Lincoln Electric
1. Why did Lincoln’s early international expansion efforts fail?
I think that the main reason why Lincoln’s early international expansion efforts fail is that company has lack of international experience. Therefore they made a lot of mistakes while they were trying to expand the company’s international manufacturing presence. The first mistake was that they tried to implement their incentive system instead of the system that existed in acquired plants. Willis didn’t take into account the cultural differences between countries. For example, European managers and workers were philosophically opposed to piecework and seemed to value vacation time more highly than extra income from bonuses. I think that for implementing new incentive scheme Lincoln also chose wrong mode of entry into European market. Afterwards European plants went into troubles. Another mistake was that corporative executives paid little attention to their subsidiaries; the whole company became very decentralized. HQ didn’t know real causes of troubles in their plants and deemed that their incentive scheme would increase productivity and solve their financial problems, it was also low level of collaboration between plants. After that the headquarter of company realized full scale of troubles and tried to assemble an International Strategic Liaison Team to analyze the foreign operations. In this step they also made a mistake. Instead of assembling this team from managers which were aware of situation In European plants it was comprised entirely of Cleveland-based managers. All these mistakes in common made Lincoln’s early international expansion efforts unsuccessful.
2. What is your evaluation of the company’s new internationalization strategy under Tony Massaro’s leadership? Is it likely to be more successful than the previous offshore initiatives? Why or why not?
Tony Massaro was the first CEO with substantial international experience. To my mind his internationalization strategy was more
I think that the main reason why Lincoln’s early international expansion efforts fail is that company has lack of international experience. Therefore they made a lot of mistakes while they were trying to expand the company’s international manufacturing presence. The first mistake was that they tried to implement their incentive system instead of the system that existed in acquired plants. Willis didn’t take into account the cultural differences between countries. For example, European managers and workers were philosophically opposed to piecework and seemed to value vacation time more highly than extra income from bonuses. I think that for implementing new incentive scheme Lincoln also chose wrong mode of entry into European market. Afterwards European plants went into troubles. Another mistake was that corporative executives paid little attention to their subsidiaries; the whole company became very decentralized. HQ didn’t know real causes of troubles in their plants and deemed that their incentive scheme would increase productivity and solve their financial problems, it was also low level of collaboration between plants. After that the headquarter of company realized full scale of troubles and tried to assemble an International Strategic Liaison Team to analyze the foreign operations. In this step they also made a mistake. Instead of assembling this team from managers which were aware of situation In European plants it was comprised entirely of Cleveland-based managers. All these mistakes in common made Lincoln’s early international expansion efforts unsuccessful.
2. What is your evaluation of the company’s new internationalization strategy under Tony Massaro’s leadership? Is it likely to be more successful than the previous offshore initiatives? Why or why not?
Tony Massaro was the first CEO with substantial international experience. To my mind his internationalization strategy was more