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Case
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Reference no. 9-308-S13
Spanish language
Published by: Harvard Business Publishing
Originally published in: 1998
Version: 22 April 1998
Revision date: 10-Apr-2019

Abstract

This is a Spanish version. Lincoln Electric, a 100-year-old manufacturer of welding equipment and consumables based in Cleveland, Ohio, motivates its US employees through a culture of cooperation between management and labor and an unusual compensation system based on piecework and a large bonus based on individual contribution to the company's performance. Despite opening a few international sales and production ventures in Canada, Australia, and France, Lincoln remained focused on manufacturing in the United States until 1988. At that time, the company's new CEO expanded manufacturing through acquisitions and greenfields in 11 new countries, attempting to transfer its unique management philosophy to each. However, Lincoln was unable to replicate its highly productive system abroad. Operational problems led to a major restructuring in the early 1990s, supervised by Anthony Massaro, a newcomer to the company. In 1996, Massaro was named CEO and set about expanding the company's manufacturing base through a new strategy. The case concludes in Asia, where Lincoln's regional president is trying to decide whether and how to establish a manufacturing presence in Indonesia, and in particular whether to try to transfer Lincoln's unique incentive-driven management system.
Industries:
Size:
USD1.1 billion revenues, 6,300 employees
Other setting(s):
1988-1997

About

Abstract

This is a Spanish version. Lincoln Electric, a 100-year-old manufacturer of welding equipment and consumables based in Cleveland, Ohio, motivates its US employees through a culture of cooperation between management and labor and an unusual compensation system based on piecework and a large bonus based on individual contribution to the company's performance. Despite opening a few international sales and production ventures in Canada, Australia, and France, Lincoln remained focused on manufacturing in the United States until 1988. At that time, the company's new CEO expanded manufacturing through acquisitions and greenfields in 11 new countries, attempting to transfer its unique management philosophy to each. However, Lincoln was unable to replicate its highly productive system abroad. Operational problems led to a major restructuring in the early 1990s, supervised by Anthony Massaro, a newcomer to the company. In 1996, Massaro was named CEO and set about expanding the company's manufacturing base through a new strategy. The case concludes in Asia, where Lincoln's regional president is trying to decide whether and how to establish a manufacturing presence in Indonesia, and in particular whether to try to transfer Lincoln's unique incentive-driven management system.

Settings

Industries:
Size:
USD1.1 billion revenues, 6,300 employees
Other setting(s):
1988-1997

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