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Article
Publication date: 6 February 2021

Howard Cooke, Rianne Appel-Meulenbroek and Theo Arentz

The purpose of this paper is to identify the variables that influence corporate real estate (CRE) decision-making and gauge their relative importance to each other, thereby…

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Abstract

Purpose

The purpose of this paper is to identify the variables that influence corporate real estate (CRE) decision-making and gauge their relative importance to each other, thereby understanding the consequent challenges/implications for CRE managers (CREM’s).

Design/methodology/approach

Interviews were undertaken with experienced CREM’s using the causal network elicitation technique to create decision networks for the variables they considered for the specifically defined scenario: dealing with surplus property from a change of business strategy. These networks illustrate the complexity of the mental representations required for the realignment of the CRE portfolio. The key variables are more extensive than alignment theory suggests, namely, financial stakeholders. Additional variables identified include risk, lease accounting, costs, financial analysis, business metrics and motivational drivers. The latter indicates the importance of self-esteem and peer recognition for CREM’s and financial benefits for the C-suite. Accordingly strategy alignment needs to incorporate CRE both in terms of strategy creation and implementation.

Findings

These networks illustrate the complexity of the mental representations required for the realignment of the CRE portfolio. The key variables are more extensive than alignment theory suggests, namely, financial stakeholders. Additional variables identified include risk, lease accounting, costs, financial analysis, business metrics and motivational drivers. The latter indicates the importance of self-esteem and peer recognition for CREM’s and financial benefits for the C-suite. Accordingly, strategy alignment needs to incorporate CRE both in terms of strategy creation and implementation.

Originality/value

This research appears to be the first that looks in detail at the mental representations used by decision-makers while making CRE decisions.

Details

Journal of European Real Estate Research , vol. 14 no. 1
Type: Research Article
ISSN: 1753-9269

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