The Lincoln Electric Company

The Lincoln Electric Company is a successful business. They boast record profits, have remarkably low employee turnover, and have created an organizational structure that is both researched and respected. The have managed to do these things by focusing on key elements of their business: valuing their employees, having an open door policy, and creating employee ownership.

Lincoln Electric had a unique organizational strategy with numerous creative ideas. First, to keep and better motivate its employees, the company implemented a special incentives system which effectively distributed profits inside the firm. These incentive “were expressions of mutual respect for each person’s importance to the job to be done” (Lincoln, 1961, p. 11).

In 2007, Lincoln electric invested in expanding its global manufacturing footprint, one of the largest undertaking in its history, constructing and upgrading 10 plants throughout the world and thru acquisition of Vernon Tool company, which is a manufacturer of computer-controlled pipe cutting equipment, expands Lincoln’s automation solutions meanwhile acquisitions in china and Poland further tighten the grip of Lincoln electric global market position (Lincoln Electric

Its founders, first John C Lincoln and James Lincoln, who later joined the company as the General Manager, had one duty to get done; to ask his employees to elect a committee that would give him advice in regards to the company’s operations. Since then, an organization structure was performed.

Founded in 1895 by John C. Lincoln, the Lincoln Electric Company is a high-quality manufacturer of welding machines and welding equipment based out of Cleveland, Ohio. Lincoln Electric is founded upon a strong foundation of competitive logic, using manufacturing to create the highest quality welding equipment and the lowest costs.

merit pay plan, the bonus plan, and the management style it is clear to see that the Lincoln

The Lincoln Electric Company is a welding company that has been around since the late 1800’s. Not only are they known for their prospering business, but they also are known for their management plan. A company’s culture has so much to do with their success, and The Lincoln Electric Company is definitely a business to look up to in that regard. They are a company that succeeds through their sturdy history, their incentive plan for their employees, their management style, and much more.

In the movie “300”, the Greek King of Sparta Leonidas, leads his army to face the approaching Persian hordes. Spartan culture accentuated strength, discipline, and putting the needs of the many above self. Spartans were feared far and wide for their battle prowess and relentless commitment to mastering the art of warfare. Lincoln Electric, shares many of the qualities that made Sparta great. It is a company with a focus on mastery, frugality, industriousness, and a culture that aligns everyone towards domination of an industry that they have held leadership in for nearly one-hundred twenty (120) years. In fact, as recently as 2014, they were the largest provider in the welding supplies industry, with over 14% global market share (Samani, 2014).

In 1895, engineer, inventor, and businessman John C. Lincoln started Lincoln Electric Company. His brother James would join him shortly, in his business endeavor, starting in 1907 (Sharplin, A 1989). James managerial style would most closely be described as people-oriented. He once said “Labor and management are properly not warring camps; they are parts of one organization in which they must and should cooperate fully and happily.” (Sharplin, A 1989) Early on, he created the Advisory Board, a committee made up of both employees who were elected by their peers and upper management, including the chief executive officer. The Advisory Board continues still to this day, meeting bimonthly to discuss employee policies, working conditions, etc. Though these meetings, employees have gained such things as health benefits, life insurance, paid vacation time, retirement pension plans, stock incentives, continued on and off site education, and much more. (Sharplin, A 1989)

Their incentive management plan is First of all, to keep and better motivate its employees; the company implemented a special incentive system which properly distributed the resulting profits inside the firm. This system had four components: piecework, annual bonus, guaranteed employment and limited benefits. The piecework element was beneficial, because all of the employees had to ensure their own quality and there was no

In order to better structure the company an advisory board was created. The advisory board meets with the CEO twice a month to discuss various matters. It was during these advisory board meetings that Lincoln Electric decided to give its employees two

John and James Lincoln professed to be devout Christians and embodied their faith in their treatment of their employees early on in the company. While a clear hierarchy and protection of management control was evident in their organizational structure, they ensured that employees had regular access to the management team both formally and informally. Management roles may have been protected and controlled but they were seen strictly as tasks to perform just as every other employee was assigned their tasks. In this respect the workplace was and remains designed strictly around function, no perks exist for management that do not exist for every employee. (Sharplin) This example points to the importance of a people-oriented culture in the workplace and is almost egalitarian in nature. (Flat World Knowledge,

One of the first incentives to work for the company where reduced work hours and health benefits (Sharplin, 1985, p. 2). This was then followed by a system that would allow workers to get a bonus based on the rate of completion, and then a pension plan that was introduced towards the end of the second World War (Sharplin, 1985, p. 2). This brings to light that the company was interested in hearing from their workers as some of these incentives came to be due to the feedback from the workers (Sharplin, 1985, p. 2). Each employee was evaluated on a regular basis and there was a clear and easy to understand system in place that each worker could follow (Sharplin, 1985, p.

Getting started during an economic depression in the late 80s, that too with a capital investment of just $200.00, John. C Lincoln introduced his own new design for electric motors in the market. Moreover, after the joining of John. C’s younger brother, James F. Lincoln. The company not only expanded its product line but, introduced the world’s first portable wielding machine as well. After turning over the company fully to James, he established an Employee Advisory Board which later on help the employees cover up in a group life insurance, later on introduced a piece rate pay method and made them earned paid vacations for the first time in the country’s history in 1923. The company also launched an Employee Stock Ownership Plan, which helped them received their first annual Incentive Bonus in 1934.

One of the first things that stands out in reading the article as it relates to continuing influence on the company is that James Lincoln asked employees to help him with company operations and formed a committee that met two times a month. This committee helped in getting the number of hours worked each week reduced from 55 working hours to 50 working hours. Seeing the need to continue to make the workplace a desirable one, the company decided to provide a fully paid life insurance policy as well as starting a welding school. The founders continued to have influence on the company by continuing to make it a great place to work. The developed vacation plans and workplace benefits to keep morale high and retain quality workers. They even created a pension plan and a system that allowed the promotions to occur from within. Founders remained engaged in seeing the company prosper and never lost