Case facts Was founded by John C.

Lincoln in 1895 to manufacture electric motors and genera tors Headquartered in Euclid, Ohio, a suburb of Cleveland Lincoln Electric had been the worlds largest manufacturer of arc welding products for more than 30 years. Manufactured more than 40% of the arc welding equipment and supplies sold in US in 1974. Domestic net income was $17.5M on sales of $237M Approximately 48% of employees were shareholders in 1975 Problem statement How can the Lincolns philosophy and culture/norms implement the strategy of the c ompany successfully? Analysis

Strategy : 1) To build quality products at a lower cost 2) To concentrate on reducing costs and passing the savings through to the customer by continuously lowering prices 3) To give to the worker and the stockholders a higher return How do the companys philosophies implement this strategy? Philosophy, culture/norms Implementation Results Value in Individual 1)competition and adequate incentives enable every peopl e to develop to his or her fullest potential Compensation policies Wages based on piecework output A year-end bonus system Guaranteed employment for all workers Incentive management should be fair - Piecework price cannot be changed because the worker is making too much money. - System is open to challenge piecework price which is established by A Time Stu dy Department Increase of efficiency the labor cost per piece will be relative ly small and the overhead will be still less Guarantee of quality because employees were not paid for defective work Provides a tool to motivate all employees through bonuses that redistribute a lar ge portion of the corporation s yearly profits. There is a heightened sense of ownership in the company from top to bottom Open communication allows top management to get better acquainted with their empl oyees and to encourage cooperation and thus to maintain trust between employees and executives 2)Equality for every worker There are no privileged parking spaces, executive dining room, or fancy furnishings at company headquarters Organizational hierarchy was flat, with few levels between the bottom and the to p 3)Worker consultations and Open communication Maintained an open door to all employees Created an Advisory Board that has representatives of the workers who meet with executives twice a month A 12-member board of middle managers which met with executives once a month

 Managements concern for the worker Sharing rewards employees, customers, shareholders Dividend payout policy h ad been to pay to the suppliers of capital a fair return each year for its use The customers get a proper share of the saving in lower price An employees earnings and promotion are in direct proportion to his individual co ntribution toward the companys success Management control system 1) Structure 2) Criteria 3) Measurement 4) Rewards and incentives