LE’s organizational culture
The value of recognizing that people are the most valuable assets in the company and maintaining the system of incentive management for its employees has helped LE to effectively cultivate an all time organizational commitment towards it employees and as a result, people are more willing to work in the company as compared to working in other companies (Toflo ; Wazlawick, 2008: pp. 1955-1967). LE adheres to this value through several practices including the use of federal standards and policies.
It ensures that all its employees work in a healthy, safe, clean and conducive environment to protect them from any bodily harm or substantial risks. In addition, the company equips all its employees with diverse skills which enable them to work in multiple departments as a way of broadening their intellectual and practical knowledge. LE demands that all its employees practice maximum integrity, discipline, business ethics and exhibit professional behavior when dealing with customers as well as with fellow employees.
In the same spirit of valuing people as the most valuable assets, the company highly recognizes and rewards the employees’ hard work and achievements through a pay-for-performance incentive system whereby those employee who exhibit an extraordinary performance above what is expected of them by the company are rewarded heavily. The company’s incentive philosophy recognizes the practices of working as a team and giving incentives to the employees as the most favorable and profitable ways of achieving the company’s long term goals at a low cost.
This plan is dependent on the practice of work ethics as well as cultivation of positive employees’ attitude within the company which yields quality production at low manufacturing costs. Through the incentive system, the company encourages its employees to be involved in a dynamic team work which ensures improved product quality and reduced costs. From the core values mentioned above, LE has cultivated an organizational behavior which has made it a profitable and desirable employer for many. LE’s organizational culture is based on strong motivational policies through financial as well as attitude manipulation techniques.
A great commitment and a positive attitude at all times are some of the examples of motivational policies which are strictly adhered to by LE’s organizational culture. The culture also believes in both personal and ability job fits which emphasizes on developing both the employees’ personal and ability skills for maximum productivity. LE’s organizational culture which is in practice today is mainly based on the wider context of the U. S societal values which emphasizes on individualism, avoiding uncertainty, masculinity and a low distance to power.
This societal values are in consistence with the six core values put forward by the company’s original philosophy. Lincoln’s culture is reflected in the company’s Human Resource Management practices when dealing with the employees(Angel, Junquera ; Ordiz, 2008: pp. 6029-6053). This includes piece work pay system for every individual employee and a bonus system for sharing out the profits incurred. Due to the diversity of this organizational culture, the company has been able to recruit and maintain many productive employees whose individual values fall in line with the company’s HRM policies.
LE’s organizational culture has been very helpful in assisting the company to achieve great success locally. However, this organizational culture served as a major hindrance to the company’s global expansions back in the early 1990s when the company tried to expand internationally. This is because the company transfered the HRM policies employed locally to international locations without making some modifications to fit the requirements of local values.
Lincoln’s failure in international expansions has been attributed to a mismatch between the company’s core values and the societal values of the locations where the company sought to expand. For this reason, the company’s values and culture contradicted with the values of the employees in this new environments locations leading to major losses for the company in terms of money and public confidence. Harris (2008: pp. 390-401) argues that, if LE had focused more on modifying their HR practices to fit the local societal values as well as the individual values, it would have performed better in its expansion strategy.
Helfetz and Linsky (2008: p. 10) have also argued that LE management should have strived to first identify the aspects of the company’s organizational culture which were likely to be compatible with the local cultures and which ones were not. From this point, the management would have identified ways in which to modify those HRM practices which were not in alignment with the societal values in order for them to be consistent with the local culture as well as the company’s organizational culture.
Ghoshal (1991: p. 11) believes that for a company to successfully integrate its operation globally, its organizational structures must reflect the needs and values of both the local and international societies. LE’s lack of proper consideration of the local values of various countries during its global expansion strategy was the main reason of failure. The incentive pay-for- performance system which has been very successfully in its operations in the U. S was a flop especially in the European countries where the company sought to establish its operations back in the late 1980s and early 1990s.