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 Contd...
Work Culture
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Along with a good reward system, Nucor's management also focused on providing
conducive work enviornment which fostered trust and teamwork among
employees.Nucor empowered its employees to take decisions with minimal
interference from the top management. Each plant operated as an independent
business unit. The General Managers at Nucor plants were given considerable
freedom to take decisions regarding sourcing of raw-materials, finalizing
marketing strategies, finding customers, setting production targets and HR
requirements. One of Nucor's General Managers remarked, "The beautiful part of
Nucor is that we are not constrained.
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Headquarters doesn't restrict what I spend. I just have to
make my contribution to profits at the end of the year." The general managers
were expected to generate minimum of 25% return on assets under their control.
The managers were also free to use new technology or processes. This encouraged
employees to try out new processes and technologies. The management at Nucor
made it a point not to punish mistakes and maintained high tolerance levels with
regard to failures. For example, one plant manager utilizing his authority chose
an induction furnace which cost $10 million. The new induction furnace failed to
perform as per projections and broke down frequently.
Subsequently, the manager decided to remove the induction furnace and go back to
the electric arc furnace . When this decision was conveyed to the top
management, the manager was not punished for wastage of $10 million but was
supported in his decision to remove the induction furnace.
Nucor always supported its employees and had never opted for downsizing or
layoffs. However, from time to time Nucor's management asserted that, it would
not hesitate to downsize if the situation so demanded...
Questioning Nucor's Success Formula
Not everyone agreed with Nucor's policies and culture. Some analysts
pointed out flaws in Nucor's human resources policies.
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They felt that Nucor used its recruitment tests to weed out
prospects who were sympathetic towards unions.
Richard Preston, in
his book, 'American Steel' wrote, "Nucor had put Hawley through a
psychological test devised by a Nucor psychologist, one John Seres,
out of Chicago. Nucor's psychological test, which Nucor gave to all
candidates for jobs at the Crawfordsville project, was supposed to
identify goal-oriented people, self-reliant people: Nucor material.
The test also weeded out applicants who might sympathize with labor
unions." |
If a general manager was appraising a major capital investment project he was also thinking about reducing his short-term income and consequently incentives. Analysts also felt that promotions came very slow. Many managers had occupied their current positions for a long time and Nucor had some problems in developing the skills of its first line supervisors...
Exhibits
Exhibit I: Four-Year Financial Statement of Nucor
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