Organizational Culture and Incentives at Lincoln Electric

Case Title Organizational tillage and Incentives at capital of Nebraska Electric mesa Of Content Introduction An overview of the case say S. W. O. T Analysts Case discussion Questions passport 1. Introduction An overview ot the case study capital of Nebraska Electric is a leading shaper of weld products, welding equipment, and electric motors, with more than(prenominal) than IJS$I billion in gross r pull downue and 6,000 surviveers worldwide. Although now publicly traded, members of the capital of Nebraska family exempt own more than 60 pct of the stock.capital of Nebraska Electrics tradition of innovative solutions, echnological leadership and perpetration to customers, employees, and shareholders stems from the vision of its founder, John C. Lincoln and his br separate(a), crowd F. Lincoln. Lincoln Electric has a very victoryful oversight re primary(prenominal)s that other(a) businesses benchmark their own ashess by it. For years, other companies have tried to fgur e out how management coaxes maximum fur-bearingness and fibre from its turn tailers, even during difficult financial times. The Lincoln system succeeds largely because of an organizational culture base on openness and trust, shared control, and an democratic spirit.Although the line between managers and workers is firmly drawn, managers wish the expertise of production workers and value their contributions to umteen aspects of the business. The compevery has an open-door policy for all pull in executives, middle managers, and production workers, and regular face-to-face communication is encouraged. Lincolns system worked so wholesome in the US that management inflexible to extend it overseas. Lincoln built or purchased 11 plants in Japan, South America, and europium with plans to run the plants from the US using Lincolns expertise with management control systems.Managers saw the prospect o beat local disceptation by applying manufacturing control incentive systems to inflict make ups and raise production. The results were abysmal and about sunk the companionship. Production and financial goals were not met. The huge losses in the world(prenominal) plants meant that the company would have to borrow cash to pay US workers bonuses, or surrender bonuses, for the first time, in Lincoln history. counselling wondered whether the Lincoln Management System could be transferred to other countries. 2. S. W. O.T Analysts Strength Organizational refining Everybody in company treated every bit whereby there is no special railroad car parking area or managers and return management executives ,everybody will use the comparable cafeteria for breakfast or lunch and eventually they practicing open-door policy in the organization both GAINS in Productivity will be shared with Consumers low Price Employee high Pay Shareholders&8212&8212&8212&8212 High Dividend Incentive plot >Pay according to number pieces produced and enable the workers to gain more wages than the other welding company workers by means ofout the unify states.In addition, these incentives system indirectly heightened the sense of will power among the plant workers and its encouraging them to produce more quality product ithin the timeframe. > Lincoln main strength is Lowest cost organise and High take of productivity arrangement Weakness Long working Hours > jibe to the force back law in US or any other countries ,the unobjectionable working hours for manufacturing company workers is (35 hours per week ) whereas Lincoln electric practicing (43-58 hours per week ).No Base salary >when there is no base salary, most of the workers will feel uncomfortable to work in that kind of organization. For instance, if the worker couldnt work for 43 to 58 hours per week, he or she might low wage than others and how that individual would manage he cost of spirit in United States with that low wage. chance was told by strange allocator that American eq uipment will not sell healthy in Europe So instead company decides to set up the totally owned subsidiaries and acquisition to make the Equipment locally to capture the international mart.E. g. Lincoln acquired 7 manufacturer in Europe and Mexico takes 2 years to implement or tilt the entire company workers to follow and need the Lincoln organization culture and incentives system in Mexico. Threats Political In more Europe and Asian countries the government considered piecework as Exploitative compensation system which force back employers to work harder, therefore in Germany the schema doesnt work soundly.Society As stated in weakness part, the long working hours became nemesis when Lincoln implement the strategy in Other countries because it is not acceptable since labor law limit the working hours 35 hours per week Technical Managers have no experience of work outside US and the local managers also felt unwilling to implement the culture of Lincoln in the Unit. Legal Due to many shell against the organizational culture and incentive systems of Lincoln s foreign acquired companies . Case Discussion Questions 1 . What is the source of Lincolns long-standing competitive good in the United States market for slue welding equipment?Lincolns Electric long-standing competitive expediency in the United State market achieved by a high productivity rate per worker and this company success had been on extremely high level of employee productivity. Lincolns Electric apply incentive organisation based on piecework. The workers receive no based salary but weigh on the number of pieces they produce. The piecework rates at the company enable an employee working at a normal pace to arn an income eq to the average rage for manufacturing worker in the area where the factory is based.A company faces a quality aspect when it comes to incentive scheme based on piecework. But at Lincoln Electrics the worker must reanimate or paid back any piecework that have d efect. It means the workers must be responsible for their outputs. The work culture in Lincoln Electrics is one of the attributor. The company had a strong respect for the ability of the individual. Moreover, in this company, they practicing open-door policy whereby the communication barriers between Workers and managers were eliminated. either workers are treated equally contempt of their position.Since 1934, production workers have been awarded a biennial bonus based on moral excellence ratings. These rating are based on Objective criteria example employees level and quality of output. Subjective criteria example employees attitude toward cooperation and his or her dependability. This semiannual bonus motivates workers to perform check and work harder, resulting boost in productivity. patronage high employee compensation, the worker so productive than Lincoln has a lower cost than its competitors. 2. Why didLincoln enter foreign markets through acquisitions and Greenfield vent ures, rather than through exporting? The Lincoln Electrics did consider expanding into international market by exporting, but was told by foreign distributor that American equipment would not sell well in Europe. So instead the company decides to set up wholly owned subsidiaries and acquisitions to make the equipment locally. Through acquisition, it was a speedily way to execute. The company can quickly build its presence in this targeted foreign market. Lincoln acquired seven arc welding manufacturers in Europe and one in Mexico.