Analysis of Lincoln Electric Company’s Culture
The Lincoln Electric Company can attribute much of its long lasting success to the organizational structure and culture. The company continues to realize economic and productivity growth, year over year due to their unique company culture. In Arthur Sharplin’s “The Lincoln Electric Company” case study, we are able to analyze how the organic company structure and founder values produced a unique a combination of an outcome-oriented and people-oriented culture.
Lincoln Electric Company was founded in 1885 by John C. Lincoln. However, much of the company’s success and organizational culture can be attributed to his younger brother, James F. Lincoln. James took the reins of the company in 1914. …show more content…
All aspects of the company fostered a sense of belong and unity, including the physical layout of the plant, which had an open floor plan where all materials needed were with workstations, and an employee cafeteria. Executives didn’t have elaborate offices, in fact, the office didn’t even have carpet, and they ate their lunch in the cafeteria along with the rest of the employees. In addition, employees were encouraged to help make business decisions in the areas of their expertise. This was a way to further develop products produced by the …show more content…
Along with a diverse compensation structure, which included different rates of pay for different products manufactured (“Piece Rate”), the company adopted an annual incentive bonus based on the year’s financial performance. The annual incentive for each employee was then tied back to their annual performance review. This meant every employee would get a bonus based on the overall company performance, however, their share was fully contingent upon them. When interviewed for the study Betty Stewart stated “I think with the incentive program the way that it is, if you want to work and achieve, then you will do it. If you don 't want to work and achieve, you will not do it no matter where you are. Just because you are merit rated and have a bonus, if you really don 't want to work hard then you 're not going to. You will accept your 90 points or 92 or 85 because, even with that, you make more money than people on the outside.” (Sharplin, 1989, p. 13) The better they performed, the bigger the bonus payment. This motivated the employees to continually produce at the highest level possible, so that they could earn the highest bonus
The Lincoln Electric Company can attribute much of its long lasting success to the organizational structure and culture. The company continues to realize economic and productivity growth, year over year due to their unique company culture. In Arthur Sharplin’s “The Lincoln Electric Company” case study, we are able to analyze how the organic company structure and founder values produced a unique a combination of an outcome-oriented and people-oriented culture.
Lincoln Electric Company was founded in 1885 by John C. Lincoln. However, much of the company’s success and organizational culture can be attributed to his younger brother, James F. Lincoln. James took the reins of the company in 1914. …show more content…
All aspects of the company fostered a sense of belong and unity, including the physical layout of the plant, which had an open floor plan where all materials needed were with workstations, and an employee cafeteria. Executives didn’t have elaborate offices, in fact, the office didn’t even have carpet, and they ate their lunch in the cafeteria along with the rest of the employees. In addition, employees were encouraged to help make business decisions in the areas of their expertise. This was a way to further develop products produced by the …show more content…
Along with a diverse compensation structure, which included different rates of pay for different products manufactured (“Piece Rate”), the company adopted an annual incentive bonus based on the year’s financial performance. The annual incentive for each employee was then tied back to their annual performance review. This meant every employee would get a bonus based on the overall company performance, however, their share was fully contingent upon them. When interviewed for the study Betty Stewart stated “I think with the incentive program the way that it is, if you want to work and achieve, then you will do it. If you don 't want to work and achieve, you will not do it no matter where you are. Just because you are merit rated and have a bonus, if you really don 't want to work hard then you 're not going to. You will accept your 90 points or 92 or 85 because, even with that, you make more money than people on the outside.” (Sharplin, 1989, p. 13) The better they performed, the bigger the bonus payment. This motivated the employees to continually produce at the highest level possible, so that they could earn the highest bonus