Case Study: Nucor Corporation

Case Study: Nucor Corporation

            The present paper will discuss four concepts and subsequently link them with the Nucor Corporation.  Two concepts will be derived from journal articles, whereas the other two will be strategic management models: vision and mission aspect; and strategic planning.

Ashridge Model (Chun & Davies, 2001)

The first concept is the Ashridge Model (Chun & Davies, 2001). Giving a mission to an organization is essential as it offers a competitive advantage as well as other unprecedented benefits. However,  the Ashridge mission model highlights the best approach to apply in coming up with a mission statement. It defines the mission as a statement that consists of four dimensions, namely; purpose, strategy, values, and behavioral standards.

Figure 1: Ashridge Model (Chun & Davies, 2001)

The top-most element of the model is the purpose. It depicts the goals of the organization or answers the question of why it exists. Another element is the strategy. For the organization to realize its purpose, a strategy must be in place. Therefore, for the best purpose, strategic planning (will be discussed in detail as the fourth concept) is mandatory. The two elements mentioned are empty intellectual thoughts, except if they are converted into actions through the utilization of the organizations’ value (the third element and is usually a policy or behavior guidelines). Thus through the values, the whole fraternity in an organization understands the standards of behavior to adhere to.

Vision and Mission Aspect

Mission and vision are aspects that define the objectives of the business and the approach of attaining the specific objectives.  Specific mission and goal are described as statements, which explains a desired company’s future. The objectives’ purposes and values are often to provide a particular business goal. The selected goal and mission of a company is further implemented to enhance its productivity. However, a company’s vision is considered different from a business mission. This is because a vision is used in describing the ultimate goal a specific company will want to achieve, while a mission is used in defining some issues that an organization is performing or doing towards attaining a goal.

The vision and mission statements are very important in the running of any organization since they help in directing the strategy. They clearly outline the goals and objectives of what the organization is looking forward to achieving. Vision and mission statement helps the management in an organization to create strategies that direct the company in both long term and short terms objectives. Therefore, it is important for any organization to have a clear mission as well as vision statement.

Strategic Planning Concept

Strategic planning is considered as an art of formulation, evaluation, and implementation of business strategies based on the objectives of the organization. The concept of Strategic Planning aims at integrating different business department to achieve organizational goal. These departments include research and development, marketing, information system, production, management and accounting, and finance.

The concept helps in enhancing communication between employees and employers. It also assists in empowering workers in the organization. A mission and goal help in establishing a business underlying purpose that is beyond a simple focus of making profits. Creating a substantial purpose in business helps in guiding the product type and the business’s services and policies.

Principles of Strategic Planning (Kenny, 2016)

For over 25 years, Kenny (2016) has been studying strategic planning, and from his report, he has discussed four principles in the strategic management concept. The principles are: a plan is a guidance tool; taking note of irrelevant plans; focusing on the key players and organization; and lastly, a plan is a work in progress. A plan should be viewed as a guidance tool as changes to an organization will make the plan not feasible, and from the last principle, the plan should be checked regularly to increase its viability.  The second principle serves two purposes. It allows the generation of ideas that would have remained hidden and the leveraging of change. The author defines a strategic plan as that which focuses on the organization and the relation it has to the key players, but not to an individual’s actions.

Linking the Concepts with the Articles

The fourth principle highlighted by Kenny (2016) is a plan being a work in progress. In this essence, the principle can be considered as a stage in strategic planning. Also, one aspect of the Ashridge Model is strategic.  The two – principle and element – will, therefore, be linked and discussed in the concept of strategic planning.

Ashridge Model

From the case study (Thompson, 2020), it is evident that Nucor Corporation has adhered to all the proposed elements of the mission, although the mission statement is not presented. Their purpose is “to deliver improved returns at every point in the economic cycle. We call it delivering higher highs and higher lows” (Thompson, 2020) To actualize the purpose, the CEO, Dan DiMicco, initiated actions that strengthen the competitive position during economic downturns and capitalize on these strengths when the demand for steel products is high. Overall, he declares that the strategy will improve financial performance.

When it comes to values, as an element of the Ashridge Mission Model, Nucor firm has several of them. For instance, human resource has four clear-cut values. They are; compensation to employees is according to their productivity; employees are guaranteed a future if they work as instructed; employees have a right to be treated justly; and they have an avenue of appeal in case they believe to have been treated unfairly. Due to the policies and guidelines of the organization, certain behaviors are exhibited by the employees; they are highly motivated and create an egalitarian culture.

Vision and Mission

Creating a company’s vision and mission aspect is considered as an essential tool in the business. The article titled “E-reputation: The role of mission and vision statements in positioning strategy” by Chun and Davies clearly states the importance of vision and mission in an organization. The articles point out that a company’s vision and mission assist in defining a certain set of values in a business, which further incorporated into the organization’s work culture. Following the specific set of values will make an individual’s business to attract many customers. The concept is supported by the Nucor corporation case study. The Nucor Company has set some clear goals and missions that have helped in enhancing the work performance among the employees. Nucor is made up of approximately 20,000 teammates who are focused on a particular goal. The business further incorporated certain strategies of attaining the goal, such as offering the highest quality products, being safest, providing a lower cost for their products, which has resulted in the company being more a productive and profitable steel company in the world. Besides, Nucor Corporation is based on a mission, which emphasizes on being stewards of both cultural and environmental. This helps employees to work and live in an enhanced workplace, thus ensures more productivity.

Strategic Planning

The Strategic planning aspect is deemed to be important in creating a change within an organization. This concept is clearly outlined by an article titled “Strategic Plans Are Less Important than Strategic Planning” by Graham Kenny.  The author in his article discusses that strategic planning process is considered more important than merely having a plan. A plan is deemed to be proposed action by individuals, while the planning process involves the act of implementing specific plans into actions. The planning process should involve the procedures that will involve both the organization and the employees at different levels. A consideration of the planning process will help in analyzing the business in detail. This involves targeting on its weak and strong areas, thus finding a convenient way to find a solution. Having a specified set of plans, will assist in motivating employees, and impacting the workforce to be productive.

Conversely, both the article is closely related to the Nucor Corporation Company case study. This is because the Nucor company has implemented strategic planning that involves twelve recommendations. The company has further adopted some profitable growth strategies for prolonged growth. These include the concepts of remaining a lower-cost producer of steel, becoming the market leader in all market lines, and moving up the value chain while focusing on the higher-margin products. Besides, Nucor Company has further managed to implement a simple streamlined organizational structure in its strategic planning process. This organizational structure allows employee’s innovations and effective decision making. The Nucor Corporation is further decentralized (Thompson n. p). In this case, daily operations decisions are made by their employees and general managers. Nucor has further attained strategic planning by maintaining lean staffing. In this scenario, the company has worked in reducing bureaucracy and instead streamlined organizational structure.

Nevertheless, the Nucor Company has benefited from attracting many customers through its strategic planning. It has further built a competitive environment among the employees who were working in the organization. The act of incorporating various strategies in its working environment has led to effective coordination of work. Thus gaining a competitive advantage towards its competitors. Nucor Corporation has also enhanced its product quality level improves the company’s processes of reducing waste and saving time (Thompson n. p). This further leads to reduced expenses, which can further be passed to clients in the form of lower price levels. In addition, strategic planning has assisted Nucor company in involving work coordination among its employees and staffs, which has further resulted in an increase in their level of production and effective leadership

Principles of Fundamental Planning (Kenny, 2016)

Three principles will be linked to Nucor Corporation – the fourth was discussed in strategic planning. The three are: a plan is a guidance tool; taking note of irrelevant plans; and focusing on the key players and organization.

Several plans are set in the Nucor Corporation. The main ones are integrating backward in the making of steel in 1968 and strengthening the competition when steel’s demand is weak. These thoughts served as a guidance tool and are later actualized by the incumbent CEOs. For instance, in the first plan, the company starts producing steel and their products in the late 1960s. One of the importance of the second principle is leveraging the changes. Nucor did this numerously, notably in the acquisitions. The management preferred to buy existing plants rather than building new ones because the prices were bargainable, and they operated efficiently as the new ones.        Finally, the third principle declares that a strategic plan is centered primarily on how the organization treats the key stakeholders. The significant stakeholders in the organization are the employees. The four guidelines in the human resource department (discussed under the topic of Ashridge Model) of Nucor Corporation favor the employees. The fascinating one being an avenue of appeal when they believe an unfair action has been conducted.

References

Kenny G. (2016) “Strategic Plans Are Less Important Than Strategic Planning”. Harvard Business Review.  https://hbr.org/2016/06/strategic-plans-are-less-important-than-strategic-planning.

Chun, R., & Davies, G. (2001). E-reputation: The role of mission and vision statements in positioning strategy. Journal of Brand Management, 8(4), 315-333. doi:10.1057/palgrave.bm.2540031.

Thompson A. (2020) Nucor Corporation: Using Economic Downturns As An Opportunity To Grow Stronger. The University Of Alabama.