Lincoln Electric Essay

321 Words2 Pages
1. Identify and briefly explain one example from Lincoln Electric Company of each of the five part model. Lincoln Electric Company (LEC) adheres to a very clear strategic planning process. This Formal Control Process is identified as concentrating on reducing costs and passing the savings through to the customer by continuously lowering prices. Lincoln has successfully intertwined this process in everything that they do. Each employee apparently understands this long term plan. Lincoln has successfully integrated and managed this process through communication and rewards. Lincoln’s employees are compensated handsomely in exchange for productivity, hard work, and high quality. This compensation model has historically rewarded results in bonuses up to and in excess of an employee’s annual wage. For the most part it appears that the employees are congruent with the compensation model. However, while taking a look at the future of Lincoln electric it has been argued that employees change, and what has worked in the past may not work for the future as employees goals could change from desiring more compensation to other goals. This theory has not been proven true and Lincoln is continuing to do what has worked in the past. I feel that the management style of Lincoln compliments the strategic plan. Lincoln clearly operates with an authoritarian management. The decisions are made at the top and flow to the rest of the company. In fact the company does not have a formal organization chart which makes for a flat infrastructure. The philosophy of the owner and president are ingrained in the company’s employees. It appears that the two most powerful people in the organization are involved in most, if not all, of the decisions of the company. This authoritarian style is also used with effective coordination and communication. Because of the advisory board

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