Can anyone recommend methods that I could use to effectively analyse a research work which focus is on measuring the impact of CRE on organisational performance?
It is rather difficult to measure organisational performance and in particular cause-effect relationships between Real estate interventions and organisational performance, but we try to do so in our research at the Delft University of Technology, see the paper of De Vries et al (2007) in the Journal of Corporate Real Estate and the book "The added value of Facilities Management" (Jensen, van der Voordt, Coenen, 2012). For further information see www.tudelft.nl/djmvandervoort
Hi Mr. Oladokun,
I read your question and would recommend to contact Prof Pfnuer from the University of Darmstadt (Germany). He is one of the leading scientist in that research field. Unfortunatly, the homepage is not in English, but don´t hesiate to contact him.
http://www.real-estate.bwl.tu-darmstadt.de/real_estate/index.de.jsp
Kind regards,
Michael Dinkel (University of Kaiserslautern, Germany)
Part of the challenge is answering this on a theoretical basis or a practical one.
There are issues in defining organisational performance, as noted in a previous answer and then there is dealing with the real estate performance. The organisational performance can be construed entirely in financial terms such as impact on financial statements, or more holistically using something like Kaplan and Norton's Balanced Scorecard. For the real estate aspect, part of the challenge is that CRE performs up to five roles for organisations. One is as a corporate asset, a second is as a corporate investment, a third is as a factor of production, a fourth is as a real estate commodity and the fifth is the contribution to the public realm. Each of these have different bases of performance and measurement that may be well established or not. There are some reasonably well established ones for the corporate asset and investment from corporate finance theory. It is as a factor of production that it gets very difficult and the methods that Theo van der Voordt is talking about have considerable application. Of the others, commodity can be assessed in terms of the difference between balance sheet asset value and market value. It could also be assessed in terms of the difference in these as a result of real estate development. The public realm factor is not fully recognised yet within CRE theory and probably needs a mix of economic and urban planning theory performance measurement.
At a practical level, I would suggest refer to the basis of performance assessment that exists within the organisation under consideration and apply this to to the real estate. It may not fully capture all the dimensions noted above but would, at least, allow communication about the real estate performance on the same basis as the organisation, albeit with scope for improvement along the lines suggested above
I would tend to agree with the analysis provided by Chris Heywood, it is relatively easy to measure some of the impact in terms of $/m2 of cost or production. Some of the less obvious impacts relate to the way in which CRE supports the business through enabling greater efficiencies; these can include workplace design and systems of working which serve to increase employee satisfaction with the internal environment resulting in higher productivity, less absenteeism and retention of key employees. Each of these can be used as a measure of CRE impact but are also inexorably connected with the overall organisational management effectiveness.
Please try and contact Anna‐Liisa Lindholm (PhD). I believe you can have some assistance.
Dear Timothy
You can find a review of the older literature at https://www.researchgate.net/publication/271019290_Does_property_benefit_occupiers_An_evaluation_of_the_literature?ev=prf_pub
Chris Heywood is quite right there are many perspectives on CRE. There is however some, though now old, evidence that corporates whose business is not real estate can get better returns by leasing.
As a factor of production the contribution of the estate can only really be assessed in terms of measures meaningful to a particular occupier. The most dramatic impacts are usually seen when there is a significant change. As well as churn and retention measures EC Harris found that their new ECHQ building yielded improvements in billable hours and rates achievable: measures critical to a professional service business. Colin Stuart describes them in Managing Organizational Ecologies https://www.researchgate.net/publication/264557039_Managing_organizational_ecologies_space_management_and_organization?ev=prf_pub
As Chris says measures of CRE cannot be fully separated from measures of effective management. It is a category error to assume that they should be.
Avoid cost/m2. It encourages the holding of too much low quality estate. Are per FTE and net user satisfaction provide better generalisations. Have you examined the Leesman Index?
Technical Report Does property benefit occupiers? An evaluation of the literature
Book Managing organizational ecologies: space, management and organization