Tight budget constraints and the absence of strategic planning - an exploratory analysis of FM service outsourcing

Abstract

A phenomenon that consecutive FM services outsourcing relationships in corporate business are not common in Hong Kong has triggered the researcher’s interest in exploring the issues that influence FM service outsourcing. Five focus group discussions were conducted and 25 FM managers from different companies were invited to participate in the study. The empirical findings have been examined with the support of literatures on resource-based theory and management control, and they imply that clients intend to exert control over the service providers with an aim to better allocate the resources. Yet, pure resource-related control leads to negative influences on FM service performance and there is a lack of control mechanism in FM service outsourcing. Suggestion is provided with reference to the findings of the study. First, the efficiency of resource allocation should concern value-for-money investment as well as expenses reduction. Second, an efficient control mechanism should be embedded in FM service outsourcing and the management control should focus on enhancing the communication between the client and service providers, and between the operational level and strategic level staff.