Appreciating Facilities Management

Posted: January 12, 2016 in Uncategorized

Facilities management is taken for granted by some companies nowadays. This often results to the company’s disadvantage, if not, closure. It was once discussed to us that Facilities Management defines the organization. It is all about what the company believes in (culture/philosophy), what does it provides (products/services), how does it avail the resources they need (raw materials/assets) and utilize it according to the needs/demands of the consumers. Yet, some firms tend not to understand the importance of this concept.

First, organizations must identify what their “Theory of the Business” is. As cited by Peter F. Drucker (1994) “… what company get paid for. They are what I call a company’s theory of the business.” Theory of the Business therefore is the reason why the business exist: revenue. It focuses on the product/service-perspective of the company. To relate this to facilities management, what you provide your consumers determines the identity of the company. Hence, your products/services IS the company; likewise, facilities management IS the company.

Second, organizations should understand the concept of “Resource-based View of the Firm”. As Birger Wernerfelt (1984) stated “By a resource is meant anything which could be thought of as a strength or weakness of a given firm… Examples of resources are: brand names, in-house knowledge of technology, employment of skilled personnel, trade contracts, machinery, efficient procedures, capital, etc.” Companies should understand that they cannot provide the outputs (products/services) without the necessary inputs (resources). It is what the company CAN do. In relation to facilities management, this concept is the proper utilization of the available resources of the company to deliver its output. Similarly, facilities management states the capacity of the firm to provide its services/products, in which will define the company’s ability to compete.

Lastly, when the organization is able to understand its “Theory of the Business” and the “Resource-based View of the Firm”, it does not mean that the company will not fail anymore. As mentioned in the article “Theory of the Business” by Peter F. Drucker:

“…, GM never suffered a loss while steadily gaining market share. But in the late 1970s, its assumptions about the market and about production became invalid. The market was fragmenting into highly volatile ‘lifestyle’ segments…”

This simply means that there is no fixed “Theory of the Business”. It is constantly changing according to the varying demands of the consumers. Due to such drastic circumstances, continuous improvement is the key and the resources of the company will be vital as it determines the capacity of the company to compete.

To sum it up, some companies tend to fail because they underestimate the importance of facilities management. Facilities management is incorporated with the “Theory of the Business” and “Resource-based View of the Firm” which refer to the input (resources) and output (products/services) factors of the company. Perhaps, some of them does not practice it at all as they do not know what it is all about or believed in an outdated “Theory of the Business”.



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