The Organizational Culture Of The Lincoln Electric Company

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.

Lincoln Electric Company was founded by John C Lincoln in 1906 starting with a start up business in a one room, 4th floor factory to a bigger building and started to expand his workforce to 30 people and had a great expand in their sales as it grew over $50,000 a year. He was humble, preferably to be an engineer and inventor rather than sitting around being labelled as manager. The company also gave each of their employee as paid-up life insurance policy in the 1915. After 2 years, welding schools are introduced. A year after the success of forming a welding school, employee bonus plan was attempted.In the 1919 's, Lincoln Electric 's employees association are formed to introduced some social activities and health benefits to care for the workers. After becoming General Manager, in 1925; a purchase stock plan are enable for all employees. Lincoln bonus plan was finally accepted as a trial by the Advisory Board in 1934.

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

Lincoln Electric Company also believed in a lean labor force to lessen workers hours as the demand dropped and then compensated for that with overtime hours in periods of busy demand, where the workers could make more wages.

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.

The Lincoln electric company was founded by John C. Lincoln in 1895 and has grown over

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.

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

Structurally, Lincoln electric appears to use a decentralized approach to management. According to (Draft, 2010), “decentralization relies on cultural values, traditions, shared beliefs, trust and an egalitarian spirit to foster compliance with organizational goals” (p. 548-549). Lincoln Electric also uses a lateral approach between management and employees to achieve organizational goals. Examples of Lincoln Electric’s decentralized approach include their open door policy, which is for all employees from the top to the bottom of the hierarchy, their no lay-off policy and their procedure of promoting

     Headquartered in Euclid, Ohio, a suburb of Cleveland, The Lincoln Electric Company is a world leader in welding and cutting products, as well as a premier manufacturer of electric motors. The company is well known for its dedicated, talented workforce and its superior technology. Lincoln Electric Company gives its customers total solutions along with a commitment to quality. Lincoln Electric Company is also well known for its incentive management system. Many companies strive to duplicate the success that Lincoln has enjoyed over the years.

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

Lincoln's competitive advantage lies mainly in its effective compensation and benefits system which put forth three main elements to spearhead the company's efforts. The trinity of elements comprised of piecework, bonus system and guaranteed employment. Piecework provided workers with a sense of autonomy in that now, workers can earn as much as they are willing to work for. The bonus levels in Lincoln far exceeded those of industry peers and were based on their contributions in the form of output, ideas, cooperation, dependability and quality. Consequently, the benefits provided by Lincoln were not extensive as they saw higher wages as substitutes for things such as insurance,

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

Lincoln Electric is an American multinational and a leading global manufacturer of arc-welding equipment and electric motor, is the biggest company among its related types of business in the world. Lincoln Electric has the advantage on its production. The board of directors of Lincoln Electric believes that the company can make high quality products with lower costs compared to its competitors. Their general strategies are to reduce the cost, and to reach consumers with sustainedly low price. Lincoln Electric has conceded that the source of growth of the company depends on consumers, they thus aim at offering high quality products with low price, and this sales policy has been lasting until now.