How far Finnish HQ’s have relocated? – The role of short distance relocations in Finnish HQ moves

1. How far Finnish HQ’s have relocated? – The role of short distance relocations in Finnish HQ moves Presentation at ERES 2014, Bucharest Matti Christersson Peggie Rothe James Culley Lauri Pulkka

2. Introduction: RELOCATION • Relocation is one of the tasksthatCorporate Real Estate Management is responsiblefor • Everynow and then, organisationsarerequired to relocate as their(location and space) requirementschange • Relocationcanoftenbeconsidered as a majorchange for organisations. However, ithasbeenarguedthat20-50 % of majorchangeinitiativesfail (e.g. Strebel 1996) • Relocationcanhavesignificantsocial, financial and environmentalimpactson the movingorganisation

3. What is relocation? Relocation is “a change of address of a firm from location A to location B” (Pellenbarg et al. 2002) Optimallocation • Neo-classicalapproach • Behavioralapproach • Institutionalapproach Previousresearch on relocation is predominantlyconcentratedmore on locationtheories: Processfocused • Organizationsarecomprisedof people • Decisionsare made - and affected – bypeople

4. Relocationdistance Relocation Distance Short Long • Employeesnotrequired to relocate home • Influencese.g. employeecommuting • Relocationwithin the sameurbanarea • Employeesrequired to relocate home • Changes in stakeholdernetworks • Relocation to anothercity, country orcontinent • Relocationdistancehas a stronginfluence on employeewillingness to relocate (Lawson & Angle 1998)

5. Research aim, questions and scope Mixed-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

6. Description of data • Initialdataset: Addresschange data of 134993 enterprisesin 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

7. The research process • 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

8. Results 1

9. Results 2 • 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

10. Results 3

11. Conclusions • 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 howthe relocation is done and not only where-to or how far it is done? • Relocation process focus over the “location, location, location” mantra?

12. THANK YOU!