Creation and Maintenance of the Business Culture at Lincoln Electric

Lincoln Electric Company has a very strong culture based on shared assumptions values and beliefs. This is evidenced by the attitudes of both the company management and employees towards the organization. The unchanged policies, practices and products point towards a very strong corporate culture. High employee performance and productivity over the many years of the company’s existence is also another indicator of a strong culture.

Every organization has values and beliefs that define what they do and how they do things in the organization. These values have significant influence on how the employees behaves and the general performance of the organization – it is these set of values and beliefs, rooted deep in the company’s organizational structure that depict the “dos”, “don’t” and the “hows”, of the organization and these unequivocally represents the culture of the organization. This concept became popular in the 1980s when Peters and Waterman in their book: “In search of Excellence” presented the profound argument that, the success of any organization is inextricable linked to the quality of its culture. (Carpenter, M., Taylor, B., Erdogan, B. 2009 p183). The purpose of this paper is an attempt to analyse the impact diverse cultures played in the success of the Lincoln Electric Company.

The Lincoln Electric Employees' Association was formed in 1919 to provide hearth benefits and social activities.This organization continues today and has assumed several addittional functions over the years.

Primary features of the Lincoln Electric business model and employment system are displayed through the company’s overall strategy, philosophy, compensations and benefits policy, leadership, and communication within and outside the organization.

The founder, James F. Lincoln used his Christian upbringing as the basis for his vision of how he defined entrepreneurial success. The customers ' needs are first priority, the employee second, and the stockholders are last. Quality and cost efficiency are the two most important factors considered in their product engineering and manufacturing. The hierarchy is stringent, however, the culture of the company is greatly people-oriented. This company has a strong culture that is instilled in new employees from the beginning and continuously practiced by every member of every facet in the organizational structure.

Values have five key components. They are concepts of beliefs, pertain to desirable end-states or behaviors, transcend situations, guide selection or evaluation of behavior and events, and are ordered by relative importance (Kreitner & Kinicki, 2013). Many researchers believe that when employees share organizational values, they feel more loyal, dedicated, identify more strongly with the organization and are less likely to leave (Khandelwal & Mohendra, 2010). An organization’s goal is to turn espoused values into enacted values. Enacted values are the values and norms that are actually exhibited or converted into employee behavior (Kreitner & Kinicki, 2013). Chrysler’s espoused values are innovation, leadership, responsibility and cooperation (Chrysler,

Structurally, Lincoln electric appears to use a decentralized approach to management. According to (Draft, 2010), “decentralization relies on cultural values, traditions, shared beliefs, trust and an egalitarian spirit to foster compliance with organizational goals” (p. 548-549). Lincoln Electric also uses a lateral approach between management and employees to achieve organizational goals. Examples of Lincoln Electric’s decentralized approach include their open door policy, which is for all employees from the top to the bottom of the hierarchy, their no lay-off policy and their procedure of promoting

The following paper will provide an in depth analysis as to the benefits associated with utilizing leadership to implement successful organizational change. The paper will outline and convey the importance behind effective leadership demonstration within the workforce environment. Along with this, the importance for instigating and culturing positive working relationships amongst employees, coupled with streamlined communication between staff and executive management is of the utmost importance. This paper will produce the direct correlations between innovative thinking and successful organizational cultural change, showing the importance of this

Leaders forge the path for a culture, and culture isn’t created in a day. After the death of James F. Lincoln it was widely suspected that the company would falter. The opposite was true – due to the

The Lincoln Electric Company 's culture is a wonderful example of how to create an exceptional culture within your business. Lincoln Electric has been a leading manufacturer in welding machines and electrodes for over 100 years. During this impressive tenure, the Lincoln Electric Company has adhered to its founders’ philosophy that the customer always comes first, the employee always comes second, and stockholders come third. This philosophy is upheld throughout the entire organization, from the executive team down to its factory line workers and is evident in their daily business culture. Displayed through a plethora of initiatives; including employee compensations, a concentration on productivity, encouragement of management and supervisors to participate in active leadership and a general appreciation for its employees ' input and feedback; the working culture in this organization is the backbone of the company’s continued achievements. Through the demonstration of their philosophy, Lincoln 's founders and management team have created a culture that has become a timeless model of employee productivity for the world.

Over the decades and since it was first created, the ongoing guidance and encouragement of the management towards their employees made Lincoln’s expansion possible to a global level. The ideas and philosophy of the founders are still at the core of the organizational culture because they strongly supported the company in its initial stages and helped distinguish it from others. “Thus, by providing a competitive advantage, these values were retained as part of the corporate culture and were taught to new members as the right way to do business.”

Leaders must work with others in the organization to understand the organization’s culture. The core beliefs and values that are shared by the organization’s members, that guide their actions in its behalf and define their expectations about the actions of those around them (Beach, 2006). In analyzing the culture at my previous employment, I discovered a few different types of cultures existed within my organization. The organization I worked for was a manufacturer of foam components to the Automotive, Appliance, Medical and Military industries. We have provided engineered solutions to leading global manufacturers since 1992. The company consisted of approximately 50 employees, in which about 10 of those were office personnel and the

In 1895, engineer, inventor, and businessman John C. Lincoln started Lincoln Electric Company. His brother James would join him shortly, in his business endeavor, starting in 1907 (Sharplin, A 1989). James managerial style would most closely be described as people-oriented. He once said “Labor and management are properly not warring camps; they are parts of one organization in which they must and should cooperate fully and happily.” (Sharplin, A 1989) Early on, he created the Advisory Board, a committee made up of both employees who were elected by their peers and upper management, including the chief executive officer. The Advisory Board continues still to this day, meeting bimonthly to discuss employee policies, working conditions, etc. Though these meetings, employees have gained such things as health benefits, life insurance, paid vacation time, retirement pension plans, stock incentives, continued on and off site education, and much more. (Sharplin, A 1989)

Even though John started the company, James Lincoln had the biggest impact on the management style and practices. He created an advisory board that still to this day meets twice a month in order to listen to employees who may have ideas or suggestions. The board is made up of each department in order to allow every person in the company to have a voice. He also helped start an in house welding school that still trains new employees to this day. He helped create the Employees’ Association to help provide health benefits and plan social events for employees. He helped create a pension plan and a revolutionary incentives plan that is still used as one of the best benefits of working for the company. He started allowing employees to buys stock in the company as to inspire them to work harder. Finally although he never publicly stated it or pushed religion he said believed a company should operate with Christian values, and that the priority in the business would go first customers, second employees, and third stockholders. These values and priorities still hold true in the company even today.

In 1989, Arthur Sharplin produced a case study, Sharplin (1989), outlining the organizational structure and culture of the Lincoln Electric Company. This report will be focused on analyzing Sharplin’s case study to discern aspects of the Lincoln Electric Company’s culture. First, we will discuss John & James Lincoln and their influence on the development of the culture of the company. We will discuss their Christian influence, and how applying the golden rule of doing to others as you would have them do to you, helped them shape their company. Additionally, we will discuss the company performance appraisal system, the way people communicate in the company, the merit pay plan, the bonus plan, and finally, the management style. After