Investment and management in Energy-saving construction materials market in contemporary Taiwan (II)

Investment

Investment is a meaningful word linking with finance and economy. Bakhoum (2011) define it as the the means to acquire money or other forms of rewards with an accumulated amount of asset. Technically, investment means to put something in some place. In the financial context, it can also be defined as putting money in a profitable aspect, and after a length of time the investor could acquire more money.

Typically, investment is only meaningful when it is put in the right place. As a result, the more time the investor wait, the more possible it is to acquire a stable and continuous income stream. All in all, it is a means to accumulate profits. When put in a narrower scope, investment is a kind of behavior that is widely seen in firms through many financial actions, such as buying stocks and bonds or providing

funding for projects in a market. This research adopts the second one. Moreover, investment can be direct or indirect depending on the investor's situation and the investment environment. To make an investment profitable in the future, the investor also needs to know how to evaluate the risks and options, so that the return on investment could be optimized.

Management

Management is a process in which it is designed to systematically plan, organize, control and coordinate the resources that an organization or industry has. For this research, it is that of the ESCM industry in Taiwan. The most fundamental theory about management is that it must be guided by a both experience and science. For each organization or industry is different, how the management is done is subject to both external and internal factors. The same can be said about the goals involved for managerial planning (Garas et al, 2009). Brockmann and Girmscheid (2007) claimed that management has changed a lot since its conception. Although there are rules to follow and patterns to conclude, one must not stick to a fixed formula. In addition, the main objective of many management tasks is to help the industry to maintain a stable performance in the face of changes. For the companies that are operating in it, they manage their businesses operations, financial dealings and partnerships so that they would not have too many costs to cover in the future. Especially, in the construction industry, the output and input are the most important management goals (Murakami et al, 2009). For example, the consumption of personnel, capital, materials and natural resources in total reflect the management effectiveness.

Energy-saving construction materials market in Taiwan

Energy-saving construction materials (ESCM) are the new popular products of the current construction market in Taiwan for its features in preserving energy and reducing environmental pollution (Nikje, 2012). As of now, the design of most types of ESCM follows the principle of being compatible with the regions climate and the international standards of energy preservation. Under the condition that the buildings or houses functions are neither too hot nor too cold, the structure of the overall design must be sure there is a high efficiency in saving energy. That is, the construction materials in this case, including the surface, rooftop, exterior wall and windows and floorboards can be used efficiently in conjunction with land, water, electricity and other resources (Baloyi and Bekker, 2011). There are three important standards of the energy-saving construction materials in the current Asia Pacific market. The first one is that the materials must all possess functions to preserve interior heat, which is also what the buyers are looking for. In the international market, this has already been demanded throughout the public and private practice of construction (Brockmann and Girmscheid, 2007). The second standard is that the energy cost in terms of water, electricity or other resource must be lower than that specified by the environmental authority in that region or country. The third standard is that the design in terms of appearance and quality and functions must follow the absolute specifications for one particular product type.

The investment in the production of ESCM in Taiwan

Due to the special nature of the energy-saving construction materials, it is constantly being improved or upgraded, there are many special considerations for the investment in their production as well (Bakhoum, 2011). The biggest principle is that the investment should not be made in any obsolete product types. Whether for the government or companies, this principle holds up equally throughout two decades of ESCM market in Asia Pacific. What is more, the return on investment concerning any new types of ESCM is essentially the reflection of the amount of energy saved and calculated in the form of profit. According to Chang and Ming-Chi (2011)’s survey on Asian companies dealing with and buildings using ESCM, it was found that the expenditure of operations and maintenance was roughly nine times of the construction costs. Supposing the buildings life cycles are within 40 years, it means their ratio to the construction costs is roughly 42%. This is concerning ratio because the management and investment decisions can be seriously impacted due to the little room for profit.

The management of the ESCM market in Taiwan

According to Franklin Associates (2011), the consumption of ESCM in the Asia Pacific is done by the general public and the business organizations. Therefore, its management must follow the developmental features and dynamics of both of these entities. In order to produce a systematic management environment, the policy makers must be aware of the external and internal business environments, and how they interact to impact on the production, demand and supply of the ESCM products (Hopkinson, 2007). In light of the dynamic and behavioral management theory, the current state of any market is the direct result of the environment in which it is active and the behaviors of the players, such as the suppliers and manufacturers of ESCM. In other words, the business environment and the player’s behaviors join together to shape the general conditions of the management environment. Under this premise, the management methods are rooted in the idea of how to optimize the interaction between these two factors. Nonetheless, Bakhoum and Brown (2014) claimed that the impact from the environment and behaviors are crucial because it affects how the management is designed to regulate the market. To that end, the management is done in the form of behavior or pattern analysis of the key market players. By determining the general and special patterns, it is more possible to attribute what market elements have led to the success or failure in investment.