The Lincoln Electric Company's Culture

Culture is an observable, powerful force in any organization. “Made up of its members’ shared values, beliefs, symbols, and behaviors, culture guides individual decisions and actions at the unconscious level. As a result, it can have a potent effect on a company’s well-being and success” (One Page, n.d.).

The founders of the Lincoln Electric Company left a legacy of an organization culture that promotes high productivity through sound management policies which have stood the test of time. The exponential growth of the company after the death of James F. Lincoln was a direct result of the establishment of a rich culture mix based on values that were widely shared and accepted by the members of the organization. Management empowered employees to become part of the decision making process through the contribution of ideas through the Advisory Board which was elected by the employees from amongst themselves. Reward management systems and all the other artifacts of the Lincoln Electric’s distinguished strong organizational culture will be analyzed in greater detail in this essay.

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.

The Lincoln Electric Company was founded in 1895 by John C. Lincoln, who then partnered with his younger brother James in 1907. The focus of the company originally was manufacturing electric motors, which then expanded to include battery chargers and in the early 1900’s to portable welding machines. (Lincoln Electric, 2016) The company was founded originally on a construct of Christian values, which may have played a role in creating the dominant culture of the corporation. (Sharplin) This paper presents an evaluative analysis of the business case study presented by Arthur Sharplin, with a focus on determining the overall corporate culture of Lincoln Electric categorically.

An organization’s culture can be defined as “the system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behavior”. Lincoln’s culture has with stood the test of time. The current business culture’s roots can be traced back to its founder’s younger brother. James F. Lincoln was the figurehead of the company in the 1900’s assuming the titles of General Manger and Vice-President. It was James who helped mold the company philosophy. His Christian principles and facilitation of multiple incentive and employee lead programs had a profoundly lasting effect on the company even after his death. In his wake he left a mix of business culture types/practices and artifacts to demonstrate those early principles and vision; that make up Lincoln’s highly effective organizational culture profile.

The Lincoln Electric Company Since 1895, located in Cleveland, Ohio, the Lincoln Electric Company “ the world’s largest manufacture of welding machines and electrodes” was able to create the ideal organization throughout several aspects of the company’s culture. Its founders, first John C Lincoln and James Lincoln, who later joined the company as the General Manager, had one duty to get done; to ask his employees to elect a committee that would give him advice in regards to the company’s operations. Since then, an organization structure was performed. Lincoln Electric Company separated itself from the competitors for its innovative policies.

In 1989, Arthur Sharplin produced a case study, Sharplin (1989), outlining the organizational structure and culture of the Lincoln Electric Company. This report will be focused on analyzing Sharplin’s case study to discern aspects of the Lincoln Electric Company’s culture. First, we will discuss John & James Lincoln and their influence on the development of the culture of the company. We will discuss their Christian influence, and how applying the golden rule of doing to others as you would have them do to you, helped them shape their company. Additionally, we will discuss the company performance appraisal system, the way people communicate in the company, the merit pay plan, the bonus plan, and finally, the management style. After

The company culture of Lincoln Electric is one of teamwork, support and innovation. After reading and reviewing the case study done on Lincoln Electric by Arthur Sharplin of McNeese State University, I have come away with a better understanding of how the company has become the role model for management world-wide.

Lincoln Electric Company of Cleveland Ohio USA`s organizational Culture is exceptional and has earned it the acolade of being the best managed manufacturing company in the whole world. I will explore and attempt to identify culture aspects of Lincoln Electric from several issues such as; the continuing influence of founders of the company, the golden rule, the incentive management plan,the performance appraisal system, how people communicate in the organization, the merit pay plan, the bonus plan, and the management style.

A company’s culture is inevitably tied to the personality, background, and values of its founders. The way these people want to do business determines the organisation’s rules, the structural set up, and the people they hire” (Uopeople.edu, 2016). Looking at the influence James F. Lincoln had on the Lincoln Electric Company, it is clear the things he implemented decades ago, continue to be part of the Lincoln Electric Company’s culture.

Lincoln Electric was founded at the end of the 19-th century by John C. Lincoln. He was a talented engineer who invested 200 dollars in his product electrical motors. Soon he was replaced by his younger brother James F. Lincoln, and the founder of Lincoln Electric dedicated his time to engineering activities and inventions. James F. Lincoln was a different type of inventor. He was a good manager with the nice strategic point of view over manufacturing. At the beginning of the 20th century, the company started manufacturing welding machines which become their iconic product. That is not the only thing Lincoln electric became famous for. The incentive management plan was one of a kind at that time and was the first step of creating company culture with a high focus on the employees, something unheard among the other manufacturers at that time of the century. Both Lincoln brothers were inventors and this was crucial for the earlier company development. Both were pioneers and the vision and the mission that was integrated especially from James Lincoln played a major role in the dramatic company development during the World War II.

The Lincoln Electric Company is one of the largest manufacturers of welding machines and electrodes in the world. With about 2,400 employees in the USA and near 600 workers in other countries. The Lincoln management plan is well known for accomplishing the highest worker productivity. His founder Mr. James F. Lincoln died in 1965, leaving a profitable and reliable company. As a president of the business, he invigorated a committee that was confirmed by representatives elected by employees. This committee called the Advisory Board met with him twice a month to advise him on the company operations. The Advisory Board was the pioneer of personal policies to provide benefits to their employees including the reduction of hours from 55 hours to 50 hours a week. In 1915 the workers received a paid-up life insurance. Two years after, the company opened a welding school that is still operating today. In 1919 The Lincoln Electric Employees’ Association was created to offer Health benefits and social activities to their employees.

In this assignment, our professor has instructed us to focus on a few key areas including;

The Lincoln Electric Company is a great example of an organization that has multiple cultures within it. In this week’s reading of chapter 8, we learned about several cultures. The ones that come to mind immediately when referencing Lincoln Electric Company are people-oriented and outcome-oriented. (Carpenter, Taylor & Erdogan, 2009, p. 188)

The Lincoln Electrical company has an organizational structure rooted in the values and principles set out by its two founders, John Lincoln, engineer and inventor, and later his brother James F. Lincoln. The company has a strong company culture that persists to present. Both brothers left their imprints on the company, but the primary shaper of its values and principles, and success should be attributed to James Lincoln.