such costs from any sum which
has been held by the Vendor’s solicitors as stakeholder for the Vendor and subject to
subclause (2), the Vendor’s solicitors shall release such costs from such sum to the
Purchaser within fourteen (14) days after receipt by the Vendor’s solicitors of the
Purchaser’s written demand.
Schedule H of Housing Development (Control and Licensing) Regulations
Manner of Deliver of Vacant Possession
27. (3) Such possession shall not gibe the Purchaser the right to occupy and the
Purchaser shall not occupy the said Property until such time as the Certificate of
Fitness for Occupation for the said building is issued.
Vendor to Obtain the Certificate of Fitness for Occupation
29. The Vendor shall, pursuant to the application for the Certificate of Fitness for
Occupation under subclause 26(1), at its own cost and expenses, duly comply with all
the requirements of the Appropriate Authority which are necessary for the issuance of
the Certificate of Fitness for Occupation in respect of the said Buidling.
Defect Liability Period
30. (1) Any defects, shrinkage or other faults in the said Building which shall become
apparent within a period of eighteen (18) calendar months after the date the Purchaser
takes vacant possession of the said Building to which water and electricity supply are
ready for connection to the said Building, and which are due to defective
workmanship or materials or the said Building not having been constructed in
accordance with the plans and description as specified in the Second and Fourth
Schedule as approved or amended by the Appropriate Authority, shall be repaired and
made good by the Vendor at its own cost and expenses within thirty (30) days of its
having received written notice thereof from the Purchaser and if the said defect,
shrinkage or other faults in the said Building have not been made good by the Vendor,
the Purchaser shall be entitled to recover from the Vendor the costs of repairing and
making good the same and the Purchaser may deduct such costs from any sum which
has been held by the Vendor’s solicitors as stakeholder for the Vendor and subject to
subclause (2), the Vendor’s solicitors shall release such costs from such sum to the
Purchaser within fourteen (14) days after receipt by the Vendor’s solicitors of the
Purchaser’s written demand.
APPENDIX 5
Appendix 5
Schedule H of Housing Development (Control and Licensing) Regulations
Completion of Common Facilities
28. (1)
The common facilities serving the said housing development shall be
completed by the Vendor within thirty-six (36) months from the date of this
Agreement.
APPENDIX 6
Appendix 6
Schedule G of Housing Development (Control and Licensing) Regulations
Maintenance of Services
19. The Vendor shall provide services, including refuse collection, cleaning of public
drains and grass cutting on the road reserves, as from the date he takes vacant
possession of the said Building until such services are taken over by the Appropriate
Authority but until they are so taken over the Purchaser shall, from the date he takes
vacant possession of the said Property, contribute from time to time a fair and
justifiable proportion of the cost and expense of such services, such apportionment to
be made by a quantity surveyor, architect or engineer appointed by the Vendor or with
the approval of the Controller any other competent person appointed by the Vendor.
The Purchaser shall pay six (6) months’ advance in respect of such contribution at the
date he takes vacant possession of the said Building and any payment thereafter shall
be payable monthly in advance. Every written notice to the Purchaser requesting for
the payment of such contribution from the Vendor shall be supported by a statement
issued by the Vendor which shall include a list and description of the services
provided, the expenditure incurred and the amount of such contribution due to the
Vendor in respect thereof.
APPENDIX 7
Appendix 7
Schedule G of Housing Development (Control and Licensing) Regulations
Payment of Outgoings
18. The Purchaser shall be liable for all outgoings including quit rent, rates, taxes,
assessment and other charges in respect of the said Property as from the date he takes
vacant possession of the said Building or from the date the said Property is transferred
to the Purchaser, whichever is earlier and in the event separate document of title to the
said Lot has not yet been issued and the said Property is not transferred to the
Purchaser at the date he takes vacant possession of the said Building, the Purchaser
shall indemnify the Vendor for such outgoings in respect of the said Lot in such
proportion as the area of the said Lot bears to the total area of the said Land excluding
areas reserved for roads, open spaces, electricity, substations, sewerage treatment
systems and other communal amenities and shall continue to pay the same from the
date he takes vacant possession of the said Building until the said Property is
transferred to him.
Schedule H of Housing Development (Control and Licensing) Regulations
Payment of Outgoings
22. The Purchaser shall be liable for all outgoings including quit rent, rates, taxes,
assessment and other charges in respect of the said Property as from the date he takes
vacant possession of the said Building or from the date the said Property is transferred
to the Purchaser, whichever is earlier and in the event separate document of title to the
said Lot has not yet been issued and the said Property is not transferred to the
Purchaser at the date he takes vacant possession of the said Building, the Purchaser
shall indemnify the Vendor for such outgoings in respect of the said Lot in such
proportion as the area of the said Lot bears to the total area of the said Land excluding
areas reserved for roads, open spaces, electricity, substations, sewerage treatment
systems and other communal amenities and shall continue to pay the same from the
date he takes vacant possession of the said Building until the said Property is
transferred to him.
APPENDIX 8
UNIVERSITI TEKNOLOGI
MALAYSIA
Faculty of Geoinformation Science And
Engineering
Department Of Land Administration
CORPORATE SOCIAL RESPONSIBILITY OF DEVELOPERS
IN PRODUCT PERSPECTIVE. CASE STUDY: JOHOR BAHRU
MGN 2546 Master’s Project
QUESTIONNAIRE
________________________________________________________________________
Background of Survey
1. The purpose of survey is to serve as source of data for the use of academic
research analysis as a requirement to fulfill the requirement of Master’s Project.
2. The research deals with the criteria or attributes contributing to the corporate
social responsibility adopted by the housing developers and its impact to the
property market.
3. Targeted respondents are housing developers located in Johor Bahru, Johor.
4. Thank you very much for giving your precious information to the research paper.
Please answer the following question by fill in the blank, * delete the no applicable
and ( / ) to the appropriate answers. You can choose more than one answers.
Company Profile
Company Name:
Year of Establish:
Company Type:
Private Limited/ Public Listed
Parent Company:
Location and Size Development:
1.
/
Acres
2.
/
Acres
3.
/
Acres
4.
/
Acres
Type of Township:
Garden living homes
Gated and guarded Community
Conventional
Lake living homes
High-rise lifestyle
Others
Annual Sales Revenue:
1 – 50 million
151 - 200 million
51 - 100 million
201 – 250 million
101 – 150 million
Above 250 million
Products
What are the factors considered in determining the price for your product ?
Cost
Competition
Others
State me situation when a discounted/ lower price been exercised.
Economy recession
Promotion
Competition
Others
Please quote me price offered for your products.
Price Range
(RM’000)
Property Type
Flat
Apartment
Shop
Apartment
Serviced
Apartment
Condominium
Townhouse
Single Storey
Terrace
Double Storey
Terrace
SemiDetached
Houses
Bungalows
Bungalow
Linked House
Others
Below
25
50
80
81
129
130
–
150
151
180
181
200
201
230
231
250
251
280
280
300
Above
300
Accessibility
Please select your projects location as follows :
Access to public transport/ terminal
Access to shopping complex
Assess to education hub
Assess to government amenities
Access to leisure facilities
Access to highway interchange
Assess to medical centres
Others
Infrastructure, Public Amenities and Facilities
Have you provided and offered the followings:
Infrastructure
Quiet and low traffic
Underground/ covered drains and utilities
Lots of natural open space/ parks
Wide street with bright street lighting
Paved sidewalks and cycling paths along all streets
Others
Public amenities and Recreational Facilities
Playgrounds
Market
Landscaped garden
Central park
Condominium
Fitness
and
facilities
recreational club
Mosque
Lake
Others
Which public amenities and facilities still under your maintenance and not handed
over to local authorities after vacant possession ?
Playgrounds
Landscaped garden
Fitness
and
recreational club
Market
Central park
Condominium/
common facilities
Mosque
Lake
Others
Security Features
What type of security services offered without charging maintenance fee to
customers ?
24 hour security guard posts
Perimeter
fencing/
Surveillance
CCTV monitoring
Fence
Security
patrols
in
the
neighbourhood
Intercom/ panic buttons linked to
guard house
Others
Sales Activities
What is your business hour and please write down your working hours ?
Days
Hours
Weekdays
Weekends
Public Holidays
How are you retaining your customers ?
Cash reward system
Discount/ Rebate
Incentive Packages
Redemption point system
* Gift/ Cash Vouchers
Others
Post Sales Activities (Upon Vacant Possession)
Have you received the complaints as follows:
Poor workmanship
Certificates of Fitness
Infrastructure
Title
Delay in handing over house
Interest
Payment
Others
Before handing over the vacant possession, have you take the necessary actions as
follows:
Adopt quality check at all stages of construction, test and commissioned utility
suppliers
Clear and clean individual units and construction site from construction debris
Ensure Certificate of Fitness for Occupation handed together upon vacant
possession
Extend the mandatory defects liability period of 18 months
Carry out the solid waste disposal by own cost before local authorities taking
over
Ensure the existing roads are kept clean regularly from construction activities
by own costs if there are complaints example cracks, landslide, floods causing
by surrounding areas or existing neighbouring projects are under construction.
Waive interest for purchasers upon * their request/ company policy/ goodwill
Pay quit rent to the local authority by your own cost if the property still under
Master Title and has handed over vacant possession
Provide warranty of certificate of treatment termites
Maintain and update the purchasers’ database
Others
How long do you take to rectify the defect after notified by the purchasers ?
Within one week
Within two weeks
Others
When do you carry out the of the loose fittings service (kitchen sink, tap, wash basin,
sitting covers for WC, shower heads) ?
Upon Vacant possession
Upon purchaser’s notification
Upon appointment keys collection
Others
Social Responsibility Towards Society
Have you made any special arrangements for disables, children, pregnant women, old
folks or representative group (such as resident community)?
Reserved car parks for disables
Washrooms for disables
Participate in their activities
Contribute monies for charity
Playgrounds corner for children
Walking path for disables
Formed the resident community and
pass to the owners to maintain and
manage
Others