Lincoln Electric Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Lincoln Electric Company Case Solution

Historical Background

The Lincoln Electric Co. was founded in 1895 by John C. and James Finney. Today, the management system is most associated with James Finney Lincoln. Born in Painesville, Ohio, 25 miles north of Cleveland, Finney was the son of a nineteenth century revivalist and the president of Oberlin College. This company had a long history of innovation, and is still one of the top employers in the nation. The company's system has withstood economic downturns, and it continues to develop and introduce new products. In the 1950s, the company launched a new coated electrode that is still manufactured today. This innovative process, known as FleetweldtP, made it possible for the company to survive the Great Depression and World War II. The new technology made it possible to expand Lincoln Electric's interests overseas. In the 1930s, the company established international affiliations in Canada and Australia. This venture ended in 1947.

In the 1950s, Lincoln Electric's growth was slowed by the Great Depression. But despite these economic hardships, the company managed to stay afloat and grow. The company even opened a branch in France in 1955, a short trip away from Paris. In the 1960s, the company became profitable and expanded globally. However, the global economy was in a state of recession during that time. In this period, the company's profits dropped dramatically.

After the death of James Lincoln, Irrgang became the company's chairman and CEO. Irrgang began his career on the assembly line and believed in keeping the product line small. The founders also made a point of keeping the company's product lines limited. (Peters, 1949)

a) How would you assess the human resource system of Lincoln Electric in terms of

Alignment, consistency, and credibility?

Human Resource System of Lincoln Electric Company

Lincoln Electric Company had a long history of innovation, and is still one of the top employers in the nation. The company's system has withstood economic downturns, and it continues to develop and introduce new products. Lincoln always believed that company’s success depends upon in making high quality products in least possible. This approach drives the Lincoln’s company in succeeding the best and holding the appropriate position in the market. There are so many key factors that participates in Lincoln’s rapid growth and success. These are:

Key Success factors

Participation and communication

Lincoln believed that individuals were inspired by being regarded and allowed them with an opportunity to utilize their abilities at work. He gave worker the chance to administer information and urged them to track down ways of further developing usefulness and productivity.

Piece work

Lincoln's manufacturers are not paid hourly, week, or monthly. Instead managers and laborers arrange a true rate by which workers are remunerated dependent on their real useful result which means the more they produce, the more they make.

Bonuses

Another key success factors of the company that it provides 70% of the bonuses based on the individual’s talent and hard work.Another main factor that helps the Lincoln in continuous benefit is understanding of Demand vs Distribution. Lincoln Electric Holdings, Inc. LECO is profiting from further developing interest across its end markets, powerful accumulation levels, and acquisitions and valuing activities. Focus on growing new items, and use of advanced stages to draw in clients will keep on driving the organization's top-line execution. It has been carrying out cost control measures, which will support edges and assist with refuting the effect of heightening work, cargo and natural substance costs.

Innovation and Acquisition

The company is committed to new product development and utilizing digital platforms to engage customers. Lincoln Electric’s product launches in the automation solutions market are likely to aid growth.

Price performance

(See Exhibit 1)

Assessment in terms of Alignment, Consistency and Credibility

Alignment

Alignment is an important aspect of any company's human resource system. In many cases, workforce composition plays a crucial role in the business's strategy and staffing. Aligning the human resource system with the business strategy can be an excellent way to improve the overall efficiency of an organization. However, it is important to note that alignment is not 100% effective, and it should be a part of strategic planning. It is important to note that HR functions play an integral role in the success of the strategic plan. Furthermore, according to the latest research conducted by SHRM, HR professionals are expecting several challenges in the coming years. Some of these challenges include rising health care costs, increased demands for work/life balance, and retirement.

Lincoln Electric Company is quite imperative in aligning human resource system with overall strategy. In this way the HR leaders understand all the strategic management of the company and support business objectives. This includes employee satisfaction, recruitment and salary level. This can be used to analyze disparities and trends, providing quick insights. (Friedman, 2007)

Consistency

Consistency helps to foster affective commitment among employees. The reasons may be various, but it is critical to establish a consistent approach to employee appraisal and compensation. In addition to consistency, a human resources system should also follow the institution's rules and expectations. For this, the organization must be able to adapt to changes in the institutional context, and it must maintain internal consistency within each course of HR function discussed.

In terms of consistency, Lincoln’s Company has the managers who had high level of consistency in HRM tended and showed more committed towards their work. This reflected that they felt more engaged and loyal to their work. In addition, there was a positive impact on their health. It showed that good supervision and communication in the Lincoln has helped GM improve its HRM. The QWL programs at Tarrytown helped make significant changes to the company. Whereas in terms of supervisions, Lincoln seems great at treating their workers with consistent care and motivation.

Credibility

In the modern world, the HR department faces a variety of challenges, including lack of credibility and influence within the organization. As a result, the role of HR is often not seen as productive. There are three criteria for evaluating the credibility of a human resource system: relevance, usefulness, and efficiency. Lincolns showed the great countenance in terms of credibility, and due to this reason it is one of the most trust worthy company. Another significant factor that drives Lincoln credibility is that it creates the best quality products for its potential customers. Also, It has paid dividends not just for them but for investors, customers, and the communities in which the company works. This creates the harmonized surrounding in the Lincoln’s area and helpful in driving Lincoln’s success.

b) Based on class materials and your own experience, what are some of the distortions and dysfunctions that can characterize piece rate systems and high-powered bonus plans like Lincoln has? How does Lincoln manage to circumvent those potential difficulties.............................

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Lincoln Electric Company Harvard Case Solution & Analysis