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Doris Grill Research Institute for Spatial and Real Estate Economics

Securing rationality within Real Estate Management „ Rationalitätssicherung im Immobilienmanagement “. Doris Grill Research Institute for Spatial and Real Estate Economics. Content of the presentation. Presentation of the problem State of the field Rationality Controlling

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Doris Grill Research Institute for Spatial and Real Estate Economics

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  1. Securing rationality withinReal Estate Management„RationalitätssicherungimImmobilienmanagement“ Doris Grill Research Institute for Spatial and Real Estate Economics

  2. Content of the presentation • Presentation of the problem • State of the field • Rationality • Controlling • Real Estate characteristics • Articles of the multi-paper dissertation • Research questions • Methods • Expected results

  3. Presentation of the problem

  4. Introduction • Paradox: perfect information leads to perfect rationality bounded rationality

  5. Work experience • Controller position as a stopgap • Main function: collecting, consolidating and interpreting data • IT systems and infrastructure • Quantity of data versus existing tools • Data quality and information management • Excel files and isolated applications • Long lead times • due to extensive plausibility checks • Problems with predictability • Planning and budgeting in an uncertain market

  6. Major question How is it possible to secure rationality within Real Estate Management?

  7. State of the field

  8. Rationality • “reason, common sense” • Max Weber (1921): • Zweckrationalität: “purposive rationality” • Wertrationalität: “value rationality” • Business science: • Predominant concept: purposive rationality • “As long as there is a good reason it is rational” • Implicit values: maximise utility, financial profit • Perfect rationality is a result of perfect information not possible in reality

  9. What is Controlling? • A controversially discussed question in literature and also • „In practice, people with the title of Controller have functions that are at one extreme, little more than bookkeeping and, at the other extreme, de facto general management.“1 • Management control systems, management accounting and control 1 Source: Antony 1965

  10. Controlling

  11. Concept of Controllingfrom Weber/Schäffer 1999 • Definition: Controlling means „Securing the rationality of Management“ • Rationality is defined as purposive rationality, measured by the efficiency of utilization of resources. Purposes are given. • Deficits in the rationality of the manager are defined as constraints in willingness and/or ability. • Controlling has to ensure the efficiency of utilization despite the deficits of the manager.

  12. Real Estate Management • on a meta-level • Portfolio Management • Asset Management • Project Management for Real Estate Developments

  13. Real Estate characteristics • Attributes of Real Estate that challenge Controlling: • Different information needs and operating numbers in each life-cycle • development, construction, (or acquisition), administration, renovation, termination (or sale) • No market transparency and heterogeneity of the projects and objects • Difficulties to find information and compare them • Problem of valuation • Predictability of events and budgeting is very difficult • Special know-how for different markets needed Source: a.o.Dasso 1995

  14. Articles of themulti-paper dissertation

  15. Multi-paper dissertationResearch questions and methods Securing management rationality with Real Estate Controlling Status of Controlling within Austrian Real Estate Management Securing management rationality within Austrian Real Estate Management

  16. 1st paper Securing management rationality with Real Estate Controlling • Requirements and problems for Real Estate Managers • within the real estate life-cycle • Securing the management rationality • defining the “Controlling concept” • Securing the rationality of the Real Estate Manager • bringing the concepts together

  17. Why qualitative research? • There is no strong theory to be tested • Quantitative research excludes social phenomenon beyond the questionnaire • Interest in the subjective view of the Real Estate Manager versus the subjective view of the Controller • Deficits in the rationality of the Manager (constraints in willingness and/or ability) can only be enquired indirect

  18. Qualitative methods used • Data collection: mixture of different qualitative interview methods • Expert interview • Problem-centered interview • Narrative interview • Data evaluation: depending on the type of data • Qualitative-content-analysis • Narrative analysis

  19. Research process andquality of research • Circular research process • Suitability of the method • Definition of research goals • Documentation of the way of proceeding and the problems • Regular reflection about the concept of the study preunderstanding research questions and research goals concept of the study adjustment of hypothesis data collection data evaluation construction of theory publication

  20. 2nd paper Status of Controlling within Austrian Real Estate Management • Theory: existing Controlling concepts • Interviews: Relationship between Controller and Manager (two subjective views) • Expert: Status of the existing Controlling system • Problem: Deficits of the existing Controlling system • Narrative: Activities of and cooperation between Manager and Controller • Analysis if existing Controlling is an efficient system to support management rationality

  21. 3rd paper Securing management rationality within Austrian Real Estate Management • Theory: existing concepts of rationality • Interviews: Subjective view of the Real Estate Manager on the rationality of his/her decisions • Expert: Important information for decisions • Problem: Missing or uncertain data • Narrative: Strategies to secure rationality of decisions • Analysis if the manager is willing and able to secure the rationality of his/her decision and how he/she does it in everyday-life

  22. Expected results

  23. Hypotheses • The Controlling concept is only suitable to a limited extend and should be adjusted to the special needs of Real Estate Management • Existing Controlling is not able to secure the rationality of the Real Estate Manager • The Manager does not secure his rationality with the Controlling outcome but with other sources • A lot of decisions are also not justifiable with data and facts from other sources

  24. Thank you for your attention! Research Institute for Spatial and Real Estate Economics Nordbergstrasse 15, 1090 Vienna, Austria MAG. (FH) DORIS GRILL T +43-1-313 36-5764 F +43-1-313 36-705 doris.grill@wu.ac.at www.wu.ac.at/immobilienwirtschaft

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