A critical analysis and evaluation of project success factors and investigation on its relation with the organizational structure of a leaseholder’s group
Introduction
This paper involves a research on the success factors of Collective Enfranchisement. Moreover the impact of the organizational structure of a leaseholder’s group on these success factors.
According to Dalton D Todor et al (1980) “The relationship between organizational structure and performance can best be summarized as inconsistent”
The paper gives a brief description of CE. A discussion has been carried out on the importance of an organizational structure. It includes a critical analysis by providing an organizational model (ABC Company), to investigate and evaluate Collective Enfranchisement success factors, which participate in this process. It debates on whether an organizational structure of a leaseholders group (ABC company) contributes to the success of the project such as; Collective Enfranchisement or not. In order to explain the project success factors it is vital to understand that why CE is important and why a success of CE is so crucial.
There is a transformational consumer trend that has been unfolding since 1990 by which flat owners can use their right to force a sale, of a building’s freehold, on the landlord.
ELS (Enfranchisement and Leasehold Solutions) released this news in the press release October 2007 and also published it on their website on 18th October 2007.
“New Figures show freehold purchase is on a roll, London.
Enfranchisement & Leasehold Solutions (ELS) announced that a record number of owners of leasehold flats are opting to purchase their freehold (enfranchise). ELS are currently arranging collective enfranchisement for over 2,000 flats in London. This news comes on the fifth anniversary of the Common hold & Leasehold Reform Act 2002, the legislation that made it substantially easier for tenants of flats and houses to purchase the freehold of their properties”.
In last two decades, London has shown a higher rate of CE cases, as compare to the rest of the country and the reason is a demographical shift in a leaseholder’s group.
| Old Model of Leaseholders Group | New Model of leaseholders group |
| Less money (first time buyer/senior citizens) | More affluent (high earning professionals) |
| Less empowered (Do not have access to knowledge on property law) | More empowered home owner, in touch with property law and legalization |
| Isolationist perspective( in terms of the uniqueness of British property law) | Overseas flat owners (world model of property law has arrived in UK |
| Blame culture (depends upon landlord to do everything) | Take responsibility and proactive (when things go wrong, makes an action plan) |
According to the Act 1993, it has become a law that if a building wants to acquire a freehold then at least half of the leaseholders/Fifty percent of the flats should agree together (which is called CE (Collective Enfranchisement) to force a landlord to sell the freehold to them within a reasonable time frame and on a fair market price. To apply for a CE, leaseholders group required to form a company by a company act law, which is called RTM, a right to manage Company.
This research investigates the organisational structure of the RTM company and critically evaluate its impact on the success factors of this project.
It is very important that a leaseholders group is cohesive otherwise as hypothetical situation, a solicitor would only organize the paper work but if issues occurred due to human nature such as trust issues, personal reasons, schedule problems etc, and if there is no internal management, this could turn into a disaster. A solicitor would only care about the hourly pay so if the flat owners would miss their deadline due to miss communications or personal reasons that would not concern the solicitor. However if the lease holders are not careful they can loose their one chance of applying “a right to gain a free hold title” for one year plus they would have to pay the cost of both sides. On the other hand the freeholder would be alarmed for future
According to Ms Kat Callo (Buying a freehold, 2006) there is only one LVT (Leasehold valuation tribunal) decision of every 5 applications, out of which the four are settled just before the decision and approximately 20 are settled before even applying for LVT. So the one case that reached LVT decision can go either way as once the decision is made then it is compulsory for both parties to accept it.
It is considered a failure of a CE project once the leaseholder’s group failed to negotiate with the landlord before LVT decision.
Hypothesis
Organizational structure of leaseholder groups plays a vital role in the success of Collective enfranchisement. That includes well defined and transparent project management.
AIMS
The aim of the dissertation is
To determine the project success factors of CE by considering examples of successful organizational structure (leaseholder group), then perform a critical analysis on the success factors of this project by elucidating and investigating its characteristics and establish its relation with organizational structure.
Research Questions
- What are the recognized project success factors?
- What is the organizational structure of successful leaseholder group?
- What are the success factors involve in the project CE?
- Weather organizational structure is important for a leaseholder groups to achieve successful CE?
- What is the well defined and transparent project management?
Research Objectives
- To re establish the recognized project success factors
- To evaluate the common success criteria for organizational structure of a RTM company
- To determine success factors of a CE by providing a case study of successful group
- To investigate a model of a Building A(successful), Building B (failure) and building C (failure and then success) in order to assess the impact of the organisational structure with CE’s success and failure.
- To develop an explanatory theory that associates certain factors in between an organizational structure and the well defined and transparent project management.
The significance of the Research
This research determines to
Literature Review
What is a project?
Dennis Lock (2003) explains: “The principle identifying characteristic of a project is its novelty. It is a step into the unknown, fraught risk and uncertainty. No two projects are ever exactly alike: even a repeated project will differ from its predecessor in one or more commercial, administrative or physical aspects.”
There are different definitions of a project. The most consistent one is that a project is something that is unique and never been done before, it’s usually temporary and valuable.
This has eliminated the risk of a project bearing a similarity to one and other. However what would be the school of thought if the project in reference is a law case; such as Collective Enfranchisement. All the law cases should follow exactly same procedures except if it is not possible. The process of Collective Enfranchisement includes an effective supply and chain management of a continuous communication flow, organization and ability to control which are also the defined characteristics of a project management.
“Project management is the activity of defining, planning and controlling projects. A project is a set of activities with a defined start point and defined end sate, which pursues a defined goal and uses a defined set of resources.” (Nigel Slack, et al. second edition 2009)
It is a however, very peculiar to say that a project success only relies on its characteristics. To make a project successful there are several elements that contribute to it and among them there is always a co relation. There is unique project success factors involve in every project. To improve the quality of a project one must realize a set measurement.
For example, use six success factors for project quality by Michael L Young, 18TH March 2009
- A Good Plan
- Appropriate Communication
- Manage Stakeholders
- Good Measurement
- Constant Review
- Act Early
Theses project success factors do indicate a certain organizational structure. However it would not be the case with every project or every organization. According to Dennis Lock (eighth edition 2003) every company has its own ideas about how to arrange itself and its work. It is highly possible that if three companies doing similar work could be compared, three organizational structures would be found. Further, all three companies might be equally successful (or equally unsuccessful), implying that it is not always possible to say with any degree of confidence that there is one best organizational solution.
There is still a certainty that if those three companies follow exactly same organizational structure and they all have failed, it could anticipate that if the structure would change, the implementation of the procedures will differ and it could lead to a successful start. However, there is no way of knowing it until we have those three companies, having the same structure but the implementation is different from one an other and we can assess the successful company with comparison to the unsuccessful company in order to measure the importance of organizational structure.
“Although the inconsistency of the impact of structural dimensions on performance is known, it is, however widely accepted that specific structural forms do indeed influence performance in some way” (Miler, D 1988)
The organisational structures are divided in several categories and have so many theories and literature on them, the very common and well know types of organisational structure are Formalisation, integration, centralization and complexity. In accordance to project management there are specific project matrix organisations such as
Project Matrix Organization
In project matrix organization there are two types
1. Functional matrix for a single project: A project manager has been introduced to the plan and progress the special work through the organization. The project manager has no direct line authority, and acts as a coordinator. This arrangement is also known as a coordination matrix.
2. Matrix for multiple projects: several projects are being handled by this company but each has its own project manager. The degree of authority given to these project managers by comparison with the departmental managers varies between companies.
Within these, there are different matrix strengths that determine the authority and level of responsibility of a project manager such as
Weak matrix: the level of decision making power and control is less than the internal managers
Balanced matrix: there is a confirmed difference about the level of decision making power between the project managers and department managers, however it is very similar to weak matrix
Stronger matrix: there are two forms of stronger matrix, project matrix in which the decision making power of each project manager takes priority over the authority of the internal manager and second is secondment matrix which is the most powerful form of the matrix, the internal manager must provide his staff to work full time for the project manager, and those employees are answerable to their PM as long as needed.
By critically analysing the case studies on CE, it would help one to establish that where and how this project matrix organisation was implemented and whether it had any impact on the success or failure of the process.
Methodology
To carry out any research, methodology is the most important part as this would determine that how you would get results of your research. According to Mark Saunders et al. (2009) Research is something that people undertake in order to find out things in a systematic way. Research has number of characteristics such as
- Data are collected systematically
- Data are interpreted systematically
- There is a clear purpose: to find things out.
Most of the business researches are applied research as to improve the understanding of a particular business or management problem, such as a critical analysis of a CE’s project success factors and their relation with organisational structure.
Research design
This research is mainly based on the London Collective Enfranchisement projects. The property business is very affluent and therefore mostly international companies are involved. After the credit crunch hit the London property market in 2008, it made the flat owners become more aggressive towards raising the market value of their property. Although there had been a noticed trend of CE since 2002 but this really gave it a boost. The number of years left on the lease is actually very crucial to the market value of the property as the number of years gets lower the market price drops as well. If a flat/building has remaining 90 years on the lease that means that the new buyer does not have to worry about the complicated process of getting an extension for at least 30 years. But if there are only 50 or less years left on the lease, then the buyer will have to pay for lease extensions. The extensions cost even more when there are less years reaming.
This research population would be based upon the leaseholders who have either participated in the project before or are in the process at the moment. I t would also include those who could be the potential participants in future such as building that are thinking about it .
have been massive attractive business opportunities in the country and London is the most multicultural part of the country. The interest of Overseas to invest in London property has been growing rapidly.
References
Dalton D Todor et al.(organization structure and performance: a critical Review, Academy of management review, Vol.5, page 49)
ELS (Enfranchisement and Leasehold Solutions) released this news in the press release October 2007 and also published it on their website on 18th October 2007.
Ms Kat Callo (Buying a freehold, 2006
Dennis Lock (2003
Operations and process management, Principles and practice for strategic impact, Nigel Slack, Stuart Chambers, Robert Johnston and Alan Betts second edition 2009, Pearson Education Limited
Michael L Young, 18TH March 2009
Dennis Lock (eighth edition 2003)
(Miler, D 1988) Relating Porter’s business strategies to environment and structure: Analysis and performance implications, Academy of management journal, Vol. 31, Larry P. Pleshko Strategies orientation, organizational structure, and the associated effects on performance)