My Understanding Of The Lincoln Electric Company 's Culture

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.

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.

Lincoln serves their customers first, and stockholders last. Lincoln's goal is to evolve continually to offer better quality products at a lower price point. These views have not changed since the very humble beginnings of the company. The company's motto is the actual is limited, but the possible is immense. James Lincoln began managing this business by asking employees to elect members to weigh in decisions about company operations in a twice-monthly meeting. This practice still continues. The turnover is nearly nonexistent, with the exception of retirements and employee relocations. And the list of benefits available to employees is extensive, including job security for a guaranteed amount of hours and stock purchase option, bonuses, and

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.

3. Lincoln’s culture could not be imposed but must be nurtured. “Willis retained the existing managers of most of the acquired companies to take advantage of their local knowledge, but directed them to implement [underlined by author]Lincoln’s incentive and manufacturing systems [p 6].” While Willis appreciated the benefits of implementing Lincoln’s systems, he did not consider James Lincoln’s caveat that “All those involved must be satisfied that they are properly recognized or they will not cooperate – and

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.

Before anyone can truly understand and respect Lincoln Electrics’ culture values (which has one of the finest corporate cultures), we must look at how the company has evolved to become what it is today. In the early 1900s, the company transitioned leadership from John Lincoln, the original founder, to his younger brother, James Lincoln. John turned management and leadership to James Lincoln in order to pursue his ingenuity through inventing for the company. One of the first orders as General Manger was to assemble and advisory group that would report to him. He did so by requesting the employees from various departments to elect a representative to be on the committee that would meet with management – to this day the advisory group meets two times per month.

That both employees and management want to be a part of something great, a part of a team that is working for the same goal of making their company successful. Lincoln believed that a worker is worthy of what they earn. If they work hard, they should be paid commensurate with that effort.

This paper summarizes the culture of The Lincoln Eclectic Company. First we take a look at the influence of the company founders and how their beliefs/values exits today. Then we will review various topics such as, the companies golden rule, the performance appraisal system, the way people communicate in the company, and bonus plan, to name a few, all of which make up and highlight the companies culture.

In those early years, James F. Lincoln implemented a number of programs and initiatives with served to define a company culture that was unique in its day and which has persisted for a century. Those programs and initiatives grew out of a stated mutual respect between workers and management, based largely on James F. Lincoln’s Christian beliefs and apparent genuine respect for the people who developed, manufactured and sold the company’s products. Among those programs was the creation of an Employee Advisory Board, a production based employee pay structure, and a group insurance program which was a rare benefit in its time. Today, Lincoln Electric continues to thrive and according to its 2014 Annual Report, generated revenues on the order of $2.8 billion resulting in net income of $255 million. The Cleveland, OH-based company now employs 10,000 worldwide where it operates 40 manufacturing facilities in 20 countries. Lincoln distributes its products to 160 countries.

“An organization’s culture may be one of its strongest assets…,” (Principles of Management p. 184). Culture at the Lincoln Electric Company exemplifies this statement, and has since 1914. The Lincoln brothers’ attitude towards the employee has helped skyrocket this once small company to the powerhouse that it is today. Examining this outcome oriented company yields a perfect example of how a strong culture can add to the overall bottom line.

Lincoln Electric was founded at the end of the 19-th century by John C. Lincoln. He was a talented engineer who invested 200 dollars in his product electrical motors. Soon he was replaced by his younger brother James F. Lincoln, and the founder of Lincoln Electric dedicated his time to engineering activities and inventions. James F. Lincoln was a different type of inventor. He was a good manager with the nice strategic point of view over manufacturing. At the beginning of the 20th century, the company started manufacturing welding machines which become their iconic product. That is not the only thing Lincoln electric became famous for. The incentive management plan was one of a kind at that time and was the first step of creating company culture with a high focus on the employees, something unheard among the other manufacturers at that time of the century. Both Lincoln brothers were inventors and this was crucial for the earlier company development. Both were pioneers and the vision and the mission that was integrated especially from James Lincoln played a major role in the dramatic company development during the World War II.

Lincoln created the climate of risk-free entrepreneurship to foster innovation. He rewarded people for trying new things and motivated them on failure. This encouraged people to try harder and be persistent.