Many companies have multiple locations for their corporate headquarters, but where are they located? Whether it’s a small regional office or a sprawling multi-national headquarters, corporate headquarters serve as the heart of the corporate organization. From communications to marketing to sales, these offices are the places where the company’s core functions are carried out. These areas also handle matters related to finance, human resources, billing, information technology, and legal issues. As a result, corporate headquarters often represent an integral part of the corporate structure.
Regardless of the location, a company’s decision-making process will be driven by incentives and market conditions. An 800-person company may choose to move from California to a smaller city, but the economics of relocation would be difficult to overcome. The move would require large capital expenditures, executive relocation costs, and significant financial benefits. The decision will also be driven by mergers and acquisitions, taxation, and incentives. As the world shifts toward increasingly automated processes, shifts in manufacturing will continue to influence corporate headquarters decisions.
Although relocation costs, taxation, and incentives are driving factors for some companies, corporate headquarters location can be an important factor in business strategy. Even a smaller firm may opt to relocate its headquarters to another state to save on costs. However, there are other factors that can impact a company’s decision-making process. A large, multi-national corporation’s size and industry sector are likely to determine where its headquarters will be. Besides, incentives and business interruption costs can be costly if the company’s current location is no longer optimal for growth.
When it comes to determining where a company’s headquarters should be located, incentives play an important role. For example, some 800-person companies may opt to move their headquarters to a new state, while others may choose to remain in their current location. In both cases, the location must provide substantial financial benefits, since the cost of executive relocation and business interruption can be prohibitive to the company’s overall operations. Additionally, incentive constraints may make it less effective to base corporate decisions on NPV maximization alone.
Changing location of corporate headquarters is crucial for the company’s growth. The right location will attract the best talent and minimize business disruption. The location of a corporate headquarters can be advantageous to the city’s economy, but it should also be strategic and allow the company to remain in a city. Some cities may not be able to provide this for free, but they can offer financial benefits to the employees and executives of a new site.
The new pattern of corporate headquarters may be more attractive for some companies than others. One study found that a company that employs 800 employees could easily move to a different state and still retain its same workforce and the same environment. While this scenario might be unattractive for some cities, it is a possibility that an 800-person company can relocate to another state. This might require substantial financial benefits for the company. Ultimately, a location choice should be based on the location of the company’s headquarters.