After reading the case study, I really think that Lincoln uses decentralized approach since there is organizational flexibility and responsiveness brought by autonomy. Because of this, they have greater chance to motivate and involve their workers. There is more room for innovation due to which the concept of bureaucracy vanishes off. For e. g. as the case study, itself says that their cross functional teams make decisions and take responsibility for product planning, development and marketing. Plus the company’s operation information is easily shared among the workers to make their task more convenient.
Although they have drawn a proper line between managers and workers yet workers are free to express if they think they are paid unfairly and face to face interaction is encouraged. Not this but LE has fostered an “open-door” policy between production workers and executives and it places a strong emphasis on the inflow of ideas and worker input. This eventually allows for creative ideas and suggestions on the production process to be spread over the whole corporation. As a result, we can see that there is a steady increase in LE’s productivity per worker.
ANS. 2) Because LE has an absolute service and customer oriented approach, this has
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Then there production workers are paid on piece rate and merit basis which helps them to bring more work quality in their products and then deliver their best to the customers. ANS. 3) The major mistake that LE did was when there managers saw the local competition to beat local competition by applying manufacturing control incentives to reduce costs and raise production around the world. Failure to control spending and keep costs low undermined the desire to increase output through expansion.
And especially during the times if recession they were running out of resources which made the more difficult to increase sales as workers were short of work and used to sit idle, there was no productivity pulled by the workers. This analysis of cost-reduction and market expansion raises several questions and I think that there should be no annual bonus for some time because the economy is so shifty and volatile that it would most likely not affect daily effort of workers. Plus if there would be a job security, it would easily encourage intense loyalty and be a strong factor in building a consistent workforce.
Not this only, but LE should utilize selection to provide the company with local contacts and recommendations so that errors made earlier in incentive management can be properly addressed and altered. This would eventually help them to make future international plants more successful. ANS. 4) No it should not borrow money or pay bonuses as I mentioned earlier that it will not affect the daily efforts by the workers because of economy being so volatile, it will only worsen the situation.
They should build a strong workforce to enforce a strategy of increasing their sales and quality as there motive was, “service + customer oriented = customers satisfaction,” which means the better the quality, the more the profits they earn. If they won’t work on this their quality production level will hinder badly with a devastating effect on the entire company as they would be compromising on customers’ expectations.
By borrowing money they will incur heavy losses which will only burden them towards a poor control incentive system and poor quality service and their plants will eventually fail to meet their production and financial goals every year. Bibliography 1. Dave Hall, Carlo Raffo , Business Studies 2nd edition Causeway Press Ltd 2. George, A. L. (2005). Case studies and theory development in the social sciences. London: MIT Press 2005. 3. Schuler, R. S. (2007) Strategic Human Resource Management. 2nd Edition. Wiley-Blackwell Publishers.