International Business: HRM Issues and Solutions for Lincoln Electric

This report analyzes the international Human Resource Management (HRM) issues faced by Lincoln Electric, a U.S.-based company expanding into Asia, specifically China. The case study identifies key challenges, including the lack of paid holidays and sick leave, an incentive structure that doesn't translate well across cultures, and a lack of unified communication. The report explores three plausible courses of action: implementing an effective communication strategy that emphasizes open-mindedness, knowledge training, and nonverbal communication; creating a better incentive structure that is transparent, controlled, aligned with company objectives, and attractive; and strategic leave planning. The selected solution focuses on improving communication and adapting the incentive system to suit cultural differences. The report provides a detailed implementation plan, including a timeframe, monitoring and control measures, and addresses potential risk factors. The analysis highlights the importance of adapting HRM practices to suit the local culture to enhance employee satisfaction and organizational performance. The report concludes with recommendations for Lincoln Electric to successfully establish its market in Asia.

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Executive summary
Lincoln Electric is one of the renowned and oldest companies in United States. Established in
1895, the organisation is gradually expanded its market beyond Europe. Currently Lincoln
Electric is looking forward to establish its market in Asia successfully. However, there are some
issues that the organisation is facing mostly due to the cultural differences. Based on this, this
report suggests changing the organisational communication framework in Lincoln Electric. For
this, an implementation plan with reference to the time frame is also designed that it based pn the
international human resource management for establishing cross cultural communication in
Lincoln Electric.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
HRM challenges..........................................................................................................................3
No paid holidays or sick leave.................................................................................................3
Incentive structure...................................................................................................................4
Lack of Unified communication structure...............................................................................5
Three plausible course of action..................................................................................................7
Effective communication strategy...........................................................................................7
Better incentive structure.........................................................................................................8
Strategic leave planning...........................................................................................................9
Selected solution..............................................................................................................................9
Details of the solution..................................................................................................................9
Implementation of the solution..................................................................................................10
Open mindedness...................................................................................................................10
Knowledge training...............................................................................................................11
Implementation of nonverbal communication.......................................................................11
Procure a firm and effective HRM strategy...........................................................................11
Timeframe..................................................................................................................................12
Monitoring and control..............................................................................................................12
Risk factors................................................................................................................................12
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................14

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Introduction
The advent of globalisation has created a significant transformation in the organisational
activities. It can be stated that the internalisation of the local organisations subsequently imbibes
a number of other factors. Cultural disintegration is the most important aspect in this regard.
From the research of Calvo, Rodeiro-Pazos and Fernández-López (2017) it can be stated that the
role of the multinational business corporates has been going through a series of changes and
varies on the basis of national differences. As a result of that often it can be seen that the policies
in the parent company differs from its overseas strategic business units. The empirical studies
have argued that most of these problems were associated HRM related issues. Henceforth,
immense focus is required on the international HRM practices and strategies.
Based on this perception, the report aims to analyse the international HRM issues in
Lincoln Electric. The report is going to discuss, three HRM related issues that Lincoln
Electronic was facing and also elucidate the plausible course of action that the organisation is
facing in order to bring more efficacy into the organisational practice.
Discussion
HRM challenges
No paid holidays or sick leave
One of the major lacuna in the HRM policy can be related to the practice of developing a
beneficial policy for the employees. One of the major concern that the HR managers has to
follows is resembled with the workplace health and safety of the employees (Farndale et al.,

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2017). Based on this perception, it can be stated that HR department of Lincoln Electricis highly
focused on its employee benefits and health related concerns. Therefore, a collective health
insurance plan is implemented for the benefit of the staffs. A compassionate stance of the health
insurance plan of Lincoln Electricput a great deal of impact on the satisfaction of the
employees. In fact, it assured the employees to take adequate financial responsibilities in case of
serious life threatening health related problems an illness. In addition to this, there is also an
employment contract that Lincoln Electricalso keeps intact so that the employee can join the
organisation after getting well and fit.
Nevertheless, there is a serious challenges or gap within the HRM policy that can
facilitate huge problem for Lincoln Electricto establish its business in overseas market. For an
instance, the organisation does not entertain any king of paid holidays or sick days for the
employees. It is one of the fundamental right that the employees want as their right to fulfil their
interests. In fact, Pudelko, Reiche and Carr (2015) argued that the sick leave is one of the basic
need that the employees can seek and the organisation is abide to provide that facility. However,
in case of Lincoln Electricthe lack of sick leave or pad holidays can disrupt the business
performances of the organisation in order to engage and satisfy the employees to keep in touch
with the organisation and take part in the organisational profitability.
Incentive structure
The incentive structure is also a significant threat for the Lincoln ElectricHR department
that the organisation practices proudly. It can be stated that the reward a recognition practice is
surely a pertinent measure that the organisations are putting emphasis on in order to bring more
efficacy into the relationship between the employees and the senior management. Based on the
article of Ghosh et al. (2016) it can be derived that the sole purpose of the reward and

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recognition is to facilitate an effective measure for the business companies in the form of
motivating the employees directly. Moreover, the argument was further corroborated by
Eisenberger, Malone and Presson (2016) by stating that it is the role of the organisations to
procure better benefits for the employees to encourage them and push them to work on the
productivity. Therefore, reward has clearly a big role to play in increasing the profitability and
progress of the organisation.
Based on this understanding, it can be argued that Lincoln Electrichas a profound
mechanism in incentive system. The company primarily focusing on the notion of piecework of
the workers that is not only depended on the quantity of the productivity but also includes the
qualitative measures. As a matter of fact, it is highly important for the business organisation to
procure a better practice where the employees or the workers consider both the quality and
quantity of the works and based on that measurement, the performance of the employees can be
evaluated. However, this complexity in the incentive scheme is not popular in most of the Asian
countries especially in China. It is pivotal for Lincoln Electricto reconsider the use of the
incentive policy that the company is successfully utilised in United States. One of the major
problem is related to the cultural differences that change the perception of the Chinese workers
and the US labourers. Moreover, the existence of the trade unionism is also intensified the
practice of following the same practice in China. Therefore, it pushes the HR manager of
Lincoln Electricto reconsider and reinvestigate the possible opportunity of implementing the
same investment scheme in Lincoln Electric.
Lack of Unified communication structure
Lack of communication is considered to be one of the major aspect for the organisations
to enhance the efficacy into the organisational activities. It is essential for the multinational

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companies to formulate a better practice so that communication with the different culture can be
set. Nichols, Horner and Fyfe (2015) opined that the workplace diversity had become an
important aspect for the business organisations and it is pertinent to ensure the workplace
environment tolerant enough to adapt employees with different cultural practice. One of the
major concern in this regard is to blend the cultural practice with the organisation and the
personal ethos of the employees. From the research of Anderson and Kieliszewski (2017) the
intensity of the international business organisations has been so emphatic that it harness an
effective measure between the organisational culture and the culture of the local people. In result
the tolerant nature of the business organisation facilitates a better communication between the
international management and the local workers. This cultural exchange creates an optimistic
transformation in the organisational spectrum.
Therefore, for Lincoln Electric, the multicultural communication will develop a measure
of implementing effective measure so that it can facilitate more effective communication in
progress. However, the company is facing severe problem in order to continue the same practice
in Asia n market that it was practiced in United States. From the perspective of de Aquino and
Robertson (2018) multinational companies are always changing its policies and keeps it more
close to the local culture so that the local workforce can be recruited and fit with the
organisational culture. However, for Lincoln Electricwhile establishing its business in Asian
market the lack of common language between the workers and most of the managers erected
hindrance into the effective communication. It is also responsible to formulate a poor company
performance risk for Lincoln Electric.

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Three plausible course of action
Effective communication strategy
It is important for Lincoln Electricto procure an effective communication strategy in
order to shape a better practice of cross cultural workplace culture. The cross cultural
communication strategy has a number of steps that can facilitate an advantageous opportunity for
Lincoln Electricto procure better organisational practice. In this regard, the first it is essential to
practice a open minded nature. For the managers it is pertinent to follow the open mindedness so
that the employees from different cultures can feel relaxed to communicate with each other
(Davis, Frolova & Callahan, 2016). Cross cultural interaction is highly important for developing
a cross cultural communication. As a result the employees will get to acknowledge others
cultural backgrounds. It is essential for developing a unique cultural practice inside the
organisation. From the research of Al-Jenaibi (2017) it can be derived that the role of the
organisations is to formulate an effective communication mechanism so that a good
understanding and bonding between the employees can be furbished.
Apart from that the training for developing cross cultural communication is also
significant for the Lincoln Electricin order to enlighten the employees about the importance and
benefits of the cross cultural communication. In this training process the employee will lean to
not only speak with people of other cultures but also develop the habit of listening so that they
can understand what people belonged to different cultures are willing to say by studying their
body language. It requires a great skill to understand the saying without having any familiarity
with the language. In this regard, using the nonverbal communication is also a unique measure
that theLincoln Electricemployees can follow. One of the major practice that the organisation is
putting emphasis on is the nonverbal communication. The difference in language compels the

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managers to take the nonverbal communication strategy effectively. In association to this,
establishing companywide communication is also pertinent in order to bring more efficacy into
the practice by establishing best communication strategy.
Better incentive structure
For Lincoln Electricit is important to ensure an equal incentive structure based on cross
cultural framework. Therefore, the company has to follow a five step model in terms of the
transparent, controlled, aligned with the company objectives, attractive amount and frequency. In
this regard, transparency in the process of reward system is highly important because in a diverse
workplace it is essential to maintain an equal opportunity for the workforce so that there will be
no discriminatory measures being followed (Eddy et al., 2018). Moreover, another reason behind
the transparency is related to the domestic regulations that the organisations have to follow in
course of maintaining its business profoundly (Pomeranz, 2015). Therefore, it is essential to
make the reward system transparent and simple for abiding the legal constraints. Moreover,
controlling the entire reward system will generate a strategic advantage by maintaining a unified
reward system. In this regard, the company objectives play a significant role. It is part and parcel
of the reward strategy to align with the organisational objectives so that the company will be
benefitted by the reward mechanism. The benefit is not associated with the financial profitability
rather it connotes a clear identification of the employee retention program for Lincoln Electric.
Reducing employee turnover rate is also a crucial part for the business organisations in order to
bring more stability in the progress and productivity into the organisational practice.
Apart from that the amount of the reward is also a pertinent factor for Lincoln Electricto
engage the cross cultural workforce into the organisational productivity. The lucrative amount of
reward also boosts up the employees to perform less-precariously and highly motivated and

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focused on the development of the organisation. As a result of that a good relationship between
the organisation and the employees can be instilled. Frequency of the reward system is also
played a significant role by influencing the employees effectively. From the research of Robbins
and Wansink (2016) it can be derived that the role of the organisation is to continue its reward
strategy frequently so that the employees will be regenerated and instigated to perform in a better
manner.
Strategic leave planning
For a strategic leave planning, it is important for the HR department to incorporate the
leaves into the annual leave planning. In this regard, there are two part that an annual leave
planning will follow in terms of the sick leave and personal leave (Stevenson, 2018). Most of the
countries are supported the fact that annual leave planning has to be maintained as it is a
fundamental right of the employees. In Lincoln Electric also the HR department must follow the
same practice by establishing a clear annual leave schedule. A 48 hours of sick leave has to be
fostered by the HR department in order to create a better facility for the employees. Moreover, it
can be stated that the role of the sick leave has to be a bargain unit where it will be depended on
the vulnerability of the sickness. Beside this, personal leave can also be implemented in order to
carry out a flexibility in the employee benefit.
Selected solution
Details of the solution
Communication is the most important aspect in cross cultural workplace and Lincoln
Electric also facing the same problem while establishing its business in the overseas market.
Oetzel (2017) mentioned that multicultural communication building was a most crucial part for

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the International HRM because the employees were belonged to different language and beliefs.
An integrity or team building process is required for the multinational companies in order to
increase the productivity and profitability. Based on different cultural backgrounds it is often
impossible for the management to make contact with the employees of different culture. As a
result of that cultural hindrance will definitely jeopardize the organisational development. Based
on this understanding, Moore and Morton (2017) articulated that the HR department is solely
responsible to make a plan for organisational culture. Cooperation from the management as well
as the employees is highly desired in order to bring an equal opportunity for all irrespective of
their cultural differences or position in organisation. Ladegaard and Jenks (2015) opined that a
sense of equality is the most preferable element in developing flexible and flawless
communication among the employees and with the management as well. A professional
approach with effective means of communication can only achieve the goals of a multinational
organisation. Henceforth, setting up cross cultural communication is the most important step for
Lincoln Electric.
Implementation of the solution
Open mindedness
A liberal and transparent workplace environment can facilitate positive impact on the
diverse workforce also. The focal point of open mindedness is to reduce the cultural differences
between the employees and make them feel equal. A psychological impact is also occurred that
makes the employees satisfied and focused on their performance. Therefore, the HR management
of Lincoln Electric should emphasis on establishing an open environment where every
employee irrespective of his nationality or culture can feel free to express his voice.

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Knowledge training
After the implementation of the open environment, it is pertinent for the HR department
to conduct a training session for briefing the advantages of cross cultural team in workplace. One
of the main purpose of such training is to eradicate any kind of discriminatory mindset that often
some of the employees have possessed. In the long run those malpractices can create obstacle to
the organisational success. Therefore, in the knowledge training session all the employees and
the managers are asked to understand each other’s body language and norms so that no one can
perform any derogatory act. The knowledge training also does a research on the local people and
the employee behaviour that will help the managers to influence the diverse workforce with a
profound knowledge on their culture.
Implementation of nonverbal communication
For a pilot study the managers will take the initiative to understand the gesture, voice,
body language and facial expression of diverse team members. This practice is important before
facing the real life situation. The experts will be appointed who will train and guide them to learn
the skills of nonverbal communication. Lincoln Electric believes that the leaders will guide the
entire workforce to facilitate a better workplace culture. As a result of that it is essential for the
managers to transcend their positive intentions to the rest of the workforce.
Procure a firm and effective HRM strategy
None of the measures can bring positive impact if the HR manager will fail to implement
an effective and firm cross cultural strategy. It is the role of the HR manager to formulate a
strategy that will prevent and eradicate all the obstacles that will come in the path of cross
cultural workplace practice. Highly specific and understandable policies can be executed in order
to make the attempt of cross cultural workplace culture a success.