Analysis Of Company Culture Of The Lincoln Electric Company

The Lincoln Electric company, under the leadership of James F. Lincoln saw a major shift in the way business was to be directed and operated with visionary mind-set emulating companies like Ford, Wal-Mart, Merck, 3M as focus was towards the customer’s needs and employee’s compensation. Philosophically customer needs become critical as the reason for being in business and the employees also being the vehicle in achieving the needs of the customers as the case study by Sharplin, A (1989, p.3) clearly positions the companies aspirations. James Lincoln places much importance on the relationship with employees that is guided by mutual respect and individual effort.

Established in 1895 and specialized in producing and selling electric motors, Lincoln Electric Company rapidly developed after the movement to welding equipment and consumable welding products in the USA. By 1995, this company first hit $1 billion in sales and became the world largest company in welding industry. With the differentiate strategy by providing premium -price -products , this company got 60% sales in the North American and expanded internationally since the period of 1986 and 1992. Although this company is facing problems in global expansions, its overall strategy as well as practices in human resources, marketing, technology development, and international expansions is a useful lesson for other businesses.

Lincoln serves their customers first, and stockholders last. Lincoln's goal is to evolve continually to offer better quality products at a lower price point. These views have not changed since the very humble beginnings of the company. The company's motto is the actual is limited, but the possible is immense. James Lincoln began managing this business by asking employees to elect members to weigh in decisions about company operations in a twice-monthly meeting. This practice still continues. The turnover is nearly nonexistent, with the exception of retirements and employee relocations. And the list of benefits available to employees is extensive, including job security for a guaranteed amount of hours and stock purchase option, bonuses, and

     Headquartered in Euclid, Ohio, a suburb of Cleveland, The Lincoln Electric Company is a world leader in welding and cutting products, as well as a premier manufacturer of electric motors. The company is well known for its dedicated, talented workforce and its superior technology. Lincoln Electric Company gives its customers total solutions along with a commitment to quality. Lincoln Electric Company is also well known for its incentive management system. Many companies strive to duplicate the success that Lincoln has enjoyed over the years.

With the years going by, Lincoln Electric Company, despite its excellent performance in production, has been growing in a very steady speed, and never really grew to a large scale company.

Lincoln Electric has been on top in relating to the country’s culture of the United States. James Lincoln realized that treating people fair and realized their needs will sustain the company for the long haul. For an example, in 2008 when the United States was in recession, many major corporations laid of its employees. The feeling of discontent was high in the United States. However, Lincoln Electric did not lay off one person. Instead, the company lower their hours until the recession is over. Not only this method saved the employees’ jobs and it also sustain their morals and spirits.

Elements of Lincoln Electric’s management system that made it so popular in the U.S. such as piece-rate work, bonuses, and

Founded in 1865 by John C. Lincoln, the company is known in today’s world for its high worker productivity. The secret behind this extra ordinary success lies in the company’s founding philosophies and established policies over the year. The term ‘Organizational Culture’ was not even in practice when the company established its unique policies like reducing working hours, paid up life insurance, health benefits, social activities, paid vacations, and the pension plans. These measures not only motivated the employees but also helped build trust and partisanship. In Charles G. Herbruck’s words “... these were expressions of mutual respect for each person’s importance for the job to be done.” It can be assumed that Lincoln Electric

Lincoln Electric Company of Cleveland Ohio USA`s organizational Culture is exceptional and has earned it the acolade of being the best managed manufacturing company in the whole world. I will explore and attempt to identify culture aspects of Lincoln Electric from several issues such as; the continuing influence of founders of the company, the golden rule, the incentive management plan,the performance appraisal system, how people communicate in the organization, the merit pay plan, the bonus plan, and the management style.

While Lincoln Electric’s does not possess a formal organizational chart its objective of maximum flexibility and open door policy have encouraged personnel to take the problems to the persons capable of solving it. Such an organizational structure is deemed to be one which improves efficiencies, integrate operational and product development processes in an effort to better serve customer needs. “This structure also leverages the functional and technical strength the organizations core teams in developing markets, speed up profitable growth.

The founders of the Lincoln Electric Company early-on, set systems in place such as an incentive management plan and an employee advisory board that would propel the company forward even long after the founders had retired and passed away. By fostering an environment of "mutual respect" Lincoln Electric "claims levels of productivity more than twice those for other manufacturers" with a market share of "more than 40 percent".

9). This, however has not stifled the atmosphere of equality at Lincoln, that is consistent with the POCP. The management style at Lincoln Electric is best summarized by a quote from James F. Lincoln, brought to attention by Sharplin on page 9, “...Management is the coach who must be obeyed. The men, however, are the players who alone can win the games.” The spirit of this quote is exemplified, not only by the empowerment of employees, but also by the lack of preferential treatment for stakeholders who are usually given a great deal of consideration. Management is not afforded any extravagance, even being made to eat in the same area as blue collar workers (p. 10). Stockholders take last priority on Lincoln’s list of stakeholders ( p. 3). Lincoln was very focused on improving the efficiency of his processes, not for the profit of stockholders, but for the benefit of the customer. He knew that everything else would follow. Lincoln, instead of catering to the wishes white collar stockholders, made an effort to enhance the financial well being of his employees. By setting aside 50% of the company’s stock for employee ownership (p. 10). The inclusiveness of the employee ownership program, as well as the way other stakeholders are treated is essential to maintaining a sense of fairness at the Lincoln Electric Company and in turn their

James F. Lincoln was the founder of The Lincoln Electric Company that is well known all around the world now. Of course, the company’s organizational culture was not established by just one person but with efforts of many coworkers. Values of the founder were a guiding light for all workers and the managerial staff. When Lincoln died in 1965, the employees of the company were frightened that old system of the founder would not work as well as before, but since the company had its long history and it was an already formed organizational culture, they successfully gone through the death of the great founder and succeed. The values of the man are still alive. The founder was a great believer and he had the golden rule that sound as following “The program that Christ announced, ‘As ye would that others would do to you do ye even so to them’ is the complete answer to

In order to gain an understanding of the Business culture at Lincoln Electric, I will create a model describing how the culture was created and continues to be maintained. I will attempt to show also that Lincoln has a strong culture which affects the way the employees think and behave. There are several factors are involved in the creation of their Business culture:

The Lincoln Electrical company has an organizational structure rooted in the values and principles set out by its two founders, John Lincoln, engineer and inventor, and later his brother James F. Lincoln. The company has a strong company culture that persists to present. Both brothers left their imprints on the company, but the primary shaper of its values and principles, and success should be attributed to James Lincoln.