Management: Organization and Plant Managers

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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…‎

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