Lincoln Electric Case Study

The Lincoln Electric Company is a prime example of how organizational culture influences a company’s profitability and performance. For many years they have implemented several policies within the company to improve employee performance and productivity. It also dictates employee behavior. “Culture is a more powerful way of controlling and managing employee behaviors than organizational rules and regulations.” – Principles of Management, Flatworld Knowledge

The polices implemented by the Lincoln Electric Company have been so effective that the rate of turnover is restricted to retirements and new employees leaving the company. Long term employees of the company usually find no reason to leave. The organization doesn’t have

This can boost morale as it doesn’t limit employees to feeling stuck in a niche and gives them hope of advancement. There are no requirements that are needed to apply for these jobs with the exception of a few positions that require an engineering degree. “When an employee feels threatened by a lack of job security, she may stop putting the necessary effort into completing assignments and interacting with colleagues, due to a belief of not having a future with the organization.” – Laura Woods. Lincoln definitely subscribed to this belief and as a measure to eliminate this concern, the implemented a policy which ensures each employee a guarantee that they will not be fired after a year of employment unless they are guilty of misconduct and they will have at least a 30-hour work week each week. The Lincoln Electric Company has not had any layoffs since 1949. This would provide job security and satisfaction. They also have a very selective hiring process and external candidates are only selected for entry level positions. Once a candidate has a personal interview with the Personnel Department and have been cleared for the next level, they then meet with a committee of vice-presidents and superintendents. After the candidate has made it through that process, the supervisor who the candidate will be reporting to makes the selection. This process is the

The company identifies its stakeholders as the customers, stockholders and employees. Lincoln through its efficient business practices has managed to manufacture its goods at a high quality and low price while setting the standard in the industry for their products. This provides the customer with above par service as they receiving a premium product for a reasonable price. The benefits provided to the employees are already significant along with annual bonuses which are above average. Finally, the stockholders benefit from the high quality and standards provided to the customers and the productivity of the satisfied workers, with exceptional dividends and