Critical Analysis of Lincoln Electric
Lincoln Electric: Critical Analysis on the Philosophy of Control
Kaplan University
Shannon Blair
Introduction
The purpose of this paper is to analyze a case study related to issue of control and how organizations can utilize different approaches of control in order to improve quality and performance in all arenas, domestic and global. The focus of this case revolves around Lincoln Electric, an Ohio based company that has set the bar for how to develop and implement a successful management system. This paper will use the Lincoln Electric case analysis to present recommendations on how managers can use control methods to enhance employee performance, increase employee participation and empowerment, and improve organizational quality in all areas.
Lincoln Electric, a manufacturer of welding products, welding equipment, and electric motors is a leader in the welding manufacturing field, with sales over $1 billion and 6,000 workers worldwide (Daft, 2012, p. 566). While the company is publicly traded, the Lincoln family still holds a large portion of stock. The company’s founding values are still very much a part of its’ corporate culture today and include: honesty, openness, loyalty, accountability, and self-management (Daft, 2012, p.566). Lincoln promotes trust within the organization and its’ employees by encouraging communication between all levels of employees, encouraging workers to challenge management if practices or compensation rates appear unfair, by hiring workers with little to no experience and investing in their training and development, and by following a “no layoff policy” for which no workers have been laid off since 1951 (Daft, 2012, p. 566).
While these practices point toward a decentralized control approach, other practices such as strict performance goals, defined tasks, and clear manager/employee differences suggest a form of hierarchical control. Daft (2012) describes the kind of extrinsic reward system that Lincoln has in place as
Kaplan University
Shannon Blair
Introduction
The purpose of this paper is to analyze a case study related to issue of control and how organizations can utilize different approaches of control in order to improve quality and performance in all arenas, domestic and global. The focus of this case revolves around Lincoln Electric, an Ohio based company that has set the bar for how to develop and implement a successful management system. This paper will use the Lincoln Electric case analysis to present recommendations on how managers can use control methods to enhance employee performance, increase employee participation and empowerment, and improve organizational quality in all areas.
Lincoln Electric, a manufacturer of welding products, welding equipment, and electric motors is a leader in the welding manufacturing field, with sales over $1 billion and 6,000 workers worldwide (Daft, 2012, p. 566). While the company is publicly traded, the Lincoln family still holds a large portion of stock. The company’s founding values are still very much a part of its’ corporate culture today and include: honesty, openness, loyalty, accountability, and self-management (Daft, 2012, p.566). Lincoln promotes trust within the organization and its’ employees by encouraging communication between all levels of employees, encouraging workers to challenge management if practices or compensation rates appear unfair, by hiring workers with little to no experience and investing in their training and development, and by following a “no layoff policy” for which no workers have been laid off since 1951 (Daft, 2012, p. 566).
While these practices point toward a decentralized control approach, other practices such as strict performance goals, defined tasks, and clear manager/employee differences suggest a form of hierarchical control. Daft (2012) describes the kind of extrinsic reward system that Lincoln has in place as
References: Bloom, N. and Van Reenen, J. (2010). Why do management practices differ across firms and countries?. Journal of Economic Perspectives, 24(1), 203-224. Daft, R. L. (2012) Management (10th Edition). Mason, OH: South Western Cengage Learning. Hastings, D. F. (1999). Lincoln electric’s harsh lessons from international expansion. Harvard Business Review, 77(3), 162-178.