Lincoln Electric Case

In: Business and Management

Submitted By ehuberdeau
Words 694
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Lincoln Electric, a company started over a century ago by John Lincoln had grown from a small electric motor company into the worldwide leader in welding consumables and other innovative products. It's success is attributed to dynamic and innovative products coupled with leadership based on shared-knowledge and adaptable incentive plans for it's employees.

These incentive plans included company stock offerings, stock bonuses, good salaries, paid vacation, and guaranteed jobs. The incentives were believed to have contributed to the incredible success of the organization, and could be utilized as a model to their international operations..

Though Lincoln had a string of international success in their Canadian, Australian, and French operation,they were failing to realize profits internationally despite having rapid sales growth. Their balance sheet took a major hit as their debt began to climb, and were beginning to run low on cash.

There were a number of causes to this failed policy. Just to name a few, acquisitions, management, and a poor business environment. As a result of their acquisitions, they were entering new markets that had poor labor management, unions, and low productivity. The management was dislocated abroad, and local management was highly inadequate. Secondly, the business environment was also poor. They were in the middle of a global recession, and the market was overpriced for companies. They would eventually learn from their mistakes, raise cash through a sizable 123 mm equity offering and bring in a new CEO.

In the 1990's, Tony Massacor was brought in as the new steward to built on past success and usher in a new era. Throughout this period, Lincoln was successful while competitors like GE, BOC, and WestingHouse struggled. The mistakes they would later learn from when they plan to enter into the Asian market.

Their success…...

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