A Case Analysis of the Lincoln Electric Company Culture
The Lincoln Electric Company, located in East Cleveland, Ohio State of the United States, is a welding machine manufacturing company known as one of the most successful companies. The Licoln is also well known for its successful management and high productivity. By measuring various aspects from its incentive management plan to the management style, we can see that the company reflects people-oriented culture. In this summary, I will analyze the culture of the Lincoln and reason it with discern features.
The company started small, in 1895, bearing an economic recession and unexpected disaster, the two brothers, John, followed by James Lincoln managed the company through a success.
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Such loyalty to the employees resulted in a tremendous increase up to 24 million dollars by 1941 in times of war, and it is clear comparable success to its beginning with only few hundred dollars. In the prologue of James Lincoln’s last book, we can see that the company puts importance and respects to the implementations of employees. The author Charles G. Henbruck says there, that “they were expres-sions of mutual respect for each person 's importance to the job to be done” (Lincoln, 1961, p. 11). Considering these factors, the Lincoln Company thus emphasizes and reflects the people-oriented …show more content…
Despite of its strict management authority, employees themselves take part in management in different ways. Richard Sabo, Manager of Public Relations, says "The most important participative technique that we use is giving more responsibility to employees." Also, as mentioned earlier, the Advisory Board is elected by the employees, and every two weeks they hold discussions to with the president and the chairman on ways of improving operations. This board has existed since 1914 and has contributed to many innovations. This committee, for example, first recommended the incentive bonuses. Every Lincoln employee has access to Advisory Board members and replies to their proposition are promised by the following encounter. Therefore, the Lincoln Company respects individual’s dignity and put great importance on well treatment of its people, which is also one aspect of people-oriented culture.
In conclusion, the Lincoln Electric Company is characterized by people-oriented culture. It is characterized by its exceptional incentive management, fairness, respect for individual’s contribution and dignity. The company’s management also adopts performance appraisal system beneficial to its people, assures employees’ job security and encourages their participation for better work environment with openness and shared trust. And through them, the company
Each organization big or small has its own values, ways of doing things and assumption that it operates in. The principles and ethics that exist in each of these companies are the baseline through which the company operates its affairs. This is what can be called as that organization’s culture. The culture in existence has an impact on the productivity, effectiveness and efficiency (Keyton, 2011). The basis of setting the most appropriate culture of a company is not only to move or increase the profitability but also to make the stakeholders happy and satisfied. One aspect of that is the employee or the human resource the firm who put their expertise in the firm and add a bit of creativity and innovativeness to move the products. Chick-Fil-A operates in a competitive industry thus it requires all the stakeholders.
The Lincoln Electric Company started in 1906 by James F. Lincoln in Cleveland, Ohio. His father was a minister and so in turn you can see many Christ like principals at the center of Lincolns Electric Company. James’s Golden Rule was taken from the Sermon on the Mount: Do unto others as you would have then do unto you. Through this philosophy stems many of Mr. Lincoln’s main ideas for his company such as: The Incentive Management plan, the way people communicate within the company, the bonus plan and even down to the management style.
WHEN: They were founded in 1949, but the Hermens actually started the company in 1897
Corporate culture refers to an organization that shares the same values or beliefs that are usually instilled or passed down by example from the upper level executives throughout the organization (Thorne, O. Ferrell, & L. Ferrell, 2011, p. 191). Most organizations are molded from ideals set in place by the founders or upper level executives of an organization. In Enron’s case, they believed in doing whatever it took and unfortunately it bread competitiveness throughout the company, which forced employees into making unethical decisions in order to save their jobs. The CEO, Jeffrey Skilling, decided to implement a program that evaluated employees every six months and the bottom twenty percent of employees would be terminated. This created a
The aim of this report is to evaluate current Human Resource Practices within Steel Co and identify weaknesses that the current model possesses. Performance and Reward management tools available will be evaluated in order to make recommendations on how the Management tools could compliment the system that Steel Co currently employs.
...ategic positioning is its incentive management system, which is what differentiated the company from its competitors. Lincoln Electric had excellent labor relations where an “open door policy” was implemented between executives and employees. Under Lincoln’s incentive system, the workers were rewarded for their productivity. The employees’ earnings and promotions were determined in direct proportion to their individual compensation towards the company’s success. This served as an effective system that motivated workers to be more efficient and increase the productivity of high quality products with reduction to costs. Lincoln Electric’s strength in being a player in the manufacturing industry is building high quality products at a lower cost than their competitors. The company follows a low-cost strategy that is supported through their incentive management system.
Lincoln was able to grow and prosper through the process of human motivation which is called incentive management. James F. Lincoln, who founded Lincoln Electric summed up in his monograph that employees have no desire to develop their skills in the workplace unless paid properly (Lincoln, 2016). He then talks about how incentives create cooperation, for if employees are not recognized, they will not cooperate with productivity (Lincoln, 2016). The incentive system included compensation and benefits e.g. bonus systems, piece rate pays
In order to achieve its desired public image and to acquire an organizational identity centered on quality and safety, qualitative research on GM’s culture can be facilitated. Intertwined with the study of organizational culture is organizational citizenship behavior (OCB), which is the performance that supports the social and psychological environment in which task performance takes place. OCBs were found to be positively related to overall organizational effectiveness, unit-level performance, and customer satisfaction (Greenberg, J., 2013). A study of the OCB in GM may help in the change it aims to implement. GM may start by creating an environment where its employees are truly committed to its safety policy while also increasing their job satisfaction.
One of the biggest influences of the founders of Lincoln Electric is from James Lincoln, who created a board of advisors from the pool of employees to advise him (Sharplin, 1989). The board met every two weeks when it was first started, and it still meets today, nearly two hundred years after the company began. This board of advisors is made up of active employees in the company, and they are free to raise suggestions, criticism, or any topics of interest that the employees want the company to address. This level of honesty and openness is a rare quality, and this ability for employees to directly speak with their supervisors and discuss new ideas is probably one of the reasons why employees are so pleased.
Engagement is also an important part for the employees. The company provides information of the board meetings to all employees. This enhances the employees’ feelings of being well-informed and engaged. The employees even can challenge the current unit wage for manufactured parts. This is an open discussion, so we can see that employees are treated as if they were partners.
Lincoln Electric Company is a great example of how a successful organization creates successful employee satisfaction. Company founders are the key stakeholders in making the organizational culture a success. They are the leaders with the vision of how they want to promote their company and they have to present the values to their employees so that the employees also do understand that the success of an organization is a success for themselves. It was not an easy task for Lincoln Electric Company to plant the foundation of organizational culture. There were many obstacles that Lincoln Electric Company had to overcome to succeed. Lincoln Electric Company strongly believed that the customer satisfaction should be their main goal. The value on the return of the happy customer was significant that it directly impacts the success of the business. Lincoln Electric Company was very much coined on the term of customer satisfaction and they strive their best to provide the
Management and The Body Shop In this paper I will be taking a look at basic management functions. The approaches, and the synthesis of two views of management. I will attempt to take an overview of culture and its effect on a company.
This essay gives a basic idea of what organizational culture is, and emphasis on the controversial issues of managing organizational cultures. As there are various definitions for organizational culture, and none of them are universally agreed. Therefore, for an easier understanding by readers, the definition of organizational culture given in this essay focusing on levels of culture, and will be discussed t together with Schein's(1983) framework. Before talking about managing organizational cultures, the types will be introduced first. Because, there are some descriptions about managing different types of organizational cultures, in the following content.
Corporate culture is the shared values and meanings that members hold in common and that are practiced by an organization’s leaders. Corporate culture is a powerful force that affects individuals in very real ways. In this paper I will explain the concept of corporate culture, apply the concept towards my employer, and analyze the validity of this concept. Research As Sackmann's Iceberg model demonstrates, culture is a series of visible and invisible characteristics that influence the behavior of members of organizations. Organizational and corporate cultures are formal and informal. They can be studied by observation, by listening and interacting with people in the culture, by reading what the company says about its own culture, by understanding career path progressions, and by observing stories about the company. As R. Solomon stated, “Corporate culture is related to ethics through the values and leadership styles that the leaders practice; the company model, the rituals and symbols that organizations value, and the way organizational executives and members communicate among themselves and with stakeholders. As a culture, the corporation defines not only jobs and roles; it also sets goals and establishes what counts as success” (Solomon, 1997, p.138). Corporate values are used to define corporate culture and drive operations found in “strong” corporate cultures. Boeing, Johnson & Johnson, and Bonar Group, the engineering firm I work for, all exemplify “strong” cultures. They all have a shared philosophy, they value the importance of people, they all have heroes that symbolize the success of the company, and they celebrate rituals, which provide opportunities for caring and sharing, for developing a spiri...
Organisational culture can be defined as a total function of common beliefs, values, patterns of behaviour that held and shared by the member in an organisation. It is also a valuable resource which can improve competitiveness of a company and uses to distinguish the company (Barney 1986). From 1970's the study of organisational culture has become an important issue and closely studied in early 1980s. Since then organisational culture turned out as one of the most important factors which affects the overall performance of a company. It brought organisational culture to the performance of a company which has become a critical topic in management department. In addition to what organisational culture is, organisations need to aware and prepare changes of the expanding workforce from business growing. Companies are facing with maximizing benefits as well as profits while minimizing negative factors that comes from those changes. There is no only one answer for the issue, but some of guidelines are clear. Awareness of organisational culture, teamwork, individual performance, external environment adaptation, leadership, and measurement of organisational culture are key factors that lead a company performs better.