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Corporate Solutions at Jones Lang LaSalle 2001 Case Solution
Jones lang Lasalle is an investment management service company, the company is specialized in real estate, as they are the world’s leading management service company of commercial real estate. The case is based on the organizational challenges that the company faced and how they plan to make the change to tackle the challenges. Real estate has undergone a significant change which forced the companies to compete increasingly on price. Companies started with global expansion and started to take over the market, they started to outsource their business unit to third-party providers which benefitted them. JLL’s organizational structure was not suited for the changing marketplace, which was stopping the company from working. The culture of separation and autonomy was not working which forced the company's largest account BofA to outsource its commercial real estate management and was going to pay other service providers. The company tries to change its organizational structure so it can provide integrated service, the new international-level organizational structure requires cross-functional communication within the company, and more clients focus on work to achieve the goals of the company. CSG group was made for helping the company build internal communication and work in a team to achieve the goals. The group was led by Peter Barge, who introduced a new management system to fulfill the mission of the company.
Following questions are answered in this case study solution
What competitive changes do support the reasons for introducing a new organizational form?
Discuss the current organization structure. Do you believe it would be appropriate to tackle the new competitive challenges JLL is facing? Motivate your answer.
Discuss the structure after restructuring. Do you believe it is appropriate or not? Make sure you clarify pros and cons when motivating your answer.
Being Peter Barge, how would you plan the change management process supporting the organizational change that is occurring at JLL? What are the resistance to change that you are going to face, and how could you overcome them?
Discuss to what extent the (national) cultural diversity of JLL may affect the replication at international level of an organizational structure which require strong collaboration, cross functional communication and client focus?
Case Analysis for Corporate Solutions at Jones Lang LaSalle 2001
1. What competitive changes do support the reasons for introducing a new organizational form?
The main competitors that JLL has in global real estate are CB Richard Ellis (which provides property management, investment banking, and corporate services), Cushman & Wakefield (providing industrial, retail, and technology property) Trammell Crow (providing the clients with project development management and facilities management), and Grubb & Ellis (offers strategic planning and asset management services). The companies mainly focused on increasing commercial real estate which cause JLL to make changes in their structure so basically due to an increase in the competition the companies tried to make more sales by providing a broader range of products and services, this was done to reduce the total cost. Other reasons for doing this were to spread overhead and increase the volume of the company’s transactions. Companies tried to differentiate their offerings to the customers as they focused on integrating the services so the customers are offered more, which will increase the profit volume. Another reason was that companies started to expand their estate business oversea, and they tried to outsource the real estate business to a third-party provider with the plan of consistent service provided worldwide. Companies' plan of giving departments to third-party providers was to ensure that there is a decrease in management cost of real estate and inefficiencies, it also helped in leveraging the expertise of the service. The companies also got involved in technological innovation that allowed the companies to demand curve and expanded their geographical footprint. The companies also started accessing the information on the local market where the physical presence of these firms was difficult. These changes caused the companies to extend nationally and globally so it became difficult for the company to compete. The main reason was a different culture that JLL had which created clients to go away and hire others, the hiring caused the competition to work more and change the dynamics. BofA was leaving because they were not getting their service done properly from JLL due to their separate unit culture, so competitors did teamwork while their work which created a challenge for the company.
2. Discuss the current organization structure. Do you believe it would be appropriate to tackle the new competitive challenges JLL is facing? Motivate your answer.
The organizational structure of JLL was based on each unit working on its own and communicating directly. Every business unit has its team, and they are working for the unit, so the company was having a culture of separation. The organizational structure of JLL does not support cross-function communication and client focus as units are just supposed to do their work. The company was standing with the support of human resources, it's marketing, and mainly the global client services. The company directly was taking over all the work like tenant representation, project development management, corporate property service, and leasing & management. Land, retail, and capital markets were also in the hand of Jones Lang Lasalle Americas. JLL Americas was created in January 2001 so they can stimulate collaboration between the business units and end with independence. I don’t believe that this structure will be able to tackle as it operated as autonomous service lines as they are not fully suitable for standing with the development of the integrated services. The communication that JLL had in the company was poor as all the business units were working on their own directly. The business unit faces difficulties, and the service offerings just stay what they were. The focus should be on collaboration between the business units that JLL’s organizational structure is not giving as it is more of independence and autonomy.
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