Management: Organization and Plant Managers
How does the Nucor case illustrate the limitations of the simple organizational structure?
1.1 In this Nucor case, it illustrates that simple organization structure have their limitations. From this case we can see that Nucor only has three levels of management that makes the plant managers report directly to the CEO, and it makes the CEO hard to maintain the company using this simple structure and also hard to make decisions on trade battles. This is happened because the CEO can’t concentrate and focus to his mainly job which is making decisions, with this simple structure he has to maintain the report from the plant managers too. From this case, we can say that simple structure has limitations. When the organization size increases, decision making typically becomes slower and risky because the decision only depend on one person and it makes the information overload at the top management. It is also difficult to maintain in anything other than small organizations.
1.2 One of the major organizational structure flaws in Nucor is that the plant managers report directly to the CEO. The limitation Nucor is facing in terms of organizational structure is the absence of chain of command. Chain of command should be implemented in Nucor’s organizational structure as it would enable plant managers to report to a superior employee who would have the authority and unity of command. This system would enable the superior employee to give orders to the plant managers and create a systematic structure in terms of responsibility. Nucor also lacks a span of control as it would control the number of levels and managers in the organization. Since the organization only consists of 66 employees, Nucor should implement a wider span of control which would have fewer levels of employees that would work efficiently and be more productive. Another organizational structure which Nucor lacks is centralization. Due to the fact that plant managers report directly to the CEO, this leaves the CEO with too much responsibility and would not enable the CEO to make the right decisions. There needs to be some sort of centralization which would concentrate the decision making at a single point in the organization and control the plan managers more efficiently.
Do you think other organizations should attempt to replicate Nucor’s structure? Why or why not?
2.1 It depends on which type of the organizations. If the organization is still new and small business, it’s better to use the simple structure of organization just like Nucor did. Because it can simplify, fast, flexible and inexpensive to maintain the organization. And the accountability is also clear. But if the organization is big and the size is getting increase, it’s better to use more complex structure organization rather than simple, because with simple structure it’s difficult to maintain in anything other than small organizations.
2.2 I do not think other organizations should replicate Nucro’s structure as it is not the CEO’s job to communicate with plant managers directly. Nucor implemented a new layer of management by adding the five vice presidents; this is not the only structure important for the organization. There needs to be some sort of authority as well as a unity of command which would coordinate the structure of the organization and maintain the communication process in the organization as smooth as possible.
Why do you think other organizations have developed much more complex structures than Nucor?
3.1 We think that the other organizations have developed much more complex structures than Nucor because of the other organizations have bigger size of business rather than Nucor. So they have to develop the structure to a more complex rather than simple structure. If they still . . . . 3.2 Other organizations must have implemented a complex structure in terms of who reports to whom. This kind of structure is vital for every organization as it increases productivity and is…