Organizational Culture And The Lincoln Electric Company

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ORGANISATIONAL CULTURE AND THE LINCOLN ELECTRIC COMPANY

The success of a business is intimately tied to the success of its culture. To understand better how organisational culture is created and maintained we will examine one of America’s most successfully managed companies, the Lincoln Electric company. We will examine many aspects of the company that contribute to its culture, such as the influence of the company’s founders, the golden rule, the incentive management plan, the performance appraisal system, the merit pay plan, the bonus plan, the way people communicate within the company and the management style. In analysing these we will reveal a strong people oriented culture formed and maintained for over a century.
Lincoln Electric
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Consequently, there has never been an attempt at unionising within the company and this is partly due to there not being a need. When workers are not being exploited, there is no need for them to fight back.
James Lincoln was the son of a congregational minister and his Christian values were a guiding principle in his managerial decisions. When viewing his employee policies, we can see the golden rule at work. The needs of employees at every level are thoughtfully considered and aligned with the needs of the company. More than that, the customer is also given great consideration and the creation of products with real value is given providence over marketing or advertising. There is a genuine commitment to creating real worth rather than short term profits. James treats both the customers and the employees with respect and dignity, creating a culture is that is people oriented. The only people involved in the business that are not see as important are the shareholders. They are not actively involved in the business and their interests are therefore seen as the least important. This attitude may have protected Lincoln from a gradual change toward a more aggressive or sales oriented culture.
Lincoln’s incentive management plan is not only exemplary in its structure, but also in its implementation. For example, piece work has been shown to increase worker productivity, but has also been widely abused as a means of rewarding workers less for the work
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