Securing rationality withinReal Estate Management
„Rationalitätssicherung im Immobilienmanagement“
Doris GrillResearch Institute for Spatial and Real Estate Economics
Content of the presentation
Presentation of the problem
State of the field Rationality
Controlling
Real Estate characteristics
Articles of the multi-paper dissertation Research questions
Methods
Expected results
Presentation of the problem
Introduction
Paradox:
Demand for more figures, facts and
transparency on decision making
Intuitive decision making and information overload
perfect informationleads to
perfect rationality
bounded rationality
Work experience
Controller position as a stopgap Main function: collecting, consolidating and interpreting data
IT systems and infrastructure Quantity of data versus existing tools
Data quality and information management Excel files and isolated applications
Long lead times due to extensive plausibility checks
Problems with predictability Planning and budgeting in an uncertain market
Major question
How is it possible to secure rationality within
Real Estate Management?
State of the field
Rationality
“reason, common sense”
Max Weber (1921): Zweckrationalität: “purposive rationality”
Wertrationalität: “value rationality”
Business science: Predominant concept: purposive rationality
“As long as there is a good reason it is rational”
Implicit values: maximise utility, financial profit
Perfect rationality is a result of perfect
information not possible in reality
What is Controlling?
A controversially discussed question in literature and also
„In practice, people with the title of Controller have functions that are at one extreme, little more than bookkeeping and, at the other extreme, de facto general management.“1
Management control systems, management accounting and control
1 Source: Antony 1965
Controlling
Concept of Controllingfrom Weber/Schäffer 1999
Definition: Controlling means „Securing the rationality of Management“
Rationality is defined as purposive rationality, measured by the efficiency of utilization of resources. Purposes are given.
Deficits in the rationality of the manager are defined as constraints in willingness and/or ability.
Controlling has to ensure the efficiency of utilization despite the deficits of the manager.
Real Estate Management
on a meta-level
Portfolio Management
Asset Management
Project Management for Real Estate Developments
Real Estate characteristics
Attributes of Real Estate that challenge Controlling:
Different information needs and operating numbers in each life-cycle development, construction, (or acquisition), administration,
renovation, termination (or sale)
No market transparency and heterogeneity of the projects and objects Difficulties to find information and compare them
Problem of valuation
Predictability of events and budgeting is very difficult
Special know-how for different markets needed
Source: a.o. Dasso 1995
Articles of themulti-paper dissertation
Multi-paper dissertationResearch questions and methods
15
• Is this special Controlling-Concept suitable to secure the rationality of the Real Estate Manager?
1st paperLiterature
Review
• Is the existing “Austrian Real Estate Controlling” able to secure management rationality?
2nd paperQualitative
Study
• How does the Real Estate Manager secures the rationality of his decisions in everyday life?
3rd paperQualitative
Study
Securing management rationalitywith Real Estate Controlling
Status of Controlling within AustrianReal Estate Management
Securing management rationality withinAustrian Real Estate Management
1st paper
Securing management rationality with Real Estate Controlling
Requirements and problems for Real Estate Managers within the real estate life-cycle
Securing the management rationality defining the “Controlling concept”
Securing the rationality of the Real Estate Manager bringing the concepts together
Why qualitative research?
There is no strong theory to be tested
Quantitative research excludes social phenomenon beyond the questionnaire
Interest in the subjective view of the Real Estate Manager versus the subjective view of the Controller
Deficits in the rationality of the Manager (constraints in willingness and/or ability) can only be enquired indirect
Qualitative methods used
Data collection: mixture of different qualitative interview methods Expert interview
Problem-centered interview
Narrative interview
Data evaluation: depending on the type of data Qualitative-content-analysis
Narrative analysis
Research process andquality of research
Circular research process
Suitability of the method
Definition of research goals
Documentation of the way of proceeding and the problems
Regular reflection about the concept of the study
preunderstanding
research questions and research goals
concept ofthe study
adjustment of hypothesis
data collection
data evaluation
construction of theory
publication
2nd paper
Status of Controlling within Austrian Real Estate Management
Theory: existing Controlling concepts Interviews: Relationship between Controller and
Manager (two subjective views) Expert: Status of the existing Controlling system Problem: Deficits of the existing Controlling system Narrative: Activities of and cooperation between Manager
and Controller
Analysis if existing Controlling is an efficient system to support management rationality
3rd paper
Securing management rationality within Austrian Real Estate Management
Theory: existing concepts of rationality Interviews: Subjective view of the Real Estate
Manager on the rationality of his/her decisions Expert: Important information for decisions Problem: Missing or uncertain data Narrative: Strategies to secure rationality of decisions
Analysis if the manager is willing and able to secure the rationality of his/her decision and how he/she does it in everyday-life
Expected results
Hypotheses
The Controlling concept is only suitable to a limited extend and should be adjusted to the special needs of Real Estate Management
Existing Controlling is not able to secure the rationality of the Real Estate Manager
The Manager does not secure his rationality with the Controlling outcome but with other sources
A lot of decisions are also not justifiable with data and facts from other sources
Research Institute for Spatial and RealEstate EconomicsNordbergstrasse 15, 1090 Vienna, Austria
MAG. (FH) DORIS GRILL
T +43-1-313 36-5764F +43-1-313 36-705
[email protected]/immobilienwirtschaft
Thank you for your attention!