A

Case
Study

Presented By:

Samarjeet Parmar
Dharmendra Khairajani
Siddharth Purohit
Parth Joshi
Birju Shah
 Flow of Presentation
Nucor TI & HP
- History - Difference in Strategy
- Operations
- Strategy
- Organization Structure
- Human Resource Policies
- Compensation
- Information Systems
- Benefits
- Technology
- Future
History
 Nuclear corporation of America- A co. involved in nuclear
instruments & electronics business.
 In 1972 it changed its name to Nucor corporation.
 Focus on making steel from recycled scrap metal and fabricating
steel joists for nonresidential construction.

Operations
 Located its facilities in rural areas across U.S.A.
 By 1998 Nucor consisted of 9 businesses, with 25 plants.
Strategy
 Building steel manufacturing facilities economically and
operating them productively.
 Continuous innovation, modern equipment, individualized
customer service and producing at competitive prices.
 Debt Equity ratio was not allowed to exceed 30%.

What is their competitive advantage?

 Mini-Mills
 Large applicant pool to hire from because they are seen as an
attractive place to work, allows them to be very selective for
who they hire
 Have a willingness to take risks.
 Organization Structure

Chairman/Vice Chairman/President
Vice President/Plant General Manager
Department Manager
Supervisor
 Human Resource Policies

 Employee Relations Principles

 Manage to provide opportunity according to
productivity
 Employee should have confidence
 Right to be treated fairly
 Avenue of appeal
 Compensation
Production Incentive Plan
 Paid weekly bonuses based on production

 Based on group not individual performance

 If tardiness or attendance kept team from meeting goals, then no one
received a bonus in the group
○ If you are 5 minutes late, you lose your bonus for the day
○ If you are 30 minutes late or absent, you lose your bonus for the week
 4 forgiveness days
 Maintenance personnel were assigned to each team
○ No bonus paid if equipment is not operating
 Supervisors were apart of bonus teams
○ Received same bonus as employees
 Output and bonus info for each team was posted at the entrance
 Compensation
Department Manager Incentive Plan
 Annual bonus received based on performance of the entire plant
 Based on return on assets
 A return of 25% or better was expected by the plant
Non-production and Non-department Manager Incentive Plan
 Bonus based on each plant’s return on assets
 Includes everyone not in previous 2 plans
 Every month each plant received a chart showing its return on assets on year-
to-date basis
○ Posted in employee cafeteria
Senior Officers Incentive Plan
 Based on return on stockholder’s equity above certain minimum earnings
 If Nucor did poorly, then Senior Officers would only receive their base pay
 Senior Officers earned less than other industry executives
 Information system
- Weekly report
Bids, orders, production, backlog, inventory, shipments
- Monthly report
sales revenues, costs, contribution, return on assets employed
- Meetings in February, May and November
 Benefits
- Profit sharing below officer level
- Monthly stock purchase plan
- Nucor scholarship fund
 Technology
- No external help for technology development
- Mini mill concept
- Scrap steel as raw material
- SMS Schloemann-Siemag
- Iron carbide plant
- Nucor Yamato Blytheville Arkansas
- National medal of Technology
 Texas Instruments & Hewlett-Packard

 Large, Standard markets based  Selected small markets based

on long-run cost position.
 Enter early in a product’s life
cycle, and stayed through
maturity.
 Aggressive cost improvements,
with equally aggressive price
cuts.
on unique, high-value/high
featured products.
 Create a new product and then
replaced it when it matured.
 Cost improvements, but sought
higher margins and held prices
longer.
 Texas Instruments & Hewlett-Packard
 More capital-intensive, cost-
effective production processes
to match high-volume standard
product needs.
 A balanced portfolio of
businesses where mature,
large business provide
resources for young, high-
growth business.
 More Sales, more incentive
compensation.
 Flexible production processes
to match low-volume, more
custom product needs.
 All high-growth, high margin
businesses that met their own
resource needs, largely on an
individual basis.
 More Creativity, more incentive
compensation.
 Reference
 Management Control Systems
by Robert N Anthony & Vijay Govindarajan

Web Sites:
www.ti.com
www.hp.com
www.nucor.com