Chinese Company: Facts and Analysis on Lincoln Electric
Hi, this is a case analysis on Lincoln Electric (Chinese Company).
The purpose of this assignment is to Make a decision as to what are the major problems of the case.
With the problems in mind, think and search for alternative courses of action that would be feasible. Research is necessary at this stage. Consult general texts and special references pertinent to the problems. Searching the web (e.g., Google search 'Lincoln Electric in China' and reviewing Lincoln's website are recommended. If business conditions affect the solution, find the appropriate facts.
Analyze and evaluate the materials considering both the strengths and the weaknesses.
Decide on what your specific recommendations are to be.
This is how the format shall look
Summary of the facts: Present a brief summary of the important facts. Omit non essential facts.
Problems: State the problems or questions concisely.
Analysis: Present your analysis in outline form with complete sentences. Follow good practices in the use of spacing, indentations, and other techniques that invite attention to the important points, making your report easy to read. The makeup of your report is important. Express your ideas clearly. Support your ideas with adequate information and data. The strengths and weaknesses of alternative courses of action should be developed. The analysis should build to support your recommendation.
Recommendations: This section should be brief but an answer must be given to each of the problems or questions stated in #2 above.
Supporting evidence: Tables, charts, or other research-based information.
Bibliography: Sources of information that you found to be helpful in preparing the case should be cited here. This is essential.
The analysis is in an outline form (single space)
Attached is the case study one original file and modified.
Lincoln Electric
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Introduction
Lincoln Electric is headquartered in Cleveland, Ohio. The company specializes in welding and cutting equipment production, as well as electric motors. It boasts a successful management regime, especially in the United States. Its success centers on its great incentive system. The company is famed for its totally committed employees and its embracement of technology. Its incentive system in Cleveland for example, also called the piece rate payment scheme, which is a bonus system given at the end of the year, which places emphasis on individual performance. This bonus is sometimes as massive as one’s salary in some cases. Many other corporations usually strive to match or better the successes of the company to no avail. This paper looks at the entry of the company into the Chinese market and the dilemma it faces over the same, considering this is a new country with an entirely new culture (Bjorkman & Galunic, 2003).
Summary of the facts
There is a new leadership in place for the company, as Jeffrey Kundrach has replaced Julius Wu as the new General Manager. The prevailing situation is that the company is enjoying quite a tremendous growth in China, with much of what looked like an open, deserted place now filled with offices. The company took the opportunity of introducing automatic technology into the Chinese market, after the local stick companies kept engaging in a fierce fight for popularity and market domination.
Problems
The main problem with the company was the type of management and human resource policies that it would use in China. The company had a good and proud track record in its country of origin, but there still remained a big dilemma as to whether a similar strategy in management as the one used in the United States would be successful in China as well. If it was to apply the same technique, its longstanding dominance in the market would be placed on the line. The other dilemma is that, in case the incentive system is suitable for this Chinese and the bigger Asian market, when and in which way should it be implemented?
Analysis
The introduction of a new General Manager for the company is bound to be a challenge ,since it points to the fact that there lies uncertain times ahead(Redman & Wilkinson,2009) .The incoming manager will inevitably twitch a few things in terms of the company’s operations, and this might have far-reaching effects on the running of the company. The entry into a foreign market is bound to be quite problematic and full of friction due to conflicting cultures which translate to a clash in business and management practices.
The differences are bound to be on literally every facet of the organization’s existence and operations in the country. There will be the differences in the organizational structures first. The company’s hierarchical structure might not be the most suitable for the Chinese market. This is because the Chinese employees observe a cult-like following for the Kai Fu Lee practice, where they want to have a close tie to the company’s national leader (Marchington & Grugulis, 2000).
For example Google Inc. experienced a similar problem in China,where the employees needed closer relations to the company’s regional leader in order to stay relevant and be treated without bias.This is because they fear the marginalization that they might face from their fellow countrymen if they are openly working for the company.
The graph below clearly illustrates this concept.
As can be seen, the concept of teamwork is interpreted differently in these two different cultures.
The option of going it as a fully owned foreign organization is bound to be a tricky one. On the more positive side, the company as an independent foreign entity will enjoy the privilege of independent decision making as well as the personalization of property rights (Paauwe & Boselie, 2003).However, the darker side will mean that the company continues operating under the continuous scrutiny of the Chinese government. It will also be subject to the approval by the country’s citizens, which can go either way. There is also the difference emanating from the barriers in language and culture.
The company should look into the methods it can use to ensure its way of management back home is slowly integrated into the Chinese market. The first option can be to go into it as a joint venture. The joint venture will involve the alliance between the company and a local firm. This will enable it to seamlessly ease into the Chinese market without necessarily raising much storm (Briscoe & ...