Lincoln Electric Case Study

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Lincoln Electric Case Study
Edris Holland
Grand Canyon University
Leading As a General Manager: LDR 620
Professor Brian Johnson
July 27, 2011

Lincoln Electric Case Study
Lincoln Electric Case Study Questions
1. Does Lincoln follow a hierarchical or decentralized approach to management? Explain your answer and give examples. Lincoln follows a decentralized approach to management. The company has an open-door policy for all top executives, middle managers, and production workers, and regular face-to-face communication is encouraged. Workers are expected to challenge management if they believe practices or compensation rates are unfair. According to (Daft, 2010) open-book management is used in decentralized organizations to share the financial condition of a company with all employees. Open-book management encourages active participation in achieving organizational goals, helps the employee understand how his or her job affects the financial success of the organization, and allows employees to see the interdependence and importance of each business function (Daft, p.560). 2. Based on what you’ve just read, what do you think makes the Lincoln System so successful in the United States? Lincoln uses a diverse control approach. Tasks are precisely defined, and individual employees must exceed strict performance goals to achieve top pay. The incentive and control system is powerful. Production workers are paid on a piece-rate basis, plus merit pay based on performance. Employees are also eligible for annual bonuses, which fluctuate according to the company’s profits, and they participate in stock purchase plans. A worker’s bonus is based on four factors: work productivity, work quality, dependability, and cooperation with others. Some factory workers at Lincoln have earned more than $100,000 a year. 3. The problem with transporting Lincoln’s control systems to other national cultures is Managers at international...
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