How far Finnish HQ’s have relocated? – The role of short distance relocations in Finnish HQ movesPresentation at ERES 2014, Bucharest

Matti ChristerssonPeggie RotheJames CulleyLauri Pulkka

Introduction: RELOCATION• Relocation is one of the tasks that Corporate

Real Estate Management is responsible for

• Every now and then, organisations are required to relocate as their (location and space) requirements change

• Relocation can often be considered as a major change for organisations. However, it has been argued that 20-50 % of major change initiatives fail (e.g. Strebel 1996)

• Relocation can have significant social, financial and environmental impacts on the moving organisation

What is relocation?

Optimal location Neo-classical approach Behavioral approach Institutional approach

Process focused Organizations are

comprised of people Decisions are made - and

affected – by people

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Relocation is “a change of address of a firm from location A to location B”

(Pellenbarg et al. 2002)

Previous research on relocation is predominantly concentrated more on location theories:

Relocation distance

Employees not required to relocate home

Influences e.g. employee commuting

Relocation within the same urban area

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Relocation Distance LongShort

Employees required to relocate home

Changes in stakeholder networks

Relocation to another city, country or continent

Relocation distance has a strong influence on employee willingness to relocate (Lawson & Angle 1998)

Research aim, questions and scopeMixed-model design using descriptive analysis over quantitative data

• The aim of the research is twofold:– What is the role of short distance relocation in the relocation phenomenon in

Finland?• How often companies have relocated?

• Definition:– Short distance relocation: a relocation of 10 kilometres or less– In addition, within municipality relocations considered as a distinct group

• Scope:– Within-country relocations of limited liability companies’ HQ in Finland

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Description of data• Initial dataset: Address change data of 134993

enterprises in Finland Information based on the Finnish Business Information

System

Address change between 1.1.2006 and 12.7.2011

Only the last address change included (in case multiple changes)

Data included company ID, name, field of business, new and old address, new and old post code, Headcount category, Revenue category, Date of address change, Code of company form

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The research process

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Raw data was edited and in order to match research scope and due inadequate entries:

40043 rows excluded due to the fact that they were other than limited liability companies 26190 rows excluded due to inadequate headcount, revenue and/or field of business

data 3813 rows were excluded due to change being de facto a correction of the address 204 rows were excluded due to missing address data

The addresses were geocoded by using a GIS software (ArcGISTM)

Mean, Median, Min., Max, percentile thresholds calculated

The analyses were conducted using a spreadsheet program

Results 1

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Headcount N

Median distance (km)

Mean distance (km)

Percentile

< 10 km < 25 km < 50 km < 100 km

0 - 4 30228 5,12 31,21 65,9 % 81,3 % 87,4 % 91,3 %

5 - 9 4107 3,19 19,69 75,4 % 87,9 % 92,2 % 94,5 %

10 - 19 3563 3,36 21,18 74,9 % 87,7 % 91,8 % 93,9 %

50 - 249 559 3,46 40,19 69,6 % 80,3 % 84,1 % 87,8 %

250 - 130 5,83 35,47 70,0 % 86,2 % 87,7 % 91,5 %

N/A 76 4,76 37,80 67,1 % 78,9 % 82,9 % 85,5 %

5 + 8359 3,32 21,94 74,7 % 87,3 % 91,4 % 93,8 %

Total Dataset: 38663 4,65 29,22 67,8 % 82,5 % 87,9 % 91,8 %

Results 2

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Relocation frequency:

Ca. 30 % of the companies had relocated (at least once) during the 5.5 year time period and ca. 6 % during the last year of the time period

Headcount N Within the same municipality

Between municipalities Within %

0 – 4 30228 17831 12397 59.0 %5 – 9 4107 2768 1339 67.4 %10 – 19 2272 1507 765 66.3 %20 – 49 1291 876 415 67.9 %50 – 99 384 233 151 60.7 %100 - 249 175 115 60 65.7 %250 - 499 68 35 33 51.5 %500 - 999 31 19 12 61.3 %1 000 - 31 18 13 58.1 %N/A 76 46 30 60.5 %

Total 38695 23448 15247 60.6 % 5+ 8435 5617 2818 66.6 %

Results 3

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Conclusions

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The vast majority of the Finnish HQ relocations are in fact short distance relocations (two thirds, or even three fourths)

Ca. 30 percent of all limited liability companies had relocated at least once during the 5.5 year time period

Thus, a few questions come about:

As the majority of relocations in done on a relatively short distance and not on regular basis, one could ask a question should it be more about how the relocation is done and not only where-to or how far it is done?

Relocation process focus over the “location, location, location” mantra?

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THANK YOU!