The Lincoln Electric Company is a prime example of how organizational culture influences a company’s profitability and performance. For many years they have implemented several policies within the company to improve employee performance and productivity. It also dictates employee behavior. “Culture is a more powerful way of controlling and managing employee behaviors than organizational rules and regulations.” – Principles of Management, Flatworld Knowledge The polices implemented by the Lincoln Electric Company have been so effective that the rate of turnover is restricted to retirements and new employees leaving the company. Long term employees of the company usually find no reason to leave. The organization doesn’t have …show more content…
This can boost morale as it doesn’t limit employees to feeling stuck in a niche and gives them hope of advancement. There are no requirements that are needed to apply for these jobs with the exception of a few positions that require an engineering degree. “When an employee feels threatened by a lack of job security, she may stop putting the necessary effort into completing assignments and interacting with colleagues, due to a belief of not having a future with the organization.” – Laura Woods. Lincoln definitely subscribed to this belief and as a measure to eliminate this concern, the implemented a policy which ensures each employee a guarantee that they will not be fired after a year of employment unless they are guilty of misconduct and they will have at least a 30-hour work week each week. The Lincoln Electric Company has not had any layoffs since 1949. This would provide job security and satisfaction. They also have a very selective hiring process and external candidates are only selected for entry level positions. Once a candidate has a personal interview with the Personnel Department and have been cleared for the next level, they then meet with a committee of vice-presidents and superintendents. After the candidate has made it through that process, the supervisor who the candidate will be reporting to makes the selection. This process is the …show more content…
The company identifies its stakeholders as the customers, stockholders and employees. Lincoln through its efficient business practices has managed to manufacture its goods at a high quality and low price while setting the standard in the industry for their products. This provides the customer with above par service as they receiving a premium product for a reasonable price. The benefits provided to the employees are already significant along with annual bonuses which are above average. Finally, the stockholders benefit from the high quality and standards provided to the customers and the productivity of the satisfied workers, with exceptional dividends and
...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.
1. How was Lincoln able to grow and prosper for so long in such a difficult commodity industry that forced out other giants such as General Electric, Westinghouse and BOC? What is the source of Lincoln’s outstanding and enduring success?
Employees and customers have been of high importance through the years at Lincoln Electric Company. Employees are valued and compensated well for their productivity, performance and reliability. The goal has always been to have mutual respect with both the employees and the customers. When an employee or customer has something to say, whether it’s positive or negative, they know they are going to be heard.
...ible if Lincoln Electric stopped prioritizing its employees. By making sure to look out for its employees’’ well-being, the company can stay aggressive and stable without stagnation or lawsuits. Ultimately, the company sounds like it blends traditional management elements with an above-average attention to employee morale, training, and well-being. For a place that’s nearly two hundred years old, with thousands of satisfied employees, this is an impressive track record. Other companies should look at the management style present at Lincoln Electric for proof that companies can make profits and still put their employees above stakeholders.
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
Organizational cultural is the system of shared beliefs and values that develops within an organization and guides the behavior of its members, while organizational structure is an expression of social and economic principles of hierarchy and specialization (Kinicki, 2015). Both the culture and the structure of an organization are important things for management to understand in order to successfully set and achieve an organization’s goals. Companies who excel in highly competitive fields can attribute their successful economic performance to a cohesive corporate culture that increases competiveness and profitability. This culture is best utilized in an organization that has the necessary structure to allow its employees to coordinate their
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
They seem very organized and have employees that know what they are doing. They have higher ups that are not boastful with their authority, but use their authority to promote the business and its success. Employees are hired, well respected, and rewarded for their good deeds while on the job. Customer service is excellent, with little to no complaints on that regard. Although John was a Christian, mush like myself, he used his Christian values and teachings as a inspiration for his success and did not impose his values on his employees. John was one to let his employees have minds of their own. If I were looking for a place of employment, I would not mind working for Lincoln Electric. I would send my resume straight
Lincoln electric is very good for the employee and in turn, it has created a very good
...the Second World War in an effort to maximize America’s mechanical output and help win the war, Lincoln gave away proprietary information to competing companies.. This cost the company competitive advantage, and in turn profits, for several years after the war, but based on their skills and adaptability, they were able to out stripe the competition soon after. We are also told that Lincoln Electric will not fire an employee, which allows the workers to embrace change and progress, even if it means they will incur a short-term downturn in productivity. Upon some further reading, we were able to see that Lincoln electric came upon hard times in the 1980s, and lost 40% of its sales. Even in this time of hardship, they stuck to their promise of not firing an employee, and today they have regained all of their lost ground and are extremely profitable and productive.
From being a student in the business program I have found that the courses in the MSM program has material that identifies key theoretical concepts and tools of strategy as well as some of the key issues facing business managers and leaders in today’s competitive business world. Therefore, to learn new management and leadership skills as well as how to be an effective business leader, you need to practice. Studying and analyzing a case study allows us to engage in the practice of strategic management by putting ourselves in a decision maker’s position and forcing us to deal with real life business scenarios facing actual managers and leaders in the workplace. However, to be an effective manager or leader you have to have control. Daft (2012) said managers approach to control is changing in many of today’s organizations. Thus, the case study of Lincoln Electric will help me to understand and identify the type of control process approach is used, why it works well for the organization, as well as identify why the control process approach wasn’t successful overseas.
Treven, S., Mulej, M., & Lynn, M. (2008). THE IMPACT OF CULTURE ON ORGANIZATIONAL BEHAVIOR. Management: Journal Of Contemporary Management Issues, 13(2), 27-39. Retrieved on April 09, 2014 from EBSCOHost http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=35866261&site=ehost-live
Lincoln Electric introduced management trainee programs and involved its workers more at strategic level. The training was given under the supervision of effective leaders of the organization. Because of these methods Lincoln Electric cope up with different situation and challenges and became a successful organization.
Formed in 1895, The Lincoln Electric Company is a model of the Human Resource Management. James F. Lincoln the founder set out to organize the company. He had a strong believe that the customer came first, employees second, then the stockholders. Therefore, profits are to be last, it was preferable to give the customer the best product available at a reasonable price.
Organisational culture is one of the most valuable assets of an organization. Many studies states that the culture is one of the key elements that benefits the performance and affects the success of the company (Kerr & Slocum 2005). This can be measured by income of the company, and market share. Also, an appropriate culture within the society can bring advantages to the company which helps to perform with the de...