Lincoln林肯电气组织行为学案例-英文

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Course: Organizational Behavior

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Homework: Lincoln Electric Co. case

Name: Stella

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I declare that this assignment is my own work, which all sources of reference are acknowledged in full and it has not been submitted for any other course.

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Case Study : Lincoln Electric Co.

Lincoln Electric Co., which was established in 1895 by John Lincoln, has been one of the leading companies which produce arc welding products, and it competes with Miller Electric Manufacturing for the NO.1 position in welding machines. The mother company in US contributed mostly for the succession. However, during the global expansion, some area experienced failure. For example, German operation lost US$1 million every two weeks in1992. After restructuring of international operators, Lincoln is still a profitable company.

What specific factors lead to the success?

What lead to the succession of Lincoln? Two main factors must be concerned. First one is the strategy of high quality. The high quality made some giants such as General electric and Westinghouse exited the industry. Second one is the reward structure, which supports the company’s strategy. “High Quality Strategy”relies on quality controlling, skilled workforce, advance technologies and high work ethic, etc. Here, I am going to analyze how the reward structure worked.

Reward Structure

Firstly, Lincoln set up piecework system in 1914. There are two main issues for this system. First one is the piecework standards. If the standard is unfair, workers will have low work ethic and the company can not make sufficient good quality products. In order to solve this issue, Lincoln established time-study department and employees can challenge

the piecework standards. Second one is how to keep the high quality of the products. Under the piecework system, employees are more tend to produce quickly. In order to solve this issue, Lincoln set up a tracking system that can track back to individuals, and workers must rework faulty pieces in their own time. As a result, the piecework system not only can increase the productivity, but also keep high quality of the products.

Secondly, Lincoln introduced year-end bonus in 1934 and has a stock purchase plan. In order to encourage workers to produce high quality products, one of the four assessing criteria for the production employees is “Quality”, which is evaluated by the quality assurance department basing on the tracking system. Another one criteria of “Ideas and Cooperation” encouraged all the employees, like a brainstorm, to find a way to improve the output of the company. This brainstorm can help the company to increase the productivity and quality of the products. Also, the size of the bonus also depends on the company profits. For the stock, by 1925 Lincoln introduced stock ownership plan. This plan can increase the competitiveness of the company because it is one of the first plans in US. In 1996, more than 60% of the US employees owned shares. Employees feel more related with the company and have higher work ethic to fulfill the strategy of the company. With the piecework and bonus, workers are among the highest-paid workers in the US.

Lastly, other intrinsic rewards also increased the sense of belongingness. First one is the employment guarantee policy. Lincoln secured at least 30 hours of full-time work for the employees with three or more years tenure. Second one is the feedback system. The