How far and often do organizations relocate offices?

Abstract

Relocation is one of the tasks that corporate real estate management is responsible for. They are important events for organizations as there can be a variety of different impacts due to relocation. Previous research has made a distinction between long and short distance relocations. This paper focuses on contributing to the knowledge of the relocation phenomenon. The purpose is to examine the relocation distances and frequencies of companies' HQ relocations. The study uses quantitative data of address changes of Finnish companies. The data is qualitatively analyzed in respect to the relocation distance and the amounts of relocated companies in order to formulate an understanding of how far and often companies have relocated. The findings of this study indicate that the majority of relocations are short distance relocations. Two thirds were relocations of less than ten kilometers. The median relocation distance was less than five kilometers. Further, 30 percent of the companies had relocated at least once during the five and half year period and six percent during the last year of the dataset. In addition, there were some evidence of SMEs relocating more frequently and to a closer proximity than large corporations. The increased knowledge of the relocation phenomenon's scale, volume, and nature supports the development of relocation management, as well as the relocation related service business, thus enabling organizations, possibly, to relocate more efficiently and optimally. The dominant role of short-distance relocations suggests that from organizations' perspective, there are certain underlying drivers for organizations to remain within same region. Also as relocations appear to take place infrequently, sufficient knowledge of relocations within organizations should be ensured case-by-case.The findings of the study give an overall view of the scale and volume of the relocation phenomenon within the private sector in Finland by substantiating the phenomenon. The relocation distances or frequencies of Finnish HQs have not previously been studied in this detail and quantity. The importance of relocation management and workplace change requires more attention as opposed to the mere location selection approach.

Review and assessment of factors affecting the workplace relocation process

“…Location is usually addressed based on considered attributes that will serve the organizational goals (Christersson and Culley, 2018). The location of the workplace is a significant driving factor for relocation (Nitsch, 2006; Rothe and Heywood, 2015).…”

“…Workplaces are considerable capital investments, representing prosperity and welfare of organizations. They serve as a medium for business interactions, hence providing physical nodes of variable means of business conducts, collaborations and work processes (Christersson and Culley, 2018). Economical operability of the workplaces is usually limited to a set of locational capabilities, serving business functions and the human resource.…”

A framework for modeling the knowledge of workplace relocation

“…Initiate the pre-relocation activities (P1) Process definition. The "Initiate the pre-relocation activities" process (node "P1" in Figure 1) involves analyzing business needs (Balbontin and Hensher, 2019), assessment of the existing condition of facilities , assessment of relocation options (Christersson and Culley, 2018), planning for the relocation, allocating the budget needed for the relocation and designing the new premises. This process entails conducting meetings between the business managers and the facilities manager for reviewing the business needs, functional and technical workplace needs and the required workplace characteristics, as well as the legislative and regulatory workplace requirements.…”

“…Analyze business needs for relocation (P1.1). This function will serve to inform the organization on its business needs (Balbontin and Hensher, 2019) for expansion and downsizing (Hills and Levy, 2014), centralization and decentralization (Lee, 2002), facilities requirements for mergers and acquisitions Christersson and Culley, 2018), need to terminate existing facilities and need to change region of operation. The activity starts by the identification of functional (Straub, 2009) and technical workplace Workplace relocation framework needs according to the organizational image and culture (Christersson and Rothe, 2012).…”

“…Hence, investigating the suitability of the workplace to sustain works' output in relation to current and future needs could justify a relocation decision (Remøy et al, 2019). Workplace relocation is an opportunity to introduce elements of change (Bull and Brown, 2012;Christersson and Culley, 2018). These elements are not limited to introducing new ways of work, improving functionality of the workplace and optimizing space usage, enabling for technological transformation but more of a gate for improving employees' productivity, communication, commutes and accessibility (Lahtinen et al, 2015;Zarabi and Lord, 2018).…”