Professional Housing Management Practices in Hong Kong

CHAPTER 12. Quality Management in Property Management

Quality Management in Property Management 223 CHAPTER 12 Quality Management in Property Management FAN Cheuk Hung Introduction Hong Kong has faced significant political, economic, social and technological changes in recent years. Given the escalating demand of owners and the freedom of consumer choice, owners will no longer tolerate management companies with substandard services. To keep pace with this new development, the property management industry must strive towards the goal of providing a customeroriented and value-added professional management service. A company which implements Total Quality Management (TQM) will give a guarantee of quality services. TQM is a management philosophy focused on motivating all levels of employees in an organization to continuously improve its operation and management processes to achieve good business results and customer satisfaction. A typical Malcolm Baldrige TQM model comprising the principle elements of Leadership, Strategic Planning, Customer & Market Focus, Measurement, Analysis & Knowledge Management, Human Resources Focus, Process Management and Business Results, can be applied to the housing management industry. Quality Management is a must for companies to survive in the present business environment and is the key to success for practitioners in the housing management profession in the twenty-first century. This chapter therefore aims to discuss the concept of TQM and its application to property management in Hong Kong. It initially recaptures the various developments leading to the current emphasis on quality management. It then outlines the key elements of the TQM model, followed by a detailed discussion of its application in housing management. Finally, the way forward to achieve quality management is suggested. 224 Fan Cheuk Hung From quantity management to quality management Historical development in the housing management industry In Hong Kong, the concept of property management began in the public sector. it was triggered by the disastrous Shek Kip Mei fire in December 1953, when many people became homeless. The housing management task for the government was to rehouse a large population within a short time. The quality of the housing units and the management service was not the primary concern. In the private housing management field, it was not uncommon, in the past, for the government to request the property developer to undertake the management of the building. The vested interest of the private developers was often well protected by provisions in the Deed of Mutual Covenant (DMC). It became rather difficult for the individual owner to terminate the existing management contract and choose another property management company even if they found that the management performance had not been to their satisfaction. Legal amendments In the wake of consumer rights in the property management industry, the government introduced, in May 1993, the Building Management Ordinance (BMO) to replace the Multi-storey Buildings Ordinance. The new ordinance overrode the unfair terms and conditions in the DMC and also encouraged the formation of owners’ corporations. Owners were given, among others, the power to hire property managers and determine the management expenses. The provisions in the BMO have also been relaxed to permit easier termination of a property manager. As a result, with a view to bidding or retaining the management contract, the management companies have to cut the costs of the manager’s remuneration and strive hard to provide value-added services. Escalating demands of owners In the past, owners were satisfied by low management costs. As time went by, owners perceived good property management as the reliability to provide cleaning, security and maintenance service to the estates, to be responsive to complaints and to organize social functions occasionally. Today, owners do not just require professional management services that are value for money but must Quality Management in Property Management 225 also have value added services. They are smart consumers who are keen to compare the management costs from building to building. They are also demanding with respect to the level of service provided by different management companies. Given that quality professional management may enhance the lifespan and the value of property, the owners are ready to choose their own property management service provider. Competitive tendering permits owners to maximize their return for quality management performance. Standards and performance indicators are integral parts of a tender proposal nowadays. Aspects of the service are translated into quantifiable service standards. Management companies making bids have to include quality assurance plans and even performance pledges in their proposals. Those who fail to improve their efficiency, effectiveness and service quality can no longer meet customers’ expectations...