LINCOLN ELECTRIC COMPANY: A COMPARISON OF ITS APPROACH TO MANAGEMENT WITH THAT OF OTHER
AMERICAN COMPANIES AND JAPANESE COMPANIES
This research compares the approach to management of the Lincoln Electric Company with that of other American companies and with that of Japanese companies. Lincoln Electric was founded by John Lincoln during the economic depression of the late 1890s. It was John Lincoln's younger brother James, who joined the firm in 1907, however, who was to shape the company into the organization that it was to become and remains in the early 1990.
James Lincoln was a pioneer in participative management. He formed employee committees in 1914, the purpose of which was to advise company management on operations. He was also a pioneer in the development of employee benefits and support programs. The profit sharing plan developed at Lincoln Electric in the 1930s remains a model of effectiveness and efficiency in the early 1990s.
Lincoln Electric's commitment to its employees is matched only by its commitment to its customers. These policies have made the company the largest manufacturer in the world of welding machines and electrodes (Standard & Poor's, 1991, pp. 4215). Although James Lincoln died in 1965, his accomplishments at Lincoln Electric may be measured in the continued success of the company subsequent to his departure. The firm has operated at a profit each year since 1965, and profit growth occurred in all but the 1982 1983 period of severe economic recession in the United States.
Although Lincoln Electric is the premier performer in its industry, the company follows a purposefully narrow approach to product research, development, and manufacture, which, while designed specifically to exploit contemporary industry conditions, does not provide the flexibility required to adapt to radical changes, should such changes occur in the industry. While this approach is contrary to the growth at any...