Lincoln Electric
Introduction:
In 1895 an inventor by the name of John C. Lincoln designed and developed the electric motor. He developed it in such a way that it could not be matched by any other competitor. However, his passion for inventing kept him from being able to manage the company he created. In 1907 he hired his brother, James F. Lincoln, to manage the day-to-day of the plant operations. This is when the plant began its growth and success. It became a billion dollar company under his tutelage. The Lincoln Electric Company, the world’s largest arc-welding manufacturer and top producer of industrial electric motors, now employees over 4,000 people and its sales have topped one billion dollars. How did Lincoln gain this overwhelming prosperity? Many have tried to figure this out, even studies have been conducted on Lincoln Electric’s organizational structure, James Lincoln’s incentive management practices, and the other keys to their success; and still no one has mastered it. Lincoln still operates today the same way that they did years ago and it is still working for them. However, what does the future hold for Lincoln Electric? Will they be able to keep up with high demand of productivity that everyone has come to know without lower employee job satisfaction?
Managerial Issues: In this analysis we will examine different factors of Lincoln Electric such as the company’s communication between employees, their problem solving techniques, and their conflicts. But the most important factors we will analyze are the incentive reward systems, the pros and cons of the system, the company’s leadership and the vision of the company.
Incentive reward system: Lincoln Electric did not feel that it was important to regularly communicate with all of their employees, which is the reason behind the advisory board. The advisory board is a group of employees that would meet every two weeks to discuss any new ideas on ways to improve operations, increase productivity, job
In 1895 an inventor by the name of John C. Lincoln designed and developed the electric motor. He developed it in such a way that it could not be matched by any other competitor. However, his passion for inventing kept him from being able to manage the company he created. In 1907 he hired his brother, James F. Lincoln, to manage the day-to-day of the plant operations. This is when the plant began its growth and success. It became a billion dollar company under his tutelage. The Lincoln Electric Company, the world’s largest arc-welding manufacturer and top producer of industrial electric motors, now employees over 4,000 people and its sales have topped one billion dollars. How did Lincoln gain this overwhelming prosperity? Many have tried to figure this out, even studies have been conducted on Lincoln Electric’s organizational structure, James Lincoln’s incentive management practices, and the other keys to their success; and still no one has mastered it. Lincoln still operates today the same way that they did years ago and it is still working for them. However, what does the future hold for Lincoln Electric? Will they be able to keep up with high demand of productivity that everyone has come to know without lower employee job satisfaction?
Managerial Issues: In this analysis we will examine different factors of Lincoln Electric such as the company’s communication between employees, their problem solving techniques, and their conflicts. But the most important factors we will analyze are the incentive reward systems, the pros and cons of the system, the company’s leadership and the vision of the company.
Incentive reward system: Lincoln Electric did not feel that it was important to regularly communicate with all of their employees, which is the reason behind the advisory board. The advisory board is a group of employees that would meet every two weeks to discuss any new ideas on ways to improve operations, increase productivity, job
References: Bennis, W. & Towsend, R. (2005). Reinventing leadership: Strategies to empower the organization. New York, NY: HarperCollins. By, R. (2005). Organizational change management: A critical Review. Journal of Change Management, 5(4), 369-380. Caruth, D. & Humphreys, J. (2008). Performance appraisal: Essential characteristics for strategic control. Measuring Business Excellence, 12(3), 24-32. Cuervo-Cazurra, A., Maloney, M., & Manrakhan, S. 2007. Causes of the difficulties in internationalization. Journal of International Business Studies, 38(6), 709-725. Eisenberg, D., Sieger, M., & Greenwald, J. (2001). Lincoln Electric: Where people are never let go. Time Magazine. Retrieved from http://www.time.com/time/magazine/article/0,9171,1000155-1,00.html. Foster, R. & Akdere, M. (2007). Effective organizational vision: Implications for human resource development. Journal of European Industrial Training, 31(2), 100 - 111 Goldberg, R Gazendam, H. (1994). Conceptual analysis and specification of organizational theories. Proceedings of the Hawaii International Conference on System Sciences, 27(4), 787. Hastings, D. (1999). Lincoln Electric’s harsh lessons from international expansion. Harvard Business Review, 77(3),162-178. Higgs, M. & Rowland, D. (2005). All changes great and small: Exploring approaches to change and its leadership. Journal of Change Management, 5(2), 121-151. Joni, S. & Beyer, D. (2009). The right fight: How great leaders use healthy conflict to drive performance, innovation, and value. Publishers Weekly, 256(46), 45-46. Kohn, A. (1993). Why incentive plans cannot work. Harvard Business Review, 71(5), 54-61. Kotter, J. (1996). Leading Change. Harvard Business School Press. Kotter, J. (2007). Leading change. Harvard Business Review, 85(1), 96-103. Lewis, L., Schmisseru, A., Stephens, K., & Weir K. (2006). Advice on communicating during organizational change. Journal of Business Communication, 43(2), 113-137. Loup, R Man from Modesto (2012). Lincoln Electric Case Study Analysis 80. HubPages Business. HR Advice and Tips. Retrieved from http://manfrommodesto.hubpages.com/hub/lincoln-electric-case-study. McClelland, D. (1967). Money as a motivator: Some research insights. McKinsey Quarterly, 4(2), 10-21. Morden, T. (1997) Leadership as vision. Management Decision, 35(9), 668-676. Nadolska, A., & Barkema, H. (2007). Learning to internationalise: The pace and success of foreign acquisitions. Journal of International Business Studies, 38(7), 1170–1186. O’Conner, E. & Fiol, C. (2006). Creating organizational support for change. Physician Executive, 32(3), 76-78. Plowman, D., Baker, L., Beck, T., Kulkarni, M., Solansky, S. & Travis, D. (2007). Radical change accidentally: The emergence and amplification of small change. Academy of Management Journal, 50(3), 515-543. Reich, R. (1994). Leadership and the high performance organization. Journal for Quality and Participation, 17, 6-11. Reif, W. (1975). Intrinsic versus extrinsic rewards: Resolving the controversy. Human Resource Management, 14(2), 2-10. Winter (1997). Motivation. Journal of Personal Selling and Sales Management, 17(1), 76-77.