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Nucor Corporation Case Study

Essay by review  •  April 7, 2011  •  Case Study  •  2,625 Words (11 Pages)  •  1,493 Views

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History

Nucor Corporation is in the steel producing industry. Nucor Corporation is the largest steel producer in the United States with over $4.1 billion in sales annually. Nucor's headquarters are located in Charlotte, North Carolina. Nucor's corporate offices have been located in the South Park area of Charlotte since 1991. Nucor Corporation is a unique company with tremendous flexibility between its management and employees.

This steel giant has its own website: www.nucor.com. Daniel R. DiMicco is the Vice-Chairman, President and Chief Executive Officer of Nucor Corporation. Terry S. Lisenby is the Chief Financial Officer, Treasurer and Executive Vice President of Nucor Corporation. The company moved its headquarters from Phoenix, Arizona to Charlotte, North Carolina in 1966. The company later expanded the joist business with new operations in Texas and Alabama. Nucor built its first steel bar mill in Darlington, South Carolina in 1968. In 1972, the company adopted the name Nucor Corporation. During that span, Nucor has built three more Vulcraft facilities, eight steel mills, and expanded into other steel products. Currently, Nucor has operating facilities in 12 states. Nucor's products include carbon and alloy steel in bars, beams, sheet, and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing. Nucor is the nation's most profitable steel producer. Nucor also remains the nation's largest recycler. Nucor recycles over 10 million tons of scrap steel annually. The company's origins began with auto manufacturer Ransom E. Olds. Olds founded Oldsmobile and then Reo Motor Cars. These origins no doubt had a significant impact on the creation of what is now known as Nucor Corporation.

The company's success derives from its more than 9,500 employees. The company's philosophy is to hire and retain highly talented and productive people. Nucor Corporation has a simple organizational structure that allows its employees to innovate and make quick decisions. The company is highly decentralized. The division general managers and their respective staff make most day-to-day operating decisions. The organizational structure at a typical division is made up of only three management layers:

* General Manager/Department Manager

* Supervisor/Professional

* Hourly Employee

As part of its Human Resource function, Employee relations at Nucor are based on four clear principles:

1. Management is obligated to manage Nucor in such a way that employees will have the opportunity to earn according to their productivity.

2. Employees should be able to feel confident that if they do their jobs properly, they will have a job tomorrow.

3. Employees have the right to be treated fairly and must believe that they will be.

4. Employees must have an avenue of appeal when they believe they are being treated unfairly.

By implementing these four basic principles, Nucor has been able to attract and retain highly talented and productive employees. Its history speaks for itself.

During the past 20 years, Nucor has not laid off a single worker. Nucor does not like the term "downsizing." Instead, Nucor protected itself from losing valuable employees by successfully implementing a policy of no layoffs during recessions. During times of recession, the company reduces the workweek rather than the workforce. Many employees prefer a reduced workweek and lower wages as opposed to the other alternative, no work and no pay. However, the employees are not alone in these turbulent times. Management believes in the "share the pain" program. This program states that any reduction in a worker's compensation is accompanied by a greater reduction in management's compensation. However, it doesn't stop there. The cut in pay goes all the way up to the CEO, which can be as much as 70% of his income. This togetherness and we philosophy strengthened the spirit and trust of its employees towards its management. Not surprisingly, Nucor enjoys the lowest turnover rate of any company in its industry. The result is a committed and loyal team of Nucor employees.

Nucor has evolved to match the demands of its business, but has also managed to keep its fundamentals unchanged. These fundamentals include taking care of its customers, promoting the safest working environment, ensuring the highest quality products and the lowest costs, improving productivity, and increasing profitability. Nucor has achieved this by being a highly decentralized and agile organization, and by using the mentor and monitor approach models.

Monitor Role

The monitor role is essential to maintaining high performance in both individuals and groups. The monitor function focuses the manager's attention on internal control issues. For example, a manager might be responsible for managing core processes to ensure consistency. The monitor function is concerned with consolidating and creating continuity. This role encourages critical thinking. In the workplace, you have to support your claims and proposals in a systematic and concise way. When reasons are put together and presented to one or more people, they form an argument. In this sense, this means you make a case for doing, believing, or recommending something. Managing information overload is also critical in this role. Managerial success depends on speed and agility, not just thoroughness and accuracy. Smart managers learn to watch the helpful data and ignore or weed through the irrelevant stuff. Less sophisticated managers drown in information anxiety. If information doesn't tell us what we want or what we need to know, then this is not useful information that we need to process or store. Good managers review all information, but great managers are able to channel information efficiently. Managing core processes are also very important in the monitor role. A good place to start in improving a process is to understand the present process. The things we do everyday are loaded with inefficiencies that we may not notice. What are the primary or core indicators that tell you how effectively a process is operating? What about inventory - the availability and quality of the supplies needed? Does inventory stack up, wasting money and space, or do supplies run out making it impossible to fill orders and resulting in lost customers? These kinds of questions can help in determining what to monitor in order to improve the process. Nucor Corporation

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