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Company Site Selection: Key Decision-makers

Delivered October 24, 2020. Contributor: Sunali T.

Goals

To identify the key decision-makers that decide where a business relocates, expands, or starts in what location, their role in the site selection process/decision, and what is motivating their perspectives.

Early Findings

  • An article from Area Development states that in some companies, the location selection decision is centralized and require executive-level approval, while in others (usually larger companies), this decision is authorized at a business-unit level based on their business needs, workforce planning, and real estate demand management.
  • At a C-suite level, the site selection process is influenced by: its long-term investment potential (e.g. the pay back period), trade-offs of risk, cost, and opportunity, and its value addition to the bottom line of the business.
  • It further states that there are 4 groups of stakeholders that influence the location decision:
      •  Corporate internal organization: this group includes those who have the authority to take the decision at the executive, VP, or manager level. They may also be influenced by internal groups such as affected employees and endorsers. The project team (including representatives from corporate real estate, human resources, finance, and the operational and technical experts, etc) develops the location solution and presents the business case to the management (usually to the CEO, CFO, COO, or head of real estate).
      •  Other non-corporate stakeholders include external corporate affiliates, community interests, and business attractors.
  • According to a business case study on relocation, the CEO and CFO were heavily involved in the decision-making process while the chairman made the final decision.
  • The same source also states that, based on their findings, larger organizations adopt a more formal decision-making process in the decision to relocate. Usually, there is a team of individuals across the business involved in the process and the CEO or chairman is responsible for the final decision.

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