The Lincoln Electric Company Case Analysis

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 Lincoln Electric Employees' Association was formed in 1919 to provide hearth benefits and social activities.This organization continues today and has assumed several addittional functions over the years.

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.

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

117 Years of Excellence; this is the header of the “Company History” section of Lincoln Electric’s website. I began the analysis at the careers section, looking through a variety of job descriptions and qualifications. The common requirements for management on the site are a Bachelor’s degree (Masters preferred), 5+ years of previous management experience, experience with Lean/Six Sigma tools to create impactful business improvements, proven experience in implementing and/or running an operation in an SAP environment, high level of integrity, confidentially, and accountability, sound analytical thinking, planning, prioritization, and execution skills, a well-defined sense of diplomacy, including solid negotiation, conflict resolution, and people management skills.

The incentive management plan of the company is one of the important aspects in the management of a company in general. It will be noted that an organization’s culture may be one of its strongest assets or its biggest liability. A well-structured incentive management plan for a company can indirectly increase production. Even as a disorganized incentive management plans of an organization may also affect production negatively. In the Lincoln electric company incentive management plans is an outcome oriented culture, since its stated in their case study that if you can produce more you will be paid more, disregarding the amount of years you have spent in the company. Lincoln electric company reward

While Lincoln Electric’s does not possess a formal organizational chart its objective of maximum flexibility and open door policy have encouraged personnel to take the problems to the persons capable of solving it. Such an organizational structure is deemed to be one which improves efficiencies, integrate operational and product development processes in an effort to better serve customer needs. “This structure also leverages the functional and technical strength the organizations core teams in developing markets, speed up profitable growth.

The Lincoln Electric Company was founded in 1895 by John C. Lincoln. The initial investment to get the company off of the ground was $200, and it was not until a few years later in 1907 that they manufactured their first welding equipment.

James F. Lincoln was the founder of The Lincoln Electric Company that is well known all around the world now. Of course, the company’s organizational culture was not established by just one person but with efforts of many coworkers. Values of the founder were a guiding light for all workers and the managerial staff. When Lincoln died in 1965, the employees of the company were frightened that old system of the founder would not work as well as before, but since the company had its long history and it was an already formed organizational culture, they successfully gone through the death of the great founder and succeed. The values of the man are still alive. The founder was a great believer and he had the golden rule that sound as following “The program that Christ announced, ‘As ye would that others would do to you do ye even so to them’ is the complete answer to

This is a vivid example of how founder/key management team’s personal value and background has a play on an organization’s culture. The company strives to provide a relatively competitive payment package to its employees to incentivize productivity. As the case study noted that typical Lincoln employee earns about twice as much as other factory workers in the Cleveland area. Most of the interviewee in the case study also said that they made more than their counterparts at other plants and production at Lincoln Electric plants were higher than that of the other plants. Some of the interviewees said outright that the incentive plan, money or compensation are the major advantages working at the company, and since the more one produce the more one make, so productivity is enhanced through money incentives as well. The manufacturing procedures appear efficient. The company’s almost zero worker turnover, on the other hand, also attested the success of its compensation

Upon review of the Lincoln Electric Company case study conducted by Arthur Sharpish of Harvard University, I came to find that the culture within the company is what elevated Lincoln Electric above all other companies in that field. When analyzing the report I considered many aspects of the company in order to determine what exactly that separates Lincoln from their competition.

Lincoln Electric Company is headquartered in Cleveland, Ohio. Established in Euclid, Ohio by John C. Lincoln and James F. Lincoln. The organization has been very successful and is now the world leading manufacturing company of welding products for over 120 years. Through their vision, John C. Lincoln and James F. Lincoln established a habit and culture of modernization and distinction that continues to drive the Company. Everyone at Lincoln strives to keep their legacy alive through James’s beloved motto, The Actual Is Limited; The Possible Is Immense” (Sharplin 3).

Lincoln Electric, one of the most successful companies, is the world leading manufacturer of arc welding products. It is also one of the leading producers of industrial electric motors. This success is mainly driven by the ethical practices of the company. The Lincoln Electric’s main stakeholders are its customers, its employees, and its stockholders, and it has historically valued customer and employee interests over the stockholder one which helped it to be very successful. In other words, the outstanding

The Lincoln Electric Company is a shining example of an effective organizational structure. In this analysis, summarized from Arthur Sharplin’s case study from 1989, several different aspects of the culture will be discussed and how they have propelled the company in to success. The first aspects will be the company’s mottos, long standing traditions and way of communication; afterward, the pay structure, including bonus programs and performance reviews and to conclude, the management style. The Lincoln Electric Company’s management and culture have been researched and referenced by many, nearly any company could benefit from at least one of the key aspects of the welding equipment manufacturing giant’s strong culture.