Crisis Leadership and the Learning Organization in Emaar Properties (Research Paper Sample)

Crisis Leadership and the Learning Organization in Emaar Properties
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Abstract
The Emaar Company was established by Muhammad Alabbar in 1997. The company deals with real estate and controls the largest property development market in Dubai. During the 2008 global financial crisis, it was the only property company in Dubai that recorded a profit. Alabbar used inventory write-down policy that saw J L Homes of the US being written off. His leadership style has developed the company, thereby making it listed on Dubai Financial Market in 2006. Its investments are not only located in the United Arabs Emirates but also abroad. Emaar has a close relationship with the royal family, and major buildings built by Emaar in the country are a pride of the state, for example, Burj Khalifa.
Keywords: ISO, real estate, Emaar
Crisis Leadership and the Learning Organization in Emaar Properties
Introduction
The Emaar Company experienced financial crisis in 2008. Still, approaches used by the management were efficient and helped the company to remain profitable in 2008. The leadership of the organization played a great role in ensuring that the corporation did not collapse. The learning organization in Emaar Company is achieved through teamwork to develop new ideas. The company is driven by the innovation which is invested. It also prepares its innovators to become the future leaders. The paper mainly discusses crisis leadership and the learning organization in Emaar.
Background
Emaar Properties deals with real estate development in the UAE. Founded in 1997, the company is a public joint-stock company. Under the vision 2010, it grew to become one of the biggest real estate companies in the world. It was listed on the Dubai Financial Market in March 2006 CITATION Aam09 \l 1033 (Dawawala, 2009). The Emaar Company has developed through joint ventures and strategic acquisitions. Some of the companies it acquired in 2006 include John Laing Homes of the US and Hamptons International of United Kingdom. In 2007, Emaar invested $20 billion in residential projects in Algiers. In addition, it entered into a joint venture with Tatweer’s Bawadi investing $16 billion in hospitality in Dubai. With vast investments, the company diversified its profits to handle possible risks.
Between 2001 and 2007, the company had completed about 21,000 residential units and had passed ownership to proprietors. It has won some awards due to its significant contribution in the provision of affordable residential houses, for example Mohammed Bin Rashid Al Maktoum Business Award CITATION Gul16 \l 1033 (Gulf Business, 2016). Emaar was also declared as the property company of the year in 2007 consecutively. The company holds Certification for quality and environment management.
In May 2009, Emaar Properties launched the largest shopping mall in the world, the Dubai Mall. Other major property development projects include Dubai Fountain and Burj Khalifa (Emaar, 2010). The 160 storeys building was opened in 2010. In 2013, the company started several projects in Downtown Dubai including Burj Vista, Vida Residence, and Boulevard Point. In October 2014, Emaar started six residential towers at Dubai Creek Harbor which are to be unveiled in 2017 CITATION Abd12 \l 1033 (Alawi, Akhtar, & Al-Quati, 2012). Emaar has invested internationally in Egypt, India, Syria, Turkey, Pakistan, and Saudi Arabia. International projects have contributed to company’s stable and world renowned image.
Body of Report
According to Emaar (2012), company’s profit dropped by 15 percent in 2008. Compared to 2007, the annual revenue dropped from Dh17. 9 billion to Dh16.0 billion. Still, in the same year, the company lost 85% of its market value. Earnings per share dropped from Dh1.08 in 2007 to Dh0.92 in 2008 CITATION Iss09 \l 1033 (John, 2009). The major reason of company’s profit drop is the global financial crisis. The founder and chairman of Emaar, Muhammad Alabbar, observed that to mitigate negative impacts, the company had to maximize productivity by increasing geographic expansion and business segmentation. Emaar property adopted conservative accounting policy in the fourth quarter of 2008. Due to an unprecedented economic crisis, the Emaar recorded inventory write-down in JL Homes of Dh0.919 billion. With timely measures taken, the company managed to prevent further failures.
The real estate market in Dubai was slowing down in 2008. The state of the global financial climate discouraged the purchase of residential houses. As a result, towards the end of 2008, the company wrote off J L Homes at Dh1.773 billion and a goodwill amounting to Dh2.523 billion CITATION Iss09 \l 1033 (John, 2009). However, Alabbar handled the challenges of the global crisis by steering the company to become the only company making profits in Dubai. For instance, in 2008, Emaar reached milestones in its growth by opening several developments like Dubai Mall and Dubai Marina.
Alabbar explored structures, plans, actions, and changes that strengthened Emaar during global financial crisis. The learning organization that he set allowed the management to practice the art of change. Emaar became a vibrant learning organization through shared vision, team learning, and change of mental models CITATION Bus17 \l 1033 (Business Bureau , 2017). Through his leadership experience, Alabbar designed learning activity that addressed the financial crisis. Through a reflective dialogue, he inspired shareholders to come up with a collective wisdom. Emaar offered a framework for change guided by the vision and values of the organization. Organizational strengths and assets were strategically explored to prevail through the financial crisis.
Evaluation and Discussion
Emaar was able to address challenges of the global financial crisis by taking measures that enabled it to emerge as a leading real estate developing. For the two decades that the company has been in the market, it has pioneered in Middle East real estate industry CITATION Abd12 \l 1033 (Alawi, Akhtar, & Al-Quati, 2012). It has provided residential houses at affordable prices, developed iconic shopping malls and prestigious hotels. Emaar has changed architecture and landscape of Dubai. The excellent developments established by Emaar have also enabled local communities to develop a sense of owning residential houses.
According to Alabbar, the company is strategizing to digitalize its market. All aspects of its operations are digitalized to enhance efficiency and productivity and standardize customer service delivery. Alabbar wants to reach as many customers as they can due to a shifting market landscape. The company has delivered about 41,500 residential houses globally since 2001 CITATION Sim10 \l 1033 (Kerr, 2010). The company enjoys a good relationship with Sheik Muhammad, the ruler of Dubai. According to Alabbar, were not Sheik Muhammad, the Burj Khalifa would have had ninety floors, 73 more were added. Abu Dhabi bailed out Dubai in 2008 during the global financial crisis. Burj Dubai was renamed to Burj Khalifa to honor Sheik Khalifa, the ruler of Abu Dhabi. It is clear that Emaar symbolizes and reflects current UAE culture and aspirations in many ways.
Finding, Suggestion, and Conclusion
During the global financial crisis of 2008, Dubai's property market collapsed, but Emaar did not suffer. The royal family intervened because it controls a stake of 30 percent. The Emaar was able to increase investments in shopping centers and posh hotels while Nakheel and Dubai Properties s