Assignment #4: HRM Issues/Diversification Strategies: Nucor Corporation

Strategic Management, Business 599

Introduction In this paper, we will present an analysis of Nucor Corporation in Case # 10 (Arthur, Strickland, & John, 2010). The paper will discuss the trends in steel industry and how it may impact Nucor’s strategy. In addition, the paper will describe the organizational and management philosophy at Nucor. Furthermore, the paper will identify 3 HRM issues related to strategy implementation and recommend actions to address these issues. Recommendation whether a related or unrelated diversification should be used will also be discussed. Finally, we will be looking at Organizational structure issues the company
In the steel industry, product differentiation is hardly noticeable so companies in this industry must compete in cost and delivery service. Nucor’s plants were built near the customers in order to guarantee the lowest possible cost for steel purchases and Nucor does have significant distribution channels in the US with its 14 different steel plants which allow wide market coverage. But with a globalization challenge, this kind of distribution approach will create a problem since Nucor do not have any steel plants outside US. Nucor over took US Steel to become the second-largest steel producer in the United States. The corporate strategy of the company is focused on being the lowest cost provider of steel by finding opportunities to reduce cost. It emphasizes technological leadership by aggressive pursuit of innovation and technical excellence. In addition, employee relations with fair compensation and egalitarian benefits were just as important as technological advances. The simple, streamlined organization structure to allow employees to innovate and make quick decisions works very well for Nucor. The company is highly decentralized, which makes them able to make uncompromising quality, responsive service, and competitive pricing. The standard unwritten practice of equalizing freight was stopped by Nucor which was unheard of in the steel industry. The production cost is the most important if the company is going to be profitable and survive.