Lincoln Electric is a leading manufacturer of welding products, welding equipment and electric motors Their management system is so successful that people refer to it with capital letters-the Lincoln Management System-and other business uses it to benchmark their own Lincoln uses diverse control approach The company’s system success is largely is due to the organizational culture based on openness and trust Because the management system worked so well, senior executives decided to extend Lincoln Electric overseas Things didn’t go quite as they planned and managers at international plants failed to meet their production and financial goals every year
Question 1: Does Lincoln follow a hierarchical or decentralized approach to management? Hierarchical (centralization) – decision authority is located near the top of the organization Decentralization – decision authority is pushed downward to all levels Lincoln Electric follows a decentralized approach to management The company uses an “open-door” policy Every employee has direct access to managers for open communication, discussion and give feedback They have an advisory board composed of people elected by their fellow workers who meet with senior management biweekly
Question 2: What is the problem with transporting Lincoln’s control system to other national cultures? What suggestions would you make to Lincoln’s managers to make future international manufacturing plants more successful? Problems Differences in culture across the globe - The European labor culture was hostile to the piece-work and bonus control system - Therefore, the system wasn’t very effective in different countries with different work cultures
Suggestions Increase sales and maintain monthly profit - Management should use salespeople because they highlight the costsavings and benefits of Lincoln Electric's products, and also draw in new customers via LE's name recognition and reputation for high...