Fuzzy multicriteria decision‐making tools for selecting a professional property management company

• Author: Shih‐Tong Lu,Kai‐Wei Wu,Dong‐Shang Chang,Jiun‐Yi Shiu
• Published date: 01 July 2019
• Date: 01 July 2019
• DOI: http://doi.org/10.1111/itor.12356

Intl. Trans. in Op. Res. 26 (2019) 1527–1557

DOI: 10.1111/itor.12356

INTERNATIONAL

TRANSACTIONS

IN OPERATIONAL

RESEARCH

Fuzzy multicriteria decision-making tools for selecting

a professional property management company

Jiun-Yi Shiua, Shih-Tong Lub,c, Dong-Shang Changcand Kai-Wei Wud

aDepartment of Banking and Finance, Kainan University, Taoyuan,Taiwan

bDepartment of Logistics and Shipping Management, Kainan University, Taoyuan, Taiwan

cDepartment of Business Administration, National Central University,Taoyuan, Taiwan

dExecutive Master of Business Administration, Kainan University, Taoyuan,Taiwan

E-mail: jiunyi@mail.knu.edu.tw [Shiu]; stonelu@mail.knu.edu.tw [Lu]; changds@mgt.ncu.edu.tw [Chang];

hamletway@Yahoo.com.tw [Wu]

Received 19 June2015; received in revised form 11 June 2016; accepted 3 September 2016

Abstract

This study develops a model to assist a condominium committee in selecting an appropriate property man-

agement company. This model adopts the literature reviews and expert interviews to construct the suitable

evaluation criteria of property management companies, then applies the fuzzy linguistic preference relations

to determine the relative weights of evaluation criteria, and adopts the fuzzy technique for order preference

by similarity to ideal solution (TOPSIS) and fuzzy VlseKriterijumska Optimizacija I Kompromisno Resenje

(VIKOR)approaches to rank the alternatives for the condominium committee.Additionally, a condominium

in Da’an District of Taipei is used as an example of how an appropriate property management firm can be

selected using these two models. The resultsof fuzzy TOPSIS and fuzzy VIKOR are compared and discussed

to understand the properties of selecting alternatives. The model proposed here allows the condominium

committee to select professional property management firms systematically, making it highly applicable for

academia and practices.

Keywords: professional property management company (PPMC); fuzzy linguistic preference relations (fuzzy LinPreRa);

fuzzy TOPSIS; fuzzy VIKOR

1. Introduction

The characteristics of high-density development in Taiwan have led to a drastic increase in urban

land use in recent years. High rises and centralized community type housing in large condominiums

are the latest development trend. Taiwan issued the “Condominium Administration Act” in 1995,

aiming to reinforce condominium property management and enhance and maintain better living

quality through the establishmentand operation of management bodies.For high rises and large con-

dominiums in Taiwan, in general, individual units (unit in a condominium that is owned separately

C

2016 The Authors.

International Transactionsin Operational Research C

2016 International Federation ofOperational Research Societies

Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St, Malden, MA02148,

USA.

1528 J.-Y. Shiu et al. / Intl. Trans. in Op. Res. 26 (2019) 1527–1557

and used independently) of property and designated private areas (shared areas of a condominium,

which are designated by an agreement to be used by specific unit owners) for individual use are

managed by individual residents, depending on the property area entrusted and the level of autho-

rization, management of the shared areas (parts of a condominium other than the individual units,

and affiliated buildings not owned by any specific individual, and for common use) of the property,

and management of the designated shared areas (individual units in the condominium that are des-

ignated for common use byagreement) for common use can be categorized into three major models:

fully outsourced management, owner management, and partially outsourced management (Hung

and Chang, 2002). As the internal structure of construction and facilities becomes more complicated,

the maintenance of certain facilities requires professional skills of all sorts. The owner management

model often cannot meet the necessary requirements to manage buildings. Therefore, to maximize

the utilization of buildings and ensure the proper and safe usage of all facilities, the most com-

mon model among the three is the fully outsourced management model. The professional property

management company (PPMC) has gained popularity because of this increasing market demand.

Lin et al. (2004) reported that the problemsof property management, among others, are as follows:

a low participation ratein ownership clarification meetings, a low reporting ratein the establishment

of condominium management committees (CMCs), an insufficient supply of PPMCs and a lack

of professional expertise, low participation rates in community voting and selection activities, the

high complexity of condominium property management, unmatched administrative penalty power

and the responsibility of the CMC, and understaffing among related central and local government

officials. Moreover, the selection of a PPMC is usually decided by the CMC, which is selected by all

the residents. As the committee consists of members fromdifferent backgrounds, it is a challenge to

adopt a fair and effective evaluation and selection model that enjoys consensus among members of

differentbackgrounds to select an adequate PPMC that meets the requirements of the condominium.

To address this challenge, this paper attemptsto use the management system of condominiums and

the operations of management bodies as the foundations on which to create a scientific, efficient,

and effective PPMC evaluation model to provide a decision-making tool for CMCs.

When CMCs are in the process of selecting a PPMC, they should not choose solely based on the

price or on a few selection criteria. They should examine various aspects of the candidate PPMCs,

including business operation, service capability, and service quality. This recommendation assumes

that such a selection process utilizes multiple criteria decision making (MCDM). Therefore, this

paper begins with an introduction to the development of condominium management and then

creates an evaluation system for PPMCs via a literature review and expert interviews. Based on the

established evaluation system, we apply the theory of fuzzy linguistic preference relations, fuzzy

LinPreRa, proposed by Wang and Chen (2008), to compare the relative importance of the selection

dimensions and criteria. Subsequently, the linguistic variables incorporate with technique for order

preference by similarity to ideal solution, TOPSIS, developed by Hwang and Yoon (1981) and

VlseKriterijumska Optimizacija I Kompromisno Resenje, VIKOR, developed by Opricovic and

Tzeng (2002, 2004) as the ranking procedure. That is, we apply the fuzzy TOPSIS and fuzzy VIKOR

as the two evaluation models, to evaluate and rank the PPMC candidates, to come as close as

possible to the ideal alternative during the process of evaluation and ranking. In addition, we also

compare the results of these two methods. It is the objective of this study to apply theories to

build a scientific evaluation model that will be capable of assisting CMCs in finding a suitable

PPMC.

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2016 The Authors.

International Transactionsin Operational Research C

2016 International Federation ofOperational Research Societies