The Social Dimension of the Relationship Between Corporate Real Estate Executives and Outsource Service Providers

Rob Kooymans and Megan Walters

ERES from European Real Estate Society (ERES)

Abstract: Outsourcing of corporate real estate management is a long-established practice in the United States and, to a lesser extent, in Europe, Asia and Australia. While the imperatives for outsourcing have been widely studied, there has been little research into the nature of the working relationship between the corporate real estate unit and the outsource provider of CRE management services. Contracts are in general incomplete, due to the contracting partiesí inability to specify ex ante all outcomes ex post. Outsourcing contracts are more incomplete than most due to their on- going relational nature. In the event of an uncertain event, social mechanisms such as trust, commitment and co-operation may have to over-ride the contract to ensure the continuance of the relationship. This paper discusses the existence and importance of the social dimension of contract relationships in outsourcing. It concludes that there are important implications for the effectiveness of corporate real estate outsourcing contracts, especially where the number of service providers within the market is small.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2001-06-01
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