The paper "Business Model for Lincoln Electric Company and the Employment System" is an outstanding example of a management case study. The case study of Lincoln Electric Company (LECO) describes their incentive system and incentive strategy. It discusses the strategy choices on a global scale that the company faces while moving forward. The company is deciding whether the next step to globalization should be a strong push in the Indian market. Previously, the company has enjoyed a relatively incremental success in the Chinese market. The success has been driven by the aggressive expansion of the company using sets of majority-owned plants and joint ventures.
Thus, the LECO the company is contemplating on the methods of applying lessons learnt in China together with Latin America, Asia and Europe to the Indian case. The essay will form a report on the LECO case study on various issues as discussed below. Main Features of the Business Model for LECO and the Employment System Overall Strategy The overall strategies for the Lincoln Electric Company (LECO) are several. First and foremost, LECO established very consistent and practicable (HRM) Human Resource Practices and policies aimed at building trust (Jordan, 2008).
The latter has been the case since the inception of the company. Secondly, the company has a history of boosting confidence in their human resource by giving them surety in terms of future rewards. The system ensures most workers earn on average $17, 600 annually on a week having 32 hours and also earn the same amount in bonuses (Jordan, 2008). Thus, high productivity is inevitable due to high job satisfaction and motivation levels among the LECO’ s employees.
The other strategy is that the company’ s system operates on cooperation, equality and need. Thus, the high productivity creates efficiency of operations which in turn generates competitive advantage for the company over its rivals (Budhwar & Aryee, 2008). Philosophy The philosophy of LECO has always been to keep in touch with their customers and providing them with the best quality products and services in the energy sector (Jordan, 2008). Thus, the company has capitalized in creating systems that ensure the ultimate achievement of its core objective which is their customer’ s satisfaction. To accomplish this philosophy, the company utilizes its core capital asset which is the human resource (Jordan, 2008).
The HRM policies created favor the employees in terms of their compensation and job benefits and therefore culminating into a highly productive workforce. In result, LECO has realized increasing levels of success in the Canadian, United States (USA) and Chinese markets. The latter has resulted in another philosophy for the company which has been to reap the fruits of globalization as evidenced by their move to the Asian Chinese market and the intended entry into the Indian market (Jordan, 2008). Leadership The Lincoln Electric Company (LECO) enjoys high success in the US as much as in Canada and the China markets.
LECO is the leading welding equipment manufacturer in terms of size globally. LECO deals in products ranging from plasma welders to stick welders. Before 1955, LECO had expanded successfully and internationally into France, England and Australia (Jordan, 2008). The powerful business model and the HRM policies acted as the main drivers to further global expansion to other nations though it delivered contrary results. A careful analysis led to the development of HRM policies that were locally responsive (Schuler & Jackson, 2008).
The latter was then deployed with renewed efforts for international expansion. Presently, LECO maintains thirty-five manufacturing facilities in seventeen countries worldwide (Jordan, 2008).