The Lincoln Electric Company Case Study

Organizational culture is the summation of the underlying organizational values manifesting as collective assumptions, attitudes, beliefs, expectations and norms.  Grounded in the customs and

The organization culture as a leadership concept has been identified as one of the many components that leaders can use to grow a dynamic organization. Leadership in organizations starts the culture formation process by imposing their assumptions and expectations on their followers. Once culture is established and accepted, they become a strong leadership tool to communicate the leader 's beliefs and values to organizational members, and especially new comers. When leaders promote ethical culture, they become successful in maintaining organizational growth, the good services demanded by the society, the ability to address problems before they become disasters and consequently are competitive against rivals. The leader 's success will depend to a large extent, on his knowledge and understanding of the organizational culture. The leader who understands his organizational culture and takes it seriously is capable of predicting the outcome of his decisions in preventing any anticipated consequences. What then is organizational culture? The concept of organizational culture has been defined from many perspectives in the literature. There is no one single definition for organizational culture. The topic of organizational culture has been studied from many perspectives and disciplines, such as anthropology, sociology, organizational behavior, and organizational leadership to name a few. Deal defines organizational culture as values,

Established in 1895 and specialized in producing and selling electric motors, Lincoln Electric Company rapidly developed after the movement to welding equipment and consumable welding products in the USA. By 1995, this company first hit $1 billion in sales and became the world largest company in welding industry. With the differentiate strategy by providing premium -price -products , this company got 60% sales in the North American and expanded internationally since the period of 1986 and 1992. Although this company is facing problems in global expansions, its overall strategy as well as practices in human resources, marketing, technology development, and international expansions is a useful lesson for other businesses.

Organizational culture can be values, beliefs and norms which define how members think, feel and behave. More specifically, organizational culture is defined as shared philosophies, ideologies, beliefs, feelings, assumptions, expectations, attitudes, norms, and values (Schein, 2011). It is important to understand organizational culture has tremendous influence on its members, their views of the workplace, their efforts and their productivity. Culture is created by leaders, members and the environment in which the organization finds itself in. However, I believe it is primary the leadership’s responsibility to uphold the standards of a positive culture. As leaders, we must understand the culture we’ve created and how to maintain it or improve it. The Debra Woog McGinty and Nicole C. Moss corporate survey exhibited I’m in an Established/Stable culture.

Organizational culture are the belief and values that gives away a company’s identity, and it can be spread to its employees by communicating with each other. There are four components on how an organizations culture is shaped founder’s value, business environment, national culture, and the senior leader’s vision (Zimmerman, 2015, CH 6 PPT, Slide 4). It is important to remember that an organizational culture sets its structure and how everything is conducted. Understanding the concept of an organizational culture is important when job hunting and trying to find a career. It is important that you know the organization you want to work for and understand its values and how the organization functions. I believe that by knowing this you will have a very easy time fitting into the organization.

Organizational culture creates a unique identity that diversifies an organization from its opposition. Ogbonna & Lloyd (p, 32, 2002) defines organizational culture as “the collective sum of beliefs, values, meanings and assumptions that are shared by a social group and that

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.

For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer as a result of its culture. In other words, just as having the “right” culture may be a competitive advantage for an organization, having the “wrong” culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.

In this case analysis I will be analyzing and summarizing my understanding of the organizational culture of the Lincoln Electric Company, based on key pointers and a Harvard Case Study by Arthur Sharplin. In my analysis I will be using the framework from chapter eight of the textbook “Principles of Management” by Carpenter, Bauer and Erdogan to discern aspects of the company’s culture. The company is said to have a distinctive management culture and manufactures welding equipment. It is located near Cleveland, Ohio USA. Lincoln Electric Company is considered to be one of the best managed manufacturing companies in the world.

In the movie “300”, the Greek King of Sparta Leonidas, leads his army to face the approaching Persian hordes. Spartan culture accentuated strength, discipline, and putting the needs of the many above self. Spartans were feared far and wide for their battle prowess and relentless commitment to mastering the art of warfare. Lincoln Electric, shares many of the qualities that made Sparta great. It is a company with a focus on mastery, frugality, industriousness, and a culture that aligns everyone towards domination of an industry that they have held leadership in for nearly one-hundred twenty (120) years. In fact, as recently as 2014, they were the largest provider in the welding supplies industry, with over 14% global market share (Samani, 2014).

After taking the chance to read the Lincoln Electric Company Harvard study case, it is interesting how they viewed taking care of their employees throughout multiple decades, while business today focuses more on outcome-oriented cultures, where employees tend to not have that many benefits, or any benefits at all. The Lincoln Electric Company started poor, but as they took excellent care of their employees, they flourished into a successful entity in the world of business in America. With the enactment of a variety of programs such as health benefits, annual bonuses, paid vacation and a suggestion system that paid workers for great ideas, it is clear that their team-oriented system has paid off in the long run and kept their turnover rate at an all-time low.

The Lincoln Electric Company is one of the largest manufacturers of welding machines and electrons in the world today, with $1 billion in sales and 6000 workers worldwide. The company is also the pioneer in the development of the arc-welding industry and the originator of the innovative employee incentive system. “It was founded in 1895 by Engineer John C. Lincoln to manufacture an industrial motor of his own design. By 1909, it began to produce welding machines, and In 1914 James F.Lincoln his younger brother became the general manager, and actively promoted the welding industry, which expanded with the need to repair the navy vessels during the First World War”. Moley Raymond. (1962) The American century of John C. Lincoln. Retrieve

In 1906 John C. Lincoln incorporated his business East Cleveland, Ohio forming what we know today as the Lincoln Electric Company. Though the company started out as a relatively small operation, it is now one of the largest producers of welding Machines and electrodes. Branching out from Cleveland, Ohio the company now has more factories in U.S. as well as in other countries. The company’s success has be attributes to several different factors, one of which is the company’s unique culture.

This is a problem, because without a reliable definition (or definitions) of culture, we cannot understand its connections to other key elements of the organization. Nor can we develop adequate approaches to analyzing, preserving and molding cultures. If we can define what organizational culture is, it gives us an understanding on how to help solve problems and even to create and evolve better cultures

The Lincoln Electric Company was created by John C. Lincoln in 1895 after being forced out of the Elliot-Lincoln Company. The Lincoln Electric company would go on to become the world’s largest manufacturer of welding products and machines. This all came to be due to the business culture instilled by the founders and continued up to the present. A Harvard case study done by Arthur Sharplin, shows the organizational culture within Lincoln Electric is unique to any single ordinary business culture. There is evidence that points to the use of all seven OCP (Organizational Culture Profile) principles, in order to maintain one of the world’s most successful and efficient companies.