Nucor in 2005 Essay
Brief Introduction It says that in every success of an organization retains the achievements of overall workforces, in which a leading American steel company manages to survive a business enterprise in the diversities of the 21st century marketplace. Today, Nucor Corporation’s success can be traced back from its historical beginnings where it earmarks business stability. In 2005, Nucor’s business stability and organizational capabilities has once again surpassed the challenges of time where America struggled from a desolate economy as a result of subsequent downturn of the marketplace that drawn impact to most companies in the steel industry.This paper will discuss the organizational life of Nucor Corporation, highlighting the organizational experiences and how it achieved the goals and continue to be competitive as a far-growing company in the rapidly emerging industries and market.Historical overviewNucor Corporation can be likened to a “century-old oak tree” that has passed by time and continue growing from its consistently distinct era of regeneration, having Ransom E. Olds (REO) Motor Car Company as its predecessor in 1905 who sold the whole business manufacturing to Bohn Aluminum and Brass Company in 1954.
A year later, shareholding has helped REO established the Nuclear Consultants Incorporated as a service company. The growth of shareholding has able REO being back in business upon establishing the “Nuclear Corporation of America Inc.” where it held office at the Empire State Building in New York City to regain “business status”.The successful venture towards 1960s has gained from business purchases, in which the buyout of Vulcraft Corporation in 1962 has concentrated REO’s business on steel joist manufacturing.
Realizing the steel manufacturing business as non-relevant to “nuclear”, REO has adopted the corporate name as Nucor Corporation and expanded its operation by adding three more vulcraft plants, together with the purchase of Birmingham Steel and its Mississippi Steel plant (Barnes & Tyler, 2005).Corporate expansion and meeting the challengesThe appointment of Dan DiMicco as the Chief Executive Officer (CEO) on September 2000 has streamlined the corporate leadership by redirecting the steel manufacturing “within the capacity” of domestic market and concentrate more on business purchases, as DiMicco retains REO’s philosophy “to acquire profitable conglomerate”.Meeting the challenges of US recession in 2005 has managed Nucor Corporation to position its strategic plan. DiMicco implied that Nucor’s strategic plan for 2005 was central in consolidating its 11, 3000 workforce that could be the “least” of American population to be affected by the declined in public spending, in which several construction and real estate firms has held from operating.
However, since Nucor’s “domestic production capacity” is adaptable to market disruptions, the depreciations of capital investments are flexibly absorb. On the other hand, Nucor’s corporate strategic plan have positioned its key operating components, such as to cite (1) optimizing existing operations, (2) pursuing strategic business purchases, (3) continuous manufacturing growth through commercialization or adoption of new and matured technologies, and (4) earmarking global joint ventures or partnership. The corporate strategic plan has achieved its 2005 revenue target that accounted the net sales of $12.70 billion, representing growth rate of 12% from $11.38 billion in 2004 (Nucor Corporation, 2005).One that indicates Nucor’s continuing growth despite the 2005 downturn of US economy is its plant operation in 19 States with an increased workforce of about 11,900 in 2006.
In addition, the incoming year of 2007 has again favored Nucor’s business purchase through shareholding with Harris Steel, dealing a total of $1.25 billion that represents 50% of Nucor’s shares.Nucor’s business cultureAccording to the study conducted by Frank C. Barnes and Beverly B. Tyler of North Carolina State University, the Nucor’s business culture can be described in five key areas, such as (1) decentralized management philosophy, (2) performance-based compensation, (3) egalitarian benefits, (4) product quality and customer service, and (5) leadership in technology.A review on Barnes and Tyler (2005) findings pointed out a “consolidated organization” that has strong organizational leadership and depth of successful business endeavors.
This brings the fact that not any of Nucor’s manufacturing plants [whether solely established or acquired] are unionized. Nucor is divergent to employee unions, considering that Nucor Corporation is a labor-intensive industry. Thus, validates the findings that no Nucor plant has ever seized a successful union certification election, although Nucor management do not engage the usual “union busting” strategy (Barnes ; Tyler, 2005).Corporate responsibilityOrganizational leadershipNucor is exceedingly decentralized in its organizational operations.
A review of Nucor’s organizational set-up represents only five employees at the management levels, such as (1) supervisors (career professional degree), (2) department manager, (3) division general manager, (4) executive vice president, and (5) president (Nucor Corporation, 2008). It is also noteworthy that mainly operation-related decision-making is executed at the division or even lower levels. Meanwhile, about seventy personnel works as corporate office staff, in which may probably be the nominal number of office staff deployment as compared with other large corporations in the typical American corporate offices.According to Nucor’s performance-based compensation, all employees are entitled to receive substantial compensation and benefit packages together with performance incentives, such as (1) department manager annual incentive based on the percentage of net income, (2) supervisory level incentive for work group productivity, (3) professional and clerical bonus to employees based on the division’s net income return on assets, and (4) senior officers incentive based on annual percentage of net income from stockholder’s equity (Nucor Corporation, 2008).Additionally, a periodical bonus of $20,000 is given to all employees, in which “two extraordinary bonuses” were given during the economic recession in 2005.
Among other Nucor’s “egalitarian benefits” are provided through profit sharing, scholarship program, employee stock purchase plan, extraordinary bonus, and service awards programs, wherein attributed to ensuring employee family welfare and adoption to America’s “no child left behind policy” that refers for the right of the child to education (Nucor Corporation, 2008).Environmental responseAs of year 2000, the US Department of Justice (DOJ) and the US Environmental Protection Agency (EPA) has resolved the issue on Nucor’s environmental compliance, alleging inadequate control of toxic chemical emission of selective plants sites located in 7 States. A $98 million settlement from lawsuit was then settled, dubbed by the University of Massachusetts’ Political Economy Research Institute as “the largest and most comprehensive environmental settlement ever with a steel manufacturer”, the Nucor environmental program has expanded its operation in recycling of steel [mostly used cars and appliances] and other recyclables by integrating “mini milling equipment” that is cost-effective and efficient to mitigating environmental emissions (Govindarajan, 2000).
Nucor’s continuing programs for technological advancement is likewise attaining the focus on sustainable environmental protection programs and complying with the US-EPA, as well as the environments in Western Australia and Brazil where international steel manufacturing are located (Nucor Corporation, 2008).Harmonizing governmental relationsIn Dan DiMicco’s corporate address, he emphasized on the complex competition in the domestic and global market, wherein the effects of government actions and policies have a larger impact on Nucor. According to DiMicco, Nucor is greatly influenced by global trends and government dealings (Nucor Corporation, 2008).DiMicco pointed out that Nucor’s governmental relations can be harmonized by its workforce participation in the local and national politics that concerns Nucor’s major issues. It may be perceived in DiMicco’s statement that Nucor’s political concern in harmonizing governmental relations pertains to the company’s stronghold of 11, 9000 workforces [exclusive of shareholders, loyal suppliers, patrons and community partners] that the government may look on the “voting potentials”. Further, it may be deduced that what DiMicco implied on the relevance of Nucor’s workforce capability is to “amplify” governmental relations that plays an important role in Nucor’s business.
As quoted by DiMicco, “harmonizing governmental relations is not only about doing business but a venture that concerns health care, political reform, tax policy, environmental issues and regulations”. It appears that Nucor’s standpoint in harmonizing relationship with government addresses Nucor’s organizational responsibility to ensure the welfare and benefits of its workforce and positioned its corporate responsibility at the broader context.Conclusion The organizational circumstance of Nucor Corporation in 2005 signifies a predominant American enterprise that endures the difficulties of time and believes in the capability of its organization. Nucor’s success can be measured by its relevance to steel industry, having skilled manpower and loyal workforce that asserts a continuing profitable business. Nucor’s diversified venture could be said as an inherent virtue from its founder and predecessor.
The historical experiences retain the spirit of Nucor’s contemporary organizational life. Another success story of Nucor is realizing its business culture and philosophy to the existence of its workforce, workplace and marketplace. It may be noted that the continuing change of management has not affected the morale and professionalism of the workforce, substantiated the viability of the workplace to the challenge of industry and nurture the business relevance to the marketplace. It may be perceived, meeting the challenges of year 2005 has enabled Nucor to re-assess, retrieve its operation and reposition at the vantage point of economic downturn. Of which Nucor could have found the “right barometer” of measuring its weakness to transform into strength. In conclusion, Nucor has enabled organizational fortification at any given turn of the industry and fast-changing global events. On the other hand, the financial viability of capital budget in the “profitable conglomeration” has sized up the domestic market needs and international ventures that cushion the “fall” of economies.
Indeed, Nucor has not only earned its successful venture but continuing an American legacy of a century-old conglomerate.ReferencesBarnes, F.C. and Tyler, B.
B. (2005). ‘Nucor in 2005’. North Carolina State University.Retrieved 11 September 2008.Govindarajan, V. (2000).
‘Nucor Corporation (A)’. Center for Global Leadership.Tuck School of Business at Darmouth. Retrieved 11 September 2008. fromhttp://mba.tuck.dartmouth.
edu/cgl/downloads/20015_Nucor_A.pdf.Nucor Corporation (2008). ‘Our Stories’. Retrieved 11 September 2008 fromhttp://www.nucor.com/storyindex.htm.