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Nucor Corporation Report

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Updated: May 20th, 2019


Nucor Corp is one of the largest companies that produces and recycles steel. In the US, Nucor is the second largest steel producer with average net sales of about $4.6 billion.

Approximately, Nucor recycles over ten million tones of scrape steel (Nucor Corporation, 2009). With the new trends in the emerging stages of globalization of the steel industry, Nucor is expected to be one of the major players. The company strategies and the effective management of people is one of the capabilities that Nucor Corporation must explore so as to remain competitive in the global stage.

This paper will be exploring the steel industry trends and the way it impacts on the Nucor corporate strategies, the management philosophy and organization structure. It will further identify three human resources management issues that are correlated to the implementation of corporate strategies as well as recommendations of actions that could be used to address the issues. Finally, the recommendations that are relating or unrelated to the diversifications that the company needs to investigate.

The trends in the steel industry

As indicated, Nucor is the one of the largest steel firms. With net sales of approximately $4.6 billion, Nucor is placed second in the United States steel industry (Nucor Corporation, 2009).

It is approximated that Nucor recycles over ten million tones of scrape steel. The corporation operates stores in 9 states and the major products includes alloy and carbon steel bars, plates, sheet and beams; joist girders and steel joists; steel fasteners; light steel framing gauges; cold finished steel; metal building system and cold finished steel (Nucor Corporation, 2009).

The industry in which Nucor operates is highly dynamic and quit innovative sector. The steel industry is continuously becoming accustomed to new innovations and changing itself to be more competitive in the world market. As Lyakishev and Nikolaev (2003) indicated, the first half of this century will be dominated by electric steel refining that is based on the direct reduction of iron and the use of iron bearing scrap steel making technologies.

Adopting this scrap based mini mill steelmaking technology as its core process will make Nucor have the competitive advantage over other firms in the industry. Lyakishev and Nikolaev (2003) further pointed out that those countries that adopt the scrap based mini mill or the electric arc furnaces will have scrap surpluses which is added competitive advantage.

The industry is currently improving its products such as improved steel grades as well as adopting new production procedures that results in cost effective product lines that is needed in the ever changing marketplace. Statistics indicates that the demand for steel in the developing economies is growing faster compared to the growth in the developed economies.

However, Lyakishev and Nikolaev (2003) indicates that the growth in the industry has stalled in the recent years majorly due to the slowed growth in the construction industry as a result of the financial and economic downturn experienced since 2008.

The anticipation is that the growth in the global demand for steel will pick up and reach its peak to over two billion tones in the first quarter of the century.

According to Nucor Corporation (2009), Nucor already have competitive advantage since it is the most efficient and effective producer of steel in the world today. For the company to remain competitive over major producers such as china as well as other producers of metallurgy such as aluminum, Nucor must reduce its costs of production, have greater control over its production strategies and have increased price advantage.

Such competitive pressure will make Nucor to become more innovative, reduce costs as well as duplication of efforts to increase efficiency. Moreover Nucor must have control over its units of production so as to realize the economies of scale and attain leadership on costs. All these strategies are essential as the firm battles costs and ensures that its revenues increase.

The structure of the organization and management philosophy

The company is segmented into two divisions the steel mills and steel products. The steel mills division is further divided into four divisions while the steel product segment is further divided into five divisions. Nucor focused all its production to steel. This resulted into all the firms division dealing with steel manufacturing (Nucor Corporation, 2009).

Some of its divisions are doing value additions such as steel decking, metal buildings, wire mesh and fasteners. Besides its divisions, Nucor have acquired various companies that deals in steel. In addition, the company also holds about 50% stake in various steel companies in Europe.

Nucor management philosophy has made it one of the steel companies that have not lain off its workers. All workers are paid according to their performance and bonus pay is used as a motivation. Nucor is highly decentralized organization with key decisions for the daily operations made by the line managers. The company is structured in four layers. At the lowest level are the shop floors workers are under supervisors. The supervisors are under general managers who work under the chief executive officer.

Issues concerning human resource management and recommended actions

The decentralized management strategy enable line managers decide on the way they will carry out their daily activities. Moreover the decentralized system allows managers to consistently perform and produce results (Ketkar & Sett, 2009). Those who underperform normally find themselves living the company.

The fact that the Nucor managers are left to decide on their own quarters is evidenced by the fact that the steel mills are running over half the capacity. In situations where the quarters are not met then the managers are either fired or not allowed to advance. The company is also using the weekly bonus system for hourly employees.

The bonus is given based on the achieved production. Nucor hourly workers are considered to be very successful teams though money driven. The bonus is given when the capacity is over 51% and any production that is below that capacity is not rewarded. The treatment of workers within Nucor applies even to the acquired firms by the company.

Diversification and rationale recommendations

Series of acquisitions and larger stakes in other companies has made Nucor to be one of the companies that is well diversified within the steel industry. However the company can still acquire any other company with products that is unrelated to steel (Thompson, Strickland & Gamble, 2009).

Acquired company should be within the metallurgy industry. The diversification may be vertical expansion through the acquisition and production of raw materials made by the competitive metals such as aluminum which is used in the manufacture of light weight vehicles. The diversification may also be horizontal where the Nucor acquires wholly the company that produces its competitive products (Thompson, Strickland & Gamble, 2009).

In other words, the company diversifies in other metallurgy industry. This type of diversification should be aimed at those firms that produce products that offer direct competition to steel. Moreover, Nucor should look beyond the American market. With presence in countries such as Brazil, Nucor should use the experience in those countries to vigorously diversify in the world arena.

Issues that Nucor need to address

With the expansion in the global market arena Nucor must look into ways through which it can have international managers who are not only highly skilled in the steel industry but also take cognizant of the country culture in which they operates (Ketkar & Sett, 2009). Good management within the international intermediaries will be essential for the success of the company.

Moreover, the company must restructure so as to accommodate the international subsidiaries especially in the consolidation of the financial management. Although it is essential for the company subsidiaries to have autonomy in operation decisions, there should be a strong central management that deals with major decisions that affect the whole company.

The company human resources management should also adopt the strategic human resources management plan that aligns the employees’ efforts towards the achievement of the company goals and mission (Ketkar & Sett, 2009).


Nucor Corporation will still face a lot of challenges though the company is being praised for huge economies of scale as well as its position as the top steel producer. There is a lot of uncertainty in the industry future. The reason is that the industry majorly depends on the natural resources and infrastructure which is continuously being depleted.

Nucor Corporation must adopt new innovative ways in order to survive. Employee’s engagement is critical for the firm’s performance and success. Therefore, the adoption of the best human resources management practices will ensure unrelenting organization success hence growth and development.


Ketkar, S. & Sett, P. (2009). HR flexibility and firm performance: analysis of a multi-level causal model. International Journal of Human Resource Management, 20(5), 1009-1038.

Lyakishev, N. & Nikolaev, A. (2003). Steel metallurgy: trends, problems, and prospects for growth. Metallurgist, 47(1/2), 66-74.

Nucor Corporation (2009). Nucor Corporation SWOT analysis, pp.1-9. Retrieved from <>.

Thompson, A., Strickland, J. & Gamble, J. (2009). Crafting & executing strategy. Strayer University: McGraw Hill Learning.

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