LINCOLN MANAGEMENT SYSTEM 7
Inthe study of organizational theory, management theories are paramountto understanding. Management theories date back to the pre-scientificmanagement period, and evidence are in the days of early Mesopotamia.Many proponents have discussed various management theories and theirapplicability in the running of organizations. The culture of anorganization is influenced by the behavior of the people. People makeorganizations run efficiently and effectively. The scientificmanagement theory was advanced by Fredrick Taylor, who was amechanical engineer working in the United States of America.Scientific theory refers to the process of applying scientificmethods and analysis procedures to improve the functioning of theorganization. The theory focuses on the actual physical unitsproduced by workers in the organization. Organizational structure anddesign are two key factors in the determination of success or failureof a given firm.
Hierarchyof authority in the management refers to the aspect of who reports towhom and also the span of control for each manager (Slack 2006). Thenumber of employees, a given supervisor controls or reports to him,is commonly known as span of control. There are severalorganizational structures each depending on a given company. However,the most common structures are: centralized and decentralizedorganization structure. Where a given number of decisions are made bya solitary person, the structure is known as centralized. On theother hand, a decentralized organizational structure employs the roleof teamwork in decision making process (Lussier 2008).
Lincolnapplies the decentralized approach of management in the running ofthe organization. This is evidenced by the openness and trust amongthe employees and top management. There is also the free flow ofcommunication with no give specific chain of command. This system ofmanagement is advantageous because different people are endowed withdifferent skills (Slack 2006). Additionally, there is a sharedcontrol and spirit of co-ownership of the task being performed. Theeffects are highly motivated employees who have the desire toperform. The absence of a complex chain of command is anotherinstance that shows the decentralized approach of management atLincoln. Another instance of decentralization at Lincoln is the opendoor policy at all levels. This policy encourages communicationthereby solving any problem as it arises (Lussier 2008).
Successof Lincoln system at its United States plant is based on severalfactors ranging from management, employees and also customer focus.Among the key factor to success is a strong and powerful incentivecontrol system. Employees are rewarded based on their performancelevels and also bonuses are offered. Vroom Expectancy Theory (1960)focuses mainly on effort, performance and reward (Slack 2006). Thetheory observes that there is a force that lures an employee to putmore effort so as to enhance performance thereby resulting intorewards. The theory is applied at Lincoln, and that is why employeeshave high levels of performance. End year bonuses based on the profitlevels of the organization are another source of motivation for theemployees who tend to perform.
Equityat any given level of organization management is another key factorto success. Stacy Adams Equity Theory (1965) states that, there is aninfluence from the feelings as equity and fairness (Lussier 2008). AtLincoln, employees are made to feel equal to another through thevarious incentive programs adopted. The policy of trust and opennessis a key to promoting equity and fairness at the workplace. Employeesare allowed to make complaints in case the compensation programadopted not fair. This aspect of control makes them feel part andparcel of the giant plant. Equity is achieved where employees areencouraged to work as a team to promote cohesion and integration.
‘Peoplecome and go but organizations remain’ this echoing by managementguru Max Weber emphasis on the importance of value addition toemployees and also the organization (Lussier 2008). Lincoln has apolicy of hiring people right from high school and incorporating themin their training program. This in itself is a success story sincethe employees have a chance to gain the practical aspect of the jobas well as perform. The organization also employs the personnelconfiguration policy whereby people are deployed to the variousdepartments according to their skill level. This is based on thetheory of specialization developed by Professor Adam Smith (Daft2013). From this policy, the organization can retain its employeesthus lowering the rates of employees’ turnover.
Customerhas always been said to be the boss, and this is confirmed at Lincoln(Daft 2010). There is a policy of maximum customer focus. Anycustomer problem is resolved immediately and in a detailed manner.The sales people involved with channels management are well trainedto equip them with the right skills of the products. They areundertaken through a technical training aimed at raising theirawareness levels on the products of the company. Customer relation isanother area of training that is given to the sales people to improvetheir customer interaction. Quality in the production process isstrictly observed to meet the customer needs. Innovation is not leftbehind at Lincoln since they have software that ensures a smooth flowof goods in the production process (Daft 2013).
LincolnControl System faces a challenge in entering new foreign markets. Oneof the major problems that lead to the challenge is the belief thatthe foreign plants could be managed at the headquarters. This createda loophole for manipulation and exaggeration of data as seen from thecase study. Entering a new market calls for patience and interactionwith the local community. Lincoln decided to buy or build new plantswhich are a costly undertaking. There is also a problem with theculture in those foreign markets. Lincoln control system employs theAmerican culture which is different from that of foreign market. Thelabor market in a foreign market does not embrace piece work andbonus systems which were the key to success of the Lincoln (Slack2006).
Infighting for success, as well as market share in the foreign market,Lincoln should do the following among others. There is a need tolearn and embrace the new culture in a foreign market (Daft 2013).This will eliminate cases of alienation of their products.Additionally, Lincoln should study the legislation requirements ofthe new foreign markets and embrace them. Management should bepracticed at the national level and not necessarily from theheadquarters. Market research should be prioritized in any task ofentering a new market. Moreover, training should be carried out forthe locals to understand the working of the system (Lussier 2008).Finally, but not the least, employees should be sourced from thelocal communities.
Managementtheories clearly show the effect of motivation to the level ofemployee performance. At Lincoln’s employees have a higherexpectation every year end from their annual performance. Themanagement should conduct a cost-benefit analysis in the event theyopt to borrow money so as to finances the bonuses (Lussier 2008). Theopen system of communication should take control, and all employeesshould be allowed to air their views. In the event that the employeesfail to support the program of lack of bonuses, management shouldcome up with new ways to fix the problem. Using debt capital tofinance payment of bonuses which are not a revenue generating eventis not advisable (Slack 2006). Therefore, the best policy to apply insuch an event is to forego the bonuses for the good of maintainingthe stability of the organization financially.
Contingencytheory of management expounds the concept of contingent running ofthe organization. It is advocated that, there are no laid rules forrunning organizations effectively. For the case of Lincoln, thefailure of foreign-based plants is a contingent event which iscontrollable through proper planning. This behavioral theory suggeststhat, many factors affect the running of the organization. Theseaspects are both internal and external to the working environment. Itis also a paramount thing for the organization to adopt newtechnological ways and methods of production so as to remain relevantand competitive. Management should select wisely the technology usedin management and production for them to remain competitive in themarket. Although Lincoln terms the retention of its staff as asuccess story, there is a need to hire from outside to bolster theexpertise levels. A clear master plan is a key in handling anycontingent event in the management of an organization.
Daft,R. L. (2010). Management.Mason, Ohio: South-Western Cengage Learning.
Daft,R. L., & Marcic, D. (2013). Understandingmanagement.Australia: South-Western Cengage Learning.
Lussier,R. N. (2008). Managementfundamentals: Concepts, applications, skill development. Mason, OH: South-Western/Cengage Learning.
Slack,T., & Parent, M. M. (2006). Understandingsport organizations: The application of organization theory.Leeds: Human Kinetics.