BUSINESS ENVIRONMENT

Business Environment



Business Environment

Introduction

Organizations often respond to challenging environmental conditions, and major shifts in the business environment can make strategies obsolete. Under conditions of intensified competition, the management practices of a small firm, particularly a growth firm, need to have objective information about the formation of the firm's performance. A growing body of research has established levels between management and several contextual or contingency variables, such as environmental uncertainty, product competition, rate of technological change, managerial climate, differentiation, integration, etc. However, there is a lack of research regarding the business environment of growth firms and property management issues.

How does the business environment affect the office spaces of growth firms? This study uses data from a sample of 387 small growth firms in Sweden that was collected by means of a postal questionnaire during two different time periods, i.e. “business cycles”. The small growth firms are assumed - directly or indirectly - to have importance in the development of economies together with the creation and development of new businesses as well as their growth potential. Business activity differs in many aspects between periods of low and high growth of GDP which is also an instrument to discern the “cyclical changes” of supply and demand of goods and services that indirectly, through chain effects, affect living standards of the population and thus the GDP. Some business activities flourish even though society as a whole endures severe times of recession. The aim of this study is to find empirical patterns of property management issues in growth firms according to changing business environment.

The current study focuses on the office areas of growth firms that most growth firms have as common and comparable space. The office area of growth firms can be subject to changes due to various reasons (McGregor and Then, 1999; Blakstad, 2001). The office need might have changed due to the emergence of ICT which enables working at locations other than the workplace, and consequently, less need of space in the firm. An argument for expanding office areas of growth firms is often the employment of staff either permanently or temporarily.

The hiring of temporary staff might have various causes: project orientation of work tasks, uncertainty of the growth of the firm and avoidance of the governmental regulations that entail permanent employment. Some dynamic notions of office space for growth firms are investigated: if a firm outsource some of the office activities it is reasonable to assume that the need for office space decreases, which is common thinking in the space management of today (Duffy, 1997; Worthington, 1998). The acquisition of (both horizontal and vertical integration) other firms entails the changing needs of office space; double functions such as reception and secretary services can then often be subject to the rationalization and reduction of the total office space.

Thus, our research question is:

RQ1. How do small growth firms respond to changing business environment regarding property management issues?

Business environment and firm behaviour

The environment is a term used to explain a number of factors ...