he Lincoln Electric Company (LEC) is a publically traded, Fortune 1000, multinational company with operations in 160 countries and manufacturing operations in 42 countries. In the fiscal year 2011, LEC produced an 11% operating income. Lincoln Electric 's business model, known as the “Lincoln Management System,” is one of the most celebrated in the world and is studied by many business schools, including Harvard (Lincoln Electric, paras. 14).
By virtually any standard of measurement, the LEC is a successful company with a very strong culture. A “strong culture” can be defined as “one that is shared by organizational members—that is, a culture in which most employees in the organization show consensus regarding the values of the company.
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“Lincoln 's goal, often stated, is ‘to build a better and better product at a lower and lower price. It is obvious,’ James Lincoln said, ‘that the customer 's interests should be the first goal of industry’”(p. 3, para. 5). What a beautiful application of the beloved teaching of
Jesus Christ: “Do to others whatever you would like them to do to you” (Holy Bible, 1996,
Matthew 7:12).
Continuing Influence of the Founders 3
The continuing influence of a founding leader can be a very strong influence on the culture of an organization long after their tenure. The leadership influence of James Lincoln has certainly been an enduring influence in the LEC. He regarded his innovative approach to business management to be an expression of “mutual respect for each person 's importance to the job to be done” (p. 2, para. 8). As the rest of this paper demonstrates, virtually every aspect of the management practices of LEC continues to reflect mutual respect for the customers, employees, and shareholders.
Dimensions of Culture
One way to think about the culture of a company is through the Organizational Cultural
Profile, which features seven distinct cultural dimensions: Innovative, Aggressive,
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If money is to be used as an incentive, the program must provide that what is paid to the worker is what he has earned. The earnings of each must be in accordance with accomplishments. (Sharplin,
1989, p. 2, para. 3)
There can be little doubt that the underlying beliefs of LEC concerning employees, and its correlated meritbased pay plan, has created a very productive workforce. “Exceptional worker performance at Lincoln is a matter of record. The typical Lincoln employee earns about twice as much as other factory workers in the Cleveland area. Yet the labor cost per sales dollar at
Lincoln, about 23.5 cents, is well below industry averages” (Sharplin, 1989, p. 6, para. 6).
Incentive Management Plan 5
Perhaps the most powerful illustration of the skillful use of an incentive management plan has been the absence of any attempt to organize the employees of LEC into a union. This is certainly owing to Lincoln’s philosophy of management. “Lincoln 's idea of the
This paper focuses mainly on the sincereity as well as the passion with which we do our job. Human body is a very sophisticated machine created by God himself. It can do all sorts of things but there are a few things at which the human body gets very perfect.And that perfectness comes from practice, devotion,love,sincerity and responsibility towards that particular thing. Let me associate the word "thing" in the previous sentence as working. Working for living. Reason I chose to write on this topic was that the Poem " Singapore" written by author Mary Oliver that I read in the book by John Schilb and John Clifford influenced me alot. The Poem narrates the life of a woman which works on an aeroplane and is cleaning teh restrooms which are very dirty. She visually and physically finds the job dirty. But while cleaning that restrooms she sees it in her own world.She finds her hands working in pleasure as she is wondering the scenes of rivers. She realises the truth of life that she has to work to earn her living.
The Lincoln Electric Company is the largest manufacturer of welding machines and electrodes in the world. Since its inception in 1895 the company has been on a stable path of progress. First under the management of founder John C. Lincoln and since 1914 under James F. Lincoln, John's younger brother. One of James's early actions as the head of the company was to create a committee consisted of elected representatives by the employees of the company, that were to advise Mr James in the affairs of the firm. They were called the Advisory Board and this was one of the smartest decisions that James F. Lincoln made regarding personnel. This was one of their prerequisites to progress and success and this is what makes them unique to this day. James F. Lincoln died in 1965 and it is obvious some people thought that the famous Lincoln standards would no longer be upheld, that profits would decrease and their employee bonus-plan might cease to exist. Contrarily to what people thought, the company remained strong decades after its founding father died. Moreover, the firm has seen higher profits and bonuses every year after that. Lincoln market share which was 40 percent before, remained stable for years and years. The company's philosophy still continues to be
ought to be attended to only so far as it may be necessary for promoting that of the consumer” (Smith, 1776: 363)
John Galt’s solution, “the strike of the men of the mind” (738), prompts many men to leave their challenging professions and take on less impressive and less conspicuous careers. Yet, Francisco, uniquely among the strikers, remains where he is, as president of d’Anconia Copper. As Francisco explains it, he faces a challenge not faced by the other strikers. While industries like Taggart Transcontinental are “precision machinery,” requiring constant, focused tho...
... the fruits of a person's hard labor will linger to give honor to their memory after their death. However, Piercy adds that "they were made to be used" to indicate that this won't be the case if a person's labor is not the fruitful productive type. Piercy concludes by stating that "The pitcher cries for water to carry and a person for work that is real" (25-26). With this figurative language Piercy develops the theme by affirming that people need to be willing to work hard in order to reach the satisfaction of accomplishing something that is meaningful in their lives.
Lincoln Electric, Inc. follows a decentralized approach to management. At foremost a decentralized approach to management according to Daft, “culture, values, traditions, shared beliefs, and trust are used to foster organizational goals” (Daft, 2012, pg.553). This approach emphases a unifying goal which is shared and is worked upon in a unifying effort for success by every member of the organization. Decentralization control management prides itself in workers autonomy and high performance work systems in respect to performance standard. Workers autonomy from the perspective of managers may be defined as, “interpersonal styles where managers take the perspectives of subordinates into account, present reasons for the decisions taken, behaviors requested, and originate opportunities for choice and self-initiation” (Baard, Deci, & Ryan, 2004, pg. 651). Thus, workers are able to utilize their skill as it pertains to specialization with little monitoring; however, this type of freedom is not counterproductive toward organizational goals, but more so geared toward high performance work. High performance work system can be considered as, “systems of human resource practices designed to enhance employees skill, commitment, and productivity in ways that employees become a source of competitive advantage” (Datta, Guthrie, & Wright, 2005, p. 135).
Organizational culture 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 competitiveness and profitability. This culture is best utilized in an organization that has the necessary structure to allow its employees to coordinate their actions to achieve its goals.
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 in 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.
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.
The company motivates employees by providing “reward” and “engagement”. Reward is evaluating the employees properly and giving reasonable salary, and are divided into three parts:
DONKIN, R (2001) Blood, Sweat and Tears: The Evolution of Work London: Texere. (Ch. 11 – Western Electric Discovers Motivation).
The concept of organizational culture is one of the most debated topics for researchers and theorists. There is no one accepted definition of culture. People even said that it is hard to define culture and even more change it. It is considered a complex part of an organization although many have believed that culture influences employee behavior and organizational effectiveness (Kilmann, Saxton, & Serpa 1985; Marcoulides & Heck, 1993; Schein, 1985a, 1990).
Exhausted, bitter, and miserable is the way that many people feel when they wake up in the morning to get ready for work. Even the very thought of work puts some people in a bad mood. Others may not mind work but still do not look forward to going. It is a rare occasion to find someone who is completely satisfied with his or her career. However, for one man, work is bliss. In “Quality” by Galsworthy, Gessler, the shoemaker, is shown to be a man of integrity and of complete dedication to his work.
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...
There are three well-established theories of classical management: Taylor?s Theory of Scientific Management, Fayol?s Administrative Theory, Weber?s Theory of Bureaucracy. Although these schools, or theories, developed historical sequence, later ideas have not replaced earlier ones. Instead, each new school has tended to complement or coexist with previous ones.