A framework for the strategic management of long‐term assets (SMoLTA)

Abstract

Managing long‐term infrastructural assets, such as real estate, buildings and equipment, is becoming more topical at the strategic level. Such assets are reported to comprise 25 per cent or more of corporate assets and occupancy costs represent 40‐50 per cent of net operating incomes and are often the third most expensive item (behind labour costs and IT). Managers with little experience of the strategic management of long‐term assets (SMoLTA) often find this a challenging agenda. This paper reports exploratory research on how managers are addressing the SMoLTA and is drawn from the views of senior managers in 25 organisations of varying sizes from the public and private sectors. In addition, the paper uses data from research on management practices in four case companies that have excellent reputations in this field, synthesising the findings into algorithmic form. This algorithm is developed and presented as a tentative framework which aims to help facilitate managers in aligning corporate and infrastructure strategy.