Lincoln Electric in Mexico

This article discusses the adjustments and challenges Lincoln Electric would face if it opened a plant in China. It also explores the differences in results if the system was introduced in a poor domain like Sudan instead of a wealthy nation like Mexico. The article highlights the importance of understanding cultural differences and the impact on employee motivation and productivity.

International Management
LINCOLN ELECTRIC IN MEXICO

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Lincoln Electric in Mexico
How do you think Lincoln Electric would have to adjust its system if they opened a plant
in China?
Lincoln Electric is founded in the year 1985 with a purpose to make electric motors. According
to me, If Lincoln Electric planned to open plant in China, it would have to adjust its entire
system because of the different work practices, customs and traditions. The people living there
and their needs and requirements are different as compared to people living in other countries.
In addition to this, employees and the workers living in North America have different
requirement than that of employees living outside North America. Since, Lincoln is widely
known for operative motivation and incentive system based on piece work. Piecework is
commonly the rate when an employee is paid for a single unit generated or action taken place.
However, according to the given case study, I can conclude that the system of piecework is
quite effective in China which can be an advantage for the company if it plans to start its
business in china. This method is also commonly used in East Asia for high production operation
activities. Generally, it is shared with a base rate salary, which is quite similar to an individual
low base pay and commissions (Cuervo-Cazurra et al., 2007). Being a company which was
established years back, Lincoln used this piecework method which is widely followed by many
countries these days for the effective and efficient work that needs to be carried out in any
company.
Despite of facing some tradition and different culture issues, the company will gain a huge
amount of profit if planned to open its plant in China. On the contrary, the employees working
in China might be highly skilled but they might not focus more on working more hours which
can create an obstacle for the company if opened in China. The employees living there might
not wish to work for long hours which will then ultimately reduce the production according to
the piecework method. Similarly, there can be a problem of cross-cultural differences. Cross
cultural communication is well-defined as the communication which arises between persons
who differs in working style, age, race, nationality, ethnicity and gender. There are many

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companies having diverse workforce and such companies are also a part of global economy.
These companies get highly involved in cross cultural communication. As per my understanding,
it is very important for the employees and the company to measure and know all the factors
which might take part in a nominal and mixed workforce. Overall, it can be concluded that
there are some advantages for the company along with few cons if planned to open a plant in
China. Taking all the points under consideration, the company might get benefit because China
is a developed country and the employees working there are highly skilled. The company might
run successfully despite of China’s culture and tradition (Parpart, Jane and Sharon, 2016)
Would the result of Lincoln’s Electric efforts have been different it had tried to introduce
its system in a desperately poor domain, such as Sudan, rather than in a relatively
wealthy nation, such as Mexico?
According to the given case study, I think it can be stated that the result of Lincoln’s Electric
would be totally different if it had started its business in Sudan rather than starting business in
Mexico. Since, there is a huge difference between the country Mexico and Sudan. Mexico is a
wealthy domain country while Sudan is poor domain country. Starting business in Mexico has
many obstacles and it took nearly two years for the company to establish its name and make
employees understand the system gradually. While, working in Mexico, the company at very
initial stage, permitted only few chosen workers to opt into the system and then later, when
they started performing good, other remaining workers were allowed to opt the same system
i.e. piecework system. The system proposed by Lincoln successfully overcame through all the
obstacles and motivated all the employees to work and produce more in terms of quantity. The
system taught the employees how there were benefitted and it also influenced them. After few
years, they started producing more units of products and earn more amount of incentive which
also created a self-satisfaction among employees. They were motivated to earn more and work
more (Hastings, 1999).
Furthermore, these were the cases and the problems faced by the company while working in
Mexico. Now, if the company had planned to start its business in Sudan, which is considered to
be a poor domain country, the company might not have faced issues related to long working

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hours. It means the employees working there would have focused more on earing incentive and
this will create an opportunity for them to work more. Apart from this, most of the employees
working in Sudan are involved in Agriculture i.e. 80% and 10% of the employees are involved in
industry and rest of the employees are working in government offices. The working condition in
the country Sudan is very underdeveloped. Kids living there also gets involved in work to earn.
Thus, it can be justified that the working condition in Sudan is not easy to be measured. The
people living there are mostly unemployed. The women working there are involved in houses
and household chores. Once when there was British colonial era, Sudan employees were
provided education and they were given skilled training but later everything went on vain.
Skilled workers are not given an opportunity and thus, they can never succeed. The people
living there migrated and started working in other countries (Nations, 2019).
I have personally been to Mexico and the people and the employees living there are leading a
quality life.
Thus, it can be concluded that Lincoln will face lots of difficulties and would fail to succeed if
started its business in low domain country like Sudan as compared to that of wealthy domain
country like Mexico.
Why do you think more firms have not tried to copy a system like Lincoln Electrics?
According to me, what I can say after analyzing the whole case study that there are many firms
who tried to copy a system of Lincoln Electrics. Despite of this, there are also many firms who
never copied this system. Lincoln electrics has been successfully implemented in U.S. while in
other overseas countries, this system did not work at all. Lincoln Electric Company is a well
renowned company in the entire market. It has good share in the market and this happened
just because of its huge and efficient production. As known, productivity plays a vital role in any
companies in order to gain maximum customer satisfaction along with the success in the
market. Lincoln Electrics pressurized its employees to work more and produce more and this
will automatically lead to earn more. Thus, working more means providing long duration to
work. The pressure generated by the company towards its employees is not the psychological
one, it is considered to be a motivational one. The company offers several schemes of bonuses

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and incentive opportunity to its employees which boost the morale of the employees towards
work and productivity.
On the contrary, the same idea can also work in an opposite way as the penalization. This
occurs when not every individual gets ready to work under such circumstances. There are many
countries who focuses on paying their employees on regular basis despite of paying as per units
produced. So, there is a big doubt if Lincoln electrics system would work effectively or not in
different countries with different work conditions and different work methods. No matter, how
effective is the Lincoln electric process is, some employees from other countries will never
prefer working under such circumstances due to long working hours. Labour plays a major role
in any organization and employee satisfaction is the major key point for any successful
organization in any country. Today, there are huge number of companies who reward their
employees for the smart work rather than rewarding for hard work. Lincoln Electric is totally
based on hard work. Though, it also provides huge amount of profit and incentive schemes to
the employees, but that only exists of the employees wishes to work more and earn more
(Vermeulen, 2001).
However, I think it can be concluded that Lincoln Electrics, despite of being one of the effective
way of generating profit for the company and incentive to the employees, no many countries
permit to opt the same method because of the alteration in working circumstances, skilled
labor, intercultural differences and many more. The countries where employees tend to work
more can have good opportunity under this system because this will help them to work and
earn according to the number of units produced. This way, employees will be influenced
towards their work with a view to gain more incentive.

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References
Cuervo-Cazurra, A., Maloney, M. M., & Manrakhan, Causes of the difficulties in
internationalization. Journal of International Business Studies, 38(5). (2007): 709-725.
Hastings, Donald F. "Lincoln Electric's harsh lessons from international expansion." Harvard
Business Review 77.3 (1999): 163-164.
Nations. “Sudan - Working conditions”.(2019) Available at:
https://www.nationsencyclopedia.com/economies/Africa/Sudan-WORKING-CONDITIONS.html
Parpart, Jane and Sharon Stichter, eds. Women, employment and the family in the
international division of labour. Springer, (2016).
Sudan. Working environment. (2019). Available at:
file:///C:/Users/Asus/Downloads/Documents/50a9f822b.pdf
Vermeulen, FControlling international expansion. Business Strategy Review, 12(3) (2001): 29-36.