Colliers International property Colliers International property ConsulatantsConsulatants

http://www.colliers.com

Dr. Chen, Collier International Property Consultants TM -2

Suggested Study QuestionsSuggested Study Questions

1. What challenges do Colliers and Stewart Forbes, its president, face?

2. Compare and contrast the Colliers organization with a traditional hierarchical firm. How appropriate is the Colliers organizational structure in light of the challenges the company faces?

Dr. Chen, Collier International Property Consultants TM -3

Suggested Study Questions Suggested Study Questions (cont.)(cont.)

3. What role does IT play in enabling the organization to meet its challenges? Do Colliers brokers and managers use IT appropriately and effectively?

4. What recommendation would you make to Stewart Forbes?

Dr. Chen, Collier International Property Consultants TM -4

Why the Colliers Case?Why the Colliers Case?

Provides students to learn the challenges of managing a “virtual organization” and the role of IT in supporting inter-organizational coordination and control.

Dr. Chen, Collier International Property Consultants TM -5

Learning ObjectivesLearning Objectives

You should be able to learn how an organizational framework within which real estate firms, which were often small, entrepreneurial, and family-held, could remain local and autonomous while gaining national and international scope.

Learn how Colliers rethink a range of strategic, organizational, and interorganizational issues and how IT systems were related to those concerns.

FIVE COMPETITIVE FORCES MODEL for FIVE COMPETITIVE FORCES MODEL for Colliers’ International Property ConsultantsColliers’ International Property Consultants

THE FIRMTRADITIONAL COMPETITORS

NEW MARKET ENTRANTS

SUPPLIERS

SUBSTITUTE PRODUCTS & SERVICES

CUSTOMERS

ThreatsThreats

Bargaining power

N

Expanding services to existing clients than on gaining new ones.

Aggressively buying local real estate firms

Changes in customer requirements and needs

Seeking to capitalize on an emerging market opportunity

Dr. Chen, Collier International Property Consultants TM -7

Colliers Faced Three Major Colliers Faced Three Major ChallengesChallenges

The trend toward globalization of markets and industries – changes and threats: customer requirements and

needs Corporation began to look to brokers not only for buying and selling properties but also for managing them (i.e., shift from transaction-oriented to a “relationship” approach)

Traditional competitors and new entrants.

Dr. Chen, Collier International Property Consultants TM -8

Colliers’ Strategy and PurposeColliers’ Strategy and Purpose

The Colliers network provided members – flexible linkage of resources– customize services to clients’ needs – coordinate activities

Network affiliation also provided local firms credibility and a reputation as an international player capable of closing complex deals.

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Sustaining ValueSustaining Value

Colliers’ key source value– face-to-face networking opportunities provided

by the annual meetings Process performance Stakeholder satisfaction Benchmarks Other See TN-1

Dr. Chen, Collier International Property Consultants TM -10

Executing and AdaptingExecuting and Adapting

Colliers’ organization design depended on trust, commitment, and cooperation; coordination and control of operations depended on high levels of information sharing and personal networking.

Colliers current authority structure and controls have been ineffective– its network has been plagued by conflicts of interest,

dual allegiances, spotty participation, and lack of commitment

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Evaluation of the Colliers’ Evaluation of the Colliers’ Organization DesignOrganization Design

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Organization Structure and AuthorityOrganization Structure and Authority Corporate HQs played a leading role in identifying and

negotiating with firms to join the Colliers federation. Authority within the Colliers’ network was highly

decentralized; corporate HQs was weak by design. Admission criteria

– level of performance– fulfillment of Colliers’ responsibilities– commitment to increasing the scope of client services

Dr. Chen, Collier International Property Consultants TM -13

Control Problems Posed by the Control Problems Posed by the Colliers’ Network StructureColliers’ Network Structure

It is difficult to compromise between following a certain pursuit as an organization and maintaining a flat structure of independent firms.

Diverse interests, skills and commitment are used to managing firms.

Dr. Chen, Collier International Property Consultants TM -14

Operating and Management ProcessesOperating and Management Processes Core operating processes

– marketing scanning and intelligence

– identification of customers

– initiation of referrals

– management of deals (transactions)

– long-term relationship management

Management systems to managing Colliers’ global operations (TN-5)

Incentives– perceived benefits

– peer pressure, and

– the commission structure

Dr. Chen, Collier International Property Consultants TM -15

How Colliers Changes its How Colliers Changes its Organization Design?Organization Design?

Increase centralized direction and control Support and facilitate the development of

effective controls at the local level Need a uniting purpose and core values, and

incentives and sanctions to enforce commitment to them

Interorganiztional design Role of information (and IT)

Dr. Chen, Collier International Property Consultants TM -16

Information Technology Information Technology Infrastructure and RoleInfrastructure and Role

Information was centralized which conflicts with the highly decentralized, network organization that the firm has attempted to create.

Communication networks are expensive, slow, and fail to provide necessary security and reliability

Little integration of data, voice, video, text and graphics despite the preference of brokers for fact-to-face (rich) communication media.

Dr. Chen, Collier International Property Consultants TM -17

High cost of an average database query and the lack of reliability and integrity of data severely limit the value of the information.

A distributed, networked information infrastructure will be required to support the organization design– Colliers possessed resources - money, people,

expertise - that could provide services and implement and manage a distributed IT architecture.

Need strong, effective leadership to exploit the potential of its IT-enabled business concept and system.

Collier International Property ConsultantsCollier International Property ConsultantsCollier International Property ConsultantsCollier International Property Consultants

Goals/

Strategies

International Structures/Systems/

Processes

Services

Colliers

Quality, Consistenc

y

Failure

to

Information

Member firm

Member firm

CSF:

Future highly

concertain

execution/ adaptation

enabledesign

define

develop

cause

shari

ng

CompuServe

Provide value

participation/commitment

In read estate, everything depended on three factors

(1) [old saying] location, -,-

(2) [new adage] information, -,-

.

.

Dr. Chen, Collier International Property Consultants TM -19

RecommendationsRecommendations

Other advice you would give to Stewart Forbes (information and communication management, training and support, etc., see TN-6)

Is the company in crisis? Which model is the Colliers based upon? (TN-

7)– anticipatory implementation model

– leader-initiated implementation model

– crisis-driven implementation model

Dr. Chen, Collier International Property Consultants TM -20

EpisodeEpisode Regional consolidation efforts have continued,

spurred by the growth of Colliers Jardine in Asia and colliers Macaulay Nicolls in North America. By the mid-1990s, Colliers has restructured to create regional HQs offices that assumed increased authority for governing regional operations.

Interorganizational operating and management processes continued to be loosely defined and controlled. Participation, commitment, and coordination among participants had not significantly changed since the time of the case.

Dr. Chen, Collier International Property Consultants TM -21

Episode (cont.)Episode (cont.)

While only minor changes in the IT architecture had been implemented since the time of the case, Louts Notes was scheduled for rollout throughout the global network in summer 1995. Lotus Notes was expected to replace CompuServ.

Dr. Chen, Collier International Property Consultants TM -22