Lincoln Electric Organizational Culture Analysis

Decent Essays
While John Lincoln founded Lincoln Electric on the basis of engineering innovations in welding technology, his interest was mainly in engineering and inventions, and his brother James was left to truly shape the culture and destiny of the company.

It is fair to say that for his time, James Lincoln was fairly radical in some of the values that he built into the organizational culture and structure. While the typology of the Organizational Culture Profile was devised much later, it is clear that Mr. Lincoln’s vision for the company would be characterized as very strongly as “People Oriented.” Perhaps informed by his Christian personal values Lincoln apparently well understood and sympathized with worker needs, as expressed in his criticism
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Although bureaucracy and rigid rules are not especially remarkable characteristics of the company culture, there are factors that contribute to stability in the culture. Although employee input (and even ownership) are encouraged strongly, the company’s approach to decision making can also be characterized as authoritarian. Employee discretion in decision making is kept within boundaries - especially those boundaries related to expertise. Another factor contributing to the company’s stability is its remarkably low employee turnover rate. With the same individuals, from management to line workers, staying with the company for life predictability naturally follows.

Furthermore, the winning formula that emerged from James Lincoln’s vision for the company helped ensure that even after his death, the company culture remained strong and his programs were continued.

Lincoln’s culture in these three areas is very well suited to the manufacturing market in which it operates and to the values that it operates under. James Lincoln’s view of finance - that capital expenditures come from earnings rather than credit - there is insulation against financial risk. This means the need to change rapidly in order to mitigate risks is minimized. The market for welding equipment is broad enough that changes in manufacturing patterns will make minimal impact on the demand for
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Lincoln’s view of the relationship between management and labor is key to understanding the strength of that relationship. He opposed labor unions but understood that labor and management are part of the same enterprise and understood that by creating a strong interest for the employees, he could secure the cooperation of the employees toward the interests of the company. The strength of this culture is evident in the fact that department heads are able to supervise a very large number of employees without having to detail each one. The employees buy into the corporate culture so well that it becomes unnecessary to oversee them closely - they participate because they are motivated to do so. The employee association that provides benefits for employees without cost to the company is a good indicator of the strength of Lincoln Electric’s culture.

Although Lincoln’s culture could also be characterized according to other types from the Organizational Culture Profile (aggressive with regards to pricing, team-oriented according to structure, and with minor affinities to the other characterizations), the company’s culture is defined by its people-orientation, its innovation, and its stability, and in these regards it is an exceptionally strong culture. Due to the strength of this culture and to the way this culture supports the company’s values and the strategic needs of the market-place, Lincoln has been amazingly

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