Many overseas managers had no desire to increase sales, and workers were found sleeping on benches because not enough work was available.
The European labor culture was hostile to the piecework and bonus control system.
Management was not properly trained and/or experienced with the markets they were entering, thus, not able to adjust the incentive program to suit the priorities of employees.
Additionally, no structure was in place to properly administer the new operations because the internal focus of the firm remained on Cleveland.
This strategy would serve as a first step from which LECO can reassess its expansion when it is more confident with the market.
They would have the opportunity to scale back the venture if it proves unsuccessful or buy out the remainder of the venture if they want to increase exposure.*Compensation: Lincoln Electric's incentive system, in its current form will not be effective in Indonesia.According to expectancy theory, employees are motivated by the belief that they can expect to achieve certain desired rewards by working hard to attain them.*Instrumentality: Rewards are explicitly linked to a measurable performance.*Positive Valence: employees value the rewards that are offered to them for desirable behaviors. There were many factors that contributed to LECO's failed attempt at internationalization.It is evident that Willis ignored a variety of cultural and macroeconomic effects related to his plan.What features of LECO account for its long-term success in the US?There are several factors that have contributed to the long-term success of Lincoln Electric in the US.According to (Daft, 2010) open-book management is used in decentralized organizations to share the financial condition of a company with all employees. Based on what you’ve just read, what do you think makes the Lincoln System so successful in the United States? Tasks are precisely defined, and individual employees must exceed strict performance goals to achieve top pay. Production workers are paid on a piece-rate basis, plus merit pay based on performance.Open-book management encourages active participation in achieving organizational goals, helps the employee understand how his or her job affects the financial success of the organization, and allows employees to see the interdependence and importance of each business function (Daft, p. Employees are also eligible for annual bonuses, which fluctuate according to the company’s profits, and they participate in stock purchase plans. The company has an open-door policy for all top executives, middle managers, and production workers, and regular face-to-face communication is encouraged.Workers are expected to challenge management if they believe practices or compensation rates are unfair.Running head: LINCOLN ELECTRIC CASE STUDY Lincoln Electric Case Study Edris Holland Grand Canyon University Leading As a General Manager: LDR 620 Professor Brian Johnson July 27, 2011 Lincoln Electric Case Study Lincoln Electric Case Study Questions 1.Does Lincoln follow a hierarchical or decentralized approach to management? Lincoln follows a decentralized approach to management.