Mckinsey and Lincoln Electric

Lincoln Electric Company is seen as the world leader in arc welding and cutting products. The demand for welding products is consistently rising given exponential growth in important sectors of construction and energy and similar infrastructure projects. Important end markets for Lincoln Electric include pipeline, building, metal forming, power facility construction, defense and construction industries etc. McKinsey's 7-S Model can be applied to Lincoln Electric Company to analyze the company's strategy and management policies. These seven S. cover some important strategic areas of operations including strategy, structure, systems, style, skills, staff and shared values. These are some core-competencies which are to be addressed carefully in order too successfully proceed in a competitive market. Lincoln Electric Company operates in a very tough environment where industry has place for only a limited number of players. Every single player has to literally fight for shrinking projects in order to survive and for this reason; Lincoln's latest strategy is global expansion. The firm understands that it is important to make its presence felt in other regions of the world in order to gain greater share of a very narrow market. North America is one region where growth has been more or less stagnant for last few years and for this reason Lincoln took its products to greener pastures including Asia Pacific, Eastern and Western Europe. While the growth in former two regions has been promising, Lincoln faced some problems in Western Europe where demand was low and projects rare came by. However things have been encouraging in Eastern Europe and Asia Pacific. In Eastern Europe, the firm had acquired Bester in 2002 and is now operating through Bester distribution system to increase its share of the market.

Lincoln completely adheres to a serious ethical code of conduct and its values are based on that alone. The firm maintains that it is important to do the right thing instead of what is in fashion or what is being accepted to make quick money. These values are carefully instilled in its employees too. The company values its employees and regularly offers incentives and performance-based pay system to ensure that hard work doesn't go unrewarded or unnoticed. The reason this firm has lowest turnover rate and the fact that its employees are very loyal is grounded in the treatment and respect accorded to people in this company. The company treats its employees like family members and one important sign of its trust is the fact that over 90% of company stock is held by family and employees. Even when employees want to sell stock, the first one to approach is the company itself and money is given to employees within 24 hours of purchase. Communication is always open and junior staff can always approach members of senior management team. This system has been in operation since 1914 and says a great deal about the kind of the culture that prevails in this organization. The firm also believes in maintaining strong relations with its shareholders because this promotes an air of trust and confidence. Lincoln Electric has been thriving in a competitive industry because of organizational structure that is highly flexible for communication and autonomy and its growth can also be attributed to its ethical values that every employee is required to share.