Lincoln Electric Case Study free essay sample

Running head: LINCOLN ELECTRIC CASE STUDY 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. We will write a custom essay sample on Lincoln Electric Case Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 560). . 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 plants failed to meet their production and financial goals every year and they exaggerated the goals sent to Lincoln’s managers to receive more resources, especially during the recession in Europe and South America. Many overseas managers had no desire to increase sales, and workers were found sleeping on benches because not enough work was available. The European labor culture was hostile to the piecework and bonus control system. The suggestions I would you make to Lincoln’s managers to make future international manufacturing plants more successful is the need to socialize the expat as they did the United States worker increasing the â€Å"buy in. † Team building sessions and coaching with reward incentives and ceremonies to increase moral. There should be no workers sleeping on the job and staffing should be regulated according to the work to be done which can be done by implementing job sharing. A cultural assessment needs to be done in each company and inject that culture into the vision of each company’s culture inclusive of foods in the lunch room cultural socialization practices and tighter control. A hierarchy system with room for growth and advancement also could be introduced. A program like six sigma control would be useful to identify measure and improve the bottom line and customer satisfaction in the company. . Should Lincoln borrow money and pay bonuses to avoid breaking trust with its U. S. workers? Why or why not. No, I believe they should downsize and go back to what works as well as forming and guiding coalition to trouble shoot and maybe get and outside agency to evaluate the issues for organizational improvement and ways to increase the company’s supply chain. Conclusion Lincoln Electri c has established itself over the last 100-years as a successful company and a desired employer. Lincoln Electric has developed a set of techniques and policies that help to make it a desirable employer; these include the piece-rate pay program, the year-end bonus and incentive program, as well as employee involvement programs. Each of these tools serves as a factor between the dependent and the independent variable. The independent variables were defined as motivation and ability-job fit while the dependent variables were identified as absenteeism, turnover, job satisfaction and productivity will necessitate strategic control changes to adapt to the global market to be competitive by implementing alternative ontrol measures by outsourcing to continue the company’s success (Buller Schuler, 2006). References Daft, R. L. (2010). Understanding Management. (9th ed. ). p. 560. Mason, OH: South-Western Cengage Learning. . Buller Schuler (2006). Managing organizations and people: Cases in management, Organizational behavior and human resource management. Mason: Thomson South- Western. Lincoln Electric: A Case Study: Joe Attinello, Cali Cook, Alia Goss, Kurt Oliver, Mark Strom, Mike Torbenson Business 305Linda Gibson. October 7, 2005. Retrieved from www. plu. edu