Research on Cost Control and Management of Real Estate Project Essay Example for Free

Research on Cost Control and Management of Real Estate Project Essay This paper takes the cost control and the management of real estate project as the object in research, and analyzes and studies relevant issues. By analyzing the cost structure of real estate construction, this paper identifies problems in cost control and management of real estate construction at present. Along with the fast development of China’s economy, the real estate industry has achieved wonderful successes, pulling economic development significantly, and contributing a lot to China’s economic development. Today, real estate construction assumes more tasks. In 2008, 3,000 billion RMB enters real estate construction. The cost control and regular management of real estate construction turns into the focus. Once the construction cost is out of control, it will lead to a great waste and will bring about more pressures for property management in later. A nice cost control is meaningful for the whole real estate construction project. To realize better cost control and management of real estate construction is important for today’s harmonious society. The cost of real estate construction is composed of four parts. The first part is the land cost, accounting for 30% of the total cost. It mainly refers to cost for building land, greening land, equipped facility land, and property management land. The second part is the construction installation cost, as the main body of real estate construction cost, accounting for 20%-50% of the total cost. Among the construction installation cost, materials cost the most, accounting for 60% of construction installation cost. The third part is the cost for equipments and machines, accounting for 1%-3% of the total cost. This part is mainly for meeting the needs of operations, management, and maintenance. The fourth part is other cost, accounting for more than 15% of the total cost. It is difficult to control this part. It mainly includes the cost for investigation and design, the cost for project supervision, and the cost for infrastructure. In special, the management cost usually surpasses the budget, which is the largest part that is hard to control in real estate construction. The management cost is only accounting for 1% of the total cost. But the absolute amount is large. It is easy for the construction company costing more in management. At present, serious problems exist in the cost control and management of real estate construction. For example, for some real estate construction, the design is earlier than the study of feasibility, which makes the later turn into useless. In bidding, some construction companies perform illegally, which makes the bidding fail to control project cost well. The popularization of assigned subcontracts and various subcontracts serve as potential threats for project quality. The delay for project payment, especially for workers’ wages, is serious. Some projects can not manage the changes of designs. Construction companies fail to follow the designs completely, which may lead to larger costs for construction. Some construction companies emphasize on the control of quality and period but fail to control the cost. All these activities make the cost of real estate construction out of control in China, which is harmful for the sustainable and healthy development of real estate industry . * Fail to Estimate the Project Exactly: Investment estimation is performed at the very beginning, namely in the study of feasibility. Present compilation of study of feasibility is lack of details. No effective items to control the number of project. The estimation has a lower preciseness. Besides, the study of feasibility has no necessary investigation. Some potential geological disasters can not be identified effectively, which leads to the rise of costs. Although some companies make â€Å"details for implement†, the effect is poor. In order to establish the project, some companies may reduce the number of project and decrease costs. * The Compilation of Project Budget Has Poor Reliability: At the stage of design, the investigation is far from sufficient. Some fundamental materials for design are inexact. As a result, the design may be irrational and will be changed significantly in construction, which causes the poor reliability of budget. * Working Drawing Budget is Unpractical: At the working drawing design stage, compile the project budget according to the design. The working drawing budget is to calculate the cost of design. The rationality of working drawing budget is about how to organize the construction and how to reach the design requirements by what kinds of methods, plus how to arrange the construction period, and how to manage workers and machines under different seasons, according to scientific designs. All these tasks are supposed to be arranged by construction companies. For design companies, to compile the budget is unpractical. * Do not Follow Basic Construction Procedures and Cannot Control Costs: For some projects, time is urgent. Therefore, the design is maybe imperfect. And the construction does not follow the basic procedures strictly. Sometimes, the study of feasibility turns into useless papers. As a result, the estimation and the budget cannot control the project cost effectively. * Contract is not Managed Well, Especially for Subcontracts and External Workers: Some real estate developers neglect to manage contracts. They do not follow the terms written in contracts strictly. Besides, some developers cannot calculate the cost of project quantities correctly. They are incapable of managing external workers effectively. * Irregular Management and Many Changes for Project: Real estate developers cannot design properly and have to change the management methods. Or, the execution is weak. They can change the design as will. Then, the scale of project is increasing and the cost is rising. * The Financing Structure is Unreasonable and Depends on One Financing Channel too Much, Which Contributes to the Rise Of Costs: At present, the funds for real estate construction in China are mainly from domestic loans, foreign funds, self-collected by construction companies, and other sources. Although financing ways are few and some are immature, limits are more. Sometimes, funds can not arrive in time. In order to insure the process of project, the construction companies have to apply loans from banks. Therefore, a large proportion of construction funds are from banks as loans. And the credit period is long and cannot match with investment return. The characteristics of real estate industry determine the lagged-behind investment return. One financing channel increases risks and costs, which leads to the accumulation of loan balance in banks, increasing construction costs and pressures for later in operation. * Cost Management is Unscientific. Lack the Idea of Cost Control. System is Imperfect. Management Cost Is High: By auditing lots of projects, we find that management is one of factors that cause overspending. Main items that cause overspending include management fees, compensation fees for removing, and supervision. Main reasons include: Lack a perfect cost control system and cannot manage and control the cost systematically, which makes it hard to identify the out-of-control of cost in time. Lack the idea of cost control and the constraint mechanism. Project managers are always focusing on quality and construction period, but not cost control. The absence of system makes the expenditure more irregular. No integrated standards for management fee are effective. Workers are more than necessary in construction companies.

Essay --

â€Å"And therefore women, being weaker vessels, are ever thrust to the wall; therefore I will push Montague’s men from the wall and thrust his maids to the wall† are the words spoken by a Capulet servant at the beginning of the play (I.i.14-17). He illustrated right off the bat that the women characters had a completely different place in society than men did and were thought to be weaker compared to them. Although there are only three main female characters in William Shakespeare’s play Romeo and Juliet, it’s easy to interpret what the roles of women were in Verona during the Renaissance time period. Based on the female characters in Romeo and Juliet, it seems they matured more quickly than women do today, portrayed a subservient role in society, and were seen as an object to possess. Considering people during the Renaissance didn’t live as long as they do now, the women in Verona during that time matured much more quickly than women do today. Marrying and having children were jobs that were often completed before the age of eighteen. Juliet’s marriage to Paris was supposed to happen when she was only thirteen years old, and Juliet’s mother tells her that she became a mother â€Å"much upon these years† (I.iii.70-72). Women during that time were passed down from their parents to their husbands without much chance of independent thought or action. Juliet had never even considered marriage until her mother brought it up, and seemed somewhat astounded when she did. Because there were arranged marriages at that time, there were likely many instances when the women didn’t love their chosen man. Juliet’s arranged marriage to Paris is an example of this, And because of it, an ample amount of trouble arose. Women had little freedom during that... ...ord to hire people to do work for them, but it wasn’t like that for other poor families of the Renaissance. Women in Verona during the time of the Renaissance had a completely different place in society than the men did. Juliet, Lady Capulet, and the Nurse were the only female characters in the play, but were able to illustrate the roles that all women had during that time period. All women during the Renaissance time, based on the characters of Romeo and Juliet matured more quickly then women do today, played a subservient role in society, and played the role of an object to possess. Their roles show that they were powerless compared to men, but still had an important role in society. Women have gained significant control and influence since Romeo and Juliet was written, but unfortunately there are still many cases around the world where women are secondary to men. Essay -- â€Å"And therefore women, being weaker vessels, are ever thrust to the wall; therefore I will push Montague’s men from the wall and thrust his maids to the wall† are the words spoken by a Capulet servant at the beginning of the play (I.i.14-17). He illustrated right off the bat that the women characters had a completely different place in society than men did and were thought to be weaker compared to them. Although there are only three main female characters in William Shakespeare’s play Romeo and Juliet, it’s easy to interpret what the roles of women were in Verona during the Renaissance time period. Based on the female characters in Romeo and Juliet, it seems they matured more quickly than women do today, portrayed a subservient role in society, and were seen as an object to possess. Considering people during the Renaissance didn’t live as long as they do now, the women in Verona during that time matured much more quickly than women do today. Marrying and having children were jobs that were often completed before the age of eighteen. Juliet’s marriage to Paris was supposed to happen when she was only thirteen years old, and Juliet’s mother tells her that she became a mother â€Å"much upon these years† (I.iii.70-72). Women during that time were passed down from their parents to their husbands without much chance of independent thought or action. Juliet had never even considered marriage until her mother brought it up, and seemed somewhat astounded when she did. Because there were arranged marriages at that time, there were likely many instances when the women didn’t love their chosen man. Juliet’s arranged marriage to Paris is an example of this, And because of it, an ample amount of trouble arose. Women had little freedom during that... ...ord to hire people to do work for them, but it wasn’t like that for other poor families of the Renaissance. Women in Verona during the time of the Renaissance had a completely different place in society than the men did. Juliet, Lady Capulet, and the Nurse were the only female characters in the play, but were able to illustrate the roles that all women had during that time period. All women during the Renaissance time, based on the characters of Romeo and Juliet matured more quickly then women do today, played a subservient role in society, and played the role of an object to possess. Their roles show that they were powerless compared to men, but still had an important role in society. Women have gained significant control and influence since Romeo and Juliet was written, but unfortunately there are still many cases around the world where women are secondary to men.

The Bribery Scandal at Siemens Ag

1. †¢ In your opinion, is â€Å"bribing† unethical & illegal or just a cost of doing business? Discuss this in light of Siemens’ bribery scandal. We believe that bribing is unethical because it takes away the fairness of a business transaction between bidders of a contract. Bribing also has a negative impact on competition because it allows for oligopolies and monopolies to emerge in an industry due to smaller competitors being unable to financially compete with the amount of the bribes. This in turn   creates a barrier for entry for prospective companies and promotes the oligopoly or monopoly in place.The lack of competition affects consumer choice by reducing their options which then stifles innovation within the industry as there is no need to generate a competitive advantage to attain customers. The legality of bribing depends on the laws of the home country that the business is based from. For example, Siemens is a German based business and German law states that bribing officials of another country to win business contracts is illegal. So, under German law, Siemens was guilty of bribing an official when it bribed employees of the Italian company Enel to gain a contract as Enel was 68% owned by the Italian government.The counter-argument is that bribing is the cost of doing business. We disagree with this because the economic benefits gained from bribing are not outweighing the cost to a company’s reputation. As we see in this case, Siemens paid a 6 million euro bribe to secure a contract valued at 450 million euros which would seem like a cost of doing business for Andreas Kley and Horst Vigener but the legal and political cost almost triple the value of the contract in euros and a loss of reputation.These executives were fortunate to escape imprisonment for the illegal actions that were committed. A company must avoid bribing government officials to win business contracts however they can ask their own government for some type of aid in the situation. We believe that having your home government involved in fostering or mediating the trade relationship with another company can potentially give better results than bribing. Siemens should have gone on a business trade mission with German officials to another country because trade missions can help form a relationship and are sources f contacts which are valuable tools to win business contracts. †¢ What options do companies have to win business contracts without bribing, especially in foreign countries? Companies can use a combination of a number of alternatives to gain a business contract without violating the law. Internally, the organization can build a better product through investing money into research and development which would then provide them with a competitive advantage to entice other businesses to choose them over a competitor.Externally, the organization can (1) contribute to the host country, (2) use complementary relations, (3) establis h the status as a market leader, (4) provide attractive business trade agreements, (5) offer outstanding business intelligence, and/or (6) differentiate service with quality contractors. Contributing to a host country would include assistance in a country’s development in terms of infrastructure, job generation, investments, and through imports. The use of complementary relations is a common practice in the business world.An example would be the relationship between car manufacturers and host countries. For a foreign company to enter the Chinese auto market, they need to establish a joint venture agreement with a local car manufacturer. It is a policy that the Chinese government imposed to protect the local auto business from strong foreign competitors. (source cited http://factsanddetails. com/china. php? itemid=349&catid=9&subcatid=62 ) Establishing the status of a market leader is less risky for a company with strong sales and a promising market for its products.This can b e an advantage in securing a deal with a strong company status in the industry. Providing attractive business trade agreements by making bigger concessions when negotiating a deal can be a great way to win a business contract. By offering a larger bulk order discount or other forms of compensation such as a royalty after a set number of units sold. This shifts the bribe from an illegal under the table pocketed amount of cash to an above the board legal bonus contingent on performance.Offering outstanding business intelligence skills is the ability to transfer organizational skills to better manage costs, strategies, and tactics in developing quality products and services in the foreign country. The transfer of these skills will most likely develop a long term relationship between the company and the foreign nation it operates in. In addition, companies value intelligent partners. With this in place, companies can stand out with this knowledge or expertise. 2. †¢ Was the board r ight in not extending Kleinfeld’s term, especially in view of his over performance as a CEO?The decision to refrain from extending Kleinfeld's term was undoubtedly a difficult one for a number of reasons, however it was the right decision given the awkward circumstances surrounding his term   as CEO. The primary concern with this decision was that Kleinfeld had brought many benefits to Siemens in a short time. In just two years under his direction Siemens' stock price shot up and there was a shift in the way the company did business as the importance of Siemens' customers was stressed as equally important to their technology.Kleinfeld's drastic reform of the corporation, although disliked by some of the older fashioned managers, was visibly effective. This previous concern also sprouts another, by not extending Kleinfeld, Siemens would now have to find a replacement CEO; a task that would surely be difficult after the public backlash resulting from the scandal. However, des pite both of those concerns the decision to neglect to extend him was made. One of the reasons is that although he was impressive in his short tenure, all of the successes of the corporation under his guidance are now questionable.In other words, how much did the corrupt practices of bribery that Siemens was accused of impact the increased success of the company in that same time. This thought alone tainted the view of Kleinfeld's time as the CEO. Even if Kleinfeld was truly fully ignorant to these corrupt practices, it does not absolve him because as the CEO it is his duty to be in full control of Siemens. He failed at clearly explaining to the entire corporation their code of conduct with regards to bribery and the consequences, therefore he is personally to be held responsible for the actions of his employees. It is for these easons that Siemens needed a clean slate if they were to reform their public image. If Kleinfeld had been retained then much of these beliefs would continue and it would have been harder still for Siemens to recover from such a devastating scandal. A new leader was needed to represent an ethical overhaul of the corporations code of conduct in order to effectively rebound from the backlash of the events. †¢ What is likely to be the impact of his departure on the company? Kleinfield’s departure as a CEO from Siemens had an impact on the employees, the board of directors, the company’s revenues, and the intellectual property.Kleinfied was very popular in the company and a charismatic leader to a number of young and proactive employees, there is a possibility that these employees to follow his departure. Also, because of the employees’ admiration of Kleinfield’s management style there is a possibility that these workers might regress to the old fashioned ways of doing things in the company. Another element in the company that was affected by Kleinfield’s departure was the board of directors. We know that Kleinfield did a major restructuring in Siemens, but didn’t create a good relationship with the supervisory board.This potentially made him expendable when the corruption scandal hit, and opened the eyes of everyone on the board of directors to a new change in conduct and social responsibility. Moreover, as mentioned earlier, another way where Kleinfield’s departure might affect the revenues of the company would be in the future election of a new CEO. Given the bad reputation Siemens acquired, it stands to reason that they will have to overpay a new qualified person to become the CEO because that person will have to deal with resucing the company in the wake of this scandal.Nevertheless, one of the biggest impacts of Kleinfield’s departure from the company is the loss of intellectual property. By losing a very efficient CEO, who transformed the company in a short period of time, Siemens lost a great asset that can also become a threat to the company if hire d by a competitor. †¢ Was Siemens really at fault or was it just unfortunate to have got caught given the perception that many companies have to resort to bribing to win contracts?We believe Siemens was unfortunate to get caught but that it is also their fault. Firstly, we think it is unfortunate because there are many other companies that bribe in the world. Being one of the few companies caught bribing made Siemens’ situation unfortunate, but it didn’t exempt it from being the company’s fault. Since the company decided to bribe, they fully understood the consequences of getting caught. Compare this with a thief: just because all the other thieves are stealing, it does not mean robbing someone is without recourse.In the end, because Siemens acted illegally by choosing to ignore its corporate social responsibility and by abiding the rules of the country, it is reasonable to recognize the company made a mistake by taking a poor risk and having it backfire. W ork Cited Helen Deresky,  International Management: Managing Across Borders and Cultures, 7th ed. (New Jersey: Prentice Hall, 2011), 61-71. Facts and Details. â€Å"Foreign Companies & Foreign Investment in China†. Last modified April, 2012. http://factsanddetails. com/china. php? itemid=349=9=62

Motivation And The Goal Oriented Behavior - 897 Words

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