Lincoln Electric Essay

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International Business LINCOLN ELECTRIC CASE REPORT SUBMITTED TO: Dr. R Raghunathan Assistant Professor, HOD Management Group SUBMITTED BY: Manikanta Varma S 2011H149241 BIRLA INSTITUTE OF SCIENCE & TECHNOLOGY PILANI, RAJASTHAN -333031 13th August 2012 Introduction: Founded by John C. Lincoln in 1895 in Cleveland to manufacture electric motors and generators. Later on it became a world leader in sales of welding equipment and supplies. James F. Lincoln, John’s younger brother joined in 1907. His independent ideas about human motivation formed the basis of Electric’s management methods and incentive compensation. Incentive management at Electric is very well structured and it contains four main components: Piece work, Annual bonus, guaranteed employment and Limited benefits. Lincoln’s incentive program and innovative management style like open door policy established a very strong culture that encouraged every individual employee to produce and innovate. Lincoln entered into the markets of Canada in 1916, Australia in 1938, and France in 1955 and they succeeded in these ventures mainly because of their incentive system and it is the most essential factor for their competitiveness. Local authorities were given the power to manage the ventures as they would have better understanding of local conditions. Assistance was given from management at USA through deputed managers. Because of severe recession in Europe and Japan, the company’s sales were hit hard in few of the subsidiaries and in France. Hence, the company decided to shun the subsidiaries making losses. Rest of them was rationalized for improved product lines and cooperation. In 1995, they realized the necessity of expanding globally and they did it in a style by creating an international HUB which includes five operating regions. In each region they carried out a detailed analysis to get clear

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