Business strategy and property strategy – how strong is the linkage?

Abstract

Purpose

The purpose of this research is to investigate the strength of the link between overall business strategy and supporting property strategies in New Zealand organizations.

Design/methodology/approach

Most organizations develop strategic business plans as a foundation and focus for decision‐making. These business plans ideally take account of the existing and potential operating environment and the strengths and weaknesses of the individual organization. An organization's management of its property assets can be either a strength, or a weakness, but does this aspect figure prominently in many organizations' strategic business plans? This research utilized e‐mail surveys of 313 organisations in New Zealand to determine the strength of the linkage between their overall business strategy and their property strategy.

Findings

Nearly all organizations surveyed had a clearly defined overall business strategy but many did not put corresponding effort into real estate strategies. Even amongst those organizations with a property strategy, significant weaknesses were found in the linkage between this strategy and overall business strategy.

Research limitations/implications

Further work can now be undertaken to measure the performance of organisations that have a strong connection between overall strategy and property strategy compared to those that do not. This may determine whether a strong connection does in fact correlate with business performance. If so, both academic and industry attention in New Zealand can then be focused on determining why some organizations' consideration of property as part of their overall business strategy is either non existent or ineffectual.

Originality/value

Corporate Real Estate Asset Management (CREAM) research in a New Zealand context is limited. This paper examines relationships that earlier literature has determined are important, in a New Zealand context. It highlights differences in the way New Zealand organizations operated and provides a basis for further research that should lead to improved organizational performance.

Citation

McDonagh, J. and Nichols, G. (2009), "Business strategy and property strategy – how strong is the linkage?", Journal of Corporate Real Estate, Vol. 11 No. 4, pp. 213-228. https://doi.org/10.1108/14630010911006701