Innovation in facilities management: from trajectories to ownership

Purpose – Innovation in facilities management (FM) is a complex process as FM is a diverse discipline. This paper aims to use innovation trajectories to explore this complex process through the introduction of a technology innovation in two FM services of security and workspace management. It also aims to consider the discourse of individuals within their trajectory to understand their positions toward the innovation. Design/methodology/approach – A two-year case study was conducted and it was based in an in-house FM department that was part of a financial institution. The specific methods used for the paper were semi-structured interviews with key participants of the project. Critical discourse analysis was used to examine the data. Findings – Individuals who were involved in introducing the technology to the FM department were both internal and external to FM as innovation in FM does not happen in isolation to the organisation. Innovation trajectories were often intertwined or occurred simultaneously during the process of a project which sometimes resulted in conflict. Tensions within the discourse of ownership of the project were particularly apparent as this discourse had a power dimension in driving the project through to implementation. Research limitations/implications – The research is limited by being a single case study so it is not possible to generalise findings but the findings may have resonances with other organisations. Originality/value – The paper presents an original idea about how to understand innovation processes in FM services.

Closed form approximations for spread options

This article expresses the price of a spread option as the sum of the prices of two compound options. One compound option is to exchange vanilla call options on the two underlying assets and the other is to exchange the corresponding put options. This way we derive a new closed form approximation for the price of a European spread option and a corresponding approximation for each of its price, volatility and correlation hedge ratios. Our approach has many advantages over existing analytical approximations, which have limited validity and an indeterminacy that renders them of little practical use. The compound exchange option approximation for European spread options is then extended to American spread options on assets that pay dividends or incur costs. Simulations quantify the accuracy of our approach; we also present an empirical application to the American crack spread options that are traded on NYMEX. For illustration, we compare our results with those obtained using the approximation attributed to Kirk (1996, Correlation in energy markets. In: V. Kaminski (Ed.), Managing Energy Price Risk, pp. 71–78 (London: Risk Publications)), which is commonly used by traders.