Content area
Full text
Low Sui Pheng: School of Building and Real Estate, National University of Singapore, Singapore
David K.H. Ho and Yeap Soon Ann: ST Properties Pte Ltd, Singapore
Introduction
Crisis can happen to any organisations. Having a detailed plan of action for the types of crisis that may occur can make the difference between surviving or succumbing to the crisis. Preparing for crises is essentially an integral part of the responsibilities of the developer which should not be overlooked but also emphasized as part of a vital element in the strategic management process. What then is a crisis?
The term "crisis" has been defined differently by management writers (see, for example., Selbst, 1978; Fink, 1986; Bell, 1971; Pauchant and Mitroff, 1992; Booth, 1993). In layman terms, the Longman Dictionary defines a crisis as "a turning point in the course of any thing; uncertain time or state of affairs; moment of great danger or difficulty" (Longman, 1978). Crisis management is therefore crucial for all organisations, because effective crisis management helps to ensure the continuous wellbeing of an organisation.
As for all other organisations, effective crisis management is equally important for property developers. Subject to external market forces and uncertainties, developers may suffer costly errors if they are caught unprepared when a crisis strikes. A good example is the anti-speculation measures introduced overnight on 14 May 1996 by the Singapore government to cool an overheated property market. These measures were implemented mainly to stop people from buying and selling their apartments for capital gains through subsidised loans given for public housing. These measures, however, spelt bad news for property developers as lower-end condominiums and houses could be affected in terms of price and demand. Prices could drop if developers started to compete by offering price cuts (Khor, 1997). These anti-speculation measures caught many developers off-guard and led many to a crisis situation. In response, developers have to survive this crisis. This example illustrates that developers fundamentally need crisis management which is not only worth it but also necessary.
Crisis management is, however, much more than a simple matter of setting up contingency plans and avoiding risk. Property developers appear to lack an integrated approach towards crisis management. The approach taken is often peril-specific and does not consider crisis...