The Lincoln Electric Company Culture

Every organization has values and beliefs that define what they do and how they do things in the organization. These values have significant influence on how the employees behaves and the general performance of the organization – it is these set of values and beliefs, rooted deep in the company’s organizational structure that depict the “dos”, “don’t” and the “hows”, of the organization and these unequivocally represents the culture of the organization. This concept became popular in the 1980s when Peters and Waterman in their book: “In search of Excellence” presented the profound argument that, the success of any organization is inextricable linked to the quality of its culture. (Carpenter, M., Taylor, B., Erdogan, B. 2009 p183). The purpose of this paper is an attempt to analyse the impact diverse cultures played in the success of the Lincoln Electric Company.

Headquartered in Cleveland Ohio, Lincoln electric’s business model consists of distributing welding consumables, equipment’s and solutions. Lincoln initially traded electric motor cars and steadily moved on to welding. Lincoln’s vision, led by founder John C. Lincoln is to provide high quality welding, joining and cutting equipment’s globally.

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.

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.

Lincoln electric’s approach to management contributes to its employee’s high motivational rate. According to (Draft, 2010), Lincoln electric motivates it’s staff with “strict performance goals to achieve pay, precisely defined task and a powerful incentive control program which is based on a piece-rate bases and merit-pay which is based on performance”(p.562). Other motivating factors are annual bonuses and stock purchase plans which all employees are offered (Draft, 2010). Another contribution to its success is their organizational culture which is “based on openness, trust, shared control and an egalitarian spirit” (p. 562-563).

Aside from it, this essay will enumerate the golden rules of the company, which I believe the core of its success. This will base on the Case Study of Arthur Sharplin from Harvard University in 1989. In the concluding part, I will describe based on what I learned from this case study about the kind of management style does Lincoln Electric Company

The written assignment of this week is going to focus on a very well known and well organized company. The Lincoln Electronic Company is the world largest manufacturer welding machine and electrodes. Since it has been created by the Lincoln family, the company has known enormous success, in this essay I going to look at some critical elements contributed that company’s success; such as:  The continuing influence of the founders of the company.  The incentive management plan.  The performance appraisal system.  The way people communicate in the company.

After analyzing the story of Lincoln Electric Company I’ve come to the Conclusion that their organizational culture they practicing is People-oriented culture. Because the company values fairness, supportiveness and they respect individual rights. There is a greater emphasis on expectation of treating people with respect and dignity.

Lincoln Electric is one of the leading producers and manufacturers of Arc Welding Products and Electric Motors. Lincoln Electric’s success lies on the foundation of the various company policies introduced by James Lincoln. This case study analyzed the critical points on which the success of Lincoln Electric’s has its foundations.

The founders of the Lincoln Electric Company left a legacy of an organization culture that promotes high productivity through sound management policies which have stood the test of time. The exponential growth of the company after the death of James F. Lincoln was a direct result of the establishment of a rich culture mix based on values that were widely shared and accepted by the members of the organization. Management empowered employees to become part of the decision making process through the contribution of ideas through the Advisory Board which was elected by the employees from amongst themselves. Reward management systems and all the other artifacts of the Lincoln Electric’s distinguished strong organizational culture will be analyzed in greater detail in this essay.

“We will distinguish ourselves through an unwavering commitment to our employees and a relentless drive to maximize shareholder value”; as found within Lincoln Electrics’ Vision Statement (Lincoln Electric 1999-2016). The beliefs and values transferred from company founders and instilled into employees can have an overwhelming impact on corporate culture. By establishing a positive corporate culture one can influence exceptional company performance. This is clearly demonstrated by Lincoln Electric Company, from its early days until its present day. I will present how the Lincoln Electric Company has done just that!

In the video, NOVA describes fractal odd looking shape people have seen before. Therefore, fractal is a never ending pattern. Fractals are infinite complex patterns that are similar to different scales like shown in the video. These fractals are created by repeating a simple process over and over again in a feedback loop.

Mutual respect is the foundation of all relationships in the Lincoln Company starting at the top of the firm. Respect is the ability to recognize of what is, a good manager are able to recognize the value of people, things and situations. A good team leader also evaluate the results and situations, take into account the pluses and the minuses, strengths and room for improvement, risks and opportunities…He is very interested in the potential of his employees. That is what James F Lincoln have brought since the beginning in the Lincoln Company. He understood that by seeking a committee advisor elected by the employees, on company operations is the best way to align a good management.

In those early years, James F. Lincoln implemented a number of programs and initiatives with served to define a company culture that was unique in its day and which has persisted for a century. Those programs and initiatives grew out of a stated mutual respect between workers and management, based largely on James F. Lincoln’s Christian beliefs and apparent genuine respect for the people who developed, manufactured and sold the company’s products. Among those programs was the creation of an Employee Advisory Board, a production based employee pay structure, and a group insurance program which was a rare benefit in its time. Today, Lincoln Electric continues to thrive and according to its 2014 Annual Report, generated revenues on the order of $2.8 billion resulting in net income of $255 million. The Cleveland, OH-based company now employs 10,000 worldwide where it operates 40 manufacturing facilities in 20 countries. Lincoln distributes its products to 160 countries.

Lincoln Electric Company is headquartered in Cleveland, Ohio. Established in Euclid, Ohio by John C. Lincoln and James F. Lincoln. The organization has been very successful and is now the world leading manufacturing company of welding products for over 120 years. Through their vision, John C. Lincoln and James F. Lincoln established a habit and culture of modernization and distinction that continues to drive the Company. Everyone at Lincoln strives to keep their legacy alive through James’s beloved motto, The Actual Is Limited; The Possible Is Immense” (Sharplin 3).