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Case Title:

Nucor Corp’s Performance driven Organisational Culture: Employee driven competitive advantage?

Publication Month and Year :  June 2009

Authors:  Vara Vasanthi under the guidance of Dr. Nagendra V. Chowdary

Industry:  Steel Industry

Region: US

Case Code:  OB0015

Teaching Note:  Available

Structured Assignment:  Available


OR

Abstract:
The ninth largest steel producer in the world, Nucor, began life as a car manufacturer later diversifying into manufacturing nuclear testing and electronics equipment and ultimately steel joist manufacturing. The success of the joist manufacturing business led the company to invest in a new experimental mini-mill technology that used scrap steel to produce steel. With the help of the new technology and a unique organisational culture, the company became the second largest producer of steel in the US. The organisational culture encompassed an egalitarian workplace and a decentralised organisational structure. The company’s compensation system is strictly based on performance, which helped keep productivity levels high in addition to boosting employee morale. The company’s culture has helped increase net income from $311 million in 2000 to $1.3 billion in 2005. But the company's expansion plans overseas and a rigid work culture are raising doubts about its sustainability.

Pedagogical Objectives:

  • To discuss the role of mini-mill technology in the success of Nucor
  • To discuss how Nucor created a unique organizational culture that fostered equality
  • To discuss how Nucor developed a competitive advantage by adopting a performance-based compensation system
  • To discuss the challenges that Nucor might face in an ever-competitive steel industry.

Keywords :  Nucor, Organisational culture, Kenneth Iverson, Core Competency & Competitive Advantage Case Study, Daniel DiMicco, Lean management structure and decentralised management structure, Motivation, Productivity, Bonus and performance-based compensation, Integrated mills and mini-mills, Chief executive officer (CEO) compensation, Share the pain, No-layoff policy, Competitive advantage, Core competency and strategic intent, Organizational Behavior, OB, Organizational Behavior case study, Motivation Case Study, MBA, MBA Program, Course Mapping

Contents:

  • The Global Steel Industry: The Competitive Landscape
  • Nucor Corp.'s Beginnings
  • Nucor's "Employee-driven" Organisational Culture
  • Forging a Winning Workforce

  • Performance-based Compensation
  • One Destination, Five Roads
  • The Hidden Factors
  • Comparison of Compensation at Nucor and US Steel

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