Assessing the impact of physical asset management (pam) practices on the sustainable organizational performance through the lens of lifecycle model and rbv theory – triangulation approach

Abstract

An organization is a bundle of resources, among which are the physical assets that have been recognized as important resources. The importance of physical assets has been increasingly recognized in recent decades. Organizations have realized the importance of managing physical assets in the ever-changing business environment. Poor physical asset management (PAM) inflicts multiple consequences on organizations, whether small enterprises or big companies. The effective management of physical assets consequently plays an increasingly important role in optimizing business profitability as it balances asset performance, cost, and risks throughout the lifecycle of physical assets to achieve organizational strategies. This research aims to investigate the link between PAM practices and the sustainable performance of an organization. The relevant theoretical foundations and research gaps are presented first, followed by development of a theoretical framework. The framework builds upon resource-based view (RBV) theory and the triple bottom line (TBL) theory to develop a theoretical framework, mainly to understand how companies’ internal resources could contribute to their sustainable performance. Based on this theoretical underpinning, two main research streams are studied: PAM practices; and the impact of PAM practices on the sustainable performance. Different sources of data were utilized to answer the proposed research questions through an exploratory sequential mixed-methods design. Phase 1 was a qualitative study employing semi-structured interviews (N=42) and thematic analysis. Data from this phase supported the extension of the lifecycle model of physical assets and led to extracting the common and partial common factors from real-world practices that would enhance PAM performance. The resultant factors were then incorporated in the conceptual framework that describes the relationship between PAM practices and sustainable firm performance. Phase 2 involved a quantitative study (N=220) using an online survey to collect the data and the implementation of structural equation modeling (SEM) to assess the proposed conceptual framework and test the hypotheses of the study. The outcome of SEM analysis provided the evidence that PAM practices are an important predictor for sustainable firm performance. By testing the impact of PAM practices on sustainable performance, this research shows that PAM practices significantly impact sustainable performance and provides interesting insights into the effects of specific PAM practices on sustainable performance. The analysis also shows that RBV and TBL are strongly linked and explains how sustainable organizational performance could be attained through the availability and accessibility of specific internal resources. Finally, the findings of this study have important theoretical and practical implications. Theoretically, the study contributes to the literature and fills several research gaps. It also proposes a new extended lifecycle model for the built environment, proposing and testing a conceptual framework that describes the interaction between PAM practices and sustainable performance, as well as providing empirical evidence of the link between RBV and TBL theories. Practically, the study on the practices of lifecycle PAM can help improve the efficiency, effectiveness, and overall performance of assets while meeting sustainability objectives, thus providing practitioners and policymakers insights into PAM practices over the entire asset life cycle.