Consequences of corporate relocation: A literature review

Relocation can have a notable influence on the relocating organization and its employees. Not only will the workforce come across a change in location, they will also encounter new premises and changes in their workspace, and they might also have to adapt to new ways of working. Additionally, relocation can have significant impacts on the relocating organisationís financial performance, and it may also alter their environmental footprint. This paper focuses on the consequences that corporate relocations have on the relocating organization itself. The aim is to identify the financial, social, and environmental impacts of relocation. The study is carried out through a literature review. Based on the review, the impacts are discussed, a conceptual framework for modeling these relocation consequences is formulated and the gaps in the literature are identified. The review of the literature indicates that previous research on financial consequences has mainly focused on market reactions to relocations, e.g. changes in the stock prices of publicly listed corporations, on the impacts of changing lease conditions, such as flexibility, or on mismatch between anticipated and real lease requirements of the occupier. Social impacts have largely been approached from the perspective of organizational change and such consequences in general, but not specifically related to the relocation process. Research on environmental consequences has mostly dealt with the sustainability and energy efficiency of the new premises or changes in means of commuting. The topics which, however, have been examined in conjunction to relocations include for example employee health issues, absenteeism, productivity, profitability, psychological issues and changing organizational dynamics. It is concluded that there is a need for more empirical research on the consequences of relocation. The framework introduced in the article will be tested with experiences of relocated Finnish case companies in the near future and it will be developed further on.