Alacrity Housing - Ethics First
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Case Details:
Case Code : CGOV002
Case Length : 12 Pages
Period : 1990 - 2001
Pub Date : 2001
Teaching Note : Available
Organization : Alacrity Foundations Pvt. Ltd.
Industry : Housing and Construction
Countries : India
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"Unfortunately today, the phrase ethics in real estate may
often qualify as just such an incongruity. Billions of dollars and many decades
of formal and informal training have made commercial real estate practitioners
better salesmen and more effective deal makers, but relatively little time,
attention or dollars have been invested in making ethics in real estate a less
contradictory phrase."
- Riis Christensen in 'Ethics in Real Estate: an Oxymoron?'
"Almost every (government) department that we interact
with has stopped asking for tips or bribes from Alacrity. In fact, we have
witnessed the delightful experience of an old hand of the department telling a
new one - Why waste your breath, they are misers - you won't get a paisa from
them!"
- Amol Karnad, Chairman, Alacrity Foundations
Unethical Practices in the Indian Housing Industry
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In India, the housing and construction sector accounted for about 40-50% of the
capital expenditure on infrastructure projects in a year. The sector contributed
significantly to the economy, enhancing GDP, increasing income and generating
employment. The construction activity accounted for about 50% of the development
outlay in India.
Till the late 1980s, the housing and construction sector was not given the
status of an industry. The sector required a scientific approach for the
management of materials, machines, manpower and money, and general management
discipline to become organized and get the status of an industry.
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With the formulation of the National Housing Policy (NHP) in 1989-1990, the
construction business started to be recognized as an industry. In addition,
the government lost its monopoly status in the industry; instead, it now
became a facilitator and monitor of the industry. Soon after the NHP was
announced, the industry grew alarmed at the unethical practices followed by
many people in the industry.
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Because of this unethical behavior, there was crisis of confidence between
the supplier and the consumer. The unprofessional and unethical practices
covered a whole range of activities in the industry. These included illegal,
unauthorized and unsafe constructions; black money transactions; time and
cost overruns; exploitative profit margins etc. Bribery was common in the
industry since many corrupt government officials demanded huge amounts for
issuing permits and clearances for drainage, water and electricity
connections, and no-objection certificates etc.
Time and cost overruns were also very common. The builders never seemed to
give possession of the flat/house on time. |
Alacrity Housing - Ethics First
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