Lincoln Electric Case Study Summary

A Summary Analysis of Lincoln Electric Company Case Study by Arthur Sharplin

Companies are always looking for the best way to survive and grow. That is the primary objective for almost all for-profit companies. With what strategy does a company attain and sustain this goal, is a mind boggling, countless number of ways. Advertising alone can attest to that. Generally speaking though they may cut cost by reducing their workforce, continually innovate their product to retain relevancy and market share, they may develop multiple streams of revenue, or even completely reinvent their business plan. However Lincoln Electric has done none of these and yet for 120 years they have been leaders, maintaining a lion’s share in a highly competitive market.
Initially the program was based on a piecework pay system, with a variety of other plans and policies suggested and adapted along the way. Other plans such as annual profit share, individual bonuses based on a merit scorecard, stock purchase plan, and no-layoff scheme have made Lincoln Electric a very people oriented company. (Sharplin, 1985) Many of the incentive plans introduced in the early years were plans that were more likely viewed by the founders as prudent investment rather than simply employee reward for work well done. These incentives directly benefitted employees thus indirectly benefitting the company and
Lincoln’s motivation was perhaps Christian in nature as some say but inherently he was a capitalist. His goal was to create a cultural environment that worked toward a common goal of producing the best product for the lowest cost possible thus increasing shareholder value. Lincoln saw that mutual respect and cooperation between management and workers was a necessary ingredient. (Sharplin, 1985) Relations in Lincoln Electric were a bi-way of shared interests and collective strategies, where management and employees treated each other as they wanted to be treated