Lincoln Electric (LE) is a worldwide leader in production of welding equipment with more than US$1 billion in sales and 6,000 workers. John C. Lincoln designed and made an electric motor with a $200 investment in 1895. Today, members of the Lincoln family own more than 60 percent of the stock.
The Lincoln Management System
Lincoln Electric’s management system is so successful that other businesses use it as a benchmark. They have effectively used feedback type control to achieve their success (Lincoln Electric, 2003). Many companies have tried to figure out how leverage decentralized management to achieve maximum productivity and quality from its workers, even during difficult financial times.
Lincoln Electric has been extremely successful over its 100 year history. . A large part of their success can be attributed to this unique and effective management style as well as the employee ownership and incentive management system. This style of management is further supported through a combination of structural, strategic and cultural norms.
To eliminate the hierarchical structure of flat and non-functional middle management level, LE is structurally different than other firms. Lincoln has an open door policy between workers which is well understood. Strategically, to maximize the performance and reduce costs this pushes LE into an integrated approach. For motivating all employees through bonuses, in large part provide Lincoln’s incentive management system provides a tool, of the redistribution corporation annual profits (Davis, 2009).
LE has adopted a decentralized two-fold focus as a basic control method (Lincoln Electric, 2003). Exceedingly strict performance goals are use in order to achieve top pay. These goals precisely defined for individual employees.
Lincoln’s Internal Culture
An organizational culture based on openness and trust, shared control, and an egalitarian spirit helped Lincoln succeed. Although firmly drawn, the line between managers and workers is, to many aspects of the business managers respect the expertise of production workers and value their contributions. An open-door policy for all top executives, the company has, middle managers, and production workers, and encouraged, regular face-to-face communication among them (Lincoln Electric, 2003).
LE has built a reputation on the principle of faith in the individual. This philosophy is an fundamental part the management style at Lincoln Electric. They substantially reward competition and teamwork in its workforce to enforce the principle of faith. With wage are being calculated on the basis of production output \not on fixed wages over time. The number of pieces that an employee is able to finish will determine how much the company pays in an annual bonus (O’Connell, 1998).
Exporting Lincoln’s Culture
Lincoln’s system had been working so well in the domestically, management decided to extend it overseas. Using Lincoln's expertise with management control...