Examples Of Organizational Culture At The Lincoln Electric Company

The founders of the Lincoln Electric Company left a legacy of an organization culture that promotes high productivity through sound management policies which have stood the test of time. The exponential growth of the company after the death of James F. Lincoln was a direct result of the establishment of a rich culture mix based on values that were widely shared and accepted by the members of the organization. Management empowered employees to become part of the decision making process through the contribution of ideas through the Advisory Board which was elected by the employees from amongst themselves. Reward management systems and all the other artifacts of the Lincoln Electric’s distinguished strong organizational culture will be analyzed in greater detail in this essay.

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 Company was a legacy company from which the families ' personal values were incorporated in the beginning and continue to be the fundamental beliefs compromising the company 's culture. By creating and implementing a culture of service, respect, and loyalty, the Lincoln Electric Company has become an institutional leader in American business standards. Lincoln 's culture cannot be summarized by a single dimension of cultural analytics because of its multifaceted culture that is innovative, outcome-oriented, people-oriented, and team-oriented

In today’s competitive world, an organization’s culture can be the greatest competitive advantage. Southwest prides their investment in their employees and their family type culture to be their advantage. Zappos’ success is credited to their approach in hiring talent (Kreitner & Kinicki, 2013). When it comes to hiring and retaining talent, culture matters. In his work and research at Glassdoor, Andrew Chamberlain, Ph.D. (2017), found that employees were less likely to leave companies with a higher rated culture. When it comes to an organization’s ability to grow their customer base and increase their bottom line, culture matters. Netflix credits their culture in their ability to excel in their market ("Netflix Culture: Freedom and

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

For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer as a result of its culture. In other words, just as having the “right” culture may be a competitive advantage for an organization, having the “wrong” culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.

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

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.”

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

Although he died in 1965, the organisational culture he established regarding shared assumptions, values, and beliefs are still evident today. His founding philosophy was broken down in to four areas. The first is the company’s attitude towards the customer; Lincoln said, “When any company has achieved success so that it is attractive as an investment, all money usually needed for expansion is supplied by the customer in retained earnings. It is obvious that the customer 's interests, not the stockholder 's, should come first” (Lincoln. J. 1961). The current President, Mr Willis, still ranks the customer as Lincoln 's most important constituency (Sharplin. A. 1985).

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

Upon review of the Lincoln Electric Company case study conducted by Arthur Sharpish of Harvard University, I came to find that the culture within the company is what elevated Lincoln Electric above all other companies in that field. When analyzing the report I considered many aspects of the company in order to determine what exactly that separates Lincoln from their competition.

Management researchers have shown their interest in culture (dating back from 1960’s) as it is believed that culture has an influence on managerial behavior and performance (Sekaran, 1983 p: 67). Along with the present problems, an increasing demand for necessity to innovate cultural solutions to organization problems in a business which has resemble the world to a global village (Doktor, Tung, and Von Glinow, 1991 a P: 259).

Organisational culture became popular in the 1980’s after the publication of Peter and Waterman’s best-selling book “In search of excellence”. It was made evident that company success had a strong correlation with organisational culture, thus competitive advantage for business. The concept of organisational culture is vastly growing in management and a subject of various research. According to the “Business dictionary” Organisational culture is defined as “The values and behaviours that contribute to the unique social and psychological environment of an organisation.”

There are plenty of reasons why Lincoln Electric Company (LEC) is successful, and a big one that people usually credit the success to is the way it’s managed. While reading the Lincoln Electric Company Harvard Case Study by Arthur Sharplin, we learned a lot about the echo of the founder’s philosophies still very present in the company, we looked at the highly rewarding merit pay plan, and we learned about LEC’s authoritarian management style. There are plenty more reasons why LEC has been so successful over the years but these three are mostly responsible for the productivity, efficiency, morale, and overall satisfaction of the factory level employees and all the way up to the President’s office.