SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

BACHELOR OF QUANTITY SURVEYING ( HONS )

STRATEGIC MANAGEMENT [ BLD 61404 ]

INDIVIDUAL ASSIGNMENT
DATE SUBMISSION : 5TH MAY 2020

AMANDA YEE JING WEN

0333742
 Vision , Mission Statement That Doesn’t Suck
By Amanda Yee

When we discuss the long run of a corporation, strategy becomes a dynamic concept which
allow CEO to define goals and objectives for the future and outlines. How these goals and
objectives to be achieved? a good thanks to formalise a company’s purposes and goals is to
own a proper mission and vision statement. Both are associated with the most reason a
corporation exists and help stakeholders understand and keep that reason in mind.

What is Vision Statement ?

A vision statement is not about what you doing but it’s what you want to be or become
something in the future. It always inspire the hearts of people who are working for it. It
should be inspirational and get people to thrill about and want to be part of it.

In my opinion, vision statement can be defined as ‘an expectation towards the obscure to
characterize the future, which joins current realities, trusts, dreams, dangers and openings’ .
In business management based on (Zel, 1997), vision statement refers to the long-term
objectives of the business which are the shapes and guides for your business strategy and
practises . Vision likewise characterizes what the association needs to become later on and
which position it desires to acquire (Efil, 2004) and is the goal directed utterance which is
concerning a future desired state.

What is Mission Statement ?

Now take a look into mission statement, for me the best way to define mission statement
is from the word ‘ mission’ itself meant. For instance, a military organization is going on a
‘mission’ which means a group of army is going out for a specific purpose to finish a specific
task given.

Thus, a mission statement is about what somebody does and not necessary aspirational.
From a company’s perspective, it defines as the current leading to its future or the way to
reach the vision. A mission statement may be change as well as it ties back to the core
values and customer needs. It summarizes what the company does and the reason beside to
set out how the company conducts its business and identifies key stakeholders. In another
way it helps employees understand where their contribution fits into the company's
objectives.

Create a good vision statement that inspires you?

A vision statement is the anchor point of any strategic plan as it outlines what an
organization would like to ultimately achieve and gives purpose to the existence of the
organization.

Look back to the organization history and investigate the significant milestones that
company has achieved since being started and include all positive and negative milestones.
These will be critically reflected the positive o the negative aftermath and how that
influenced the general business array and stand in its current position.

Strategic managers identify the need of the business to progress and the resources
needed for advancement. In addition, identify the company about how it can improve the
business with potential changes. Now, look forward to future to clearly think about where
they want the business to be in the future and how this future and its goals can be realized.
The process of critically assessing the past, present and future of company is important for
vision building at allows identification of loopholes between the present and the future.

So how a vision statement inspire to be a good example:

Aspirational - as if the statement can’t even motivate you then it can be revoke already.
That’s why vision statement always start with ‘be the best’ or ‘be the
premier’.

Short - easy to memorise as collapsing all vision into a conclusion.

Relevant - connected with what the company actually do which when public hear
your
vision statement can easily understand which career of business is it.
 Motivated - describe what company want to build someday in the future so aspiration
is
the motivation.

How to create a mission statement that never ruin ?

Your mission statement needs to decide what your business must do daily to turn your
vision statement into a reality. It is practical and rooted in the present. Therefore, you can
turn to your mission statement for guidance. As it should continue practical focus, a mission
statement is actually easier to write than a vision statement a lot.

Look back to the vision statement created before, what action steps that I should do to
reach the vision and that’s how u start write your mission statement. Thus the first stage to
look into is the customer-focused or how should I do for my customers to make this vision a
reality?”

After creating a mission statement, it’s a checklist for you to get deep look into which
firstly is original as copyrights and never plagiarism from others company mission. Secondly
is foundational as make it to be sustain and consistent for long term. The next will be staff
connection as mission statement not only CEO’s mission but related to all staff of company
to work with. Lastly, realistic is the specific thing to focus as mission statement no need to
be ambiguous and fancy but more to concrete work.

I will consider about criteria of having good mission statement in four rules which are
SSOC:

SHORT – as the mission statement is operative which can drive behaviour in

company instead of a complicated meaningless long sentence.

SIMPLE – focus on people or client understanding by using simple language that

common used.

OPERATIVE – able to drive initiatives and allocation of resources (both human resources
and capital) as you want to make clear array on what you can do and what
 you cannot do.

CLEAR – define what your business actually did. According to Bruce D. Johnson, a
good mission statement must not exceed three phrase in the statement as
or it will start to lose focus on what the real action.
IKEA’s Vision Statement

IKEA is a globally famous brand of smart and affordable home furnishing products. The
IKEA product range has three special qualities that are affordability, durability and design.
The brand is present in 28 countries with its 340 stores operating there (May, 2016). IKEA’s
product range demonstrates its passion for quality and value. While the brand has kept
delivering superior value of the customers’ money, it is also smart at marketing itself.

IKEA Vision: “To create a better everyday life for the many people”.

As a vision statement, it must be specific enough to guide business strategy and to help
the managers with decision making and resource allocation. IKEA’s vision fails to be both
specific and clear. Give a criticize to the phrase ‘create a better everyday life’ , it actually can
be used by either a health care company or even a fitness centre as we won’t relates better
everyday when we bought a furniture from IKEA as well. What IKEA does is to create better
homes by creating and selling good quality home furnishing products at affordable prices.
So, its vision statement is not explained properly and sounds more like business philosophy
rather than a vision and even looks more like a slogan.

‘ To create a comfortable living environment with creativity, enthusiasm and

togetherness.’

The improvement statement is an indication of the straightforwardness of this company

when it comes to serving its customers in the world. IKEA should create a vision statement
which applies a marketing and sales system free of complications and misleading ads. The
company trusts and quality of its products always inform the choices of its customers for a
better living environment and atmosphere. The business approach of IKEA is future-focused.
The company has established itself as a reliable and creative brand through aggregate the
best designers to ensure that all its products remain up to date with time. Other than this,
the company is never short of surprising ideas to keep its customer base on the lookout for
what is new in its platform in both products and togetherness service.

In the nutshell, vision statements are very useful at marketing of the brand and therefore
must give a clear glimpse of the company and its business.

References

Diffen.com. 2019. Mission Statement Vs Vision Statement - Difference And Comparison |

Diffen. [online] Available at:
<https://www.diffen.com/difference/Mission_Statement_vs_Vision_Statement> [Accessed
2 May 2020].

Efil, İ. (2004). İşletme yönetimi. İstanbul: Aktüel Yayınları

Masters, D., 2013. How To Write Vision And Mission Statements. [online] Business Envato
Tuts+. Available at: <https://business.tutsplus.com/tutorials/how-to-write-vision-and-
mission-statements--cms-43> [Accessed 2 May
2020].https://www.executestrategy.net/blog/write-good-vision-statement

MacDonald, L., 2019. What Do Clear Vision & Mission Statements Contribute To The
Strategic Management Process?. [online] Smallbusiness.chron.com. Available at:
<https://smallbusiness.chron.com/clear-vision-mission-statements-contribute-strategic-
management-process-24100.html> [Accessed 2 May 2020].

Ikea.jobs.cz. 2020. Vision, Culture And Values – IKEA. [online] Available at:

<https://ikea.jobs.cz/en/vision-culture-and-values/> [Accessed 2 May 2020].

Zel, U. (1997). Harekete geçirici liderlik ve işe yönelik liderlik. Ankara: MPM Yayını.
 COVID-19

Financial Challenge &

Crisis Management Plan

In ABC Construction

Report
Introduction

The coronavirus or COVID-19 outbreak has spread all over the world like lightning and was
categorised as a pandemic by the World Health Organisation (WHO) on March 11 2020. To
date, In Malaysia itself more than 6,000 people have tested positive for COVID-19 and more
than hundred people have succumbed to it.

The COVID-19 pandemic will certainly have huge impact on the economy of Malaysia’s
and it has shocked the economic structure to state of uncertainty. Recently, the
International Monetary Fund announced that a global recession will occur due to pandemic
which could be worse than the subprime mortgage crisis of 2008. Bank Negara Malaysia
(BNM) also said Malaysia’s economic growth will be in the -2.0 percent to +0.5 percent
range.

However, COVID-19 is impacting the construction industry since projects force to delay,
supply chain issues and financing pressures. The effects are rippling across the sector to
construction sites around Malaysai. Malaysia's construction sector was suspended around
RM11.6 billion in losses as only after the construction sector was shut down during the first
phase of MCO, Senior Minister Datuk Seri Fadillah Yusof said. However the works minister
said that the government has therefore decided to strike a balance between saving lives and
ensuring people’s livelihoods sustainability to prevent a more devastating effect.

According to a statement from Fitch Solutions., the extension of the movement control
order (MCO) until May 12 as a measure to curb the rise of Covid-19 cases is expected to
significantly slow the growth of the construction industry
Financial challenges

Risk is inherent in any business enterprise, but good risk management is an essential

aspect of running a successful business. Some risks can be directly managed , but some are
largely beyond the control of company management. Sometimes, what a company can do is
try to anticipate possible risks, assess the visible impact on the company's business and be
prepared with a plan to react to overcome it.

There are many ways to categorize a company's financial risks that affected by pandemic
COVID-19. One approach for this is provided by separating financial risk into four broad
categories:

A. Market Risk

Market risk involves the risk of changing position in the specific marketplace. The
coronavirus has brought the whole world to a standstill, and the property market is no
exception with mounting pressure on the supply and demand. As the property sales
galleries and warehouse are forced to be closed, thus this has resulted a huge constraint for
public to reach out the product details and way forward to purchase real estate. The
Malaysian Institute of Estate Agents (MIEA) president Lim Boon Ping said the property
market may see a sharp fall of over 50% in sales during the current movement control order
period as  the sale and purchase agreements for property transactions cannot be carried out
due to Malaysian laws require physical signatures. However, the negative impact from the
MCO is unable to be ascertained now as it takes months for the property market to react to
the latest development as the transaction time, marketing time and conveyancing time for
the whole process of agreement consume lots of time and only start making profit to our
company.

Second, as the economic in our country is falling down rapidly and this had caused public
income hits and they may face difficulty in paying the instalment. Lack of spending
confidence and more stringent lending policies are expected to deter residential purchases
as well. Think to the bad way this will decrease the purchase ability from public. In the
another way, the buyer bargaining power heighten amid the Covid-19 pandemic and MCO
as more genuine homebuyers will negotiate on prices and try to get good deals in the
transaction.

Market risk is happening a tangible change in the particular marketplace in which a

company competes. According Founder and group managing director Tan Sri Leong Hoy
Kum from Mah Sing Group Bhd said they had notified their existing purchasers through
sending push notification via My Mah Sing app and their make sure their property agents
remains fully operational as well as live chat on My Mah Sing app while they utilise online
platforms to showcase their virtual showrooms to potential buyers. Recently, Gamuda Land
also allow customers to browse and purchase certain Gamuda Land properties online via
forming partner with Malaysia top online shopping platform Shopee. This situation had
make our industry become more competitive as they utilise mobilisation technology to
continue their business as this may affect our company’s sales as we had totally stop
interact with potential buyers in this moment as well as we can’t follow the steps nowadays
and decrease the sales and the profit in the big margins.

B. Credit Risk

Credit risk means construction companies cannot give their customers a line of credit and
a company's risk of not having enough funds to pay its bills. To provide clarity, the Ministry
of Works has made a further announcement that all construction work shall be stop subject
to the MCO as only critical works are allowed to continue.

Inevitably, as the pandemic devastated our country unstoppable and this had cause the
progress of construction works will be impacted and delayed. Similarly, hereto it delays the
performance obligations under the contract consequent upon the implementation of the
MCO. As the situation cause the project that undergoing may not be able to finish or reach
out certain stage in the timeframe limited as what had stated in contract among contractor
and client. Section 57(2) of the Contracts Act 1950 provides that such contract would be
rendered void when such contract becomes impossible or unlawful to be performed and
cause frustration of contract. Thus, impropriate action for contract may cause huge
compensation made from client.

As recommended by the Government, any applications for extension of time (EOT) must
be made to the relevant approving party pursuant. Under the Malaysian Institute of
Architects (PAM) Contract 2018 (with quantities), a contractor should apply to the architect
for an EOT since it is caused by circumstances beyond the control of the contractor under
MCO epidemics. It shall further comply with the procedures, processes and conditions
contained in the PAM Contract as a condition precedent to an entitlement of EOT.

Although there are law to protect us from finance crisis to compensation due to delay of
work, but it actually will ruin the credit of company to client especially those are rushing for
completion of work as they trust out ability to perform more than expectation instead of
using MCO for a reason to delay work.

C. Liquidity Risk

Liquidity risk refers to difficulties when a company cannot convert its assets into as well as
its daily cash flow. Since construction projects are forced to stop , however in a non-process
period, there are still many fixed cost need to be do payment and this will case a burden for
company to have liquidity cash flow under pressure.

The Ministry of Human Resource published on 19 March 2020 states workers should get
paid from employers based on the agreed rate under the contracts of service throughout
the MCO. Datuk Melvin Loh Kok Man, managing director of construction company LKM
Group sadly states that 100 people are employed under their group and it is around
RM500,000 per month for them to bear the burden for salary under a crisis which no profit
is made during the MCO period, therefore they are hard to sustain their business.
Furthermore, Sabah Housing and Real Estate Developers Association (Shareda) president
Chew Shang Hai faces that costs could increase by 10% due to the fixed costs and financial
costs if they were not able to carry out work long time as Sabah lack for IBS technique and
they had more labour cost need to pay include the foreign worker included their wages,
hostel and food expenses.

As the actual earnings impact would down slope construction works in fact of the
disruption of building material supply chain. Due to the manufacture of construction
material also forced to close factory while Phase 1 and Phase 2 of MCO cause there is a risk
that the supply chain disruption may not recover in the short term especially suppliers of
key building materials, equipment rentals and imported items. As all projects are going to
start up and rush progress after MCO, the demand of material will rapidly increase. Thus, in
this cycle the builders are warned to face material shortage and increase of material cost.
Furthermore, company will face more financial crisis not only in material cost but also some
of the critical offshore equipment are being sourced from oversea, which are either in
manufacturing or dispatch phase and delivery to the site location will be impacted with
higher cost. At last, it may cost more burden in paying expensive transportation to deliver
material as well.

D. Operational Risk

Operational risks emerge risks that can arise from a company's routine business. There is
a good news announce that to allow certain construction industries to operate during the
third phase of the Movement Control Order (MCO) with standard procedure to prevent
spread of COVID-19. On the same time, Penang Master Builders and Building Materials
Dealers Association adviser Datuk Lim Kai Seng said the SOP requiring companies to reduce
the number of manpower by 50 per cent would highly limit the progress of a development
project. This is our dilemma now as we are faced with another project extension under the
MCO as having the number of workers halved will drag the progress a lot and at last we
can’t meet profit and may face compensation of contract due to delay.

Works Minister Datuk Seri Fadillah Yusof said there are 7,387 of the applications and only
allowed 1,856 to operate during the Movement Control Order (MCO). However, the
Ministry of International Trade and Industry’s (Miti) only give the approval to small
construction companies under the G1 and G2 category were among those prioritised to
resume operations during the MCO include those whose projects are below RM200,000 and
those not exceeding RM500,000 respectively. Thus, this eventually just a waiting game for
construction sector and to be sure the underlying broad market sentiment has also been
rattled by the dire economic consequences from Covid-19.
Crisis Management Plan

According to CIDB, unskilled workers had occupied 93% of the registered foreign workers
in the construction industry (Hisyam, 2015). Majority of the foreign labours have been
recruited from neighbouring countries such as Indonesia, Bangladesh, Myanmar and
Philippines and construction company need to bear big amount of money to provide
support for their hostel, food, amenities, wages ,sanitation, and medical facilities.

There are numerous construction companies in Malaysia which are supporting the needs of
construction labour in the lockdown period and this is adding stress across construction
value chain and impacting the overall economy.

Here are some crisis management plan to sustain the financial health:

A. Prioritise project

We need to prioritise our portfolio of projects amidst post MCO resources constraints.
Labour and capital can be expected to be in short supply once the MCO. First of all, have a
kick start on the ability to generate immediate and sustained employment across value
chain from labours, contractors, engineer and such on. Due to only half workforce can be
used, thus try to arrange the human resources to the projects that more rushing or near to
deadline and evaluate the progress of sub-contractor about their progress and standard.

Degree of d incremental impact from COVID-19 which cause the supply chain disruptions
for construction material such as steel and cement. Contact with the material suppliers and
distributors about the sufficient of material and compare the price given in a detail analysis
and we should cut cost from the material instead of paying the extra charge due to this
pandemic. In addition, make sure the material and plant can be reach on site once the
projects can be proceed under announcement of project.

Furthermore, ability to generate immediate revenue should take in consideration such as

for property developer should put in effort in pushing campaign for buyers to attract more
buyers for purchasing property . For instance, Sime Darby Property Bhd Acting group
CEO Datuk Wan Hashimi Albakri Wan Ahmad Amin Jaffri said special deals and rebates are
given out first with The Ridge@ KL East and Senada Residence @ KLGCC Resort for those
who do get a unit online during the campaign period. Thus, marketing department should
increase the plan for selling our property with a worthful deal with buyers with 100 percent
of effort from service team.

Last but not least, check on status of pending approvals, land acquisition and other
ongoing issues with related government or private sector to make sure the progress is
updated and the most important is obey the rules and regulation to avoid company from
getting amerce and waste money on lawsuit.

B. Revisit project definition and delivery strategy

In a time bound manner, projects company should chalk out a plan to minimise the loss of
COVID-19 and ensure viability and sustenance of projects going forward in a changed
environment. Revisit the strategic alignment of projects for budget and cashflow, review
budget availability and contingency utilisation, financial impact of MCO, outstanding and
anticipated delayed client payments , contractor’s mobilisation advance requirement and
enhanced cost of health and safety norms. View every detail of projects to avoid the
wastage or over expenses in projects.

For the projects still in procurement process, undertake procurement optimisation

include alternate sourcing and re-bidding. For scheduling, review from the accountability on
account of MCO, redraw schedule based on revised engineering and procurement due to
lack of workforce and restriction under MCO as over promise may cause compensation and
frustration of contract.

C. Build resilience

Enhance labour health and strengthen guidelines for the stay of labour at site. Under the
SOP, contractors and construction companies are also required to provide transportation for
workers and ensure social distancing is observed as the number of workers at the sites is
minimised to not more than 50 percent of the requirements on normal days. Senior
Minister of Works Datuk Seri Fadillah Yusof said body temperature of labours need to be
checked and screenings for symptoms such as coughing, sore throat or breathing difficulties
must be conducted daily at construction site entrances. Labour health is the long term
financial promise as it can promise the progress of project and avoid from extra medical
insurance that can claim from company due to COVID-19.

In addition, leverage business continuity planning such as implement a digital business

system for remote working include online project monitoring and necessitate Building
Information Modelling ( BIM ) as this investment can make more profit to company with the
utilise of technology.

D. Strengthen contractual provision

For contracting with client, explore mutual risk and explain with client about the
construction related contract about determination of ‘ force majeure’ clause exists to get
the credit from client. Force majeure define as unexpected, unknown or unexpected
circumstances and the existence and consequences of the COVID-19 outbreak which
currently known.

Generally, the right to claim for loss and expenses is a contractual right. There is no
common law remedy to claim for loss and expenses based on Clause 24 of PAM Sub-
contract allows the contractor to claim for loss and expenses. Thus, determine the
contractual right to claim for loss and expenses arising from the COVID-19 MCO. If so, it is
advise to submit your claim based on the terms and conditions of the contract. Here are the
list of things can be claim include demobilisation and remobilisation costs, site staff salaries,
accommodations, rental for forklift, excavator, other plant and equipment, scaffolding and
costs of extended insurance coverage to reduce the lose of company for a ongoing projects.
Summary

Significant near-term cash flow stress is expected in the construction sector due to Covid-
19 impact. The Covid-19 pandemic impact has led to the stalling of activity and this
disruption will have a negative impact on the operating income, profitability, and liquidity
position of construction companies in the short term.

Works Ministry along with the Local Government and Housing Ministry, Malaysian
Construction Industry Development Authority (CIDB), the Department of Occupational
Safety and Health (DOSH), Public Works Department (JKR), and the Department of Irrigation
and Drainage (DID) would be monitoring the situation and act as enforcement authorities to
ensure everyone toes the line. Thus, we should still follow the rules and regulation that
enforce during MCO period as we hope our workers and labours can stay healthy thus it can
still sustain our company’s running in a long term. In addition, protect our image and licence
as any construction company found to have breached any of the rules will be blacklisted and
even charged in court for violating the MCO.

Construction firms that can successfully manage a crisis can quit it with a minimum loss
and can expand their market shares after the crisis. In other words, firms that can escape
from a crisis with zero or minimum damage may strategically have competitive advantages
over existing rivals.
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