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1、FortheexclusiveuseofC.LEEHarvardBusinessSchool9-398-095Rev.April22,1998LincolnElectric:VenturingAbroadReturninglatetohishalf-finishedlunchofriceandstir-friedvegetables,MichaelGillespie,presidentfortheAsiaregionofTheLincolnElectricCompany,reviewedhisplanstoexpandthecompany’sproductionbaseinhis
2、area.AlthoughthisvenerableU.S.-basedmanufacturerofweldingmachineryandconsumableshadsoldproductsthroughoutAsiafordecades,thesehadbeenproducedatplantsinAustralia,theUnitedStates,andEurope.AnthonyMassaro,Lincoln’snewCEOand—likeGillespie—anewcomertothecompany,hadencouragedtheAsiapresidenttodevelo
3、pplanstoopenweldingconsumablesfactoriesinseveralAsiancountries.SuchfacilitieswouldenableLincolntotakeadvantageoflowlaborcostsandavoidtradebarriers.Specifically,GillespienowturnedhisattentiontoplansforIndonesia.Hefacedseveralsetsofchoices.ThefirstconcernedwhethertobuildafactoryinIndonesiaatall
4、,giventheparticularpoliticalandeconomicconditionsinthatcountry,thenatureofthemarketforweldingproducts,andthecompetitivesituation.Ifhedecidedthisintheaffirmative,hewouldneedtochoosewhethertoenterthemarketthroughawholly-ownedfactoryorajointventure.Finally,Gillespiewonderedwhethertheplannedopera
5、tionshouldadoptLincolnElectric’sfamousincentivesystem,creditedwithrapid,steadyincreasesinproductivityinthecompany’sflagshipplantinCleveland,Ohio.Althoughnoimmediatedeadlineloomedforthesedecisions,hewouldbeaskedtodiscusshisplansattheSeptember1996meetingbetweenMassaroandthepresidentsofLincoln’s
6、fiveworldwideregions,scheduledforthefollowingMondayinCleveland.LincolnintheUnitedStates1FoundedbyJohnC.Lincolnin1895inClevelandtomanufactureelectricmotorsandgenerators,LincolnElectricintroduceditsfirstmachineforarcweldingin1911.Thecompanyeventuallybecametheworldleaderinsalesofweldingequipment
7、andsupplies(suchasweldingelectrodes).(Exhibit1givesmoredetailonweldingtechnologyandLincoln’sproducts.)JamesF.Lincoln,John’syoungerbrother,joinedin1907andcomplementedhisolderbrother’sflairfortechnicalinnovationwithaproficiencyinmanagementandad