Norfolk Southern Strategic Decisions

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Norfolk Southern Strategy Selection Norfolk Southern, like other railroad are a very unique business and require unique strategic decisions. Railroads transport freight like trucks and ships, but railroads do not have the luxury of having their transportation infrastructure provided for them. Trucking companies don’t have to build the roads and bridges they drive on to move freight and ships don’t have to build or maintain the waterways in which they travel. However, railroads must build and maintain the tracks they use to move freight to a customer. This is an added level of strategic decision making that the railroad’s competitors don’t have to make. It is very costly to lay tracks and maintain them to prevent derailments. Once the…show more content…
Norfolk Southern’s President Jim Squires announced on January 27, 2015 that they would be relocating roughly 500 employees to their other headquarters buildings in Atlanta, GA and Norfolk, VA. Mr. Squires announced that this decision was made to, “foster departmental synergies and to make better use of the company’s real estate assets and support the company’s goal of streamlining its management workforce. (Norfolk Southern Corp., 2015 para. 3)” This is a liquidation strategy in which the company is selling off some of their tangible assets, namely the 11 story building in the heart of downtown Roanoke. Selling of the building and property will reduce the costs of maintaining and powering the building as well as business travel to and from Roanoke. The company will also gain the cash value of the equity they have by selling the building and the reduced cost of taxes paid on the property. They will incur some large upfront costs by relocating 500 employees and office equipment. However, in the long run this would likely save them money by reducing the reoccurring costs to use the building. This strategic decision is likely a good decision for the company over time but it has a large personal impact on the 500 employees that are forced to relocate or find new jobs. This type of liquidation strategy will often affect the lives of the people working for any company that goes through it. These decisions are always difficult to make, even more so than most strategic decisions. Some of the other strategic decisions Norfolk Southern have made are complicated but can be less difficult to make when dealing with laying rails instead of moving
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