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.)

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Lincoln Electric: Venturing Abroad

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