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Prepared by Group 7

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Introduction to Chaparral Steel Founded in 1973 in Texas as a JV Texas Industries and

Co-Steel International Ltd

Texas Industries bought out Co-Steels share ofChaparral in 1985

20% of Chaparral is offered in a public offering in 1988in which over 95% of Chaparral employees became

shareholdersA small player out to break all the rules in an

industry dominated by huge giants

Highly skilled management

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HR Practices at Chaparral They hired mostly enthusiastic farmworkers with no

background in steel as shop-floor workers

Mgmt. stressed on Individual Growth and Teamworkand created a very conducive environment to attractand retain talent

Employees at all level were continuously undergoing

training and development programs on and off the job Healthy job rotation also helped maximize exposure

and learning

Only 3 layers between CEO and shop-floor employee

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Ownership Among Employees Employees showed high level of ownership and would

be ready to play any role that the company demanded,whether it was in their area or not

Even Shop-floor Employees carried business cardsreading member of the sales force and visitedcustomer sites

Supervisors were rendered unnecessary and teamsbecame self-managed so that the supervisors could beallocated elsewhere when needed

Employees: We want to do the best we possibly can

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High Productivity and QualityAmong minimills, Chaparral already had the record

for best productivity, using only 1.8 labor hours per ton

By 1990, it set a new record of 1.4 labor hours per ton,as compared to the national average of 2.2 forminimills and 4.6 of the bigger integrated mills

Its quality was also equally good. Chaparral was the 1st

American company and 2nd

company outside Japan toget the Japanese Industrial Standard Certification,award to companies with consistent high quality.

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Innovation at Chaparral Despite not having a separate R&D department,

Chaparral was highly innovative and had cutting edge,state-of-the-art technology

Huge amounts were invested on R&D, to the shock ofsuppliers

The whole factory was an R&D center and every

employee was a research scientist Innovation was made a routine activity, and was kept

alive by the freedom to perform and fail