Assignment #5

I believe that one of the important factors of Nucor Steel's competitive advantage is their philosophy on decentralized management. There are only five managerial levels at Nucor. This provides a more cost efficient operation. The majority of the operation decisions are made at the division level or lower which is important because the higher up management levels can worry about more important things such as ways to further increase profitability. With an estimated 75 employees in corporate offices and staff members it maintains the smallest number of corporate office employees for a corporation of that size. Once again, this making the operations of the company more cost efficient. Another factor is the technological factor. Nucor Steel was among the first companies to implement electric arc furnaces in their operations. By using this, Nucor was able to melt down countless tons of steel from all sources. This results in high profitability. Nucor also implemented a system offering incentives to their employees for working hard. If productivity is exceeding expectations, employees are paid weekly bonuses. This is a very good way to receive great results from all employees. If the company is doing well, employees are paid better at the end of the year. This system will keep employees motivated on a daily basis. The reward system not only rewards the employees who are working hard, but the company as well. The steel business is a very competitive business but with the innovation in operations and stripping away management levels along with employee incentives,Nucor has become one of the most profitable steel production companies in the world.