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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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

Organizational Structure

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...

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

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."...

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." ...

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