Turner (2008, 67) asserts that estate agents are viewed as well paid with high fees they usually charge for their services in buying and selling homes. Thus, the public is not likely to offer much sympathy to them, as most of them are facing job losses. Though, real estate industry faced difficult times in the past, the 2007-2010 recession period was worse due to the projected paralysis of the business in which property agents make their earnings. With many companies cutting jobs, employees are uncertain of their individual financial future, this results into fewer willing buyers though the number of homes on available for sale may be higher than before.
Banks as well as other financial are more concerned with where the economy is going in regards to real estate and are taking a close look at the market trends. Thus, they are granting fewer mortgages than approved (Newman, 2011; 187). Besides the insecurity in the job market in many industries, there are increased expenses of fuel and energy, worsening the problems already facing real estate agents trying to sale their properties.
As Newman (2011; 187) explains homeowners are more worried about the costs of heating and lighting a home than before, and this plays a major part in deciding if they will buy the home or not. Business activities in the real estate industry fell to record low in 2008 when the recession was at its peak. In deed the CEBR projected then that the industry will only record similar numbers of sales in reported in 2007, in 2012. With job cuts still going on, more and more people will be willing to sell their homes in order to improve their income.
The major problem is that during this time, the market is saturated. As observed by Balzli and Janko (2007; 80) owing to the difficulty in selling homes during the recession, a lot of homeowners reduce their prices in a bid to get a buyer. This implies that they get less profit and thus the fee paid to estate agents is considerably reduced. On other occasion, after a long time of waiting for a buyer and reducing prices, the homeowner may decide not to sell the home and wait for better prices; this means that estate agents do not receive any commission.
During recession, many estate companies suffered declining prices of their shares and less earning, leaving with one option, reducing the size of their employees to keep them aloft, very few like Abbey Properties managed to survive without such drastic measures. The basic survival of the firm According to Kogut and Zander (1996; 510) entrepreneurial orientation of a company is illustrated by the level to which the top management take risks, adopt to change and exploit innovation to attain competitive advantage.
Abbey Properties (2011): About US: Retrieved from: http://abbeyproperties.co.uk/about-us:
Alvarez, S. & Barney, J. (2005): How do entrepreneurs organize under conditions of uncertainty? Journal of Management, 17(2): 129-150.
Balzli, B. and T. Janko (2007): Credit Crunch Hits Small Businesses. Der Spiegel. Hamburg, Germany, Spiegel Gruppe.
Barney, J. (1999): How a Firms Capabilities Affect Boundary Decisions, Sloan Management Review, 40(3):137-146.
Cooper, G (2008): The Origin of Financial Crises: London, Harriman House
Douglas, W (2008): Recession Survival Strategies: The BPRI Group Brining Business Intelligence to Research, 1-2
Felin, T. and N. Foss (2009): Social reality, the boundaries of self-fulfilling prophecy, and
Hisrich, R.D. & Peters, M.P. (1992): Entrepreneurship: Starting, Developing, and Managing a New Enterprise, Irwin, Boston, Mass.
Holtman, A.G. & Idson, T.L. (1991): Employer size and on-the-job training decisions. Southern Economic Journal, 58(2), 339 – 356.
Iansiti, M. (1995): Shooting the rapids: managing product development in turbulent environments. California Management Review, 38(1), 37 – 58.
Kogut, B. & Zander, U. (1996): What firms do? Coordination, identity, and learning. Organization Science, 7(5): 502-518.
Laforet, S. & Tann, J. (2006): Innovative characteristics of small manufacturing firms. Journal of Small Business and Enterprise Development, 13(3), 363 – 376.
Leiblein, M. & Miller, D. (2003): An empirical examination of transaction- and firm-level influences on the vertical boundaries of the firm. Strategic Management Journal, 24(9): 839- 859.
Lin, C.Y. & Chen, M.Y (2007): Does innovation lead to performance? An empirical study of SMEs in Taiwan. Management Research News, 30(2), 115 – 126.
Lippman, R. & Rumelt, R. P. (2003): A bargaining perspective on resource advantage. Strategic Management Journal, 11(1069 - 1086).
Matthews, J.A. (2003). Competitive dynamics and economic learning: an extended resource-based view. Industrial and Corporate Change, 12(1) 115 – 128.
McCune, J. (1995): The face of tomorrow; Journal of Business Strategy, 16(3), 50 -56.
McNeill, K.R. & Ragins, E.J. (2005): Staying in the Property marketing game: trends, challenges, strategies and techniques. Journal of Vacation Marketing, 11(1), 31 – 40.
Newman, R. (2011): Persistent credit crunch puts damper on small business The Record. Woodland Park, NJ North Jersey Media Group.
Rouse, M.J. & Daellenbach, (2002): More thinking on research methods for the resource-based perspective. Strategic Management Journal, 23, (10), 963 – 975.
Simpkins, J. (2010, August 18): Three Ways to Brace for a Double-Dip Recession: Going for the Gold: Money Morning.
Tanabe, K. & Watanbe, C. (2005): Sources of small and enterprise excellent business performance in a service orientated economy; Journal of Services Research, 5(1), 5 -21.
Teece, D.J. (1986): Profiting from technological innovation: implications for integration, collaboration and public policy. Research Policy, 15(6), 285 – 305.
Trott, P (1998): Growing businesses by generating genuine business opportunities: a review of recent thinking. Journal of Applied Management, 7(2), 211 - 223.
Turner G (2008): The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis.
UK Economy will be hardest hit (2009, January 28). Retrieved August 04, 2011, from http://www.guardian.co.uk: http://www.guardian.co.uk/business/2009/jan/28/ilo-global-unemployment-to-soar
Wallenwein, A. (2011): Credit Crunch - or Credit Collapse?" Retrieved, August 04, 2011
Whitney, M. (2010): The Small Business Credit Crunch The Wall Street Journal. New York, Dow Jones & Company.