April 06, 2011
What are the basic success indicators of Nucor to convince that the company was doing exceptionally well?
* Highest return on equity, sales growth and profit margin; least debt/capital percentage (exhibit 1)
* Zero turnover
* A focused strategy
Why has Nucor performed so well? Relate your answer to organizational design elements.
* Strategy: Nucor maintained a focused strategy that revolved around its major competencies. The firm paid a lot of attention to innovation, one critical factor required to stay ahead of competitors.
* Structure: The organizational structure of Nucor Corporation was decentralized, making the hierarchy more streamlined. Considerable autonomy was provided to the general manager at each plant that enhanced quick decision-making, while at the same time encouraging an open and informal communication system in the organization. More importantly, Nucor had high tolerance for experimentation and willingness to take risk. The firm did not did not discourage employees who made mistakes. Instead, those mistakes were accepted as a creative effort on the part of the employee, were encouraged to communicate those ideas to work on how they could have been made better without repeating the same mistakes.
* Culture: It can be inferred from the case given that Nucor Corporation conserved a …….. culture in the organization characterized by equality, care, communication and co-ordination. Compensation in the organization was based strictly on performances rather than status and role of the employee in the organization, and the compensation system was designed in a way that ensured that every employee was covered. The firm maintained an egalitarian approach toward employee benefits; allowing employees specifically at the lower levels to earn bonuses and benefits strictly based on their performances. It was evident that the firm had genuine concerns for its employees. The firm... [continues]
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