Lincoln Electroic

755 Words Sep 7th, 2012 4 Pages
Question 1 Does Lincoln follow a hierarchical or decentralized approach to management? Explain your answer and give examples.

Answer 1 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
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Lincoln electric’s approach to management contributes to its employee’s high motivational rate. According to (Draft, 2010), Lincoln electric motivates it’s staff with “strict performance goals to achieve pay, precisely defined task and a powerful incentive control program which is based on a piece-rate bases and merit-pay which is based on performance”(p.562). Other motivating factors are annual bonuses and stock purchase plans which all employees are offered (Draft, 2010). Another contribution to its success is their organizational culture which is “based on openness, trust, shared control and an egalitarian spirit” (p. 562-563).

Question 3 What is the problem with transporting Lincoln’s control system to other national cultures? What suggestions would you make to Lincoln’s managers to make future international manufacturing plants more successful?

Answer 3 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

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