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

Huiying Hou
Daniel C.W. Ho, Technological and Higher Education Institute of Hong Kong, Vocational Training Council
Jacky K.H. Chung
Kelwin K.W. Wong


Purpose: This paper aims to identify the factors that affect facilities management (FM) service outsourcing.

Design/Methodolgoy/Approach: Five focus group discussions (FGDs) were conducted for this study. A total of 25 professional FM managers were invited to participate in the FGDs. The qualitative data collected from the FGDs were analysed with the coding method.

Findings: FM managers commonly regard that tight budget constraints and the absence of strategic planning are two important factors that affect FM service outsourcing. Tight budget constraints reflect that clients control their service providers by constraining budgets, which creates a series of inefficiencies in the outsourcing process and thus lead to adverse outsourcing relationships. A series of strategies are recommended to deal with the challenges posed by budget constraints and the lack strategic planning.

Research Limitations / Implications: Twenty-five Hong Kong-based FM managers were interviewed for this study. The empirical data collected mainly reflects FM service outsourcing in Hong Kong. It is important to test the findings with a bigger group of FM managers from other regions.

Originality/Value: The managerial significance of FM service outsourcing has not yet been valued in practice. This study draws academic attention to FM service outsourcing practice and provides practical opinions from FM managers. Also, this study adopts the FGD method in data collection, which extracts to a maximum degree of authentic opinions from practitioners.