IJHMA
3,2
146
International Journal of Housing
Markets and Analysis
Vol. 3 No. 2, 2010
pp. 146-162
# Emerald Group Publishing Limited
1753-8270
DOI 10.1108/17538271011049768
Received 14 December 2009
Revised 24 December 2009
Accepted 10 January 2010
The organizational performance
of housing developers in
Peninsular Malaysia
Ismael Abu Jarad, Nor’Aini Yusof and Mohd Wira Mohd Shafiei
School of Housing, Building and Planning, University Sains Malaysia,
Penang, Malaysia
Abstract
Purpose – In Malaysia, the rapid urbanization that has been taking place since 1970s has made the
housing development sector a key factor in the growth of Malaysia’s economic prosperity. This paper
aims to shed light on the performance of housing developers in Peninsular Malaysia by looking into
the financial and non-financial measures.
Design/methodology/approach – The organizational performance of 57 housing developers was
studied by measuring their financial and non-financial performance in the period 2006-2008 using the
Business Performance Composite Index.
Findings – The results of the study revealed that the performance of housing developers in the
period 2006-2008 has been growing in terms of profit margin, financial growth, and number of
employees. Small and big housing developers were better than medium-sized housing developers in
terms of profitability.
Originality/value – This paper is unique because it looks into the financial ratios of return on
investment, return on assets, and return on sales, which will clearly show how those housing
developers have been performing financially in the period 2006-2008.
Keywords Organizational performance, Housing, Malaysia
Paper type Research paper
Introduction
One of the important questions in business studies is why some organizations succeeded
while others failed. Organization performance has been the most important issue for
every organization, be it profit or non-profit. It has been very important for managers to
know which factors influence an organization’s performance in order for them to take
appropriate steps to initiate them. However, defining, conceptualizing, and measuring
performance have not been an easy task. Researchers among themselves have different
opinions and definitions of performance, which remains to be a contentious issue among
organizational researchers. The central issue is concerned with the appropriateness of
various approaches to the concept of utilization and measurement of organizational
performance (Venkatraman and Ramanujam, 1986).
The growth of housing development in Malaysia has been progressive and quite
impressive in spite of various constraints and weakness (Agus, 1997). In terms of
houses constructed, the housing industry has been very active. Contribution of housing
development to the national economy can be observed through residential construction
output (Agus, 1997). The housing industry has contributed noticeably to the Malaysian
economy. However, not many studies if ever have assessed the performance of this
industry financially. Some previous studies looked into the efficiency of housing
developers. This study sheds the light on the performance of housing developers in
Peninsular Malaysia by looking into the financial and non-financial measures. This
paper can be unique because it looks into the financial ratios of return on investment
(ROI), return on assets (ROA), and return on sales (ROS), which will clearly show how
those housing developers have been performing financially in the period 2006-2008.
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