Lincoln Case Study Questions

1. How would you describe Lincoln's approach to the organization and motivation of its employees?

Lincoln's overall strategy was to focus on continuous cost reductions and cost savings transfer to customers because management believed that company's strength was in manufacturing and Lincoln could deliver to customers quality products at a lower cost than their competitors. On the other hand, Lincoln believed its incentive system and the climate it fostered were responsible in large part for the continual increase in productivity. Under this incentive system, employees were handsomely rewarded for their productivity, high quality, cost reduction ideas, and individual contributions to the company. In other word, an employee's earnings and promotion are in direct proportion to his individual contribution toward the company's success.

2. What role do you think this approach has played in Lincoln's performance over the last 25 years? Have any other factors been more important?

The incentive system has played the most important role in Lincoln's performance over the last 25 years because management believes that through competition and adequate incentives every person could develop to his or her fullest potential. Therefore, it has resulted in high labor productivity and subsequently relative low production cost. Besides the incentive system, there are other important (but not more important than the incentive system) factors such as top field sales force, innovative plant, and high administrative productivity.

3. What factors will be critical to Lincoln's continued success?

The most critical factor to Lincoln's continued success is whether management can keep providing attractive incentive and compensation to their employees and keep their employees enjoying the competitive and motivated working environment. Furthermore, management should continue to be to have everyone in the organization recognize that the common goal of the company is to give the customer the quality he needs, when he needs it, at the lowest cost.

And management still needs to assure that the company keeps up with the technology and have sufficient profit to pay the suppliers of capital. Then management has to make sure communication can be maintained adequately.

4. What recommendations would you make to Mr. Willis?

Mr Willis has done great job keeping costs at the lowest and motivating employees' productivity. However, since today's market is changing dramatically, past success experience may not apply in the future. Competitors may learn to imitate Lincoln's low-cost and incentive strategy. And Lincoln's low cost and incentive strategy