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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Nucor - Workers' Paradise Contd...

In the early 60s, the company made an unsuccessful bid to acquire Coast Metals3. At this juncture, Nuclear requested Ken Iverson (Iverson), a Coast Metals employee to help it identify other companies in the metal business that it might acquire. On Iverson's recommendation, Nuclear acquire Vulcraft, a steel joist manufacturing firm in Florence, South Carolina. In 1962, Iverson joined Nuclear as Vice President and took charge of the 200-person joist division. In late 1963, Iverson built a second plant at Nebraska. By 1965, the Vulcraft division was doing well. It was manufacturing steel joists at a time when a good building boom was underway.

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

However Nuclear as a whole was losing around $400,000 on annual sales of $20 million. By the middle of 1965, the company had also defaulted on two major loan payments. The President resigned and in September 1965, the board approached the 39 year old Iverson to take his place.

The new management headed by Iverson and Sam Siegal, the CFO, sold off the unprofitable half of the company. They then set out to build on the profitable bases of Vulcraft operations in Florence and in Norfolk, Nebraska. Iverson commented: "Our strategy was what executives now call 'Focusing on our core competencies' although that's not what we called it. We just placed the few chips we had left on the businesses that were turning a buck."4

In 1966, Nuclear shifted its corporate headquarters from Phoenix, Arizona to Charlotte, North Carolina.

Nucor's new headquarters, twelve thousand square feet of rented office space in a Charlotte office park, was a nondescript office staffed by 22 people on the fourth floor of a building. The office decor was spartan, simple, and functional. Iverson later commented: "I take pride in Nucor's little headquarters. To me, a big headquarters isn't grand. It is a waste of money- a gross tribute to some executives' ego." 5

Since Nucor depended on imports for 80% of its steel requirements, Iverson decided to integrate backwards into steel production, building the first steel mill in 1969.

The mill employed more than 500 people and had three electric arc furnaces which operated 24 hours a day and 5 days a week. It made relatively simple products like steel bars that did not pose much competition to big steel producers. Later however, the company started producing a wider range of products, and began to compete with the big producers on cost efficiency, flexibility, and innovation.

The company changed its name to Nucor in 1972 and in the same year added another joist plant in Indiana. Nucor started making steel decks in 1977 (with the addition of steel plants in Texas in 1975 and another in Nebraska in 1977) and cold finished steel bars in 1979...

Excerpts >>


3] Situated in New Jersey, Coast Metals manufactured molded metal castings which were used in aircraft manufacturing. It was acquired by AO Capital Corp in 1972.

4] Iverson, Ken, Plain Talk: Lessons from a Business Maverick. First Edition, New York: John Wiley & Sons, Inc., 1998

5] Iverson, Ken, Plain Talk: Lessons from a Business Maverick. First Edition, New York: John Wiley & Sons, Inc., 1998

 

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