Path dependencies and sustainable facilities management: a study of housing companies in Sweden

ABSTRACT

Facilities management (FM) of housing stocks has great potential to contribute to sustainable development, but the transition to sustainable facilities management (SFM) is complex and slow. The purpose of this paper is to investigate the challenges of transitioning to SFM for housing companies in Sweden in relation to practical and technical innovations like digitalization. Using a path dependency framework, and drawing on semi-structured interviews with 23 FM professionals, the findings reveal many technologies and practices that housing companies can adopt to transition towards SFM. However, their institutionalized path-dependent behaviour means they are unwilling to change, tend to avoid uncertainty, and overemphasize the financial bottom line. These new innovative solutions also present challenges, such as a lack of established business models and poor value for money. This study contributes insight into what path dependencies need to be broken, what behaviours need to be changed, what structures must be created, and what skills and knowledge must be developed to increase SFM in the housing sector.

KEYWORDS:

• Digitalization
• housing
• institutional logics
• path dependency
• sustainable facilities management (SFM)

Introduction

Background and aim

Facilities management (FM), the use, operation, development, maintenance, and improvement of physical assets (Nielsen et al., 2016), as a field of practice and study is currently transitioning towards adopting a more sustainable, long-term view of its operations (Opoku & Lee, 2022). Buildings account for around 40% of energy consumption and 30% of greenhouse gas emissions (Nielsen et al., 2016), and the vast majority of those negative climate effects come from the operations phase. Therefore, because the operations phase of a building’s life cycle is the lengthiest and most environmentally detrimental, it is crucial that FM of the existing housing stock transitions towards more sustainable practices and products (Wood, 2006). This transition is called sustainable facilities management (SFM), and it is a growing research field (Nielsen et al., 2016) that combines FM with sustainability through the development of innovative technologies and practices that consider the environmental, economic, and social aspects of FM operations. However, the transition towards SFM has been slow within the FM sector (Lee & Kang, 2013; Støre-Valen & Buser, 2018).

The question of how the FM sector simultaneously works with sustainability and different technical and practical innovations will continue to be an important area of FM research – both to develop the research field and to support FM professionals and the built environment (Nielsen et al., 2016). Therefore, the purpose of this paper is to investigate challenges to the transition to SFM for housing companies in Sweden, in relation to practical and technical innovations like digitalization. In this paper, housing companies refer to large-scale public and private organizations that own and/or manage residential properties (>4000 apartments). To fulfil the purpose, the following research questions are answered:

• What are the sustainability challenges housing companies face in their FM operations?

• Why is it difficult for housing companies to transition towards SFM and adopt new sustainable technologies?

Value for readers

For readers the paper provides a theoretically informed insight into SFM-related change, both in terms of what change is difficult, but also why it is difficult. This is useful both for FM practitioners who are struggling to adopt SFM practices and tools, as well as for scholars, as the paper addresses several gaps in research: Firstly, Bröchner et al. (2019) argue that digitalization and sustainability are two major forces that, since the 1970s, have influenced the development of FM. Sustainability and digitalization, then, should be considered in unison, but have not been in FM research. This paper takes a step towards addressing this issue.

Secondly, Gluch and Svensson (2018), who studied the FM work of public clients in Sweden, argue that research must explore how the FM sector can renew and add to existing housing stocks while meeting new sustainability demands. Future FM research must thus address real challenges for FM in practice, and address how professionals deal with those challenges (c.f. Bröchner et al., 2019), which is something this paper does by taking a practice perspective on the transition towards SFM.

Lastly, the paper also answers the call of Nielsen et al. (2016). They argue how SFM is an emerging, and yet immature, theme within the wider FM field, where a majority of previous SFM research has failed to explicitly apply or add to theory. As this study applies an institutional path-dependency framework, the paper provides theoretical engagement that the field is currently lacking.

Institutional context of the Swedish FM sector and housing market

This paper builds on interviews with FM practitioners working in Swedish housing companies. Because the paper applies an institutional perspective to understand the inertia to transition to SFM, understanding the institutional context of the Swedish FM sector and housing market is important. FM in Sweden is rather well-developed (Maliene et al., 2008) and in general mirrors international examples of FM in similar countries in Scandinavia or Europe, albeit FM work in Sweden often lacks a strategic direction and mindset (Svensson et al., 2022).

The structure of the Swedish housing market influences housing companies’ FM work, and the current structure of the housing market has come about through large shifts in housing policy and regulation. The Swedish housing market was heavily regulated up until the 1990s. The marketization, neo-liberalization, and deregulation of the Swedish housing market meant that many rental properties were converted into ownership and cooperative apartments. In effect, housing companies discarded the mission of ‘supplying housing for all’, to follow more profit-driven principles (Grundström & Molina, 2016; Wimark et al., 2020).

Today, the Swedish housing market more closely resembles other housing markets within the EU, where the marketization and deregulation have led to housing shortage, and in particular a severe deficit of affordable rental housing (Grundström & Molina, 2016). In effect, mixed tenure dwellings, where both rental, ownership, and cooperative apartments coexist, have decreased. Decreased tenure mix is a source of segregation, meaning that the homogenization of neighbourhoods has led to concentrations of either wealth or poverty (Grundström & Molina, 2016; Wimark et al., 2020). Another result of the major market shifts is that many housing companies, both private and public, have a considerable renovation debt for their more dilapidated neighbourhoods. Unfortunately, many of the residents of these neighborhoods are socio-economically disadvantaged, and cannot cope with rent increases as a result of renovations (Grundström & Molina, 2016).

Considering the landscape of the Swedish housing market, many public housing companies function as a type of hybrid organization that pursues both financial prosperity and public, social, and environmental goals; a triple bottom line of sorts. This goal multiplicity creates ambiguity and tensions where different institutional logics compete within the market and mission-driven strategies (Maine et al., 2022). This complex institutional environment is where the transition to SFM unfolds.

Sustainable facilities management

Challenges of SFM

SFM involves creating more liveable communities with increased cost-effectiveness and longevity for the housing stock with a lesser negative impact on the environment. This includes, for example, adopting practices and tools that reduce waste, water, and energy consumption, integrating digital technologies like AI (artificial intelligence) that help to monitor and provide s comfortable indoor climate, and adopting a circularity mindset to maintain and refurbish the existing housing stocks (Lee & Kang, 2013; Opoku & Lee, 2022).

Adoption of SFM practices has been slow as the sector is conservative and budget-focused (Lee & Kang, 2013; Støre-Valen & Buser, 2018). A reason for this inertia could be that SFM is a more complex way of working due to the multiple perspectives embedded within the SFM concept (Lee & Kang, 2013; Nielsen et al., 2016; Opoku & Lee, 2022). So, to fulfil sustainability demands, FM professionals must learn how to manage new technology to, for example, recycle smarter, reduce energy use, and manage the dynamic, intangible, and evolving knowledge of sustainability in FM (Elmualim et al., 2012; Gluch & Svensson, 2018). In addition, there is often a large gap between sustainable buildings and the actual management of the buildings, where organizations need to adopt a life-cycle perspective that feeds back FM knowledge to the design phase of the sustainable building, as flaws in the design often cause troubles in the user phase (Collins et al., 2019).

Elmualim et al. (2010, 2012) find several hindrances to committing to SFM, e.g. time constraints, financial constraints, FM not being seen as a strategic issue, lack of knowledge, and an overemphasis on financial targets rather than innovation. For FM to become more sustainable in practice, strategic sustainability targets must be translated into operational measures and the SFM perspective must be present at all organizational levels (Elmualim et al., 2010, 2012). SFM practices must also be developed collaboratively with other stakeholders (Opoku & Lee, 2022). Unfortunately, FM has long lacked a strategic approach in its operations which hinders the fulfilment of different sustainability agendas. As such, there must be clear drivers to engage in SFM work as this requires resources in terms of new practices and skills (Svensson et al., 2022).

Gluch and Svensson (2018) emphasize how institutional actors play an important role in promoting new sustainable practices within a Swedish FM context. Elmualim et al. (2012) assert that legislation, rather than the corporate image, drives the commitment to sustainability. Also, existing housing stocks often suffer from insufficient incentives to update older buildings to comply with newer standards, which is mostly due to low economic return and the fact that demolishing a building may be more cost-effective (Thomsen & Van der Flier, 2009; Wood, 2006). Similarly, Lee and Kang (2013) found that economic benefits were the main driver for adopting SFM practices and tools.

Støre-Valen and Buser (2018) investigated the challenges of implementing SFM within a Scandinavian FM context, by in part conducting two case studies of Danish housing projects. They found that there was widespread awareness of SFM among FM practitioners, but that it was difficult to affect actual end-user behaviour amongst those who are charged with operating and maintaining the building. In contrast to much previous research on SFM, Støre-Valen and Buser (2018) found that cost is not necessarily a barrier towards adopting SFM practices and tools, but that a lack of willingness to invest, inability to see financial benefits from SFM implementation, and a lack of market and tenant demand were larger barriers.

Theorizing SFM

Much previous research fails to theorize SFM, and Nielsen et al. (2016) conclude that most articles do not explain or engage with any theoretical issues and that SFM is an emerging and immature theme within the wider FM field. In literature reviews of SFM research by Nielsen et al. (2016), Alfalah and Zayed (2020), and Okoro (2023), they made similar conclusions that SFM research tends to focus on issues concerning building performance and implementation, tools and standards, digital and innovative FM, and measuring and monitoring for environmental efficiency, rather than the socio-technical aspects of managing buildings. Bröchner et al. (2019) argue that SFM research should draw more on theory found in the social sciences to capture the softer parts of FM.

Several studies find that the FM sector is tightly institutionalized, inert, and slow to adopt new practices and technologies (Gluch & Svensson, 2018; Lee & Kang, 2013; Støre-Valen & Buser, 2018; Svensson et al., 2022; Uusitalo & Lavikka, 2020). Ashford and Hall (2011) argue that path-dependent lock-in effects are one of the main barriers to sustainable development. So, to theorize and understand the challenges of transitioning to SFM, this paper applies an institutional path dependency framework, which is presented next.

Path dependency

Sources of path dependency

Institutional logics are prevailing and taken-for-granted shared beliefs and values that govern the behaviour of collective and individual actors within a community and serve as scripts for action. When institutional logics are continually re-enacted, it creates stability and continuity within the field, and this can be referred to as path dependency (Beckert, 2010). Dominant institutional logics and past choices that support that logic become difficult to divert from, and in turn become a barrier to emergent change initiatives (Beckert, 2010; Modell et al., 2007), such as SFM. In other words, existing institutionalized organizational structures, culture, infrastructure, practices, and polices constrain behaviour and limit change. So, to understand the inertia of SFM, it is important to understand path-dependent lock-in effects that fuel this inertia.

Geels (2004) states that there are three major sources of path dependency. First are rules and regimes, which encompass formal rules like government legislation and contracts, cognitive rules like upbuilt knowledge that is difficult to accumulate and then discard, and normative rules such as mutual role perceptions and expectations of what counts as ‘proper behaviour’. The second source is the vested interests and mutual interdependencies between actors in formal and informal networks, where diverging from those can upset the status quo. The last source of path dependency is the embedded costs in existing artefacts and material systems like production, processes, and infrastructure that actors are unwilling to abandon. This system leads to incremental change and innovation in line with existing paths, rather than radical change that entails a switch to divergent paths (Geels, 2004).

Breaking path dependencies

Breaking with path dependencies can thus be difficult. Usually, a great deal of financial or other resources have been invested in a specific path. Existing systems and technologies are difficult to discard and actors prefer to continuously develop existing technologies and innovations rather than adopt new ones (Mahapatra & Gustavsson, 2008). Breaking with inefficient practices and technologies to pursue an alternative path is thus costly both in terms of investments, resources, and legitimacy, especially if the alternative path is not completely compatible with current institutional arrangements. So, resource constraints can limit the range of possible paths to pursue (Kirk et al., 2007).

In general, paths that resemble existing ones are cheaper to assimilate as the information about them is already known within the field. Similar paths thus have lower switching costs associated with them (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006), and this is especially true of sustainability technologies that are inherently uncertain (Sartorius, 2006). Changing paths and adopting new technical innovations for sustainability are facilitated by periods of uncertainty, where barriers to breaking path dependencies are lower than in more stable times where path dependencies hold strong (Sartorius, 2006). Technical innovation can also help break path-dependent behaviour (Wilsford, 1994). Therefore, minimizing the uncertainties associated with new technologies, creating new knowledge, and legitimizing new technologies help break path dependencies (Mahapatra & Gustavsson, 2008).

Path dependency and FM-related research

There are limited studies that apply a path dependency framework within (S)FM research, but it has been applied in nascent fields, relating to construction, housing, and/or sustainability. In relation to construction, in a study of a construction firm that was an early adopter of a circular economy perspective in its business, Lehtimäki et al. (2020) report that internal changes made it possible for the firm to challenge its path dependencies, e.g. by creating technical and strategic management capabilities, new knowledge, and new innovative business models. External actors also facilitated this process in various ways, such as through new customer demands and new partnerships with other organizations. Uusitalo and Lavikka (2020) investigated industrialized housebuilding and found that having an entrepreneurial mindset that enables entry to new markets and developing platforms with external collaborators facilitated breaking path dependencies. Mahapatra et al. (2012) found that path dependencies supporting the use of steel or concrete material in multi-storey house building in Sweden, Germany, and the UK, hindered the diffusion of a new innovation system using wood for such construction. Institutionalized path dependencies in terms of regulation, actor networks, and investments in skills, technologies, and machinery were especially hindersome.

In relation to housing, Robertson et al. (2010) found that class was the most prominent path dependency that hindered the change of neighbourhoods’ social identities. Zwiers et al. (2017) investigated the path dependency of low-income neighbourhood trajectories in the Netherlands to understand why similar neighbourhoods may be unequally prone to change. They found that original housing quality greatly impacts a neighbourhood’s ability to change, where poor construction led to a negative trajectory.

In relation to sustainability, in a study of sustainable mobility policy in Sweden, Hrelja et al. (2013) find that more confrontational and radical attempts to break with existing path dependencies tend to have less success than more consensual and incremental attempts. When attempting to break from existing path dependencies, the new path may clash with established professional cultures and work practices, in turn causing unnecessary conflict.

Finally, in relation to FM, to understand why domestic heating practices diverge between Sweden and the UK, Gross and Hanna (2019) applied a path dependency perspective and found that different types of government interventions, cost reductions for different types of heating technologies, heating infrastructure, and end-user technologies shaped the respective heat transitions. In Swedish public FM organizations, Svensson et al. (2022) found that actors must perform both externally and internally focused institutional work to implement new strategic management measures and break with established practices. This can be done, for example, by introducing new work practices brought in by outsiders.

Method

Sampling

To investigate the challenges of transitioning to SFM, a qualitative research design was used to capture the actions and perceptions (Silverman, 2013) of actors working with SFM. Housing companies were chosen as the unit of analysis as housing plays an especially important role in sustainable development due to its large consumption of energy, square footage within the built environment, and its part in promoting sustainable lifestyles (Nielsen et al., 2016; Opoku & Lee, 2022; Robertson et al., 2010; Thomsen & Van der Flier, 2009).

The housing companies included in the study were purposively chosen (Etikan et al., 2016) to get a broad view of SFM in Sweden. Therefore, the sampled organizations were both private and public, located in different parts of Sweden, and owned different types of properties (e.g. high-income housing, low-income housing, student housing, old and new housing). The housing companies owned and/or managed between 4,000 and 200,000 apartments. The public housing companies were geographically located within only one municipality/area, and the private housing companies operated throughout several areas of Sweden. In this respect, the organization sampling can be seen as heterogenous (Etikan et al., 2016), while still representing typical housing companies in Sweden.

Interviewees who worked with FM on a strategic level and set the agenda for FM work within their organizations were purposively sampled (Etikan et al., 2016). They were chosen due to their influential positions within their organizations and their overview of both operational and strategic SFM issues, which revealed their valuable personal views on SFM as well as the more formal work of their organizations. The interviewees were mainly CEOs, sustainability managers, FM managers, and business managers. Considering the interviewees’ strategic, managerial positions, and top-down view of SFM, the interviewee sampling can be seen as homogenous (Etikan et al., 2016). Semi-structured interviews (Kvale, 2007) were used to allow flexibility in responses, and they were held during the winter and spring of 2021–2022 with 23 people (see Table 1). At this point, it became clear that themes, topics, and perceptions of the interviewees were repetitive across the interviews and little new information had arisen, reaching data saturation (Fusch & Ness, 2015).

Table 1. Information on interviewees.

Organization	Company profile	Professional roles	Interviewee codes
Public housing company A	Low-income housing	Business development manager	PubA 1
		CEO	PubA 2
		FM manager	PubA 3
Public housing company B	Mixed-income housing	FM manager	PubB 1
		Property development manager	PubB 2
		Property manager	PubB 3
Public housing parent company C (parent company of PubD & PubE)	Mixed-income housing	R&D manager	PubC 1
Public housing company D	Mixed-income housing	FM manager	PubD 1
		Sustainability manager	PubD 2
		CEO	PubD 3
Public housing company E	Mixed-income housing	Business development manager	PubE 1
		CEO	PubE 2
		Energy and environment manager	PubE 3
Public housing company F	Mixed-income housing	Development manager,	PubF 1
		Manager of project managers	PubF 2
Private housing company A	High-income housing Student housing	CEO	PriA 1
		FM manager	PriA 2
		Technical FM specialist	PriA 3
Private housing company B	Mixed-income housing	Development manager	PriB 1
		Sustainability manager	PriB 2
		Sustainability specialist	PriB 3
Private housing company C	Mixed-income housing	FM manager	PriC 1
		Social sustainability manager	PriC 2

The interviews were held one-on-one and lasted approximately one hour over Teams or Zoom and were recorded. The interviews were supported by a pre-defined interview guide with questions, topics, and prompts to ask for (Kvale, 2007). The interview guide covered four main topics that were based on a review of SFM research, in addition to other topics circulating in the professional FM field in Sweden, as could be found in industry press, newsletters, and newspapers: (1) Current state of SFM work, (2) Organization of SFM activities, (3) Prioritization of and conflicts between different SFM goals, and (4) External monitoring and knowledge sharing of SFM practices. This paper focuses on the first topic, which included themes such as the foremost challenges of SFM work, what promising possible practices, tools, and technologies there are to solve these challenges, and what routines and resources there are for SFM work.

Data analysis

The interviews were transcribed verbatim and imported into the software program NVivo to systematically sort and code the data. A thematic analysis (Braun & Clarke, 2006) was chosen because it is an established method for analyzing qualitative data, and is useful to identify, describe and organize unexpected themes and rich, detailed data patterns. The data analysis unfolded in two stages, first a more inductive analysis of the empirical data without applying any theoretical constructs, and then a more abductive analysis where the empirical data was compared and contrasted to theory.

Data were first coded according to the four interview topics, and the first topic (Current state of SFM work) was chosen as the focus for this paper. Then, the data for the first topic were recoded into smaller themes as more detailed patterns in the data were identified. The inductively derived themes highlighted the practice perspective on SFM adopted in this paper, and were as follows: FM work in practice, Practices to fulfil SFM goals, Digitalization of FM practices, and no best practice for SFM. These themes are used to structure the Findings chapter.

After these initial inductive coding rounds, it was clear that many complex challenges were hindering the transition towards SFM, and that some underlying mechanism was affecting the rate of change. To understand these patterns better, the empirical material was iteratively and abductively analyzed by moving between the data, previous SFM research, and literature on path dependency. By abductively moving between empirical data and theory, the understanding of both can be expanded, as empirical data cannot be fully understood without theory and vice versa (Van Maanen et al., 2007). Through this iterative and intuitive abductive analysis, new, more aggregated, and theoretically informed themes were identified, that was then used to structure the Discussion chapter. The abductively derived themes were as follows: Vague goals and outcomes delegitimizing SFM change initiatives, Incentives for incremental or radical change, Difficulties in breaking path dependencies, and Ways to break path dependencies.

Limitations of the research design

As with any research design, there are pros and cons. While qualitative research helps understand the dynamics of social relations and is more contextually sensitive, it cannot capture an entire population and it is more interpretive. Interviews provide rich, contextualized information that enables connecting between several topics, but generalizability is more difficult as the data represents the interviewees’ perspectives and cannot be said to represent an entire industry. This is not necessarily flaw in the qualitative approach but simply frames what qualitative research can and cannot accomplish (Queirós et al., 2017). Although the generalizability of qualitative research is often debated, this is not always the goal of qualitative research. Instead, transferability, meaning that the insights from the study can be transferred to another context by providing rich and thick descriptions and contextual information, is rather the goal (Kvale, 2007).

To minimize the risk of bias and increase generalizability, conducting interviews with several housing companies with different characteristics, such as public and private companies, different types of tenants (high income, low income, mixed income, and student housing), and different types of housing stocks (older housing and new construction), functioned as a triangulation of the results (Denzin, 2009). There was no initial intention to compare the housing companies, but it quickly became clear that all of them had very similar experiences and perceptions of SFM, thereby supporting the validity of the results to the wider Swedish FM sector. So, to understand how institutionalized path dependencies hinder the transition to SFM, a qualitative interview study was the most appropriate due to its ability to capture our socially constructed reality and why change is difficult.

Findings

FM work in practice

The interviewees emphasized how one major challenge of FM was that the work is so complex. The development, management, and maintenance of housing stock is never-ending: ‘We will never be done. Never. That is pure utopia. Because there are challenges that will continue, there will be new challenges, there will be new demands constantly’ (PubD2). The interviewees stated that continuous FM work is very important because the living environment has a large impact on people’s self-identity and wellbeing. Nevertheless, FM work often entailed ‘putting out fires’ and dealing quickly with sudden issues, rather than strategic planning. There were constantly new demands from politicians, municipalities, contactors, and tenants, which meant that the basic task of FM (to maintain and develop the housing stock) was often deprioritized. It also meant that there was a huge refurbishment debt, due to many housing companies mismanaging their housing stocks: ‘The company board asked me how large the technical maintenance debt is in our properties, and I couldn’t tell them, because we have no maintenance plans’ (PubE2). There was thus a strong disconnect between their long-term and short-term perspectives of FM.

Although there was widespread agreement amongst the interviewees that FM work needs to become more sustainable and strategic, they felt it was difficult to achieve in practice; first, the whole organization had to understand what goals were prioritized by the organization and why. Oftentimes, goals to become more digital or sustainable were vague and difficult to translate into practical everyday work tasks: ‘It’s easy for things to become ‘fluffy’. I think very few employees have actually read our sustainability strategy. […] One big challenge is to reach the whole organization and make things concrete and relevant for every occupational category’ (PriB2). Secondly, the interviewees indicated a strong unwillingness to change throughout their organizations, where many people wanted to keep things as they had always been: ‘We are a bit change averse; we are even hostile to change. […] We’re an organization that hasn’t needed to change one millimetre. We don’t want to change; we want to do things like we’ve always done them’ (PubE2). Because of the serious lack of housing in Sweden, there is little pressure on housing companies to become more innovative.

Despite the urgent need for SFM, the interviewees all agreed that the sector was inert and slow to adopt new technologies. However, they also said it was slowly starting to change: ‘We haven’t pushed the envelope enough, but we have to do the groundwork first. The need for digitalization came much faster than we expected as an effect of the COVID-19 pandemic, so we aren’t completely ready yet’ (PubB3). They felt that housing companies needed to develop new skills to become more efficient and contribute to SFM: ‘We need competencies in change management and an understanding of how we are in an environment where change is going to happen faster and faster’ (PriB1). Pursuing different SFM goals is, therefore, a difficult task, nevertheless, there are initiatives underway.

Practices to fulfil SFM goals

Despite the inertia for change, Swedish housing companies are engaging in a wide range of different practices to reach different SFM goals. However, it was hard for the interviewees to know which solutions would have the best outcome. In general, the outcome of many new solutions was difficult to measure, and it was difficult for the housing companies to know if they were truly getting value for money.

When it came to environmental sustainability, the interviewees discussed such things as using new sustainable materials, more efficient heating, water, and electrical systems, the physical adaptation of buildings to withstand climate change, fossil-free car fleets, and how to sustainably refurbish dilapidated housing stocks. Although the interviewees said they had come further in their environmental sustainability work than their social sustainability work, many uncertainties remained: ‘There is much we haven’t solved with environmental sustainability yet, so we cannot implement new solutions. We haven’t solved the problem with concrete and we haven’t solved the problem with heating’ (PubA1). So, although different innovations showed promise, adoption of them was still limited.

The most promising innovations according to the interviewees were practices related to circular economy and recycled materials, e.g. reusing kitchens rather than installing completely new ones, using old batteries from electric buses to power buildings, or reusing old bricks from demolished buildings in new production. This had become increasingly important, not only from an environmental perspective but also from a financial one, in a time when energy and building material prices were increasing as a result of the war in Ukraine: ‘Now, the rampant material prices are a big deal and the sector has a hard time dealing with it’ (PubF2).

Besides environmental concerns, how to increase social sustainability was another conundrum. Housing owners have a large impact on people’s lives, and they are providing more than a product, they are providing a home that is connected to people’s well-being and self-identity. Social sustainability is complex as it is vague, multi-faceted, and difficult to measure: ‘If you compare to social sustainability, green sustainability is much easier to systematise [… social sustainability work] are a few years behind environmental sustainability work’ (BriB2). There was considerable uncertainty over how to mitigate negative trends such as low graduation rates, unemployment, diminished feelings of safety, and criminality. Criminality was especially concerning for the housing companies, who had to deal with issues such as youths being recruited into criminal networks, unlawful renting, or money laundering.

Their efforts to increase social sustainability and decrease criminality included using social procurement to hire unemployed tenants, working with sports clubs to give youths decent recreation time, helping with homework and CVs, using landscape design to create safe spaces and deter criminal behaviour, safety certification of houses, neighbourhood social events, and creating spaces for small businesses. There were also initiatives to implement new technologies for crime prevention, like surveillance cameras, boxes emitting soundwaves to prevent loitering, or digital platforms where, for example, housing companies, law enforcement, and social services could connect and exchange information. As such, socially focused SFM work required extensive collaboration with other actors such as law enforcement, social services, and local non-profits, but there was no formal structure to facilitate this collaboration:

I wish there was a coordinating unit, or person, in every city that you could email or call to get information, but mainly to give information [about ongoing criminal activity]. I feel very frustrated that I don’t have anywhere to provide information. (PriA1)

In addition to collaborative measures, there are new promising technologies available to help drive change.

Digitalization of FM practices

Due to the complexity of reaching SFM goals, many interviewees emphasize how digitalization will be a useful tool for the future of FM. There is considerable interest in working more with ‘proptech’, i.e. technology used to manage real estates such as digital twins, AI, and BIM (building information modelling). They felt these types of solutions had the potential to make FM work more efficient across the housing stock and decrease energy consumption through smarter monitoring and more efficient heating, electricity and water use. Many of the interviewees already had monitoring systems, but these were often underutilized.

Despite the promise of digitalization, the interviewees were somewhat hesitant about implementing large-scale digital solutions and rather favoured less conspicuous solutions such as digital name plates and locks, QR codes to document maintenance measures, online identification for the contract signing, chatbots and apps to enable tenant communication, robotic lawn mowers, and sensors to monitor snowfall or the state of recycling rooms. The interviewees thought these smaller solutions made basic FM work more efficient because they did not have to spend as much time in each property to do the work manually. However, the housing companies still needed to be physically present to provide a sense of safety, to make sure the properties were clean and maintained, and to nurture relationships with their tenants. So, in many cases, such solutions may be counterintuitive for basic FM work.

The interviewees explained that implementing new technologies meant creating new knowledge, first in terms of teaching people how to use the new technologies: ‘We need to develop new competencies among our staff because new, more digitalized houses are so technical that they require a new type of competency to be able to steer them or to understand how it all fits together’ (PubB3). Secondly, new physical structures needed to be created to enable the practical implementation of the new technologies: ‘We have to build a lot of infrastructure first. Broadband has to be put down. Sockets have to be put in. I would say that the housing sector is really bad at that stuff – we’re behind on that journey’ (PriC1). The implementation of new technologies thus incurred huge investments in terms of resources, knowledge, time, and infrastructure.

Because of the sector’s slow adoption of new technologies, many interviewees proposed looking at other industries for inspiration and insight. Examples of possible solutions included online tracking services like retail companies use, online communication like in healthcare apps, or online booking systems to schedule refurbishment work like service delivery firms use:

You don’t have to invent everything yourself; you can look at what other organisations are doing, and it doesn’t even have to be in the same sector. If you buy clothes, no one is going to call customer services to track their package, but we don’t have the same tools to communicate with our customers like other sectors do. We have a lot to learn (PriB1).

Taking inspiration from other industries to adopt new sustainable and efficient technologies to reach SFM goals was necessary, as there is currently a lack of best practices and know-how for what technologies and practices to adopt, and how to do it.

No best practice for SFM

Although Swedish housing companies have identified practices to reach SFM goals and digital tools to support the transition towards more embedded SFM practices, there is currently no best practice for how to accomplish this. According to the interviewees, one major obstacle to the implementation of new technologies, tools, and practices was that there were few, well-supported business models in place to support investment in them. Despite digitalization being the ‘new big thing’ to develop SFM, there was considerable hesitation amongst the interviewees about scaling up and widely implementing new technologies and practices – regardless of whether they had been tested and had positive effects. One interviewee (PubD2) described this problem using a travel analogy

We’re very good at going on expedition. ‘Yes, start that pilot project, just go for it!’ And then those who have been on the expedition come home and say that ‘it was wonderful, there were beautiful beaches and they have great food. Maybe we should try it some more’. And the organisation just says ‘no, we’ll continue to just go on charter holidays some more’. It’s difficult to make things mainstream.

Another major issue when trying to digitalize FM and implement new technologies such as digital twins or BIM was the analogue nature of the existing housing stock. While implementing new technologies in newly built projects is easy, it is considerably more complex in more old-fashioned housing stocks. Also, the interviewees explained that a circular economy mindset is difficult to integrate into the sector, which still tends to see everything in terms of projects and not as long-term commitments, which makes scaling up difficult. As one interviewee (PriB2) put it: ‘I hope there will be better business models related to resource efficiency, i.e. recycled materials. There are some efforts made using recycled bricks, but it’s much more troublesome and expensive than buying new. New materials are too cheap’. For many of these new technologies, there were uncertainties over how to use them and what benefit they would really contribute to sustainability, efficiency, and the financial bottom line. The interviewees said that FM innovation was often more ‘talk than walk’, and that it was difficult to turn plans into action because implementation was perceived as insurmountable considering the sheer size of the housing stocks.

There was a firmly rooted fear amongst the interviewees about investing in different solutions or services before they had been properly tested: ‘With digitalisation, there are many choices to be made. You don’t want to jump on too early or too late. And, most importantly, not jump on the wrong thing. Such large investments must last over time’ (PriA1). The interviewees continuously emphasized how the transition towards SFM and the adoption of new services and technologies should never be detrimental to the financial bottom line. This was a major reason why the interviewees were hesitant to implement larger digital solutions like digital twins: ‘Our entire business model builds on us having a sustainable, profitable business. We have to show how we make sustainability profitable’ (PubA2). The reality, however, is that in the long term, the refurbishment debt only grows when housing companies are reluctant to implement new technologies and practices.

In summary, the findings illustrate many practical challenges for housing companies trying to transition to SFM. Despite the interviewees agreeing that the sector is inert, slow to innovate, and hesitant to invest in new technologies, efforts to drive change are often weak in practice. So, awareness of the problem is not in itself sufficient to address it, and a major reason for that could be path dependency. Therefore, using a path dependency framework could help to better understand and address these challenges, which is discussed next.

Discussion

Vague goals and outcomes delegitimizing SFM change initiatives

The wide range of alternative paths and technologies created considerable confusion for housing companies. First, they did not have the resources to investigate other paths (Kirk et al., 2007) due to a lack of long-term strategic perspective in their work, where they were more focused on solving unexpected issues, and had difficulties meeting demands from multiple stakeholders. This ad hoc way of working took precedence over alternative paths, as it was impossible to pursue them without basic FM work (maintaining the housing stock) being in place and without the ability to make the necessary investments (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006), which is in line with previous SFM research (Elmualim et al., 2010, 2012; Svensson et al., 2022). Secondly, not only was it difficult for the interviewees to investigate and choose between alternative paths and their associated technologies and practices, but many of the proposed solutions were difficult to measure, and the value for money was uncertain – especially for those that were technologically advanced or related to social sustainability (Sartorius, 2006). Finding ways to minimize this uncertainty (Mahapatra & Gustavsson, 2008) will be important moving forward.

The findings show, much like previous research (Elmualim et al., 2010, 2012), how vague goals are difficult to translate into concrete work practices. When alternative paths and their associated practices and value for money are unclear, it becomes difficult for housing companies to justify pursuing them, even though they may contribute more to SFM (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006). The findings also show how many of those working with FM are unwilling to change their established work practices, suggesting a clash between their professional identities and new FM practices (Hrelja et al., 2013).

To break path-dependent behaviour, strategic management capabilities are necessary (Lehtimäki et al., 2020; Svensson et al., 2022). Many housing companies clearly lack these skills, so while developing technical skills will be important for FM practitioners (Elmualim et al., 2012), developing change management capabilities may be even more important. Without skills for managing organization-wide change, organizations will likely prioritize local issues over strategic SFM work. Change capabilities are also vital to translate strategic SFM targets into operational practices at all levels of the organization (Elmualim et al., 2010, 2012; Svensson et al., 2022). Thus, if change capabilities are not embedded in the organization, adopting and implementing new practices and technologies will be difficult.

Incentives for incremental or radical change

Further aggravating the lack of strategic management skills, is a lack of incentives to change in the FM sector, likely due to its tightly institutionalized ways. The fact that change is slow (Lee & Kang, 2013; Støre-Valen & Buser, 2018) and the maintenance work is never-ending, suggests that change should be continuous, and likely also incremental (Geels, 2004; Kirk et al., 2007). Yet, doing things as they have always been done is a strongly embedded logic in the sector, and vested interests (Geels, 2004) uphold the status quo and hinder change.

To push FM work into the future, some radical change may be necessary, although previous research warns against this (Hrelja et al., 2013). New technologies do not seem to be providing that push (Wilsford, 1994), as housing companies do not know how to choose between different innovations. The political pressure of climate change adaptation also fails to drive change in the FM sector (Ashford & Hall, 2011). Instead, it is unforeseen global events that seem to have pushed transition in the sector most effectively. For example, as material prices have increased due to the war in Ukraine, there are efforts underway to find new materials. There are also efforts being made to find more efficient and reliable sources of heat and electricity due to the volatile European energy market, and digitalization has increased much faster than expected due to the COVID-19 pandemic. These sudden events have forced housing companies to switch paths and adopt new technologies and practices – even if these new paths aligned poorly with existing paths (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006). These crises have thus led to a period of uncertainty that has enabled new paths to be explored (Sartorius, 2006).

Sudden events, then, are important given how the lack of long-term perspective (Collins et al., 2019) ordinarily makes alternative paths difficult to take. A circular economy embeds the assumption of a long-term, revolving cycle of use and reuse, which is difficult to reconcile with established short-term institutional arrangements and a ‘projectified’ mindset (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006). Therefore, such misaligned paths may require an external force – like sudden events – to bring them into alignment. However, even sudden external events, like the introduction of new technologies, is not always enough to break path dependencies.

Difficulties in breaking path dependencies

The adoption of new practices and technologies requires incumbent paths to be broken. The interest amongst the interviewees in pursuing large-scale digital solutions like digital twins was not surprising given how new paths adjacent to existing paths are more likely to be pursued than widely diverging paths (Kirk et al., 2007; Modell et al., 2007). Although these large solutions need investment in new infrastructure, systems, and knowledge (Geels, 2004), most of the housing companies already had monitoring systems in place, which means that switching costs could be somewhat reduced (Kirk et al., 2007; Modell et al., 2007).

Despite these reduced switching costs, less conspicuous or small-scale solutions like digital locks or robotic lawnmowers were more often pursued in practice. However, many of these smaller solutions did not reinforce existing institutional arrangements and logics in the field, but actually detached the FM practitioners from their regular FM work such as building relationships with tenants and attending to things in the neighbourhood. So, adopting these small technical solutions resulted in a more divergent path in relation to existing institutional arrangements (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006). Thus, in terms of technology adoption, the housing companies unexpectedly seemed to adhere less to path-dependent behaviour than the theory may have predicted.

It is nevertheless clear that adopting technical solutions requires a huge investment in new infrastructure, systems, practices, policies, knowledge, and behaviours (Geels, 2004), investments that the FM sector historically has been hesitant to make (Mahapatra et al., 2012; Støre-Valen & Buser, 2018). New infrastructure and systems must be created to support larger technical solutions like digital twins, to digitalize an analogue housing stock, and to learn how to manage these new tools in a sector that is traditionally not knowledge intensive. An issue with making such investments is that they are difficult to justify (Støre-Valen & Buser, 2018), as there are no well-established business models for how to scale up successful pilot projects on a larger scale. Wood (2006), Thomsen and Van der Flier (2009), and Lehtimäki et al. (2020) all conclude that there are rarely sufficient incentives to spend money on updating old housing stocks. The same sentiment is mirrored in this study, where the interviewees expressed their frustration that recycled materials were more expensive than new, and that there were few business models to support using recycled materials. So, the institutionalized practices of the sector continually limit efforts of change.

Indeed, the most powerful norm limiting the switch to new paths seemed to be the financial bottom line, and this was true both for the private and public housing companies. Elmualim et al. (2010) report that there is often an overemphasis on financial goals rather than innovation, and the same seemed to be true in this study more than 10 years later. This overemphasis overshadowed almost every conversation about adopting new technologies or practices to increase SFM, and it was clear that sustainability had to be economically advantageous to gain support. This was evident in the fear of investing in new solutions (Støre-Valen & Buser, 2018), and this created inertia in the sector and added even more to the widespread refurbishment debt. There was a strong uncertainty amongst the interviewees about the right path forward, which led to an aversion to being a first mover. This was further aggravated by the short-term, projectified mindset embedded in current norms. As a result, it was unclear who would drive innovation and development of SFM in the sector. Transitioning towards SFM may entail trade-offs between older, known challenges, and newer, unforeseen challenges embedded in new services and technologies. The question is what trade-offs between solving old challenges and creating new challenges are acceptable to bear. The uncertainty avoidance is a major barrier to breaking path-dependent behaviour.

Ways to break path dependencies

Nevertheless, there are ways to break path dependencies and overcome uncertainty avoidance. The interviewees’ interest in adopting technologies used by other industries (e.g. retail and healthcare) can be seen as a way of minimizing uncertainty and switching costs associated with pursing new paths. Because new paths have uncertain outcomes and may align poorly with existing arrangements (Kirk et al., 2007; Modell et al., 2007; Sartorius, 2006), following paths that other industries have followed provides a map of what to expect – like a preview of sorts. Switching costs, then, are likely to be reduced because other industries have provided a blueprint of what infrastructure must be established and what knowledge must be assimilated for the new path to succeed. Emulating the technological implementations of other industries could thus be seen as a strategy to break path-dependent lock-in effects. Emulation could also be an example of externally focused institutional work of adopting outsider practices (Svensson et al., 2022).

Relying on interpersonal relationships and collaboration is another way to break path dependencies. This is especially true of the social aspect of SFM, which the housing companies said was harder for them to address than environmental sustainability with its more developed tools. This may also be because some socially focused SFM work, like dealing with criminality, lies outside of housing companies’ core business. Opoku and Lee (2022) claim that stakeholder collaboration is necessary for SFM, and Lehtimäki et al. (2020), Uusitalo and Lavikka (2020) and Svensson et al. (2022) find that collaboration with external actors can be a way to break path dependencies. Collaboration is not inherently a problem. However, collaboration nonetheless requires new ways of working, resources, and commitment between actors who have different competencies, as well as professional cultures, goals, and work practices (Hrelja et al., 2013). Finding new paths to pursue is difficult for one organization to do, trying to do it together with other organizations may be even more difficult due to, e.g. differences in knowledge, vested interests, normative rules, and expected behaviours (Geels, 2004). One question also remains: because many of the issues and efforts related to social sustainability lie outside the core business of maintaining/owning properties, should housing companies be pursuing such ambiguous paths?

In summary, the theoretical discussion of the findings clearly shows that the tightly institutionalized nature of the FM sector, and the many path dependencies constraining behaviour and hindering the transition to SFM, are troublesome to overcome. However, the identification of these path dependencies represents the first step to breaking them.

Contributions

This study makes several contributions to SFM research, to the path dependency construct, and to the actual practice of FM. For the FM/SFM research field, the paper confirms, adds to and complements much of what has been found in previous research. The paper contributes a holistic insight into the ongoing development of SFM work amongst housing companies and answers the call of previous research (Bröchner et al., 2019) to combine the study of sustainability and digitalization, rather than treating them as two separate streams of FM research. The study also applies the theoretical construct of path dependency, thereby theorizing change in the FM sector and engaging with theory in a way that FM research has often failed to do (Bröchner et al., 2019; Nielsen et al., 2016). Also, understanding the underlying mechanisms (path dependency) of inertia to adopt SFM adds valuable input to the research field, that can hopefully be translated into practical action. Further, the study illustrates how sudden, unforeseen events (e.g. the war in Ukraine, COVID-19, and energy prices) are important catalysts for change and drivers of SFM. Indeed, these force majeure types of events were more likely to drive change in SFM than government regulations (Ashford & Hall, 2011; Elmualim et al., 2012) or technological innovation (Wilsford, 1994).

Methodologically, the majority of empirical FM research included in this paper either builds on case studies (Collins et al., 2019; Gluch & Svensson, 2018; Støre-Valen & Buser, 2018; Svensson et al., 2022) or surveys (Elmualim et al., 2012; Lee & Kang, 2013). Furthermore, in Okoro’s (2023) review, she claims that only a few studies have used interviews to examine how actors work with SFM. This study therefore adds a methodological perspective lacking within the SFM research field. Perhaps most importantly, the study not only illustrates what change is difficult in relation to SFM, but also why it is difficult.

Regarding the path dependency construct, previous research holds that new paths that share features of existing institutional arrangements are more easily followed, as switching costs are lower (Kirk et al., 2007; Modell et al., 2007). This study highlights a new way in which switching costs can be lowered, i.e. emulation. Emulating other industries’ path-divergent behaviour decreases uncertainty and helps predict necessary investments in infrastructure, knowledge, and changes in behavioural norms.

For FM practitioners, the study illustrates what path dependencies need to be broken, what behaviours need to be changed, what structures must be created, and what skills must be developed to advance SFM in the sector. Answering the call of previous research, the study highlights the practical challenges of SFM and shows how FM professionals deal, or sometimes fail to deal, with those challenges.

Conclusions

Using a path dependency framework, this paper investigates the challenges of transitioning to SFM for Swedish housing companies in relation to practical and technical innovations like digitalization. The study shows that there are many technologies and practices housing companies can adopt to transition towards SFM, but that their institutionalized path-dependent behaviour is difficult to break – especially in terms of their unwillingness to change, uncertainty avoidance, and overemphasis on the financial bottom line. In addition, innovative solutions and their implementation present their own challenges, such as a lack of business models and clear value. If the issues identified in this paper are not addressed, and path-dependent behaviour is not broken, the transition towards SFM will be negatively impacted. It may cause housing companies to be unprepared for coming regulatory changes, a changing business landscape, or new, sudden crises. Most importantly, the built environment needs to adopt a long-term perspective that avoids projectification of sustainability initiatives, to create a lasting positive impact.

A limitation of this study is that it focuses solely on a Swedish context. Nevertheless, the findings are likely applicable to other western-European contexts that share similar institutional features, like mutual legislation (EU regulations), developed economies, and housing markets. Also, previous research has established that change in the FM sector is slow no matter the geographical context, thereby suggesting transferability to other contexts.

Applying the path dependency framework to other FM contexts would be a promising development of this research, especially in more emergent economies and developing countries that are only now starting their SFM journey (see e.g. Hoxha et al., 2022). For example, to understand how a more emerging economy may overcome some of the institutionalized barriers identified in this paper before they become institutionalized. Also, due to institutional working practices in the FM sector, previous research has found that sustainable practices are often discarded for more cost-effective ones (Thomsen & Van der Flier, 2009; Wood, 2006). Future research would contribute valuable insight into how to break such institutionalized path-dependent practices by investigating more coercive and non-coercive measures like carbon taxes, financial bonuses, or legislation.

Disclosure statement

No potential conflict of interest was reported by the authors.