The concealed difficulties of aligning CRE decisions to corporate goals

Tonelli, Marcello (2006) The concealed difficulties of aligning CRE decisions to corporate goals. In Clients Driving Innovation : Moving Ideas into Practice : the Second International Conference of the CRC for Construction Innovation, 12-14 March 2006, Surfers Paradise, Qld.


Realisation of the importance of real estate asset strategic decision making has inspired a burgeoning corporate real estate management (CREM) literature. Much of this criticises the poor alignment between strategic business direction and the ‘enabling’ physical environment. This is based on the understanding that corporate real estate assets represent the physical resource base that supports business, and can either complement or impede that business. In the hope of resolving this problem, CRE authors advocate a deeper integration of strategic and corporate real estate decisions. However this recommendation appears to be based on a relatively simplistic theoretical approach to organization where decision-making tends to be viewed as a rationally managed event rather than a complex process. Defining decision making as an isolated event has led to an uncritical acceptance of two basic assumptions: ubiquitous, conflict-free rationality and profit maximisation. These assumptions have encouraged prescriptive solutions that clearly lack the sophistication necessary to come to grips with the complexity of the built and organizational environment. Alternatively, approaching CREM decision making from a more sophisticated perspective, such as that of the “Carnegie School”, leads to conceptualise it as a ‘process’, creating room for bounded rationality, multiple goals, intra-organizational conflict, environmental matching, uncertainty avoidance and problem searching. It is reasonable to expect that such an approach will result in a better understanding of the organizational context, which will facilitate the creation of organizational objectives, assist with the formation of strategies, and ultimately will aid decision.

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ID Code: 41905
Item Type: Conference Paper
Refereed: Yes
Keywords: Bounded-rationality, Carnegie School, Risk Avoidance, Decision-making, Intra-organizational Conflict
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Organisational Planning and Management (150312)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2006 [please consult the author]
Deposited On: 06 Jun 2011 23:45
Last Modified: 12 Jun 2011 03:50

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