INTRODUCTION• Nucor started as a auto manufacturing company than later converted itself into the Nuclear and Electronics business in 1950’s and early 1960’s• After the firm suffered several money losing years Ken Iverson took charge as the president• After Iverson took charge he consolidated company on two businesses viz making steel from recycled scrap metal and fabricating steel joists for use in non residential construction
Cont…• In 1972 the firm changed its name to Nucor corporation• By 1998 it became America’s second largest steel maker and also was in Fortune 500 company• Nucor’s sales during Iverson’s tenure grew at an annual compound rate of about17% per annum• In the corresponding years both Nucor CEO John Correnti and Iverson were named steel maker of the year
Operations of Nucor• Nucor located its diverse facilities in rural areas across the United States• It established strong ties to its local communities and its workforce• Nucor selected operations in states with tax structures that encouraged business growth
Cont…• Nucor’s top management favoured the company’s commitment to remaining union free.• Nucor and its subsidiaries consisted of nine businesses, with 25 plants.
Strategies• Continuous Innovation• Usage of modern equipment• Individualized customer service• Usage of scrap metal• No acquisitions and mergers• Usage of low debt in total capital• No diversification
Organization Structure• Decentralized system• Four management layers: Chairman/Vice chairman/President Vice President/Plant General Manager Department Manager Supervisor
Cont…• Autonomy to the General Manager in decision making• Nucor’s board of director’s had only six members• The decision making was done by the individual plant’s General Manager and they were not liable for the Headquarters to respond to the problems• There were a total of 6800 employees working in the company
Human Resource Policies• Employee relations at Nucor were based on 4 principles: Employees would earn according to their productivity. Employees should feel confident that if they do their jobs properly, they would have a job tomorrow. Employees have the right to be treated fairly. Employees have an avenue of appeal when they believe they are being treated unfairly.
Cont…• General manager were required to hold annual dinners with every employee.• Commitment for no lay off during recession period.• No unionism.• Policy of team work.• Suggestions from lower level employees are taken into consideration.
Compensation• Four compensation plans: Product incentive plan Department manager incentive plan Non-production and non-department manager incentive plan Senior officer incentive plan
Information systems• Each plant has to submit a snapshot of the plants basic operations on a weekly and monthly basis• Managers do not have to submit voluminous reports instead they need to submit the actual and budgeted figures• The plant General managers met as a group with head quarters management three times a year to review each plant’s performance
Benefits• Profit sharing• Scholarship programmes• Stock purchase plan• Commitment of providing equal status• On the job training• Job referrals through existing employees
Technology• Use of mini-mill technology.• Backward integration.• Modernizing the existing plants.• Technology management.
Conclusion• Nucor’s overall approach towards organization and control has paid rich dividend in the growth of the company• Their ability to be a successful first mover in the adaption of new technology is remarkable• Although the company has done well for the last 25 years but still with the prevailing market conditions they need to think about diversification and mergers & acquisitions