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AssignmentFormCourse:OrganizationalBehaviorInstructor:Homework:LincolnElectricCo.caseName:StellaStudentIDNo.:Class:STUDENTDECLARATIONIdeclarethatthisassignmentismyownwork,whichallsourcesofreferenceareacknowledgedinfullandithasnotbeensubmittedforanyothercourse.Signature:……………………Date:…………4 CaseStudy:LincolnElectricCo.LincolnElectricCo.,whichwasestablishedin1895byJohnLincoln,hasbeenoneoftheleadingcompanieswhichproducearcweldingproducts,anditcompeteswithMillerElectricManufacturingfortheNO.1positioninweldingmachines.ThemothercompanyinUScontributedmostlyforthesuccession.However,duringtheglobalexpansion,someareaexperiencedfailure.Forexample,GermanoperationlostUS$1millioneverytwoweeksin1992.Afterrestructuringofinternationaloperators,Lincolnisstillaprofitablecompany.Whatspecificfactorsleadtothesuccess?WhatleadtothesuccessionofLincoln?Twomainfactorsmustbeconcerned.Firstoneisthestrategyofhighquality.ThehighqualitymadesomegiantssuchasGeneralelectricandWestinghouseexitedtheindustry.Secondoneistherewardstructure,whichsupportsthecompany’sstrategy.“HighQualityStrategy”reliesonqualitycontrolling,skilledworkforce,advancetechnologiesandhighworkethic,etc.Here,Iamgoingtoanalyzehowtherewardstructureworked.RewardStructureFirstly,Lincolnsetuppieceworksystemin1914.Therearetwomainissuesforthissystem.Firstoneisthepieceworkstandards.Ifthestandardisunfair,workerswillhavelowworkethicandthecompanycannotmakesufficientgoodqualityproducts.Inordertosolvethisissue,Lincolnestablishedtime-studydepartmentandemployeescan4 challengethepieceworkstandards.Secondoneishowtokeepthehighqualityoftheproducts.Underthepieceworksystem,employeesaremoretendtoproducequickly.Inordertosolvethisissue,Lincolnsetupatrackingsystemthatcantrackbacktoindividuals,andworkersmustreworkfaultypiecesintheirowntime.Asaresult,thepieceworksystemnotonlycanincreasetheproductivity,butalsokeephighqualityoftheproducts.Secondly,Lincolnintroducedyear-endbonusin1934andhasastockpurchaseplan.Inordertoencourageworkerstoproducehighqualityproducts,oneofthefourassessingcriteriafortheproductionemployeesis“Quality”,whichisevaluatedbythequalityassurancedepartmentbasingonthetrackingsystem.Anotheronecriteriaof“IdeasandCooperation”encouragedalltheemployees,likeabrainstorm,tofindawaytoimprovetheoutputofthecompany.Thisbrainstormcanhelpthecompanytoincreasetheproductivityandqualityoftheproducts.Also,thesizeofthebonusalsodependsonthecompanyprofits.Forthestock,by1925Lincolnintroducedstockownershipplan.ThisplancanincreasethecompetitivenessofthecompanybecauseitisoneofthefirstplansinUS.In1996,morethan60%oftheUSemployeesownedshares.Employeesfeelmorerelatedwiththecompanyandhavehigherworkethictofulfillthestrategyofthecompany.Withthepieceworkandbonus,workersareamongthehighest-paidworkersintheUS.Lastly,otherintrinsicrewardsalsoincreasedthesenseofbelongingness.Firstoneistheemploymentguaranteepolicy.Lincolnsecuredatleast30hoursoffull-timeworkforthe4 employeeswiththreeormoreyearstenure.Secondoneisthefeedbacksystem.ThepresidentrunsthemeetingswiththeEmploymentAdvisoryBoardtodiscusstheissuesofconcerntotheemployeeseverytwoweeks.Thirdoneisthetrainingandpromotionsystem.Forthetraining,LincolnElectricWeldingSchoolwasfoundedin1916,andemployssomeproductionsupportworkers,whoarepaidonhourlybasis.Forthepromotion,Lincolnfollowed“promotingformwithin”policyfordecades.Forthoneisthenopaidholidaysandsickdays.Thecompanyhelpsemployeestoaccesstocollectivehealthinsuranceplansandthesickdaysarenotrelatedtothebonusreview.Lastoneishelpingtheemployeeswiththeadhocsituationeventheheorsheisresigned.Alltherewardsshownabovecanhelpacompanysuccessinthemarket.Itisnotalwayssuitstodifferentarea.Forexample,inGermany,Lincolnfacedthestrongunionsandillegalityofpiecework.SoLincolnneedstofindanotherwaytosolvetheissuesfordifferentcountry.“LincolnWay”inChinaShouldLincolnwaybeimplementedinChina?Inmyopinion,ChinashouldimplementtheLincolnway.Whenimplementtherewardstructure,wearefacingsomeissues.However,theadvantagesovercomethedisadvantages.Firstly,thepieceworksystem,itisobviouslycanencouragetheproductivityandquality.InChina,manycompaniesalreadyusethissystemandmadeasuccession.Theissueis4 thatthepieceworkstandardsshouldbesetupcarefully.InChina,mostofthecompaniesinthisindustryareproducinglow-endproducts.Itishardtofindreferencestandardinothercompanies.Asaresult,weneedtospendsometimetodotheevaluationjob.Secondly,“BonusSystem”can“Stockownership”canwokwellinChina.AgoodexampleisHuaweiTechnologiesCo.Ltdwhichkeepstheemployeeswithhighworkpassion.Also,inChina,thepolicyofemployeesholdinghighpercentageofthestockisrare.IfLincolnintroducesthispolicy,thecompetitivenesscanbeincreased.Lastly,otherrewardslikeemploymentguaranteepolicy,feedbacksystem,trainingandpromotionsystem,andnopaidholidaysandsickdaysareallcanincreasethesenseofbelongingness.Oneobstacleisthefeedbacksystem.ChinesepeoplearenotfamiliartogivesuggestionandjudgementasUSpeople.Inthiscase,atthebeginningofthebonusassessment,weshouldlowertherequirementlevelofthe“IdeasandCooperation”criteria.Thenwebuildupanencouragecultureandincreasethelevellater.Fromtheadvantagesshownabove,weshouldimplementthe“LincolnWay”inChina.4
