How Do Businesses Select the Locations of Their Corporate Headquarters?


Quick Answer

A business considers various factors in three key areas--personnel, cost and market--when selecting a corporate headquarters location. Considerations include whether or not employees are attracted to the location or if the operational costs and tax structure are favorable. A location may also enhance brand image or create market advantages.

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Full Answer

Whether a small business or a corporate giant, attracting or relocating employees and employee retention are as important as the overall business climate when selecting a corporate headquarters location. For example, quality of life factors were one of the Boeing Company's four primary concerns when moving its headquarters from Seattle to Chicago in 2001. Cultural life, schools, crime rates, wellness indicators and personal cost of living were some of the life factors that impacted Boeing's final decision.

Economic considerations related to corporate headquarters include business taxes, state and local incentives, relocation costs (physical plant and employee relocation), quality of telecommunications infrastructure and the availability of appropriately qualified personnel. A location must also offer the appropriate space at a competitive cost. Travel and transportation considerations include traffic volume, length of employee commutes, availability of public transportation and distance to a major airport.

Market accessibility is also a factor when locating a corporate office. Businesses should consider how the costs involved with shipping in supplies and shipping finished products out to market compare across locations.

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