Introduction a. Joint presentation b. Agenda and timeshare I. Introduction 2. Early History of Lincoln electric a. Founded by James F. Lincoln in 1895 in Cleveland, Ohio b. Closely held until 1995 with voting rights of active in 2005 c. Produces welding equipment – expensive I. Less produced in tougher economic times d. Produces consumable supplies – commodity priced I. Still produced in tougher economic times and helps the company weather the storm 3. Founding philosophy of James F.
Lincoln – the Incentive Management System (“AIMS”) a. Piecework b. Annual bonus c. Guaranteed employment d. Limited benefits 4. How has the AIMS worked in the US market a. Good news I. Productivity it. Lay-offs iii. No union ‘v. Survived the 2008 economic recession b. Bad news I. Some employee complaints I’. There were some layoffs in 2008 5. International Expansion a. Expanded manufacturing to Canada in 1925 b. 1938 Australia c. 1955 France d. Between 1988 and 1992 plants acquired in 9 more countries I. 6. How has the ‘MS worked in the international markets 7. 996 “A New Approach” a. Expansion into the developing markets of Latin America and Asia b. Lincoln Electric – Asia I. Strategy 8. Potential Expansion into Indonesia – local production of consumables a. Country and market b. Competition I. How to compete? 1. Commodity price war Recession and Tougher Economic Times By papacies 3. Other c. Economic and Political Risks d. Market entry options I. 100 ownership it. Joint venture iii. Other Should Lincoln adopt its incentive policy? It should adopt local incentive policy.
Piecework – NO (under piecework system most workers could earn more but some errors could earn less) no factory in Indonesia was using piecework. How to introduce piecework into Indonesian market??? Will it be working??? Indonesian workers are more effectively managed with traditional management methods. Annual bonus merit-based- NO (it could put the earnings of the lowest ranked workers below what they might have earned with a traditional two-month guaranteed bonus). Guaranteed employment – YES Limited benefit – YES Individual or team incentive system? > Team incentive system (Asian culture)