Case Analysis: Lincoln Electric

¶ … Lincoln follow a hierarchical or decentralized approach to management? Explain your answer and give examples. Lincoln is most definitely using a decentralized approach of management. Systems that are essentially decentralized engage employees at all levels and make use of teams, which have significant degrees of autonomy, at the different levels of authority. Decentralization, in Lincoln's case, is evidenced by a number of elements.

To begin with, the company operates an open-door policy that allows employees to interact face-to-face with management, and give their views whenever they feel that things are not moving the way they should. Moreover, the company employs fair labor practices, including employee compensation and benefits. This is best illustrated by the fact that employees are allowed to challenge management whenever they feel that employee policies are either unfair or not up to speed.

A third element of decentralization derives from the fact that the company grants permission to its teams to make autonomous decisions and, hence, stand accountable for product development, planning, and marketing. Question 2: Based on what you've just read, what do you think makes the Lincoln system so successful in the United States? The culture of this great nation of ours values equality. One of the reasons this particular system has largely succeeded in the U.S. is because it strongly emphasizes, and practices the concept of treating people as equals.

I can say for sure that the system would not have been as successful if the company had drawn a thick, evident line between management and employees. The system's support for equality is evident from the fact that it trains its employees and gives them autonomy to make business decisions at their respective operational levels, rather than relying solely on management.

There is also is the aspect that the company rewards its employees fairly and solely on the basis of performance, and even provides avenues for them to develop personally, to the extent of taking up positions of management. Thirdly, the company does not put a glass barrier between management and employees despite the fact that the two are at different levels of authority.

Question 3: What is the problem with transporting Lincoln's control systems to other national cultures? What suggestions would you make to Lincoln's managers to make future international manufacturing plants more successful? "Exporting' this particular system abroad is like attempting to have a single dress tailored to suit a wedding occasion, a sporting event, and an office setting. This is almost impossible because different occasions call for different levels of activity and seriousness. In the same way, different nations, and continents for that matter, have different values, cultures, and needs.

What seems right in the U.S. may be offending in a European or Asian context. In order to thrive in international markets, a company has to mould its structures and operations in such a way that they respond to the needs, and take into consideration the values and the norm of the target market. These needs and values can only be identified through market research. Those of Asian descent, for instance, do not attach as much importance to equality as Americans do.

They would find a company that treats its managers the same way it does its employees quite ridiculous because according their culture, managers ought to be accorded the authority and protection they deserve. This is a possible reason why the Lincoln system was such a failure in the Japanese market. Question.