Do Corporate Real Estate Executives Trust Their Service Providers? Some Evidence from Australia
||Do Corporate Real Estate Executives Trust Their Service Providers? Some Evidence from Australia
||10th European Real Estate Society Conference (10-13 June 2003) Helsinki, Finland
||One of the responses to the search for corporate real estate (CRE) management competence by organisations under pressure to perform, has been to outsource many or all of the services CRE provides to the organisation. In many cases, the outsourcing has been driven by the political need to get assets and bodies off the annual report, rather than by a measured determination to manage the real estate to achieve the best strategic results for the organisation. In the middle of this activity is the CRE manager, who is at one extreme looked upon as a resource who can help overhaul the real estate operations in line with corporate objectives, and at the other, is seen as expendable. Not surprisingly, CRE managers have tended to adopt a variety of attitudes to outsourcing, ranging from being the chief instigators to being leaders of staunch guerilla resistance. The CRE managers' attitudes to outsourcing have subsequently been formed by their experiences in dealing with service providers, who are themselves, a very mixed bag of attitude and competence. Of course, "outsourcing" is rather a catch-all term. It is argued that the problem is really about organising CRE work in the most effective and efficient manner, on a continuum ranging from the pure market transaction of the spot purchase, through traditional contracting, preferred provider arrangements, exclusive provider arrangements and strategic alliances, to the non-market arrangements of the firm. As we progress along that continuum, the discipline of the market is increasingly replaced by a reliance on trust and cooperation. The question is, does the attitude of the CRE manager to service providers and outsourcing generally, militate against the organisation's adoption of the optimum method of obtaining CRE services? The paper, which draws on surveys and case studies from the author's doctoral thesis research in the private and public sectors, provides some answers to that question. It examines the relationship between the attitudes of CRE managers to outsourcing/service providers, and the arrangements that organisations make to obtain their corporate real estate services.
||Corporate real estate (CRE); corporate strategy; outsourcing; alliances; theories of the firm; trust
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||Session 7, Corporate Real Estate
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