If you are the CEO, what specific concrete steps would you take to restore the c

Question

If you are the CEO, what specific concrete steps would you take to restore the company’s reputation if it’s been dirtied? Why are these steps important?

EUTRICAL COMPONENTS SITUATION saw tur- be at incoln Electric has had an unusual relationship with its employees since it as founded by John C. Lincoln in 1895.92 The company has been on the utting edge of worker-friendly efforts. In 1923, it was among the first firms to fer company-paid vacation; in 1925, it was among the first to offer employee stock ownership plans; the first employee suggestion program was imple nented in 1929, and Lincoln employees received incentive bonuses beginning n 1934. Perhaps the most controversial of its programs, however, is its uaranteed employment plan: after three years of continuous employment with Lincoln Electric, workers are guaranteed their jobs. In the early 1980s however, the company experienced tremendous hardship. As a result of inflation, higher energy costs, and a recession in the United States, Lincoln's sales plummeted 40 percent. Company managers didn't know if they would be able to keep their promise of guaranteed employment. HOW THE COMPANY HANDLED IT The company was severely tested. However, not one Lincoln employee was laid off for lack of work. The company's loyalty to its employees was returned in 1993, when Lincoln urged its employees to attain record levels of sales and production. Employees voluntarily postponed 614 weeks of vacation in order to meet customer demands. Even after the financial crisis in 2008 and 2009 Lincoln seemed to be able to spread the pain across all ranks in an effort to survive the horrible economic conditions. Although austerity measures were needed, Lincoln still did not lay off anyone, and hasn't since 1948. In fact, here are some impressive facts from author Frank Koller, who wrote a book about Lincoln called Spark: How Old-Fashioned Values Drive a Twenty-First Century Corporation 2011 is the 78th straight year that Lincoln has made a profit. ? The total bonus pool distributed to employees in 2011 equaled 32 percent of pre-tax profit of $84 million. The average employee bonus was more than $30,000 ? The average total compensation of a Lincoln Electric employee was $79,000.93 RESULTS Incentive management is a cornerstone of Lincoln's culture. Having devel oped one of the first pay-for-performance systems in the country, this company

Explanation / Answer

Going by the case, I do not see any reputation hit or dirtied on Lincoln Electric due to below reasons:

1. Even at their toughest time they have not laid off any employees.

2. Loyalty was not expected only from the employees but also given from the employers side.

3. Employee empowerment was quite high.

4. Emphasizes was given on communication between employees and senior managers

5. They have been a live example for the word "Integrity".

6. They have proved that values stay ahead at all centuries

7. They were high on ethical standards

If I was the CEO, specific concrete steps I would take to restore the company’s reputation is as below:

1. Communication: The first thing is, I would showcase and communicate to the outside world how Lincoln electronic has stood tall even in the darkest times.

2. Brand: Build the brand value by emphasising on how it valued its employees loyality.

3. Financial statements: Announce the financial statements of profit to its investors. Also communicate effectively on how it shares its incentives with its employees

4. Culture: Maintain and pass on the same culture which it has currently and not make any unnecessary changes to it.

These steps important because:

1. Lincoln electrics has been an excellent role model for other organisations. Without communication with outside world this should not go unseen or unnoticed.

2. In order to attract more efficient talent building a brand is compulsory in this era

3. By showcasing the financial statements, Lincoln can actually prove its come back in the market.

4. Finally It is the excellent culture which has protected the organisation and hence for a good reputation this should not be touched or changed.

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