In 1895 an inventor by the name of John C. Lincoln designed and developed the electric motor. He developed it in such a way that it could not be matched by any other competitor. However, his passion for inventing kept him from being able to manage the company he created. In 1907 he hired his brother, James F. Lincoln, to manage the day-to-day of the plant operations. This is when the plant began its growth and success. It became a billion dollar company under his tutelage. The Lincoln Electric Company, the world’s largest arc-welding manufacturer and top producer of industrial electric motors, now employees over 4,000 people and its sales have topped one billion dollars. How did Lincoln gain this overwhelming prosperity? Many have tried to figure this out, even studies have been conducted on Lincoln Electric’s organizational structure, James Lincoln’s incentive management practices, and the other keys to their success; and still no one has mastered it. Lincoln still operates today the same way that they did years ago and it is still working for them. However, what does the future hold for Lincoln Electric? Will they be able to keep up with high demand of productivity that everyone has come to know without lower employee job satisfaction?
Managerial Issues: In this analysis we will examine different factors of Lincoln Electric such as the company’s communication between employees, their problem solving techniques, and their conflicts. But the most important factors we will analyze are the incentive reward systems, the pros and cons of the system, the company’s leadership and the vision of the company.
Incentive reward system: Lincoln Electric did not feel that it was important to regularly communicate with all of their employees, which is the reason behind the advisory board. The advisory board is a group of employees that would meet every two weeks to discuss any new ideas on ways to improve operations, increase productivity, job
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