Nucor Corp's Organizational Culture
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Case Details:
Case Code : HROB036
Case Length : 13 Pages
Period : 1899 - 2003
Pub Date : 2003
Teaching Note : Available
Organization : Nucor Corp.
Industry : Varied
Countries : North America
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Nucor - Workers' Paradise Contd...
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In the early 60s, the company made an unsuccessful bid to acquire Coast Metals3.
At this juncture, Nuclear requested Ken Iverson (Iverson), a Coast Metals
employee to help it identify other companies in the metal business that it might
acquire. On Iverson's recommendation, Nuclear acquire Vulcraft, a steel joist
manufacturing firm in Florence, South Carolina. In 1962, Iverson joined Nuclear
as Vice President and took charge of the 200-person joist division. In late
1963, Iverson built a second plant at Nebraska. By 1965, the Vulcraft division
was doing well. It was manufacturing steel joists at a time when a good building
boom was underway.
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However Nuclear as a whole was losing around $400,000 on annual sales of $20
million. By the middle of 1965, the company had also defaulted on two major
loan payments. The President resigned and in September 1965, the board
approached the 39 year old Iverson to take his place.
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The new management headed by Iverson and Sam Siegal, the CFO, sold
off the unprofitable half of the company. They then set out to build
on the profitable bases of Vulcraft operations in Florence and in
Norfolk, Nebraska. Iverson commented: "Our strategy was what
executives now call 'Focusing on our core competencies' although
that's not what we called it. We just placed the few chips we had
left on the businesses that were turning a buck."4
In 1966, Nuclear shifted its corporate headquarters from Phoenix,
Arizona to Charlotte, North Carolina. |
Nucor's new headquarters, twelve thousand square feet of
rented office space in a Charlotte office park, was a nondescript office staffed
by 22 people on the fourth floor of a building. The office decor was spartan,
simple, and functional. Iverson later commented: "I take pride in Nucor's little
headquarters. To me, a big headquarters isn't grand. It is a waste of money- a
gross tribute to some executives' ego." 5
Since Nucor depended on imports for 80% of its steel requirements, Iverson
decided to integrate backwards into steel production, building the first steel
mill in 1969.
The mill employed more than 500 people and had three electric arc furnaces which
operated 24 hours a day and 5 ½ days a week. It made relatively simple products
like steel bars that did not pose much competition to big steel producers. Later
however, the company started producing a wider range of products, and began to
compete with the big producers on cost efficiency, flexibility, and innovation.
The company changed its name to Nucor in 1972 and in the same year added another
joist plant in Indiana. Nucor started making steel decks in 1977 (with the
addition of steel plants in Texas in 1975 and another in Nebraska in 1977) and
cold finished steel bars in 1979...
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