Lincoln Electric Case Paper - Essay Example

LINCOLN ELECTRIC CASE PAPER 09 March LINCOLN ELECTRIC CASE PAPER Overview of key elements of the case Lincoln electric isa manufacture of welding equipments with a present global outlook. With its headquarters based in Ohio, the more than a century old company has experienced a gradual expansion process from a local organization to a global market player. Though expansion to the international market started in the year 1925 in Canada with subsequent ventures in other countries such as Australia and France, major growth was witnessed in the company’s local market.

This was attributable to the company’s organizational culture with respect to human resource management. Remuneration and rewards to employees particularly played a major role in establishing a ground for growth of the company. The company, for instance, used a motivational approach in which employees were rewarded on both “piece rates and an annual bonus” based on employee’s commitment to the organization (Mhhe, n.d., p. 47). The extent of monetary incentives is reported to have been as high as half the employees’ salaries (Mhhe, n.d.).

Another important element of the organization has been its human resource management culture. The company’s organizational structure allows for proper vertical communication between employees and management. With this respect and based on the concept of ‘self-reliance’ and competition for intra personal development, the company has promoted ‘self-driven’ human resource force that is evaluated through “output, quality, dependability and ideas/ corporation” (Mhhe, n.d., p. 47). Following the success in controlling its domestic market, the company, throughout the twentieth century rolled up its sleeves to expand its international influence.

This was pursued through establishing plants in foreign countries as well as making acquisitions. With success in France, Lincoln ventured into a speedy expansion venture that did not succeed in other foreign countries, except in Mexico. The major reason for this failure was lack of experience n international human resource management and cultural difference between the United States’ market and the foreign markets. Coupled with the economic recession towards the end of the twentieth century, the company’s progress deteriorated prompting for recruitment of managers with sufficient experience in international human resource management.

Subsequent successful restructuring of the organization’s approach to internationalization incorporated local expertise in its management (Mhhe, n.d.). Reasons for Lincoln’s success in the US and the role of HRM in the success Lincoln’s success in the United States was due to cultural harmony that ensured corporation between workforce and management. Human resource played an important role by identifying appropriate motivational culture for its employees leading to successful operational processes.

Potential problems associated with Lincoln’s practices in China Lincoln is likely to experience a number of problems in China due to cultural difference. Identified differences between the United States human resource culture and those in foreign economies such as attitudes towards rewards and working for longer hours are examples of related problems that the company might experience in china. Chinese might reject employee incentives and long working hours that are acceptable in the company’s domestic environment (Mhhe, n.d.).

Conclusion Lincoln should not introduce its domestic practices in china. This is because from experience, the company has learnt that its domestic policies are incompatible with cultures in some foreign countries. Lincoln should therefore establish local approaches, with the aid of Chinese expertise that will be acceptable in the Chinese culture Reference Mhhe. (n.d.). Three faces of human resource management in the international firm. Retrieved from: http://www.mhhe.com/business/management/evans1e/info/evans_ch02.pdf