Nucor Corp's Organizational Culture
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Case Details:
Case Code : HROB036
Case Length : 13 Pages
Period : 1899 - 2003
Pub Date : 2003
Teaching Note : Available
Organization : Nucor Corp.
Industry : Varied
Countries : North America
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Excerpts
Organizational Structure
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Unlike most Fortune 500 companies which had around 8-10 management layers
between the CEO and the employees, Nucor had only four management layers (Refer
Figure I). Nucor sought to maintain lean staffing, minimal bureaucracy and a
streamlined organizational structure. The most common joke at corporate
headquarters was that with four promotions, a supervisor could become CEO.
When Nucor first approached $1 billion in revenues, pressure increased on
Iverson to add more layers of management. The same happened when Nucor reached
the $2 billion and $3 billion milestone...
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Nucor's Success Formula
Nucor's management strongly believed that the company's success was mainly
due to its culture and not technology. When asked about the secret behind
Nucor's success, Iverson commented, "70% culture and 30% technology. The
truth is, I'm not sure if it's 80 to 20 or 60 to 40 percent, but I'm certain
our culture accounts for more than half of our success as a business."...
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Recruitment
Unlike many companies which emphasized more on technical skill set,
while recruiting, Nucor recruited people with right mindset even
though they lacked technical skills. Commenting on the company's
recruitment philosophy, James Coblin, General Manager - personnel
services (1995), said, "We can teach 'em to make steel."
Nucor looked for people who could communicate frankly with others
and work with minimum supervision... |
Reward System
Nucor's employees were paid according to their productivity. Employees were
given certain production goals, and their pay depended on realizing these goals.
Though the hourly wages at Nucor were only $9 per hour compared to the industry
average of $18 per hour, yet, Nucor employees earned more than their
counterparts in the industry due to the company's reward system which linked pay
with productivity. Commenting on the employees pay at Nucor, Jim Coblin, Vice
President HR said, "The only reason to work here is to try to get rich. Money is
important to our people."
According to analysts, Nucor's incentive plans not only encouraged the employees
to perform well at individual level but also encouraged them to excel at the
team level as the incentive plans took the performance of the teams into
consideration.
Nucor's incentive plans also resulted in healthy competition among the company's
different plants. For instance, workers at Nucor's Hickman plant worked hard to
break the production records of Nucor-Yamato plant. The internal competition
among Nucor plants was one of the main reasons for Nucor's high productivity.
Commenting on the competition among the mills, DiMicco said, "We encourage
positive competition that isn't destructive. Everybody wants to have leadership
[in the company]. It goes down to the employee level." ...
Excerpts Contd...>>
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