NORFOLK SOUTHERN RAILROAD

By: Clyde D. Rhodes Sr.December 06, 2007

Final ProjectMGMT225 Int. Bus.Thursday 8:30-11:30

Instructor: Mr. James A. Satchel

Topics Covered NSC

Vision-Mission-Creed Safety Record The Thoroughbred Code of Ethics

Trade Status NSC CNI CSX

Strategic Alliance Pros Vs Cons Three year plan/Five year plan Maps of the railways Note of Concern Conclusion Questions

Norfolk Southern CorporationNSC

CEO Charles W. Moorman

Vision – Mission - Creed Our Vision: Be the safest , most customer-focused and

successful transportation company in the world Our Mission: Norfolk Southern's mission is to enhance the value of our stockholders' investment over time by

providing quality freight transportation services and undertaking any other related businesses in which our resources, particularly our people, give the company an advantage.

Our Creed: We are responsible to our stockholders, customers, employees and the communities we serve. For all our constituencies, we will make safety our highest priority. For our customers, we will provide quality service, always trying to reduce our costs in order to

offer competitive prices. For our stockholders, we will strive to earn a return on their equity investment which will increase

the value of their ownership. By generating a reasonable return on invested capital, we will provide the security of a financially strong company to our customers, employees, stockholders and communities.

For our employees, our greatest asset, we will provide fair and dignified treatment with equal opportunity at every level. We will seek a talented, diverse work force and management with the highest standards of honesty and fairness.

For the communities we serve, we will be good corporate citizens, seeking to enhance their quality of life through service, jobs, investment and the energies and good will of our employees.

Safety Record Safety is Norfolk Southern's Top Priority. In fact, it's the first part of our corporate vision to be the safest, most customer-focused and successful

transportation company in the world . As a testament to the successful pursuit of this vision, Norfolk Southern has earned unprecedented recognition for safety. The hard work continues at Norfolk Southern to achieve even more difficult goals for employee as well as customer safety.

For 18 years in a row, NS employees have won the E.H. Harriman Memorial gold medal award for employee safety in the railroad industry. The gold medal recognizes NS as the railroad with the lowest employee personal injury ratio in 2006 among the nation's major railroads.

Norfolk Southern has won the award every year since 1989 — an achievement unmatched among the industry's major freight railroads.

The E.H. Harriman Memorial Awards are the only safety awards specifically designated to recognize railroad safety improvement. The awards are presented for outstanding performance in railroad safety and as a stimulus for the conservation of human life.

The awards are presented annually to the U.S. railroads whose employees have the lowest number of injuries for every 200,000 employee-hours worked.

It takes into account the volume of work performed, as well as the number of fatalities, injuries and occupational illnesses reported to the Federal Railroad Administration.

Customers recognize the value of doing business with a company that will never put safety anywhere but first. By being the safest major railroad, Norfolk Southern has helped create a better, more competitive transportation industry.

Norfolk Southern's objective, however, is not to win awards, but to provide employees with a safe work environment and to exceed customers' expectations by delivering products safely, efficiently and on time.

The Thoroughbred Code of Ethics The Thoroughbred Code of Ethics Working for the Thoroughbred of Transportation At Norfolk Southern, our good name stands at the heart of who we are and who we have been for over 175 years. Our customers, stockholders, fellow

employees and the communities we serve are important to us, and strong relationships with each of these groups are vital to our continued success. The importance of these relationships is expressly stated in Our Creed. Following Our Creed enables us to reach Our Vision of being the safest, most customer-focused and successful transportation company in the world. This is not new to any of us, and each of us should be proud to be a part of the Thoroughbred Team.

Recently a set of Core Values was identified to better explain what behaviors are key to fulfilling Our Creed and therefore Our Vision. These behaviors are not new. It is only their presentation that has changed. These Core Values are:

SafetyWe put safety first by taking care of the people around us and following the rules.

PerformanceWe are performance driven and committed to providing quality customer service. We act on facts and are accountable for results.

IntegrityWe do the right thing. We are open, fair, honest and straightforward.

RespectWe believe in the importance of all of our stakeholders. We value the ideas and beliefs of our co-workers.

InnovationWe constantly seek new ideas and creative solutions to business challenges.

TeamworkWe believe that working together always produces the best results.

I am introducing these Core Values to you here because The Thoroughbred Code of Ethics builds upon the Core Values by providing us with a mutual understanding of how we are expected to conduct ourselves. The Thoroughbred Code also provides examples of how the behaviors underlying our Core Values can be applied to situations you may encounter at work.

Understanding and living our Core Values and The Thoroughbred Code means more than just an awareness of them. It means each of us taking responsibility for our own conduct at Norfolk Southern by acting in both a legal and ethical manner. Conduct drives reputation, and a company’s reputation takes years to build but only seconds to lose. It is imperative that we continue to work together to maintain our good name.

Thank you for doing your part. Sincerely,

Wick Moorman

Trade StatusNSC CNI

Current Price: $50.44 Current Price: $48.48

Last Trade Time: 11/16/2007 4:01P.M. Last Trade Time: 11/16/2007 4:00 P.M.

Open: $50.11 Open: $48.58

Previous Close: $50.11 Previous Close: $48.73

Daily Range: $49.87-$50.75 Daily Range: $48.00-$49.!0

52-Week Range: $43.58-$59.77 52-Week Range: $41.57-$58.49

Volume: 3,632,801 Volume: 1,595,600

Market Cap: $19.04b Market Cap: $23.94B

P/E Ratio: 13.69 P/E Ratio: 15.82

(Cited: CAPS) (Cited: CAPS)

CSXAfter Hours: $43.50 Up 0.26 (0.60%)

Last Trade: $43.24 Days Range: 42.71-44.32

Trade Time: Nov 16 52 Week Range: 33.50-51.88

Change: Down 0.35 (o.80%) Volume: 9,345,808

Prev. Close: $43.59 Avg. Vol. (3m): 6,511,640

Open: $44.10 Market Cap: 18.18B

Bid: N/A P/E (ttm): 14.98

Ask: N/A EPS (ttm): 2.89

1Y Target Est: 4.78 Div & Yield: 0.60 (1.40%)

(Cited: Yahoo! Finance)

Strategic Alliance

A strategic alliance happens when two or more organizations join forces to meet a critical business need while remaining independent. In the past, large organizations grew by swallowing smaller companies whole. Now growth-for both large and small companies happens through strategic alliance.Strategic alliances have never been more important for business success. From a tactical perspective, they can unlock a whole range of options for expanding a company’s reach and improving efficiency. Unfortunately, too many partnerships don’t achieve their full potential because the organizations involved lack the knowledge and skills required for success. (Cited: AMA)

Pros Vs ConsProsA- Save on fuel cost by working togetherB- More efficient scheduling & delivery performanceC- Eliminate dead heading (hauling empty cars a given distance to have them loaded)D- Shared customersE- Better quality on delivery timesF- CNI already serves the three NAFTA nations (Connection Advantages)G- Sharing maintenance cost on railwaysH- Strategic alliances may facilitate entry into a foreign market (This is a key factor for NSC & CSX) (Cited: Textbook)I- Sharing fixed cost & associated risksConsA-CNI & NSC are very financially set, but CSX is getting strongerB- Competition gives each corporation a bidding blockC- Conflict and lack of trust issues

Three Year Plan1- Strategic Alliance with CNI.2- Strategic Alliance with CSX.3- This will include all three NAFTA countries. United States Canada Mexico

Five Year PlanA pond successful completion of the three year plan, the tri strategic alliance will be starting to implement their strategy of expanding towards the west coast of the United States.I believe eventually more U.S. railroad systems can be formed to work in a synchronized motion to be accommodating to the growing world of business, and do it with the utmost of efficiency!

Also, developing options on expanding farther into the north eastern parts of Canada will also be a very high probability.

Maps of the Railways

Map of Railway Systems Joining the NAFTA Nations

www.sccommerence.com/railway.html

Note of ConcernA - In the wake of the Amtrak and Norfolk Southern Corporation (NSC) collision on November

30, 2007 concern for a strategic alliance with NSC will surely arise, but again maybe not.

B - Even if there was already a strategic alliance, NSC would be the only corporation of the three that would be held financially and legally responsible. Perhaps the plan for the strategic alliance may still continue.

C - An investigation that will probably take quite some time is underway. Presently the blame is being pointed at Amtrak, which should help the plan of this strategic alliance to commence.

Highlights on the crash: Engineer tells investigators he knew limit was 15 mph, but sped up anyway. Signal warned Amtrak train to slow down because another train was ahead. Engineer applied brakes and skidded 400 to 500 feet before hitting freight train. Friday’s collision sent 71 people to hospital; investigation continues. (Cited: CNN) Picture from CNN.com

ConclusionThere is always a solution to any problem and

it can be achieved through hard work and compromise. The question is what is the best solution and will these three corporations join together to accomplish the historical task that I set before them?

Because NSC and CNI are in good financial condition they may be more interested in a strategic alliance between themselves, with intentions of buying out or merging with CSX in the future.Only time will tell.

Any Questions?