1

Running head: LINCOLN ELECTRIC: CRITICAL ANALYSIS ON THE PHILOSOPHY OF CONTROL

Lincoln Electric: Critical Analysis on the Philosophy of Control

Aileen Nunez

Kaplan University

Introduction

The organization that I currently work for is very successful in the United States, we are constantly analyzing ways to continue the success and find better methods to ensure customer service. We are getting there by keeping track of the trends and adjusting accordingly. Even though we are successful in the United States, we must be prepared and be solid here before we take the concept to another country. We have been using American business practices and a combination of hierarchal control and decentralized control. The practices may need to be adjusted according to the country. With every country, there is a different culture and a different way of doing business. What we do in America may not be successful in other countries. We must do our homework and this is why our organization has not opened up in other countries, only Canada. This is the case for the Lincoln Electric. Lincoln Electric is a leading manufacturer of welding products, welding equipment, and electric motors with more than $1 billion in sales, and 6,000 workers worldwide. The organization is known for its diverse approach, tasks and expectations clear, and the expectation to meet strict performance goals. With the achievement of these goals, the organization provides bonuses and incentives to motivate their employees. We will analyze this organizations successes, uncover what approach they are using, and find out why the same successes that are happening in the U.S are not happening on an international level.Comment by Dr. Dayton: Excellent introduction.

Problem

Lincoln Electric uses a decentralized approach. It was confirmed with the organizational culture. It is a culture based on openness and trust. Employees are empowered to make decisions on their own through the experience they have gained through the use cross-functional teams. With utilizing cross-functional teams, they are able to learn skills by taking responsibility for product planning, development, and marketing. Communication is open and employees are aware of all aspects of operations including financial performance.

Based on this analysis, while the decentralized approach works in the U.S, other countries need more direction at first as it is a new concept. There was no strategy to transition into internationalization. Lincoln decided to create a control incentive system to reduce costs and raise production in plants around the world to be competitive. With this transition, managers failed to meet production standards and financial goals every year. The managers exaggerated goals sent to Lincolns managers to receive additional resources. This was happening during the recession in Europe and South America. Bonus systems were not received well internationally because expectations were not clear because of the decentralized control.

When an organization works with a different system or has a different way of doing business, and do not prepare their employees for the expectations, the employees are not able to perform to standards. There was no training or development provided to help employees be successful in their tasks. Other countries work differently so we need to use a balance of hierarchal control and decentralized control. The countries that we are doing business in do not have a standard that is customized for their culture and management has not solicited feedback on how operation should be executed in their culture.

Solution

The solution that we recommend is to use hierarchal control which will set down the high standards for the employees and keep an eye on production while everyone is learning. Keeping a watchful by keeping tabs and providing feedback, the employees will understand what the standard is. To transition, globally, a solid strategy needs to be developed, and research completed on the country that the organization plans on starting business in to be successful. Part the strategy should be training and development.

Rothwell (2012) mentions how it is wrong to regard people through lenses of ones own values and cultural views about what is right and wrong. Based on my experience this is true, one will have a hard time adjusting to a different culture if ones mindset is not updated and your homework is not done for the country that you are visiting. People in other countries will value the fact that one has taken the time to research their country on how they behave in business and that we took the time to learn their language. This shows that we care and when we care, the employee will make the efforts as well. Adjusting ones approach needs to be taken in consideration when providing training or doing any kind of business in another country. Some tips gathered from Rothwell (2012) are to research a country beforehand, learn key words or the language the best to your ability, recognize how people participate, and work with reliable informants and local partners. Building connections with others will help create good rapport in relationships especially when your informants and resources are credible to the culture that you are interacting with.Comment by Dr. Dayton: Missing page number for citation of quote.Comment by Dr. Dayton: Rather than basing it on your experience, how about validating this statement based on research that has been published in the literature?Comment by Dr. Dayton: In formal writing, avoid "you." If used properly, second person "you" can draw the reader into a piece, but it can also alienate readers in the blink of an eye. Sometimes we do not want to be included in the author's writing. Don't impose upon your reader! So, while using the second person can be a very powerful tool under the right circumstances, it can also wreak havoc.

Conclusion

I observed assuming that employees in other countries will work the same as we do in business is not a good mindset to have. In order to be effective in bringing a business to another country, we need to be proactive and prepare for changes. Using decentralized control is not the best approach at first when going into a country new because employees are not aware of expectations and why one must have to empower themselves. In the U.S, we work differently and we are able to empower ourselves because of the flexibility of the management styles that exist. According to Daft (2012), open book management promotes information sharing and teamwork admits employees throughout the organization in the loop of financial control and responsibility to encourage active participation and commitment to goals. This may not be acceptable in other countries where financial controls are only known by executives in the company. I have found finding a balance use of decentralized control concepts and hierarchy control concepts will help transition a business in another country better. Starting off with more controlled operations to ensure understanding and expectations will help a company get off to the right start then slowly transition into decentralized control where it best fits, for example, development and training. As a manager, we need to know what we can and cannot do in a certain society and culture. Doing shows that we respect not only that individual but a culture and when we can adjust our approach, employees will notice the efforts and participate willingly in what an organizations expectations are. The last takeaway from this weeks unit is that it is not only a personality that you have to adjust to but ones culture and belief that may be deeply rooted. With change, a manager must know the great efforts, the time and patience it will take to make a transition like this successful. It is not a one size fits all in the business world.

References

Daft, R. L. (2012). Management. (10 ed.). Mason, OH: South-Western.

Rothwell, W. J. (2012). 13 PracticalRACTICAL tipsTIPS for tTraining in oOther cCountries. T+D, 66(5), 38-42.Comment by Dr. Dayton: Two thingsfirst, only the first word of an article title and subtitle is capitalized;Second, the ALL CAPS might have been appropriate for practical tips if that were an acronym for the 13 tips. (This was my first thought, since the phrase practical tips contains 13 letters.) However, its notthe 13 tips in the article cannot be listed as an acronym PRACTICAL TIPS. (Yes, I looked up the article and read it.)

GM501: Unit 5 Assignment: Lincoln Electric: Critical Analysis on the Philosophy of Control (Focus Paper)

Areas to be evaluated

Points Earned

Possible Points

Title Page

4

4

Introduction

1. What is the objective or purpose in studying and analyzing a case study and applying learning lessons you are gaining from the text?

2. What is the evidence that supports Lincoln Electric using a hierarchical or decentralized control approach?

3. What works well? Why?

8

8

Problem

1. Identify the problem.

2. What does not work well in transporting the control philosophy internationally? Why?

24

24

Recommendations

1. Based on insights you have gained in the readings, what suggestions would you offer to Lincolns managers in order to make future international manufacturing plants more successful?

24

24

Conclusion

1. Assess the function of control as a means for strengthening managements ability to manage quality and organizational performance.

8

8

Reference Page

1. Cite at least 2 sources identified in the Daft text.

2. Citation and reference per APA 6th edition.

3.5

4

Paper Length:

Write 4 pages, double-spaced, not including the title page and reference page.

4

4

APA Formatting

Appearance, Spelling, Grammar, Organization, and APA 6th Edition Format and Style

3.5

4

LATE Paper Deduction

0

-XX

Total Points Earned

79.0

80

Grade/Percentage Earned

99%