What innovation-based rationales for the introduction of the VEAs may be identified?

TECHNOLOGICAL CHANGE AT PERFECT PROPERTIES Perfect Properties runs a chain of 300 estate agents’ offices in the south of England. Up until some time ago, each office employed on average three full-time staff and two parttime staff. The day-to-day affairs of each office were overseen by the most senior estate agent, referred to as the office manager. The office managers were supported by a centralised head office function. The expectation has always been that each office would make a contribution to the overall profit of Perfect Properties. League tables have been regularly publicised within Perfect Properties, ranking the different contributions from different offices. It used to be informally understood that if an office ever failed to make a contribution to profit, the office manager would ‘stand down’ from his or her position. Before this year no office manager had ever been required to take this action. The market for properties has been buoyant for many years, and profits and working life in Perfect Properties has been good. However, over the previous six months there has been a dramatic and unexpected deterioration in the property market. The loss of confidence was precipitated by an international crisis and the property market is now expected to remain stagnant for the next few years. A consequence of this dramatic downturn has been that no fewer than 50 office managers have failed to make a contribution to profit. The overall financial situation is depressing in that Perfect Properties is evidently moving into a lossmaking situation and there is no sign of an early recovery in the property market. The board of Perfect Properties have reviewed four potential strategies, but in the end they have favoured an IT-based solution. The largest costs for Perfect Properties are labour costs, resulting from the large, geographically dispersed office network. Other estate agents in response to the downturn have reduced staff numbers, and Perfect Properties feels it must take a similar course of action. However, the concern is that clients who personally visit offices and talk to staff have often been a potentially lucrative source of business. The solution adopted by the board has been the introduction of a virtual estate agent (VEA) in every office. The VEAs are client-friendly interactive computer terminals. Although Perfect Properties already has a strong Internet presence with its own website, the VEAs are regarded as far more interactive. Initially, the software was designed to respond to the needs of potential purchasers, but in the longer term the VEAs are intended to deal with vendors as well. The VEAs through interactive questionnaires allow users to identify the right area and type of property for them. This is then linked to the properties that the office and other offices have available, scored against a 0–100 ranking reflecting the level of suitability. Unfortunately, there was no opportunity to pilot the VEAs, given the unexpected nature of the downturn in the property market. The VEAs were introduced into offices over a very short timeframe. The average staff establishment for each office has meanwhile been reduced from three full-time and two part-time staff to two full-time and one part-time member of staff. Perfect Properties have always employed a proportion of the workforce on short-term contracts, which has enabled this reduction in staff numbers. However, the major staff reduction at the same time as the introduction of major technological change into the offices has not been positively received by employees. The staff disparagingly refer to the VEAs as the ‘basic boxes’, regarding them as giving an inferior rather than a complementary service. There have even been anecdotal claims that VEAs have been sabotaged by staff members ironically feeding them coffee and sandwiches. However, the VEAs have proved to be very popular with clients. The VEAs appear to appeal to clients in just the way some people prefer to use automated teller machines outside the banks instead of talking to a bank clerk inside a bank branch. The VEAs are proving to be the salvation of Perfect Properties, attracting many new clients at a very difficult time. Although the initial implementation costs were high, the VEAs have helped to both reduce labour costs and generate more revenue. Over time even the staff in the offices have begun to appreciate how the VEAs help to deal with basic enquiries in an effective manner.


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1. What innovation-based rationales for the introduction of the VEAs may be identified?

2. How can the technological changes in Perfect Properties be explained in terms of social determinism?

3. What could have been done to manage the introduction of the VEAs better?

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