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Nucor at Crossroads Case Write-up Why has Nucor done well in the past? Nucor Steel was the second largest “minimill” in the United States with total production of 2.1 million tons of steel making capacity. Minimills were successful in adopting improvement in furnace and casting technologies quickly and took advantage of the declines in integrated steelmakers’ demand for scrap as the.

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Nucor At A Crossroads Pdf Free Printable
Nucor At A Crossroads Analysis
Nucor At A Crossroads Pdf Free Online

<p>NUCOR CORPORATION Charlotte, North Carolina. Nucor Corporations mission is to Take Care of Our Customersby being the safest, highest quality, lowest-cost, most productive, and most profitable steel and steel products company in the world. In 2006, Nucor employed 12,000 employees and earned gross revenue of $1.76 billion, a personal best. It is one of the best-run steel companies in the United States. Nucor operates one of the leanest corporate organizations in the nation. A typical Fortune 500 company has a triple-digit corporate staff. Nucor, which ranked No. 189 on the list in 2005, has about 65 corporate employees. Its organizational structure has just five levels of management: president and CEO, executive vice president, general manager, department manager, and supervisory/professional. This streamlined chain of command allows the general managers at each Nucor division to operate their facility as an independent business.With the day-to-day decisions made at the operating facilities, Nucor can respond to suppliers, customers, and employees without waiting for a decision from the corporate office.Reducing the distinctions between management and hourly employees serves Nucor well. Nucor remains committed to not laying off employees in slow periods. Since its entry into the steel-making business, Nucor has not laid off a single worker. The result is a committed team of Nucor employees and high-quality products.Nucor uses base pay and productivity bonuses to motivate its employees. Employees involved directly in manufacturing are paid weekly bonuses based on the production of their work groups. The bonus can average 80170 percent of the base wage and has no set limit. Department managers earn annual incentive bonuses based primarily on the return on investment of their facility. These bonuses can be as much as 100 percent of base salary.Professional and staff employees, such as accountants, engineers, clerks, and receptionists, can earn bonuses up to 28 percent of salary. The base pay of Nucor employees is actually significantly below industry average, but the productivity bonuses make them among the highest-paid workers in the world. And Nucors employees respond positively to Nucors production incentives.The success of Nucor is due in part to the unprecedented domestic and international demand for steel. Growing economies, particularly China, have had an insatiable need for steel. But in the last year China has become self-sufficient and not only produces enough steel to meet local demand but also is emerging as a major exporter of steel. As this chapter is being written, Chinese steel-makers are negotiating with Indian steel companies to start joint ventures to produce high-quality steel. Worldwide supply of steel is catching with demand, and current inventories are higher than industry analysts consider appropriate.With decreasing demand, production will slow, which means bonuses will decrease and total compensation (base pay plus bonus) could fall below industry average. You wonder what this would do to employee motivation. You start to think about alternative non-monetary recognition programs that you could initiate now so as to minimize the impact of decreasing bonuses on employee motivation. What if the demand for steel decreases so much that Nucor is forced to revoke its long-time no layoff policy? How will layoffs be handled; what will employees perceptions be? Instead of layoffs, could you reduce the number of work hours? What criteria will you use to determine who works how many hours? To maintain a motivated work force, you must ensure that these decisions are fair, and perhaps more important, that the employees see them as fair. You also realize that you will have very little time to plan, communicate, and execute your programs. </p><p>As the chief HR officer of Nucor, what would you do?</p>

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Nucor has performed very well because it has formulated a competitive strategy that is very effective and it has implemented that strategy. (a Is Nucor's industry the answer? Nucor's industry is not the answer. Had Nucor's industry been responsible for Nucor's success then other steel companies would have performed equally well.
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Summary:

For more than 20 years the Nucor Corporation has been one of the leading manufacturers of steel and steel related products in the world. With their technology advancement, low debt ratio, decentralized type of organization and many more, this company still thrives to achieve better goals in their company. Aside from the positive views of the company, it also faced problems like bankruptcy. (te pakidagdagan n lng)

History:

Nucor traced its origins to auto manufacturer Ransom E. Olds, who founded Oldsmobile, and later, Reo Motor Cars.

Through a series of transactions, the company eventually became the Nuclear Corporation of America, a company involved in the nuclear instrument and electronics business. In 1972, the firm changed its name to Nucor Corporation. By 1998, it had become America’s second-largest steel maker.

Operations:

Nucor related its diverse facilities in rural areas across the United States, establishing strong ties to its local communities and its work force. As a leading employer with the ability to pay top wages, it attracted hard-working, dedicated employees.

Nucor At A Crossroads Solution

These factors also allowed Nucor to select from among competing locales, siting its operations in states with tax structures that encouraged business growth and regulatory policies that favored the company’s commitment to remaining union-free. By mid-2008, Nucor operated 53 facilities throughout the United States and one in Point Lisas, Trinidad. The company also maintained operations through wholly owned subsidiaries, Harris Steel and the David J. Joseph Company (DJJ).

Strategy:

Nucor’s strategy focused on two major competencies: building steel manufacturing facilities economically and operating them productively.

Organization Structure:

Compared to the typical Fortune 500 company with 10 or more management layers, Nucor’s Structure was decentralized, with only the four management layers illustrated below: Chairman / Vice Chairman / President

Vice President / Plant General Manager
Department Manager
Supervisor

Human Resource Policies:

Employee relations at Nucor were based on four principles: 1. Management is obligated to manage Nucor in such a way that employee will have the opportunity to earn according to their productivity. 2. Employees should feel confident that if they do their jobs properly, they will have a job tomorrow. 3. Employees have the right to be treated fairly.

4. Employees must have an avenue of appeal when they believe they are being treated unfairly.

Compensation:

Nucor provided employees with a performance-related compensation system. All employees were covered under one of four compensation plan, each featuring incentives for meeting specific goals and targets.

1. Production Incentive Plan

* employees directly involved in manufacturing were paid weekly bonuses based on actual output in relation to anticipated production tonnages produced. The bonuses were paid only for work that met the quality standards and were pegged to work group, rather than individual output. 2. Department Manager Incentive Plan

* Department managers earned an annual incentive bonus based on the performance of the entire plan to which they belonged. The targeted performance criterion here was return on assets.

3. Non-Production and Non-Department Manager Incentive Plan * All employees not in the Production Incentive Plan or Department Manager

Incentive Plan – including accountants, engineers, secretaries, clerks, and receptionists – received a bonus based primarily on each plant’s return on assets. It could total over 25% of an employee’s base salary.

4. Senior Officers Incentive Plan

* Included all corporate executives and plant general managers. A portion of pre-tax earnings was placed into a pool that was divided among the officers. If Nucor did well, the officers’ bonuses, in the form of stock (about 60%) and cash (about 40%), could amount to several times their base salaries. If Nucor did poorly, an officer’s compensation was only base salary and, therefore, significantly below the average pay for this level of responsibility.

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Information Systems:

Benefits:

Nucor took an egalitarian approach toward employee benefits. Nucor’s benefit program also attested to the company’s commitment to education.

Technology:

Nucor did not have a formal R&D department, a corporate engineering group, or a chief technology officer. Instead, it relied on equipment suppliers and other companies to do the R&D, and they adopted the technological advancements they developed – whether in steel or iron making, or in fabrication. Teams composed of mangers, engineers, and machine operators decided what technology to adopt.

Future:

The company’s biggest challenge (in the future) is to continue to grow the company at 15 – 20% per year, and to keep earnings parallel with its growth.

Analysis:

Nucor At A Crossroads Analysis

Nucor Corporation became one of the top corporations in the steel industry because of their handwork and technology innovation. This company also sees and takes care of its employee’s needs, which in return gives them a quality service in their work.

Conclusion:

Nucor, even though we can see it as a successful, almost perfect company, still faces problems like other businesses in the industry.

Problem:

The company has lost one-third to one-half of its market value when the stock reached its peak value (mid-2008), and has not recovered as of 2012.

Recommendation:

Nucor At A Crossroads Pdf Free Online

We can recommend change in the company’s technology, like getting more advance equipments in making steel and steel-related products. Or the company could make a merger to other company to utilize its resources to its maximum while keeping cost low.