...Tuesday, September 9, 2014 Nucor Corp A! Subject - Structure/Ops! • Decentralized ! - Distance between MGMT and ops! • Communication between top mgmt and supervisors?! - Autonomy for plant mgr - operated as an independent business! • Employees tell mgrs about their bad decisions — where is top mgmt? (no input/guidance)! • Too many risks?! - HR - People like working there! • Large labour supply! • Performance based pay, fairness! • Grievance reviews! - GM, then HQ! - Does HQ need to get involved?! • Annual dinners with GMs, monthly crew meetings, employee surveys! - Discuss any employee problems! • No layoffs! - Reduced workweek instead! - Compensation! • 1. Production Incentive plan! - Bonuses for workgroups (25-40 workers) based on anticipated vs. actual production! - 80-150% of base wage - BIG! 1 Tuesday, September 9, 2014 - Late - Lose bonus for the day, Sick - Lose bonus for the week! • 4 forgiveness days per yr! • Too harsh? Maybe not considering strong labour pool! - Supervisors and maintenance included! • No bonus paid of equipment not operating on that shift! • 2. Department Manager Plan! - Annual bonus based on ROA for the plant! • Target of 25%! • Average 82% bonus in recent years! - High?! • 3. Non-Production/Department Mgr Plan! - Accountants, engineers, clerks, etc! - Bonus based primarily on ROA for their plant! - Could be over 25% of base salary! • 4. Senior Officers Incentive Plan! - inc. Plant General Mgrs! - Based on return on shareholders’...
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...------------------------------------------------- Case Analysis Case Analysis Format Directions Required Format for Writing of All Assigned Cases Simply download the format exactly as it is and type your responses to each of the sections DO NOT DELETE ANY SECTION DO NOT TYPE WITHIN THE SECTION BOX Isaiah T. Tyler Name_______________________________________________ Nucor Steel Corporation Case___________________________________________ ------------------------------------------------- Section I ------------------------------------------------- What is the setting of the case i.e. the type of industry, the firms, operations, and nature of the environment/market[s]? ------------------------------------------------- ------------------------------------------------- What appears to be the issue(s), concern(s), problem(s), challenge (s) and/or opportunities and their significance for the organization? ------------------------------------------------- Nucor Corporation with 24 plants/divisions and 8,000 employees, operated in nine states recycling more than 10 million tons of scrap steel annually. Producing carbon and alloy steel in bars, beams, sheet, and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; and metal building systems, the corporation was known as the most modern and efficient, having streamlined organizational structure, incentive-based compensation and rigorous quality systems in the United States. Nucor Corporation entered...
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...Title of the Case: Nucor in 2009 Time Context or Period: 1905-2009 of Nucor Summary of the Case: In 1905, Ransom E. Olds, creator of the Oldsmobile, had a dispute with stockholders and left his own company — Olds Motor Works. He soon formed REO Motor Company, which evolved into the Nuclear Corporation of America and ultimately, Nucor. In 1962, this was the year that Nuclear Corporation made two moves that would soon change the company and ultimately the American steel industry. First, they acquired a company called Vulcraft, an unassuming producer of steel joists and girders. Second, to run Vulcraft, they hired a man named Ken Iverson who would soon emerge as one of the great visionaries and mavericks in American industry. Barely staving off bankruptcy, Nuclear appointed Ken Iverson as its new president. He acted quickly to put the company on a course toward profitability including selling off inefficient divisions. Not long after we shed our conglomerate business model to become a highly focused steel producer, The board of directors elected to change the name of the company from Nuclear Corporation of America to simply Nucor. Since then, Nucor has contributed over 70 million dollars to Scholarships and Educational Disbursements. It is a source for millions of dollars for educational funding. To this day, every child of every Nucor teammate is entitled to educational funds from the company. Now, Nucor is one of the leading steel producers in the United States. Later...
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...MEMORANDUM FROM: X SUBJ: “Nucor in 2013” Case Analysis EXECUTIVE SUMMARY The success of Nucor results in correct strategy that managers selected. Nucor Corporation is the largest steel manufacturer in the United States. The steel industry is a fragmented industry. There are many marginal competitors existing in the steel industry. Competitions are high. Nucor is in mature stage of the business life cycle. In this stage, Nucor needs to gain more market share. I strongly recommend Nucor develop product diversity, and spread great company culture to earn sustainable profit growth. ANALYSIS The steel industry in U.S. is not a great industry to begin business for a company due to the economic environment. A bunch of steel companies are facing bankruptcy. However, Nucor breaks the barrier and has strong development in this environment. Industry Analysis. The U.S. steel industry is facing recovery from global recession period, and is in the worst economic period dating back to early 1980s. Also, a number of steel companies have faced bankruptcy, reorganization, or no longer operating. Moreover, because of overcapacity, the steel industry has become a burden that U.S. is willing to get rid of. That is to say, trying to break the siege of the status quo in the steel industry is a challenge to Nucor. Porter’s Five Forces Model. Porter’s five forces model can help identify the current state of Nucor in the steel industry. First of all, new entry to this industry...
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...Conduct an Analysis of Case #10 Nucor Corporation and prepare a (4-5 page report). Discuss the trends in the steel industry and how it may impact Nucor’s strategy. The trend had been major steel production using blast furnaces. New technology using arc furnaces adopted by Nucor led to increased production and cost savings. The arc furnace technology took less labor, increased production, and was considered the new most cost-effective strategy among the steel industry. It was Nucor’s decision to adopt this process and be the first to introduce this new process to the United States. Many steel companies were going out of business due to reduced demand for steel and failing economies across the globe in the late 90s into the 2000s. Nucor chose to buy these failing plants when easily convertible to their production lineup. This also in many cases was a cheaper route than building new plants. The acquisition strategy proved to be essential as these failing firms were already setup for steel production at mass quantities and Nucor was able to inherit their ties and partnerships as well as their presence in their surrounding geographical area. The constant drive for efficiency and cost effective production was another strategy chosen to increase competitive advantage, market share, and ultimately become the number one steel producer among heavy competition. Discuss the organizational structure and management philosophy at Nucor. The management structure of Nucor was very different than...
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...University of Pennsylvania ScholarlyCommons Master of Science in Organizational Dynamics Theses 1-31-2007 Organizational Dynamics Programs Nucor Corporation: A Study on Evolution Toward Strategic Fit Regina Gordin University of Pennsylvania, regina.gordin@gmail.com Submitted to the Program of Organizational Dynamics In the Graduate Division of the School of Arts and Sciences In Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania. Advisor: Everett Keech This paper is posted at ScholarlyCommons. http://repository.upenn.edu/od_theses_msod/1 For more information, please contact repository@pobox.upenn.edu. NUCOR CORPORATION: A STUDY ON EVOLUTION TOWARD STRATEGIC FIT by Regina Gordin Submitted to the Program of Organizational Dynamics In the Graduate Division of the School of Arts and Sciences In Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania Philadelphia, Pennsylvania 2006 NUCOR CORPORATION: A STUDY ON EVOLUTION TOWARD STRATEGIC FIT Approved by: ________________________________________________ Program Director ________________________________________________ Advisor ABSTRACT For much of its century long history, Nucor Corporation and its predecessors displayed turbulent financial performance. Several attempts at a strategic realignment proved unsuccessful, and in...
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...Case 1-1 and case 3-2 | | NUCOR CORPORATION (A & B) As of 1999, Nucor Corporation( had been the most innovative and fastest-growing steel company of the last three decades. As an example of how a knowledge machine works, we see Nucor as a far more interesting company than, say, Andersen Consulting or McKinsey, because unlike professional service firms whose only output is knowledge, Nucor’s end product is steel, a tangible non-differentiable commodity. Yet, as we describe below, for much of the three decades from 1970 onward, Nucor had been a knowledge machine par excellence. Since the late 1960s the U. S. steel industry has faced numerous problems, such as substitution from other materials, foreign competition, slowing of steel demand, and strained labor relations and has reported one of the poorest profitability and growth records in the American economy. Yet, despite operating in a fundamentally troubled industry, during this time period, Nucor enjoyed an annual compounded sales growth rate of 17%, all generated organically. Furthermore, the company’s profit margins were consistently well above industry medians, and average annual return to shareholders exceeded 20% (see Box 1 for a business profile of Nucor Corporation). Nucor achieved this phenomenal and sustained success by excelling at a single task: creating and mobilizing knowledge...
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...Nucor at a Crossroads MGMT XXXX-XXX Nucor’s Historic Performance, Competitive Advantage, and Five Forces Analysis With roots dating back to 1904 in the automobile manufacturing industry, Nucor’s business strategy has morphed many times over the course of the past century in response to struggling sales and unrealized business strategies. Since F. Kenneth Iverson’s appointment as Nucor’s President in 1965, however, Nucor has performed very well. With a focus on efficiency, Nucor is committed to minimizing bureaucracy and maximizing performance and productivity via the utilization of an open-door/continuous improvement/ entrepreneurial culture, a compensation scheme premised on performance-based incentives, and — last, but not least —commitment to technological advancement. With this approach, in an industry with 36 different companies, Nucor enjoyed the second largest market share in 1986, with 16 plants and an annual production capacity of 2.1 million tons of steel. In 1985, Nucor was ranked the most productive steel-maker in the United States and the second most productive in the world, averaging 981 tons per employee, per year. Nucor managed to achieve this success using a low-cost strategy, which proved to be particularly suitable in the highly competitive, commodity-like steel industry. Despite its positive performance, competition in the U.S. steel industry was keen in 1986. At that time, the industry had sustained seven straights years of decreasing domestic...
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...ASSIGNMENT #4: HRM ISSUES/DIVERSIFICATION STRATEGIES Introduction This paper presents the analysis of the Nucor Corporation case (Thompson, Strickland, Gamble, 2010, Nucor Corporation, p. C-193). Nucor is one of the largest producers of steel in the United States with a production capacity that exceeds 26 million tons. Nucor was among the first steel companies in the United States to use electric arc furnaces to melt recycled steel. In 2007, Nucor recycled nearly 10 million cars in its production processes, the equivalent of one SUV every four second (Nucor.com). Trends in the Steel Industry Steel Industry Trends are not at all static in this industry and is a very dynamic. The country that is producing the maximum amount of steel may not be in the first position in the coming years. Analysis of the Steel Industry Trends show that from the period starting from 1910 until the year 1960, the first position in terms of producing the largest amount of steel in the whole world was captured by United States of America. During this period, it was observed that almost half of the total steel production around the globe was produced by USA. However, the scenario started to change after the countries like Japan and China came to the fore. Again, in the recent years, India as well as Brazil has shown tremendous performance in the steel production side. According to the recent Steel Industry Trends, China is the largest steel producing nation. However, it has also been seen that the...
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...Nucor Corporation: Competing against Low-Cost Steel Imports Week 8 Assignment Bus 599 Nucor Corporation is today one of North America largest steel maker company. Although the company has a strong position in the steel market today, things have not always been as positive. According to Crafting & Executing Strategy, Nucor was first known as Nuclear Corporation of America, a company involved in the nuclear instrument and electronic business in 1950’s and early 1960’s. Facing bankruptcy, the company changed direction and decided to invest in the stable steel-joist business. The new name, Nucor Corporation, came along with the change in 1972 to break away from the nuclear image and embrace the new venture. This transformational change was due to the vision of new CEO and president, F. Kenneth Iverson. His strategic initiatives revealed to be a blessing as Nucor Corporation has been successfully growing since its creation. Discuss the trends in the steel industry and how it may impact Nucor’s strategy. The electric arc furnace technology was introduced in 1960. The “mini-mills” was limited when compared to integrated mills in the industry. In addition, the operating costs of companies are lower compared to integrated mills because they use electric arc furnaces that can produce various steel products to minimize production costs. (Thompson, Strickland, & Gamble, 2010). Nucor Corporation started using thin-slab casting during the 1980’s and it was their...
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...University of Pennsylvania ScholarlyCommons Master of Science in Organizational Dynamics Theses 1-31-2007 Organizational Dynamics Programs Nucor Corporation: A Study on Evolution Toward Strategic Fit Regina Gordin University of Pennsylvania, regina.gordin@gmail.com Submitted to the Program of Organizational Dynamics In the Graduate Division of the School of Arts and Sciences In Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania. Advisor: Everett Keech This paper is posted at ScholarlyCommons. http://repository.upenn.edu/od_theses_msod/1 For more information, please contact repository@pobox.upenn.edu. NUCOR CORPORATION: A STUDY ON EVOLUTION TOWARD STRATEGIC FIT by Regina Gordin Submitted to the Program of Organizational Dynamics In the Graduate Division of the School of Arts and Sciences In Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania Philadelphia, Pennsylvania 2006 NUCOR CORPORATION: A STUDY ON EVOLUTION TOWARD STRATEGIC FIT Approved by: ________________________________________________ Program Director ________________________________________________ Advisor ABSTRACT For much of its century long history, Nucor Corporation and its predecessors displayed turbulent financial performance. Several attempts at a strategic realignment proved unsuccessful, and in...
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...GBA 490 Nucor Individual Written Case Major Issue 1: Nucor is forfeiting market share to foreign steel producing companies who are exporting goods into the United States. In 2011 direct steel imports from foreign competitors accounted for 22% of the U.S. market despite significant unused steel making capacity. Many foreign steel producers have costs at or below that of Nucor. These low production costs allow for foreign companies to undercut the prices offered by Nucor. This in turn leads to the reduction of jobs in the steel industry in the United States. Due to differences in exchange rates and foreign companies receiving government subsidies outside steel producing companies are able to offer unusually low prices for their steel products. Until the World Trade Organization enforces regulations to limit these unfair trade practices, or the U.S. government imposes higher tariffs on imported goods Nucor will continue missing out on large portions of market share within the United States. Major Issue 2: The level of earnings that Nucor is enjoying is nowhere near the level that they had been making before the financial crisis of late 2008. They were in the red in 2009 losing roughly 293 million dollars and have since been creeping steadily back up to a mere 778 million in net earnings in 2011. This is roughly half of the earnings they were reaching from 2004-2008 as they were netting and average of 1.5 billion dollars per year. The steel industry is one that is very volatile...
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...Assignment #4: HRM Issues/Diversification Strategies: Nucor Corporation Strategic Management, Business 599 Introduction In this paper, we will present an analysis of Nucor Corporation in Case # 10 (Arthur, Strickland, & John, 2010). The paper will discuss the trends in steel industry and how it may impact Nucor’s strategy. In addition, the paper will describe the organizational and management philosophy at Nucor. Furthermore, the paper will identify 3 HRM issues related to strategy implementation and recommend actions to address these issues. Recommendation whether a related or unrelated diversification should be used will also be discussed. Finally, we will be looking at Organizational structure issues the company would need to address to implement the strategy. Trends in Steel Industry and Its Impact on Nucor’s Strategy An analysis of the steel industry trends shows that from the period starting from 1910 till the year 1960, the first position in terms of producing the largest amount of steel in the whole world was captured by United States of America. During this period it was observed that almost half of the total steel production around the globe was produced by USA. But things started to change after the countries like Japan and China came to the fore. Again, in the recent years, India as well as Brazil has shown tremendous performance in the steel production industry. According to the recent steel industry trends, China is the largest steel producing...
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...Case study for Nucor steel company Case studies bring interesting, real-world circumstances in the study of business fields. Managers make different decisions in their companies, and each decision has a direct influence in revenue, costs, and profits. In analyzing the case study of Nucor steel company, different central firm issues, firm goals, the constraints to improving the firm and the relevant alternatives to counter the problems are addressed. To grow in steel market, metal producers are increasingly expanding territories, not only to better manage input costs, but also to secure access to strategic raw materials. With improving economies’ growth is expected to boost desire for many to purchase the product in the medium term. Steel producers and mini-mill companies are situated in the midst of a very competitive environment in both domestic and global scale which adversely affects their profitability. This competition among steelmakers is to capture a significant portion of the steel market in light of the fact that, the global supply of steel far exceeds the demand for steel products (Thompson, 207). The first competitive forces impacting steelmakers is the force to drive down the profitability of steel industry, steelmakers are primarily affected by the abundant steel supply versus demand, which depresses the market price of steel as a commodity. Competition among steelmakers is to lower product prices in order to capture a significant portion of potential customers...
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...Why has Nucor performed so well ? Mini-mill effect Low cost competitive strategy Organization structure : Superior human capital Decentralized & flat structure with autonomy to plant General managers without information system overload. HR policies for encouraging innovation & optimum productivity Tolerance to experimentation & willingness to take risk Approach to control : Information system : Weekly reports, Monthly reports, Meeting of all plant GM’s 3 times a year Metrics based Incentive plan based on nature of job Important aspects of Nucor’s overall approach to organization and control & their fit with the company’s strategic requirements? Strategy: Build facilities economically & operate productively Continuous innovation Delegation with information Max D:E of 30% Approach to organization structure : Superior human capital Decentralized & flat structure with autonomy to plant General managers without information system overload. HR policies for encouraging innovation & optimum productivity Tolerance to experimentation & willingness to take risk Approach to control : Information system : Weekly reports, Monthly reports, Meeting of all plant GM’s 3 times a year Metrics based Incentive plan based on nature of job Mechanisms to accumulate knowledge in individual plants A weekly report per plant sent to headquarters on the operations-related variables: A monthly report comparing actual to budgeted figures for sales revenue, costs, contribution...
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