Business report on Emaar Properties PJSC - Essay Example

?Emaar Properties PJSC Introduction Emaar Properties PJSC is a Dubai based Public Joint Stock Company which was incorporated in 1997 and since has established itself in the global market. It is the largest publicly-listed property developer in the MENA region (Emaar.com, 2007). The company which started as a real estate company has today diversified into various business segments. It has not just shaped landscapes and built homes but also has developed and master-planned value added communities that has been able to satisfy the lifestyle needs of a diverse customers. Emaar Properties today is the leader in real estate and construction sector in The Emirate. Today the company has its presence globally which is a result of its expansion strategy. The company has expanded geographically and at the same time has been able to segment its business into numerous industries (Emaar.ae, 2010). The numerous business segments of Emaar Properties are: Emaar Hotels & Resorts Emaar Commercial Leasing Emaar Technologies Emaar Retail Emaar Malls Group Emaar Hospitality Group Emaar International was launched in 2004 to diversify the business. With this strategic move the company has been able to sustain the growth as it is not dependent on a single market. Even though the company’s main focus is North Africa, Middle East and the Indian subcontinent the company has its presence in UK, US and other western countries (Emaar.ae, 2010). The following diagram shows the company’s global presence: (Emaar.com, 2007) This report is targeted analysing the organization’s basic legal, social, and economic environments. It also addresses the organization’s managerial, operational, and financial issues along with identifying the various change factors and its impact on the company and its management. Analysis of Emaar Properties’ Legal, Social and Economic Environments Every organization is influenced by the external environment irrespective of the industry. External environment not just affects the performance of an organization but also influences the working and structure. Therefore, it is very essential for an organization to analyze, anticipate and strategise according to the external environment it operates in. Following is the analysis of Emaar Properties external environment: Legal Environment Legal environment is an important external factor that can have a direct impact on an organization. It is very important as it defines the framework under which an organization must operate. As Emaar Properties is operational in numerous countries, the company must look into each country independently and understand the legal environment in the specific country. Emaar Properties has done well to adapt to legal environments of different countries. It has made necessary changes to its organizational structure to abide by the laws in each country. With respect to the parent country, Emaar Properties has been able establish a strong relationship with the government of UAE. The legal system in UAE has accommodated both modern and classical concepts. It has a modern legal structure and at the same time has been able to keep the traditional values intact. The government of UAE has promoted and tried to reform the overall structure of the country with intent to providing the citizens with modern amenities at an affordable cost and the best services. Emaar Properties has aligned its business model on these lines which has helped it to achieve great success in a short time. Emaar Property’s business model is aimed at providing the best services at effective prices to the citizens. Its numerous services such as building of homes, community centres, hospitality, malls, education, etc have all contributed to the development of the country and hence, the company has received full backing from the government. Emaar Properties has a partnership with the government wherein 32% of the shares in the company is held by the government. This has tremendously helped the company to understand and tackle any legal issues. This also shows how the company has been able to adapt to the legal environment in the company. The company has also partnered with many local governments and other major players in the countries that it operates in. The various legal factors in different countries that comprises the legal environment affects the functioning of the company are: Laws relating to Competition and Consumer Protection Environment Protection and Business Obligations Property Law Corporate Business Entities (Incorporation, capital raising, Company Management, etc) Business Contracts As the company is operational in numerous countries, it must look into the laws in each country individually. Social Environment Social environment is as important as the legal environment. Understanding and acting with respect to the social environment is very important for a company is it will build the reputation of the company. Each country and market will have a different social environment. Most important aspect of the social environment is to understand the social behaviour of the consumer. Emaar has customised designing and development to meet the needs of different customer with diverse social backgrounds. A strategy applicable in UAE is not suited to countries in America or Asia. Also it is important for a company to be socially responsible and make a positive to contribution to the society. To gain the confidence of the local population it is necessary to do more than job creation. Emaar has successfully made a positive contribution to the society by creating Eco-friendly solutions. All its projects have implemented numerous eco-friendly innovations. The company has also been socially responsible by ensuring the commitment and working of its supply chain in the respective countries. “Earth Watch” – an initiative by Emaar Properties has gained lot of popularity and has attracted a lot appreciation from different quarters of the society. Under the initiative, the company has come up with numerous innovations in recycling techniques which has helped it bring down its carbon footprint (Alabbar, 2010). Economic Environment Economic environment is a sensitive factor which can have major impact on the financial success and in-turn overall success of the company. The economic conditions in UAE have been stable due to the raise on oil prices and this has tremendously helped Emaar Properties and many other companies in the country. The economic conditions have ensured that the domestic market is very attractive and also there has been financial assistance from the government that has helped the company to overcome the economic crises in the last decade. The economy in the international market also has been bright as there economic and population growth in the targeted countries. The financial strength of the company has been an advantage in tackling issues in the countries with low economic growth. On a whole the economic conditions favour the company. Analyzes the Organization’s Managerial, Operational, and Financial Issues Managerial Issues There are many issues that arise on the managerial, operational and financial front. Managing the entire organization is a major challenge considering the scale of the organization. It is essential to have a dedicated, highly qualified and experienced management team in order to ensure that the company is efficiently. Various management issues that the company faces are human resource management, supply chain management, resources management, time line management etc. Considering that the activities of the company are diverse and involve numerous stakeholders, it becomes highly essential for the overall management. Employees need to be taken care of and all resources necessary must be made available to them in for them fulfil their responsibilities properly. The communication through supply chain must be well managed so that it will coordinate and will be in sync with the other activities. Most important is to ensure that the timeline of a project is met. This is crucial as it will affect the company’s reputation and future business. Operational Issues There are various operational issues that can also come up. Some of the operational issues are non-availability of raw materials, shortage of human resources, lapses in the supply chain, natural calamities, etc. The company must have a contingency plan and critical paths in order to complete the project successfully. Financial Issues The scale at which the company operates, it is essential to ensure continuous cash flow to ensure that the project progresses with no problems. There is a continuous requirement of finances in order to meet the various requirements such as salaries, purchase of raw materials, fees for various legal obligations, etc. Project Example of the above Issues An example of the issues that the company can face during a project execution was clearly visible in the construction of Burj Khalifa. There were numerous issues such as the failure to provide the raw materials, labor issues, time management, financial crisis, etc. Due to these issues the project timeline was not met and the project was delayed. It needed the company to make use of the crisis management plan and come up with a contingency plan. After the implementation of the contingency plan the project was completed but not without a huge delay (Evenson &Vanney, 2008). Potential Change factors Various potential change factors that can affect the company are economic conditions and legal environment. As we have seen above the company is affected by numerous factors but these 2 are the main change factors that can affect the company resulting in changes in the way the company functions. Economic downturn that is expected or predicted by experts can make a negative impact on many markets that the company is functioning in and this might result in change in the consumer attitude and also affect their buying behaviour. Also the legal changes in independent countries must be closely watched and any changes must analysed and incorporated into the company’s structure and functioning. Gantt Chart Gantt chart is a pictorial representation of the timeline of a project (Byrnes & Baxter, 2005). Following is the Gantt chart of a standard project of Emaar Properties: PERT Chart References Alabbar, M. (2010). Emaar Properties PJSC. Governance Report for the year 2010. [Online]. Available at: http://www.emaar.com/Emaar.Upload/EMR-SINGAPORE-EN-US/CMS/PDF/CorporateGovernanceReport2010Eng3APR11.pdf. Accessed on 16th September. 2011 Byrnes, M.A. & Baxter, J. (2005). There is another way!: launch a Baldrige-based quality classroom. WI: ASQ Quality Press Emaar.com (2007). Emaar Properties PJSC. Dubai Financial Market International Investor Conference. [Online]. Available at: http://www.emaar.com/Emaar.Upload/EMR-SINGAPORE-EN-US/CMS/FINAL_DFM_15_Minute_Presentation.pdf. Accessed on 15th September 2011. Emaar.ae (2010). Emaar Properties PJSC. [Online]. Available at: http://www.emaar.ae/index.aspx?page=home. Accessed on 14th September 2011. Evenson, J. M. &Vanney, A. F. (2008). Burj Dubai: Life Safety and Crisis Response Planning Enhancements. CTBUH 8th World Congress 2008 Read More