Location of Office Building | Urban vs Semi-Urban | Important factors

Location of the Office Building

Location of Office building
Location of Office building

The success of any enterprise largely depends upon the selection of a suitable location. Even a well-managed concern shall find it difficult to achieve success, if it is located in an unsuitable site. Mistakes made in the selection of a suitable location for the office building is more or less permanent and no amount of subsequent improvements will help to overcome the difficulties of an ill conceived site.

A bad location destroys the efficiency of the office workers as well as its esteem to the outsiders who deal with the organization.

When the problem of location will arise?

The management is not faced with the problem of selecting an office accommodation very often. The problem will usually arise only in the following specified circumstances.

1. At the time of starting the business.

2. The increase in the workload due to growth of the enterprise may require a change in the office location.

3. When the facilities provided in the existing location plan are no longer sufficient for expanding business and therefore, the entire expansion of the existing office or a new location is necessary.

4. If the lease for the office premises has expired and the owner of the premises is not willing to renew the lease.

5. When the whole plant is shifted from one area to some other area situated at a distance (Sometimes even the whole plant may be shifted from one State to another).

Location of Office Building – Urban vs Sub-urban

The management should first take a major decision as to whether the office should be located in the urban or suburban area (country location is not at all considered here).

Many organizations prefer only urban areas. Particularly trading companies, banks, insurance companies etc. prefer only urban location. But the trend has changed in case of other enterprises.

Industrial units, servicing units etc. prefer to establish their offices in semi-urban areas. Each location has its own merits and demerits. We shall now discuss them briefly.

Urban Location

Urban office building
Urban office building

Urban area means and includes large cities and towns. Even Taluk headquarters and municipalities can be considered as urban location in some cases.

Merits of Urban Location

1. Proximity to related trade offices.

2. Nearness to service facilities like banks and post offices.

3. Easy access to customers.

4. Better transportation facilities.

5. Prestige value to the organization.

6. Availability of recreational and other facilities.

Demerits of Urban Location

1. High rent, rates and taxes

2. Traffic congestion and over crowding.

3. More noise, dusts and fume.

4. Less scope for expansion.

5. High cost of living for employees.

6. Polluted and unhygienic environment.

Sub-urban Location

Suburban office building
Suburban office building – Merits, Demerits

Suburban area refers to an area situated at a distance from a city but quite closely connected with it by means of transport and communication.

Merits of Suburban Location

1. Accessibility to customers.

2. Nearness to main transport routes.

3. Low rent and tax.

4. Less congestion and less over crowding.

5. Quiet and hygienic environment.

6. Much scope for future expansion and modernization.

Demerits of Suburban Location

1. Lack of service facilities.

2. Lack of adequate transport and communication facilities.

3. Absence of recreational and other facilities.

Choice of Location

The various limitations of suburban location are no longer continuing and many defects have been cured already. Banking facilities are now available even in remote places due to the massive branch expansion at a greater speed. Therefore, the facilities, which are available in metropolitan cities like Mumbai, Chennai, Kolkata etc. are now increasingly available in semi-urban areas also. Therefore, the recent trend is in favour of semi-urban areas rather than urban areas.

In Western countries also, there has been an increasing tendency to locate offices away from urban concentrations to sub-urban areas. Some of the more important reasons for this tendency are as follows:

1. Highest Cost

Per square foot or metre cost of office site is excessively high in urban areas while it is comparatively less in semi-urban areas. As a rule, the space is very expensive and the tenant has to put up with many inconveniences, which would be quite unusual in small towns.

2. Over Crowding and Congestion

Urban centres are becoming over crowded and congested with all the bad consequences and hence even the requisite space is not easily available.

3. Growing Transport and Communication Facilities

The growth of transport and communication has facilitated the growth of suburbs where office building can be conveniently located.

4. Shift in Industrial Activity

There has been a physical shift of industry from urban to sub-urban (or even rural) areas. The Government of India is also very generous in providing financial assistance and incentives to industrial units started in backward rural areas. This also means that some part of the office must go to the manufacturing unit.

Thus, it is evident from the foregoing discussion that the sub-urban location is now endowed with all facilities available in the metropolitan cities at the same time freed from all evils associated with cities.

However, while deciding the actual location for an office, the management should strike out a proper balance between the two location and due consideration should be given to the cost factor. At the same time, profitability factor should not be sacrificed for effecting a savings in cost.

Factors to be considered in selecting the Office Location

Once a decision has been made as to urban and sub-urban location, it would be desirable to consider the following factors for selecting the location of the office building within the general location selected. It can also be called as office site.

The term site refers to the exact location or area where the office is to be housed within the general location (Urban or Semi-urban) selected.

1. Availability of Means of Transport

The office must be located in an area where transport services are in frequent supply. This is particularly very important for the convenience of the office workers and staff as well as the customers or persons who deal with the enterprise.

2. Proximity to related Trade Offices

It is also desirable to house the office in the immediate proximity of other offices, which are in the same line of business. Such a location enjoys localization.

3. Availability of various Service Facilities

Service facilities such as banks, insurance, post offices, road transport companies, offices, retail stores and restaurants ensure greater efficiency of the business since they are to be used by the staff as well as by the business customers.

4. Relation of Office with other Department

The office is a connecting link between various departments. As such it should be located at a place where it is convenient for all the department people to contact the office without any delay.

Leffingwell suggests the following choices in locating the office.

1. When all the functions of the business are carried on in one location, the office can best serve if it is located in the same location.

2. If the office serves to a particular function most, it should be located in the immediate proximity of that division or department.

3. If the nature of the business does not require the office located nearer to any of the main functions of the business, the management can opt for some other location, which is otherwise advantageous.

5. Building Restrictions

The local authorities can impose certain restrictions upon the use to which the building may be put. This factor should be considered particularly in establishing the plant. However, in case of accommodating an office, those restrictions do not pose any complicated problems.

6. Growth Factors

The office building once selected should be continued forever unless there are compelling reasons for a change in the location. The space may be sufficient at present. But the management should not be guided by the present requirements only.

When the firm grows further, more space will be required. Therefore, the building selected for housing the office must have enough space to satisfy future requirements.