Nature of Strategic Decisions:

Thoughts from Nucor

Prof. M. R. Dixit
IIM Ahmedabad

Key Phases in Nucor

Nucor - I
High aspirations and
negative results
Nucor - II
Random walks in Nuclear
Business Weak results
Nucor - III
Inefficient Conglomerate
Nucor - IV
Focused industry Leader
Nucor V
Looking for a breakthrough

Emergence of Industry
Leadership
Late Entrant
Industry in its maturity stage
Harnessing opportunities for organizational
innovations
Cost based leadership
infrastructure
outsourcing
learning and efficiency orientation

Key words

Expectations
External Environment
Trade offs
Assumptions
Multiple consequences: Cause & Effect
Linkages among multiple consequences
Logical
Integrated

Key words

Induced reactions
Emotions
Time horizon
Competence
Learning
Risk-Return
What if

Nature of Strategic Decisions

Large Commitment of Resources

Commitment for longer time horizons
Company wide influence
Inter-functional involvement
Irrevocable or revocable at high cost
Involve risks
Decisions under partial information and
uncertainty

Approach to Problems of Nucor

Define your decision questions clearly

Generate options
Define criteria and constraints
Evaluation
Choice
Assumptions and contingencies
Draw from the literature

Criteria for evaluating strategic

options

Consistency with competencies you have or

likely to acquire
Consistency with resources you have or
likely to have
Consistency with opportunities and
constraints
Nature of retaliation and Acceptability of risk
Consistency with values

Competencies
What are the competencies needed to
identify, formulate and implement strategic
decisions, and guide the future directions of
Nucor?

Leadership Competencies

Visioning
Decision making with partial information
Assumption tracking
Innovating and creating
Sensing weak signals and linking
Implementation

Implementation

Communicating
Motivating
Mobilizing
Organizing and
Control

All the best