Organizational Strategy Of Lincoln Electric

The Lincoln Electric company, under the leadership of James F. Lincoln saw a major shift in the way business was to be directed and operated with visionary mind-set emulating companies like Ford, Wal-Mart, Merck, 3M as focus was towards the customer’s needs and employee’s compensation. Philosophically customer needs become critical as the reason for being in business and the employees also being the vehicle in achieving the needs of the customers as the case study by Sharplin, A (1989, p.3) clearly positions the companies aspirations. James Lincoln places much importance on the relationship with employees that is guided by mutual respect and individual effort.

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.

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 years to be a global manufacturer of welding products and battery systems. The Lincoln

Established in 1895 and specialized in producing and selling electric motors, Lincoln Electric Company rapidly developed after the movement to welding equipment and consumable welding products in the USA. By 1995, this company first hit $1 billion in sales and became the world largest company in welding industry. With the differentiate strategy by providing premium -price -products , this company got 60% sales in the North American and expanded internationally since the period of 1986 and 1992. Although this company is facing problems in global expansions, its overall strategy as well as practices in human resources, marketing, technology development, and international expansions is a useful lesson for other businesses.

Headquartered in Cleveland Ohio, Lincoln electric’s business model consists of distributing welding consumables, equipment’s and solutions. Lincoln initially traded electric motor cars and steadily moved on to welding. Lincoln’s vision, led by founder John C. Lincoln is to provide high quality welding, joining and cutting equipment’s globally.

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.

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’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.

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.

“We are a global manufacturer and the market leader of the highest quality welding, cutting and joining products. Our enduring passion for the development and application of our technologies allows us to create complete solutions that make our customers more productive and successful. We will distinguish ourselves through an unwavering commitment to our employees and a relentless drive to maximize shareholder value” (http://www.lincolnelectric.com/en-us/company/Pages/vision-statement.aspx). This is the vision of James Lincoln, founder of Lincoln Electric Company. I will look at this vision and apply it towards the

Planning, Organizing, Leading, and Controlling are the four basic management functions. These four functions serves as a general guiding rule for every organization or company towards the attainment of desirable leadership style. Executives’ drive the company pursuant to its mission statement, employees should have mutual respect to one another, and the company should offer an acceptable compensation. Thereby working as one community for a crystal clear vision. Having read the Lincoln Electric Company Harvard Case Study by Arthur Sharplin, I would like to contextualize my evaluation into different perspectives. These perspective includes: Continuing influence of the founders, the golden rule, compensation schemes, open communication, and management style. Continuing influence of the founders of the company "The actual is limited, the possible is immense.” With this slogan that the company has, it actually reflects how profound the influence of the founders to the current people living in the company. It was very clear to my understanding that Lincoln treated everything and everyone as associates. Lincoln’s did not only focus on the profitability he could gain with his product nor the productivity that the employees could offer, the founders had an exquisite realization of building relationship with their product, customers, employees and business partners. The influence that Lincoln’s as founders created paved way through an inevitable inspiration that up until today, people

Elements of Lincoln Electric’s management system that made it so popular in the U.S. such as piece-rate work, bonuses, and

The Lincoln Electric Company 's culture is a wonderful example of how to create an exceptional culture within your business. Lincoln Electric has been a leading manufacturer in welding machines and electrodes for over 100 years. During this impressive tenure, the Lincoln Electric Company has adhered to its founders’ philosophy that the customer always comes first, the employee always comes second, and stockholders come third. This philosophy is upheld throughout the entire organization, from the executive team down to its factory line workers and is evident in their daily business culture. Displayed through a plethora of initiatives; including employee compensations, a concentration on productivity, encouragement of management and supervisors to participate in active leadership and a general appreciation for its employees ' input and feedback; the working culture in this organization is the backbone of the company’s continued achievements. Through the demonstration of their philosophy, Lincoln 's founders and management team have created a culture that has become a timeless model of employee productivity for the world.

In this case analysis I will be analyzing and summarizing my understanding of the organizational culture of the Lincoln Electric Company, based on key pointers and a Harvard Case Study by Arthur Sharplin. In my analysis I will be using the framework from chapter eight of the textbook “Principles of Management” by Carpenter, Bauer and Erdogan to discern aspects of the company’s culture. The company is said to have a distinctive management culture and manufactures welding equipment. It is located near Cleveland, Ohio USA. Lincoln Electric Company is considered to be one of the best managed manufacturing companies in the world.

The continued influence of founder James Lincoln’s values and belief system is visible throughout every aspect of the organizational culture at the Lincoln Electric Company. Although James Lincoln believed that businesses should follow Christian morality, he did not impose religion on any of the employees. Instead, his beliefs are reflected in the company’s policy of always placing the customer first, and its view that this practice is not only morally correct, but also beneficial to the company’s economic success -- which has been proven true.