Physical Work Environments: An Integrative Review and Agenda for Future Research

This review examines the effect of physical work environments—the dedicated, tangible spaces where employees carry out their professional tasks—on organizational processes and outcomes. We synthesize decades of research across various disciplines using a conceptual framework that defines physical work environments along three key dimensions: ambience, spatial configuration, and aesthetics. These dimensions are analyzed for their effects on both internal stakeholders, such as employees, and external stakeholders, including clients, suppliers, and investors. Our analysis reveals two major themes in prior research: (1) task accomplishment, which focuses on how physical work environments influence physical and mental health, motivation and attitudes, as well as work processes; and (2) resource position, which explores how these environments impact a firm’s tangible resource position, its ability to attract and retain human resources, as well as shape intangible assets such as organizational culture and reputation. The study also highlights contradictory findings and methodological limitations in existing research and proposes future research agendas. By providing theoretical insights and practical guidelines, this work seeks to guide both scholars and managers in understanding how physical workspaces can be designed to improve organizational outcomes, particularly as firms adapt to evolving work arrangements following the COVID-19 pandemic.