Lincoln Electric Case Study Solution

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As we learn from the case study, the Lincoln Electric Company is the largest global manufacturer of machines for welding, which are used in all kinds of construction projects. This means that the company has a large global presence and many employees, so its culture affects thousands of its workers. Even though it is now 2014, the company still has a large market share and very satisfied employees, so clearly the culture leaves employees satisfied and motivates them to work hard for the company.

One of the biggest influences of the founders of Lincoln Electric is from James Lincoln, who created a board of advisors from the pool of employees to advise him (Sharplin, 1989). The board met every two weeks when it was…show more content…

The founders also had a “Christian ethic” (Sharplin, page 3), but they did not preach to their employees. Instead, they chose to live by example. They did not use deceptive advertising, and they also used an “open door policy” (Sharplin, page 7) with higher management-level employees. This meant that workers could go into offices and talk to their supervisors, showing a level of equality that is not present in all workplaces.

The company also used an incentive management plan, merit pay plan, and bonus plan to reward its employees. To achieve higher worker productivity, they implemented the incentive management plan, which Sharplin says is still the model college textbooks use to talk about powerful incentive plans. The performance appraisal system happens twice a year, and employees get scores out of 100 in different categories. According to Sharplin, the average score is an 80 for all employees, showing a high level of performance in the workplace. The bonus plan is another important way for the Lincoln Electric company to stand by their golden rule, since they give back to their employees when they do well. According to Sharplin, this bonus included about 20% of the workers’ annual wages, along with extra bonuses during strong years. The pension plan for retired people also helps former employees, showing that Lincoln Electric cares about the long-term welfare of its workers.

People communicate in different ways in the


researcher wanted to know deeper in management compensation and itsimplementation. By studying and researching issues that arise in the company,researcher will get a clearer picture about what action needs to be done when problems arise.

1.3 Research Question

The problems of this case are:


How would you characterize Lincoln Electric’s strategy? What is the nature of Lincoln’s business and upon what bases does this company compete?2.What are the most important elements of Lincoln’s overall approach toorganization and control that help explain why this company is so successful?How well do Lincoln’s organization and control mechanisms fit the company’sstrategic requirements?3.What is the corporate culture like at Lincoln Electric? What type of employeeswould be happy working at Lincoln Electric?4.What is the applicability of Lincoln’s approach to organization and control toother companies? Why don’t more companies operate like Lincoln?


What could cause Lincoln’s strategy implementation approach to break down?What are the threats to Lincoln’s continued success?


Would you like to work in an environment like that at Lincoln Electric?

1.4 The Aim/Objectivity

The objectives of this case are:


To characterize Lincoln Electric’s strategy. To know the nature of Lincoln’s business and the bases does Lincoln competes.


To find the most important elements of Lincoln’s which is because that element,Lincoln can achieve success. And to know Lincoln’s organization and controlmechanism which is fit the company’s strategic requirements.


To know the corporate culture like at Lincoln Electric. To know type of employees would be happy working at Lincoln Electric.


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