What do you think of Lincoln’s emerging international strategy by the mid-1990s? Does this company have a competitive advantage that can be transferred to the global environment? How is Massaro’s recent overseas initiative different from Lincoln’s earlier failed approach?Lincoln Electric: Venturing Abroad
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.
1. The observable artifacts associated with the Chrysler culture was that the CEO was located in a penthouse office of the building which Mr. Marchionne moved to the middle of the engineering department; he streamlined senior leadership, and to the remaining 15 members he gave them added responsibility feeling that the more decisions they had to make the faster they would work to meet the deadlines; he also gave them the opportunity to take full authority to take risks without worrying about bureaucrats barriers and they were allowed to make smart decisions and to be held accountable for them (Lueneburger, 2014).
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.
In his book, Phillips delves into the leadership qualities embodied by Lincoln and explores Lincoln’s own leadership style as it related to both his early career as a lawyer and later, into Lincoln’s political life. Through his research into this book, Phillips relates how Lincoln developed strategies for management based upon his own early lessons in life. Phillips then demonstrates how Lincoln used this knowledge to not only convince the public he was the right man to lead the nation as president, but also to win the Civil War.
Key elements of the first wave of LE's international ventures are: domestic operations accounted for 85% of the worldwide production and nearly all new product development until the late 1980's, universal application of the "incentive management programs", and in general the corporation paid little attention to there international divisions. However, as of 1996, Lincoln re-organized its international ventures by naming a president for each of the five regions, this is a demonstration of a new emphasis and focus on the international ventures from LE. In additional to the CEO having a planned oversight into the expansion there will be council consisting of each of these presidents to plan, integrate and implement global strategies. The compensation for these presidents will also include interregional cooperation. Both of these efforts address key Lincoln weakness from there prior international ventures of: "sink or swim" corporate attitude and interregional destructive competition. One final item is that Lincoln realized that in the second wave of international expansion true understanding of a country/culture is as important as technological skills.
Lincoln Electric Company is a manufacturing company, which has been focusing on welding products for the recent 30 years. The company had outstanding brothers leading the company to success. John was a technical genius and he brought the best skills in production and James was good at management and he was working on the employees ' incentives. The company gained its reputation through the world war till present as the welding equipment supplier with higher quality and lower price at the same time. For the production aspect of welding equipment, it is an advanced production line with continuous flow with high flexibility and low idling time.
Though, in reading the Lincoln Electric Company Harvard Case Study by Arthur Sharplin, add up to what I learned from chapter eight this week, I can realize the that the organizational culture is the cornerstone for the growth of any organization. The success of Lincoln Electric Company is due to the environment that is previously established by the Lincoln’s family. If we look at in the introductory of the Harvard case study, Arthur Sharplin states that “The Lincoln incentive management plan has been well known for many years. Many college management texts refer to the Lincoln plan as a model for achieving high worker productivity.” (pp. 1). This is to say that they have already set some policies to make the company what it has always been since its creation.
With multi-million dollar, domestic updates and acquisitions in such countries as Italy, China, and Indonesia, Lincoln Electric Company wasted no time by dwelling on its first losses in Lincoln&#8217;s history. Lincoln is back on track as the world leader in arc welding, after faltering for only two years. Lincoln is committed to providing substantial value to all of its stakeholders.
It is essential that Lincoln Electric research other countries cultures values and norm prior to transporting their management control system to that country, because cultural values differ and what one culture values another may not. To be successful in another country, Lincoln Electric will need to adjust their management control system to include what motivates that particular culture. An example of differing cultures is the fact that the piece work and bonus system works here in the US, but according to (Draft, 2010), “the European labor culture was hostile to the piecework and bonus control
Mutual respect is the foundation of all relationships in the Lincoln Company starting at the top of the firm. Respect is the ability to recognize of what is, a good manager are able to recognize the value of people, things and situations. A good team leader also evaluate the results and situations, take into account the pluses and the minuses, strengths and room for improvement, risks and opportunities…He is very interested in the potential of his employees. That is what James F Lincoln have brought since the beginning in the Lincoln Company. He understood that by seeking a committee advisor elected by the employees, on company operations is the best way to align a good management.
“We will distinguish ourselves through an unwavering commitment to our employees and a relentless drive to maximize shareholder value”; as found within Lincoln Electrics’ Vision Statement (Lincoln Electric 1999-2016). The beliefs and values transferred from company founders and instilled into employees can have an overwhelming impact on corporate culture. By establishing a positive corporate culture one can influence exceptional company performance. This is clearly demonstrated by Lincoln Electric Company, from its early days until its present day. I will present how the Lincoln Electric Company has done just that!
Ans. An Indian expansion through an investment in the major production facility is the most logical step for Lincoln Electric in pursuance of its long term strategic goals. The company needs to be free from its dependence on North American sales; the sales in the North American markets are stagnant whereas other markets especially the Asian markets are growing significantly faster. Its long term financial targets which include sales growth double the rate of growth in worldwide industrial production, operating margins over 15%, earnings
In order to make future international plants more successful than previous acquisitions, Lincoln Electric’s managers may consider re-evaluating their management control approach; carefully evaluating the international labor laws and regulations of the plant prior to deciding whether or not to invest in it; and providing increased training and development to managers and workers of both the parent company and host company to ensure understanding of both sides’ cultural values and beliefs.
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.