Assignment #4: HRM Issues/Diversification Strategies
BUS 599 Strategic Management
Conduct an Analysis of Case #10 Nucor Corporation and prepare a (4-5 page report).
Discuss the trends in the steel industry and how it may impact Nucor’s strategy.
The trend had been major steel production using blast furnaces. New technology using arc furnaces adopted by Nucor led to increased production and cost savings. The arc furnace technology took less labor, increased production, and was considered the new most cost-effective strategy among the steel industry. It was Nucor’s decision to adopt this process and be the first to introduce this new process to the United States. Many steel companies ...view middle of the document...
(Thompson, Strickland, & Gamble, 2009)
This simple structure is evident as Nucor held plant managers and their staff responsible for day to day operations. Each plant ran by the plant manager was seen as its own entity and operated independently of other plants. These plant managers reported to 4 executive vice presidents. The accountability of each plant coupled with the bonus compensation structure passed responsibility and accountability on to everyone including the hourly employees. Bonuses were paid on a weekly basis based on output exceeding the standard. Immediate rewards were received by employees and managers who exceeded the standard. This helped drive a healthy corporate culture that promoted efficiency, and competition. This strategy also drove innovation and increased morale indirectly as all employees want to earn more money.
Identify three HRM issues related to strategy implementation and recommend actions to address these issues.
One of Nucor’s successful strategies was acquisitions. Nucor would acquire firms who were in trouble are already operating in the negative and revamp their procedures and product lineup to go along with Nucor’s lineup. An acquired firm would be operating on a different pay structure than Nucor’s pay for performance incentive structure. Nucor would post what employees would make if they were under the pay for performance structure. Many times the Nucor pay structure paid a great deal more than their current structure. (Thompson, Strickland, & Gamble, 2009)
Workers would soon transition with little pushback in hopes of the opportunity to increase their income. Nucor could have released the new pay information to soon to be employees before or at the time of acquisition to reduce complaints and grievances among future workers. The earlier release of the new pay structure could also lead to sooner increased productivity, once part of the natural competition among other plants participating in the pay for performance structure.
Another Nucor strategy was joint ventures. Nucor went into a joint venture with a Brazil firm to produce steel using Eucalyptus trees as fuel for production. This was a cost effective strategy as the trees cost less than typical ore fuel requirements. This was also considered environmental friendly as it harmed the atmosphere less than typical fuels would and the trees would grow back once harvested. Nucor also joined with a Chinese steelmaker to try a new technology called HIsmelt. This new process converted ore to metal instead of using outdated blast furnace technology. Both joint ventures introduced questionable new processes which could have ultimately led to failure or the loss of jobs for those involved in the old process. However, they were necessary advancements utilized to drive company growth and introduce new methods and procedures for increased efficiency and output. They were able to grow year over year and trying to remain environmentally responsible...