Lincoln Electric:  Venturing Abroad

Christopher A. Bartlett; Jamie  O'Connell

Case | HBS Case Collection | January 1998 (Revised April 1998)

Lincoln Electric: Venturing Abroad

by Christopher A. Bartlett and Jamie O'Connell

Abstract

Lincoln Electric, a 100-year-old manufacturer of welding equipment and consumables based in Cleveland, Ohio, motivates its U.S. 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.

Keywords: Acquisition; Restructuring; Transformation; Construction; Compensation and Benefits; Management; Market Entry and Exit; Labor and Management Relations; Competitive Advantage; Expansion; Manufacturing Industry; Ohio;

Format: Print

22 pages

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Citation:

Bartlett, Christopher A., and Jamie O'Connell. "Lincoln Electric: Venturing Abroad." Harvard Business School Case 398-095, January 1998. (Revised April 1998.)

The case traces Bryan Upton’s 20-plus years as managing director of a Sheffield-based cutlery company and describes the strategic and organizational actions he took to raise sales and earnings at more than 25% annually, even as the local industry was in steep decline.
After outlining how the U.K. cutlery industry has evolved, the case describes the major changes introduced by Upton and his mentor Jerry Hahn in Richardson Sheffield to upgrade production technology, innovate the product line, and instill customer orientation. The case focuses on the impact of Upton’s controversial approach to human resource management in general and to management selection and development in particular on the organizational climate at the firm.
The case closes by identifying some major changes that threaten Richardson Sheffield. In 1986, Hahn’s ownership position is sold to an Australian industrial company with a different operating style and different strategic objectives for Richardson Sheffield. Top management is also undergoing a transition, with Upton gradually moving aside and outsiders being introduced. Finally, the approaching 1992 EC market harmonization presents new competitive challenges and market opportunities.

Teaching Note | HBS Case Collection | June 1995 (Revised September 2019)

Richardson Sheffield

Christopher A. Bartlett and Ashish Nanda

This note was prepared to aid instructors in the use of "Richardson Sheffield," HBS No. 392-089. The case traces Bryan Upton’s 20-plus years as managing director of a Sheffield-based cutlery company and describes the strategic and organizational actions he took to raise sales and earnings at more than 25% annually, even as the local industry was in steep decline. After outlining how the U.K. cutlery industry has evolved, the case describes the major changes introduced by Upton and his mentor Jerry Hahn in Richardson Sheffield to upgrade production technology, innovate the product line, and instill customer orientation. The case focuses on the impact of Upton’s controversial approach to human resource management in general and to management selection and development in particular on the organizational climate at the firm. The case closes by identifying some major changes that threaten Richardson Sheffield. In 1986, Hahn’s ownership position is sold to an Australian industrial company with a different operating style and different strategic objectives for Richardson Sheffield. Top management is also undergoing a transition, with Upton gradually moving aside and outsiders being introduced. Finally, the approaching 1992 EC market harmonization presents new competitive challenges and market opportunities.

Keywords: Development; general management; Human Resources; Management; Leadership; Strategy; United Kingdom;

Citation:

Bartlett, Christopher A., and Ashish Nanda. "Richardson Sheffield." Harvard Business School Teaching Note 395-212, June 1995. (Revised September 2019.) View Details

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Describes the entrepreneurial leadership of Jack Manning Bancroft (JMB), a young Indigenous Australian university student who created the Australian Indigenous Mentoring Experience (AIME), a nonprofit organization he formed to respond to the problem of Indigenous high school students completing high school at less than half the rate of non-Indigenous students. The case traces the strategic, organizational, and cultural challenges JMB faced in building an organization that eventually offered mentoring partnerships to 8,000 Indigenous students in 350 high schools throughout Australia. Furthermore, the AIME students were completing school and going on to university at the same rate as non-Indigenous students. The case concludes as JMB contemplates taking his successful, sophisticated model to the United States.

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Lincoln Electric: Venturing Abroad

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