An exploratory study of the impact of organisational environments on property development firms

Abstract

Purpose

This study aims to identify a set of external organisational environments that have different degrees of impact on property development firms in Hong Kong.

Design/methodology/approach

Organisational environments were operationalised into 40 independent variables. Data were collected using Web-based questionnaires. Further, 150 senior executives working in property development firms rated the identified variables and successfully completed the questionnaire. Exploratory factor analysis was used to simplify the correlations among variables by identifying a smaller number of shared factors that accounted for the observed correlations.

Findings

This study identified six major environmental factors, namely, (1) property market environment, (2) property development environment, (3) general political and economic environment, (4) property price environment, (5) general property development industry environment and (6) residual environment. If the property development process is viewed as an input–transformation–output open system, Factor 2 significantly affected the transformation process, Factors 3 and 5 affected both the transformation process and its final output, and Factors 1 and 4 affected the final output. Other factors did not appear to be significant.

Research limitations/implications

Because organisational environments may change from place-to-place and time-to-time, the data may vary accordingly.

Practical implications

Traditional management systems cannot cope with current environmental changes. The performance of developers depends on their ability to respond to the issues that arise from increasingly unpredictable, novel and turbulent environments. Developers must continuously scan, monitor, forecast and assess their external environments.

Originality/value

This study contributes to a better understanding of the environmental sectors that significantly influence property development firms.

Citation

H.K. Ho, P. (2014), "An exploratory study of the impact of organisational environments on property development firms", Journal of Financial Management of Property and Construction, Vol. 19 No. 3, pp. 226-245. https://doi.org/10.1108/JFMPC-03-2013-0006