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Lincoln Electric - Lincoln and the Decentralized Approach

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Case Study: Lincoln Electric

Isaac Kurapati

Grand Canyon University



Lincoln and the Decentralized Approach

Fundamentally, Lincoln electric uses a decentralized method towards organizational management. Based on (Draft, 2010), "decentralization relies on cultural values, traditions, shared beliefs, trust and an egalitarian spirit to foster compliance with organizational goals" (p. 548-549). Likewise Lincoln Electric uses a parallel approach among employees and management to accomplish organizational objectives. The open door program, which is applicable to all workers from the uppermost to the lowermost of the organizational ladder, no lay-offs and the practice of promoting employees from inside the organization are examples of Lincoln's decentralization approach. The company also exercises and promotes face to face communication between management and employees; moreover employees are encouraged to challenge the management if they are unfairly treated with regards to practices and compensation rates. The openness company's management staff is also encouraged to reward employees that exhibit core values of loyalty, trust-worthiness and self-management (Draft, 2010).

Lincoln's Success

An exclusive investment in their intellectual Capital particularly their human capital is the main reason Lincoln Electric has become very successful. They invest, cultivate and use their human capital to its fullest degree. According to (Draft, 2010), Lincoln Electric has "cross-functional teams, empowered to make decisions, take responsibility for product planning, development and marketing(p. 563). The company is transparent with information about its operations and economic performance with all its employees. It also has success because of its approach to management and the highly-motivated personnel. Electric's approach to organizational management is the backbone to its employee's extraordinary motivational level. According to (Draft, 2010), the Staff of Lincoln Electric are motivated by "strict performance goals to achieve pay, precisely defined task and a powerful incentive control program which is based on a piece-rate bases and merit-pay which is based on performance"(p.562). Some of the other motivational elements are the stocks purchasing plans and annual bonuses where all workers are qualified for (Draft, 2010). Also an additional important influence to its successes is Lincoln's managerial philosophy which is "based on openness, trust, shared control and an egalitarian spirit" (p. 562-563).

Lincoln Transported Internationally



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