Nucor case Essay

1. Why has Nucor done well in the past?
By 1986, Nucor was the second largest and most progressive minimill to produce steel, with 2.1 million tons capacity and 10% of total domestic steelmaking production. To establish itself as one of the top steelmakers in the industry, Nucor capitalized on its three pillars of strength: savvy administrative principles, resourceful operations, and liberal financial investments.
Administration:
Iverson and his team believed in a flat hierarchy and decentralization. Thus, Nucor had only five layers of management, as oppose to a dozen at competitive integrated US steelmakers. This made for a more effective communication between the employees and resulted in prompt and efficient decision-making.
Instilled a competitive and result oriented culture by establishing “high-powered performance incentives.” These incentives included employee stock ownership and profit sharing, discretionary bonuses, education allowances, and high productivity bonuses.
To endorse equality, Nucor worked to eliminate status differences between employees by providing same insurance coverage and holidays, no assigned parking places, and requiring all factory workers to wear the same color attire regardless of the authority level. Nucor also listed all employees in alphabetical order on the cover of its annual report. This especially signaled to employees a sense of equality, personal ownership and accountability to the company.
To promote openness and risk-taking, Nucor encouraged bold decision making from its managers, instead of threat of punishment for mistakes.
Operations:
Nucor charged F.O.B. prices, which allowed for the customers to budget their own delivery, versus majority of integrated mills and minimills, which charged additional fees for delivery. Eliminating quantity and preferred customer discounts also permitted Nucor to simplify its billing system and minimize costs of order-processing.
Nucor primarily focused its operations on production instead of procurement and marketing, thereby putting a larger emphasis on recruiting and training its production workers.
To retain skilled workers, Nucor

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