Practice vs theory: short-term financials trumps long-term value creation

Abstract

Purpose The aim of this paper is to present findings from the research project “Oscar – Value for Owners and Users of Buildings” and investigate two research questions: What in early-phase planning of real estate projects and facilities management creates value for owners and users of buildings? Do respondents in private enterprises, public administrations and hybrid organizations have different priorities during early-phase planning of buildings and facilities management concerning which factors creates value for owners and users of buildings? Design/methodology/approach This study is based on a national survey (N = 837) among Norwegian owners and users of buildings where the respondents report their emphasis on economic, social, environmental and physical aspects during early-phase planning of buildings. The data have been analysed through descriptive statistics, ranking of means and one-way ANOVA supplemented with bootstrapping. Findings Many Norwegian owners and users of buildings emphasize short-term financials and seem to overlook recent research concerning what creates long-term value such as life-cycle planning and the buildings’ elasticity, flexibility, generality. Respondents employed by private enterprises seem to have shorter time horizon than respondents employed by hybrid organizations and public administrations. Research limitations/implications Further empirical research in Norway and preferably also in other countries, based on surveys with large random samples of respondents is needed to establish whether it is possible to generalize this study’s findings. Practical implications Increased emphasis during early-phase planning of buildings on aspects creating long-term value can significantly increase the buildings’ value creation for owners and users. This article indicates some attention areas and possible strategies during early-phase planning to improve the long-term value creation for owners and users. Originality/value This is an empirical study (national survey) with particular emphasis on how early-phase planning of buildings can contribute to value creation for users and owners during the buildings’ use phase.