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Analysis of Lincoln Electric

Hi, I need assistance in answering the following questions about Lincoln Electric:
1. How would you describe Lincoln's approach to the organization and motivation of their employees?
2. What role do you think this approach has played in Lincoln's performance over the last 25 years? Have any
other factors been more important?
3. What are some of the key financial metrics that demonstrate the success of Lincoln?
4. What is the applicability of Lincoln's approach in motivation to other companies and situations?

Please use the case “The Lincoln Electric Company” (Harvard Business School case, no. 9-376-028).

Solution Preview

1. Lincoln Electric's approach to the organization is to produce a "progressively better product at a lower and lower price for a larger and larger group of customers" (Fast, 1983). As well, they are paying their employees bonuses based upon their productivity, quality of work, cost reduction ideas and contributions to the company. Essentially Lincoln Electric has linked their company's strategy and performance to their employee's pay (the bonus system). This leads to stable management, satisfied employees and continual improvement throughout the company.

2. James F. Lincoln suggested that progress is dependent upon pressure and in order to achieve continued growth, one must apply proper incentives. The management of the organization is incentivized to succeed to increase shares of the market, return on investment and overall growth. Engaging the worker in this approach helps to encourage further pressure on the system and thus further promote growth. Paying workers on piecework ...

Solution Summary

This detailed solution is based on a Harvard Business School report regarding Lincoln Electric. It addressess Lincoln's approach to the organization and motivation, the role these items have played in the company's performance, other important factors, key financial metrics, and how to apply Lincoln's approach to other companies.