Organization and Lincoln Electric

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CHAPTER IINTRODUCTION
1.1
Background of Case Study Selection
Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.Researcher are interested in doing research on the company becauseresearcher wanted to learn more about control system especially managementcompensation, both theoretical and practical. Lincoln Electric Company one of companies has realize the method of control system especially managementcompensation in their company.In the Lincoln Electric Company, researcher get knowledge of control systemespecially management compensation, particularly its association with corporate profits. However, in its application is often the application of compensation hasexperienced various problems and constraints. So also happened in the LincolnElectric Company.Every company absolutely has a strategy to sustainable them company. The top priority of Lincoln is customer. Company always sensitive with consumer needs.Certainly, the firm’s customer wants to get the best price and the best quality. And, product of Lincoln fulfill it. Lincoln also concerns employee and stockholders needs.Management compensation always was determined by a wage survey of similar jobsin Cleveland area where the company do operational process. Lincoln ElectricCompany is a good example for other company which is concern to customer,employee and stockholders. Not all company like Lincoln Electric Company. So, because of that, we choose Lincoln Electric’s Case. 1.2 Motivation

Researcher motivation to conduct research on issues of control systemespecially management compensation in the Lincoln Electric Company because 2
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:
1.
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? 5.

What could cause Lincoln’s strategy implementation approach to break down?What are the threats to Lincoln’s continued success? 6.
Would you like to work in an environment like that at Lincoln Electric? 1.4 The Aim/Objectivity
The objectives of this case are:
1.
To characterize Lincoln Electric’s strategy. To know the nature of Lincoln’s business and the bases does Lincoln competes. 2.
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. 3.

To know the corporate culture like at Lincoln Electric. To know type of employees would be happy working at Lincoln Electric. 3
4.To know the applicability of Lincoln’s approach to organization and control toother companies. To know the reason other companies doesn’t operate likeLincoln.5.To know the causes of Lincoln’s strategy implementation approach to break down and also the treats from the causes of Lincoln’s strategy implementation.6.To give our opinion about working at Lincoln Electric Company. 4

CHAPTER IILITERATURE
The objective of literature, researcher want to explain the theoy about...
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