ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Lincoln Electric Case Study Analysis

Updated on April 8, 2014
Lincoln Electric mechanical engineer Erin Justice
Lincoln Electric mechanical engineer Erin Justice | Source

Overview of Key Elements of the Case of Lincoln Electric

The key elements of the Lincoln Electric Human Resources Management (HRM) case study are several. First, Lincoln electric established consistent HRM policies to build trust. This has been true since inception. This long history promotes confidence in employees and surety of future reward. Workers average $17,600 per year on standard 32 hour work weeks. They are able to earn about this same amount again in bonuses. This system creates high productivity. Lincoln Electric operates on a system of equality, cooperation, and need. Each employee is given the same number of hours as others. When business slows, all workers reduce hours equally. When overtime is needed, this workload is also distributed without favor to the workers.

Industry Leader

Today, Lincoln Electric is the largest manufacturer of welding equipment. Lincoln Electric sells a wide range of products from common stick welders to specialty plasma welders. Lincoln Electric successfully expanded internationally before 1955 into England, Australia, and France. It took this powerful HRM model into each of those nations. In the 1980’s, Lincoln Electric moved to expand simultaneously into several more nations. Funds equivalent to nearly half annual production went into the expansion. Results returned contrary to expectations.

A new CEO backtracked and sold off some of the investments. After careful analysis, a wider, locally responsive HRM model was developed. This new model was deployed with a renewed international expansion effort. Today, Lincoln Electric maintains 35 manufacturing facilities in 17 nations.

Why is Lincoln Electric So Successful in the United States? Role of HRM Practices

Lincoln Electric enjoys great success in the United States. The reward systems, people resourcing, and HRM models promote their success. The high bonus potential increases productivity and employee loyalty. Costs of hiring and firing are nearly eliminated; employees willingly reduce hours when need arises and work overtime when there is need for increased production. Lincoln Electric utilizes a greater brain trust. Regular meetings with workers, convened every “two to five weeks” (Stropki, 2010) purpose to focus on company improvement. At these meetings, employees are able to broach any production issue or worker grievance. This improves the company culture. Further, this employee participation makes the company locally responsive by mining worker’s direct production knowledge. The culture is additionally enriched by harvesting input from the open market.

Worker Pride

Part of the investment of the workers is their own input. When workers have a say in goal setting and policy, they work much harder, and for much greater duration, than employees who simply receive goals and targets by direction from upper management. Additionally, one of the rewards of effort is image. Lincoln Electric's proud heritage extends fully to the workers. CEO, chairman, and president of the company, John M. Stropki, gave credit to the employees in his August, 2010 television interview with Liz Claman on Fox Business. This creates a corporate culture of worth in employees, and a sense of pride. This pride has real value and comprises part of the “benefit” package at Lincoln Electric.

How to Win Friends & Influence People
How to Win Friends & Influence People
One of the most iconic business leadership books of all time. As a small businessman, I benefited many times from the wisdom shared in this book. Highly recommended for students and business leaders.

Potential Problems with Introducing Lincoln Electric's HRM Practices into China Operations

Introducing the same system in China should only be employed following careful analysis and planning for initial, short-term modifications. A key element of the reward bonus system is trust. In China, trust between the common worker and people in power falls far short of the trust a citizen of the United States has for those who sign paychecks. In the U.S., workers trust in a history of Judeo-Christian morality and in the powerful American Judicial system to ensure contract and promise fulfillment. Additionally, Asian culture is very group oriented and compliant. The individual is less likely to labor assiduously for self. Compliance means not likely to speak out- this will reduce the potency and effectiveness of regular meetings between management and workers. Third, Asians are less future-oriented than the Judeo-Christian oriented culture of North America. Dominant religious thought leans toward ideas of Islam and Buddhism. These cultures believe in fate. A Muslim driver, whose children stood up in the back seat as he sped at 75 miles per hour said, “If it is Allah’s will that we should die, die we will. We cannot overcome the will of Allah.” This aspect of thought makes Chinese less likely to work as hard as Americans for future bonuses.

Different Cash Flow Reguirements

Additionally, part of the motivation for the American workers is that the base pay fails to earn them the (legally defined) poverty level income. They require the bonus monies to make a decent salary. In China, food forms a major portion of living expenses. Chinese people require more regular pay and more of their pay regularly. They need their money to purchase food each day, a customary practice in the majority of world cultures.

Lincoln Electric Should Introduce Its HRM Practices into China

The Lincoln HRM policy should be introduced into China. But, some modifications are necessary. First, bonuses must be paid more frequently. Frequent payments will more quickly demonstrate to Chinese workers they can trust management and the delayed rewards program. Second, workers familiar with the reward program and corporate policy should be brought to new Chinese plants to demonstrate and teach corporate culture and high productivity practices. Third, management-employee meetings should initially be more frequent. Suggestions should be implemented quickly in order to create openness and trust. Fourth, as with all workers who do not perform well for future bonuses, material rewards do work. So, part of the reward package should include material items like microwaves, cell phones, or even vacation trips to Ohio headquarters in Cleveland.

When Lincoln Electric expands into China, they should implement their existing compensation system. However, initial modifications will reduce the risk of rejection. Trust must be established early. The success of Lincoln in international expansion in the last two decades will make an expansion into China a likely success- and more so with careful analysis of Chinese culture.

The Chinese culture, and Chinese work place culture are very different than American society and American corporate culture.
The Chinese culture, and Chinese work place culture are very different than American society and American corporate culture.

Resources for Lincoln Electric Case Study:

Evans P., Pucik, V., & Bjorkman, I. (2011). The global challenge: international human resource management (2nd ed.). McGraw-Hill.

Claman, L. (2010, August 23). [Interview with John M. Stropki]. Lincoln electric’s guaranteed employment. Retrieved July 18, 2011 from the Web site of Fox Business at:

Lincoln Electric International HRM Case Study Analysis

Which do you feel is most important in international expansion, with regards to HRM?

See results

Lincoln Electric Overview of Compensation, Job Security, and HRM

Want to Make Money Publishing Old College Essays Online?

It is easy to make money with hubpages. My old college essays are earning me money. You can join me for some easy extra pocket money, maybe even a car payment if you want to keep writing (about whatever you want, as long as people will read it!).

Here is a link to an article where I explain a short term strategy and a long term strategy:

How to make money writing online

Click the link to learn a little more about earning money online.


    0 of 8192 characters used
    Post Comment
    • profile image

      Kathy Jackson 

      8 years ago

      Thank you for your paper. I have learned from it tonight.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)