Business in Nucor Essay

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Nucor Corporation - Structuring for Efficiency and Effectiveness
Nucor achieved its position as one of the largest steel producers in the United States by carefully monitoring costs and paying attention to the needs of its markets. This strategy of providing its customers with a competitive product at competitive prices has brought success and growth to Nucor, in sales, income, and stock price. Recently, however, the control of the organization has been brought into question. The recent announcement of a joint venture between Nucor and U.S. Steel to develop, test, and bring on line a new method for turning iron ore into steel added to the concern over the ability of company management to maintain the entrepreneurial spirit
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Iverson determined that one means of maintaining both quality control and costs was a highly decentralized organizational structure. Corporate staff was kept to a minimum. All decisions dealing with operations were delegated to the individual plants. Iverson believed that the managers closest to the action should be given the responsibility to develop plans to allow the plants, and the firm, to adapt to any changes in the environment. Iverson also gave plant-level mangers the authority to make and implement the decisions necessary to make these adaptations. Each plant manager gave a brief monthly report to headquarters and received a report comparing the divisions' performance. Major expenditures and changes were made by consensus at the periodic meetings of all plant and corporate managers.

Iverson took pride in the lean corporate structure. But the lack of corporate staff appeared to become a problem as Nucor expanded. By 1994 the company was operating 16 plants, and the flat-rolled steel plants increased the diversity of the operations reporting to the president. Nucor president, John Correnti, noted "My biggest fear is even though we're now a $3.3 billion company, we've still got to act, feel, and smell like a $300 million company (1)." Some steel industry analysis remained concerned over how Iverson would continue to control the growth of a company that was attempting to

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