NUCOR: Value and Transition Harvard Case Solution & Analysis

Case: 3

The next situation or the case where John Fariola the Executive Vice President, had to take the decision whether to buy electrodes from Felder Company. The internal factor that impacted the decision was that if the decision is successful, it will directly affect the performance and the same is the situation if the decision fails the team will of Fariola will be responsible.

The external factor in this situation is that he cannot take decision of purchase for other units because of the decentralized organization structure. This was the external factor, because each department was responsible for his team’s performance and decision making.

Problem Statement and Analysis

The main problem that is identified in the case “Nucor: Values and Transition” is the decentralized organizational structure. Although it has been the key success factor for the company since taken over by Ken Iverson, but recently it has created a situation where higher authority was unable to take the final decision because of the decentralized structure. Unit heads are the ones who make the final decision which has to be obliged by the senior management. This practice is hampering senior management from taking a final decision, although in all the three instances the senior management was not convinced with the final decision has shown signs of dependent decision making. All the three cases identified portray the fact that in each. In the first instance, Iverson was convinced that Epple did not do cheating intentionally. In the second case, Dan DiMicco was imposed the decision by the plant manager to fire Giles Martin when tested positive with drugs. In the third instance, Fariola was unable to take the decision himself because of the decentralized and the flat organization structure.

Case Problem Solutions

Centralized Organizational Structure:

As the case states, the main problem identified is the decentralized structure that has restricted the top or the higher management to make decisions. Therefore, one of the solutions to the current problem at Nucor is to transform the organizational structure into a centralized structure. By making it a centralized company the final decision making will then be taken by the senior management. As the case identifies, in the current situation where Epple was fired by the project manager and his team because he cheated with the bonus system. But while discussing the matter with the CEO Ken Iverson he answered him that it was not deliberate and not intentional. In fact, The misses are counted, which resulted in increased bonus (Jacobides, 2007).

However, Epple promised the CEO that no such complaints will come forward and he will make sure that he works with commitment and devotion. While conducting meeting with the line worker, Iverson realized that the employee was positive and wanted to correct his mistake and wanted to stay with the company. But as the case states, the final authority under the leadership of Iverson was with the project or the unit head who was responsible for all the decision making therefore Iverson was in fact, unable to support him. Therefore a solution to the current problem is that although project manager or the supervisor should be the authority within each unit, but the final decision making should be handed over to the CEO who can make a decision as per the situation without being bias (Jacobides, 2007).

Continue with current structure:

The current organization, which is the flat or the decentralized structure can be remain intact and the functioning and decision making with the company can be divided to departmental heads respectively. As the case states, under the management of Ken Iverson, Nucor has established itself into a better company where the production has kicked off drastically. The employee performance has also increased since the installation of decentralized structure. As the case indicates, outsiders thought and considered of purchasing the machines used by Nucor to increase the production, however, the main reason for this change and growth was the fact that employees were given the power to make decisions regarding their plant and its operations.

The decentralized structure in reality helped the company grow because it made the plant managers and supervisors control all the different issues regarding employees. Once the authority was given to them, plant managers made sure that their respective units were given the importance and all their issues were resolved instantly (Jacobides, 2007). The decentralized structure allowed employees to follow the rules, guidelines and decision making of their reporting authority which increased the production and the quality of steel manufactured. The system has made the decision making a lot easier for the top management because now they can reply to the team and the departmental heads to decide the various operational decisions that can offer improved and better solution to a certain specific problem................................

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