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Competitive Advantage and Internal Organization: Nucor Revisited

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  • Pankaj Ghemawat

Abstract

Why does the cost of organizing particular activities differ across competitors? This article explores in detail the organization of Nucor, a steel minimill that has sustained a significant cost advantage over its competitors. Nucor's past success highlights the complementarities among organizational policies and competitive advantage as well as barriers to the imitation of apparently superior organizational arrangements. The case study also suggests avenues for additional empirical and theoretical research.

Suggested Citation

  • Pankaj Ghemawat, 1994. "Competitive Advantage and Internal Organization: Nucor Revisited," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(4), pages 685-717, December.
    • Handle: RePEc:bla:jemstr:v:3:y:1994:i:4:p:685-717
    DOI: 10.1111/j.1430-9134.1995.00685.x
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    References listed on IDEAS

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    1. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    2. Ghemawat, Pankaj, 1993. "Commitment to a Process Innovation: Nucor, USX, and Thin-Slab Casting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 135-161, Spring.
    3. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    4. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-817, August.
    5. Gale, Bradley T, 1972. "Market Share and Rate of Return," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 412-423, November.
    6. Sudipto Bhattacharya, 1979. "Imperfect Information, Dividend Policy, and "The Bird in the Hand" Fallacy," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 259-270, Spring.
    7. Pankaj Ghemawat, 1993. "Commitment to a Process Innovation: Nucor, USX, and Thin‐Slab Casting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 135-161, March.
    8. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
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    Cited by:

    1. Kyung-Hye Kim & Seung-Weon Yoo & Kyong-Soo Choi, 2019. "Information Asymmetry among Multiple Principals and Inefficiency within the Organization," Sustainability, MDPI, vol. 11(24), pages 1-14, December.

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