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Nucor Corporation Case Study

Essay by   •  April 5, 2013  •  Case Study  •  1,389 Words (6 Pages)  •  1,184 Views

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Managers rely on a varied skillset to maximize the potential of their employees. This is true across all industries. There are common skills that managers share that transcend market specialties. Chief among the managerial skillset is knowledge of systems theory in the context of measuring organizational effectiveness. System theory deals with understanding an organizations role within the environment. It considers the processes that transform inputs into a useful product for the larger environment. Managers must be concerned with the effect of individual behavior on system. Managers have an inherent interest in influencing employee behavior in a manner that best serves long term organizational effectiveness. The purpose of this case study is to provide an overview of the management style of Nucor Corporation in its relation to internal characteristics and effectiveness. The material is presented in three sections: case study overview, management style , and performance based culture. This review of the case study follows the history of Nucor Corporation and specific management strategies aimed at influencing employee behavior and increasing efficiency. Understanding systems theory and developing a constructive awareness of internal processes may lead to higher levels career satisfaction and organizational effectiveness.

Company History

Nucor Corporation is a relative new comer in the steel industry. Nucor is known for its unique management style and recognized as a leader in steel mini-mill technology. The company began producing nuclear instruments and electronics in the early 1950's. The firm hired Ken Iverson in 1965 in hopes of turning their failing business around. (Govindarajan, 2000) Iverson was instrumental in redirecting the firm's output from nuclear related electronics to recycled steel and steel products for commercial building applications. (Govindarajan, 2000) By the turn of the millennium, Nucor was at the top of the American steel industry. According to the Tuck School of Business at Dartmouth, Nucor's success was based on Iverson's focus on two major competencies: to build steel manufacturing facilities economically and operate them productively. (Govindarajan, 2000) The organization is known for innovation, technological advances, excellent customer service, and producing high quality steel at a competitive price.

Current Industry Posture

In December of 2012, Nucor held the leading market position in North America. MarketLine's analysis of Nucor states that their position gives them an advantage over their peers and allows them to increase efficiency by producing steel on a larger scale. (2012) The Strengths Weaknesses Opportunities and Threats (SWOT) analysis also predicts further success for Nucor due to a positive outlook for the steel market in America. (MarketLine, 2012) The main threat that the corporation faces is global competition from smaller steel organizations merging to combine resources and networks.

An Exemplary Case

In Organizational Behavior and Management, Ivancevich, Konopaske, & Matteson describe a well-known incident in Nucor's recent history and describe how the corporation's internal management led to the outcome. (2010) Ivancevich et al. (2010) illustrate the benefit of Nucor's decentralized and streamlined management style in the case they chose for inclusion in their book. The situation revolves around a production plant in Arkansas that lost its power. The managers reach out to other maintenance personnel to inform them of the dilemma. A power outage at a steel mill is considered critical because it forces production to cease. Electricians from Indiana and North Carolina traveled to the downed plant within 24 hours and had the mill up and running within 72 hours. The critical point in the cases study is that the electricians were not directed by anyone on the management team to assist the Arkansas plant. The employees acted on their own motivation and concern for the production of Nucor steel. Ivancevich et al. further not that despite the three day work stoppage the mill in Arkansas went on to produce a record amount of steel in the first quarter. (2010)

Managing Individual Behavior

Management Principles

In the case study, the question arises: Why would the employees rush to the aid of another plant located across state lines? The



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