Lincoln Electric : A Leading Business Model For Management

Lincoln Electric (LE) has been a producer of electrical and welding technology products since the late 1800's. The company remained primarily a family and employee held company until 1995, then approximately 40% of its equity went to the public. James Lincoln, one of the founders, developed unique management techniques that effectively motivated the employees. These management techniques were implemented as an unusual (for the era) structure of compensation and benefits called "incentive management". The incentive management system consisted of four key areas: factory jobs based solely on piecework output; a year-end bonus that could equal or exceeded an individual's regular pay; guaranteed employment; and limited benefits. Management

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.

The Lincoln Electric Company is one of the largest manufacturers of welding machines and electrons in the world today, with $1 billion in sales and 6000 workers worldwide. The company is also the pioneer in the development of the arc-welding industry and the originator of the innovative employee incentive system. “It was founded in 1895 by Engineer John C. Lincoln to manufacture an industrial motor of his own design. By 1909, it began to produce welding machines, and In 1914 James F.Lincoln his younger brother became the general manager, and actively promoted the welding industry, which expanded with the need to repair the navy vessels during the First World War”. Moley Raymond. (1962) The American century of John C. Lincoln. Retrieve

The Lincoln Electric Company is a welding company that has been around since the late 1800’s. Not only are they known for their prospering business, but they also are known for their management plan. A company’s culture has so much to do with their success, and The Lincoln Electric Company is definitely a business to look up to in that regard. They are a company that succeeds through their sturdy history, their incentive plan for their employees, their management style, and much more.

In 1906 John C. Lincoln incorporated his business East Cleveland, Ohio forming what we know today as the Lincoln Electric Company. Though the company started out as a relatively small operation, it is now one of the largest producers of welding Machines and electrodes. Branching out from Cleveland, Ohio the company now has more factories in U.S. as well as in other countries. The company’s success has be attributes to several different factors, one of which is the company’s unique culture.

Lincoln Electric was founded by John C. Lincoln in 1895 in Cleveland, Ohio and has remained one of the most prominent and successful American manufacturing companies over a century later. Lincoln’s place in the world of welding machines and electrodes was not done by accident or attributed to luck. It was built by vision and design. John was more of the scientist, preferring to focus on being and engineer rather than managing a company. That’s when James, his brother took the reins (along with a typhoid illness that kept him away from the plant). James Lincoln had a vision for the company that reflected his Christian values, though those values were not imposed on his employees. He used his values as a guiding force as to how to encourage and empower the staff at Lincoln Electric to invest one hundred percent of their efforts into creating the strongest, and most stable manufacturing company in the world.

Lincoln has grown in size due to its management style such as how its leadership has been structured and company ethos never being compromised. The founder James F Lincoln and his family members that followed after him, have always tried to maintain the morale and productivity of the company through innovative leadership and organisational skills.

The company was originally founded in 1895 by John C. Lincoln to make electric motors he had patented. In 1907, he brought on his younger brother, James F. Lincoln, who began leading the company according to his ideals in 1914 as both General Manager and Vice President. Christian ideals were the cornerstone of James Lincoln 's business philosophy, but these were his personal beliefs, and never tried to push them onto his employees or his customers.

Once Mr. James F. Lincoln steps in as the Vice President and General Manager we start to see some incisive management decisions made. These decisions have truly built an amazing organizational culture whether The Lincoln Electric Company claims to have a company culture or not.

Lincoln Electric’s Tradition of innovative solutions, technological leadership and commitment to customers, employees, and shareholders stems from the vision of its founder, John C. Lincoln and his brother, James F. Lincoln

The effectiveness of the company’s doctrine is attested to by its continued growth after James F. Lincoln’s death in 1965. This illustrates that the culture he had founded was strong enough to ensure the company continued to prosper even in his absence. When still in infancy, the company suffered major setbacks including being gutted down but bounced back to employ about 30 workers by 1906 while sales kept growing too. James Lincoln pioneered an advisory committee that was elected from the staff members. The innovation, akin to a tradition, has persisted to date whereby the CEO meets with the Advisory Board twice every month. This kind of representation is critical in ensuring that the employees’ interests are taken care of. This certainly is a disincentive for go-slows and strikes as the grievances can be routinely handled at the highest

What makes Lincoln Electric Company so famous among management researchers and study communities? What gives them competitive advantages? Lincoln is known for its high labor productivity, very low employee turnover rate, high profitability and stable market share. The principle behind Lincoln success is their incentive management style. This famous Lincoln management style created a unique organizational culture. In this paper, I will be summarizing the organization culture of Lincoln: how is it created and what values of culture Lincoln possesses using Organization Culture Profile (OCP) topology?

First, I examined the ongoing influence that has been exerted by the founders of the company. Lincoln Electric was founded by James F. Lincoln at the turn of the 20th century. His influence in leadership and his approach toward the customer has stood the test of time. James believed that the success of his company lay with the customer and a motivated labor force.