The decision‐making behaviour of office occupiers

Abstract

Typically, studies of the occupiers' choice of office property have focused on the influence of location. Following the standard behavioural assumptions of neo-classical economics, the firm is assumed to make the rational profit-maximising decision on the basis of full information. All firms are implicitly assumed to be homogeneous. This general approach eliminates much of the complexity from the decision-making process. This paper uses evidence from a survey of over 100 office occupiers in Edinburgh to examine the influence of a broader range of factors on individual firms' choice of office. Using logistic regression techniques on the survey data, the empirical analysis shows that by taking account of heterogeneity of firms, it is possible to identify the type of property occupied. Firms' decisions are closely related to their size, business type and whether the market they serve is local, regional or national.

An Examination of Business Occupier Relocation Decision Making: Distinguishing Small and Large Firm Behaviour

“…Leishman and Watkins (2004) confirm that the standard behavioural assumptions of neo-classical economics, rational profit maximising on the basis of full information, that form part of rational choice equilibrium (RCE) economics, eliminates much of the complexity from the decision making process.…”

“…There is a tendency for corporate real estate research on this topic to concern itself with the activity of large companies and organisations, operating in national or global markets, and to focus on the factors that influence their choice of location (Leishman et al 2003, Leishman andWatkins, 2004).…”

Forecasting office rentals in Gaborone in the short and long term

“…The rent function is invariably represented by specifications that consist mainly of location characteristics of offices. On the demand side, the assumptions that firms are rational and homogenous and that it has perfect information in its location choice decision were also increasingly questioned by researchers in behavioural studies, Wyatt [22]; Leishman and Watkins [23]; Leishman et al [24].…”

“…The behavioural approach to analysis of office accommodation determinants has advocated the importance of studying the heterogeneity of firms and its decisions in the space selection. Leishman and Watkins [23] surveyed 119 office occupiers in the Edinburgh office market. They classified the office properties of the sample occupiers into four homogeneous clusters, based on the physical attributes of the properties, and then they showed that the choice of the office type by the firms is dependent on the characteristics of the firms, such as its size, type of business and its market coverage -either locally, regionally or nationally.…”

Short-distance relocation management approaches: 5 Case from Finland

“…Tendency to relocate has been shown to decrease with the organization's size (Brouwer et al, 2004) and the choice of property type depends on the type and size of the organization and the extent of their market (Leishman and Watkins, 2004). Studies also show that, depending on the organization, the decision making processes apply different sophistication levels (Greenhalgh, 2008;Leishman and Watkins, 2004) and that, for example, smaller organizations rely more on external contacts and networks (Greenhalgh, 2008). Further, the relative importance of different location, building, and space attributes in decision-making has received a good deal of attention.…”