Management

The Lincoln Electric Welding Company in Shanghai

The objective of this study is to review and analyze Lincoln Electric’s international human resources (HR) practices as are affected by the decision to establish a subsidiary in China. Early outcomes and future issues or problems will be discussed. Lincoln initiated a new attempt at expanding in Asia in the mid-1990s, after the shutting down of the Japanese company. This followed the 1995 opening of a new management organization for the company involving new executive positions and complementary personnel to supervise each of the five major strategic locations: Asia, Latin America, Russia-Africa-Middle East, Europe, and North America (Business Week 2003). Michael Gillespie is a British national and having associated with Lincoln from ESAB, the major competitor of Lincoln in Europe and Asia, was assigned head for the Asian region. Asia was at present a primary target of the company and Gillespie was summoned by Massaro to develop an innovative and competitive approach for the region (Business Week 2003). The plan of Gillespie was to build regional competencies and create a unified manufacturing business and sales with Asia (Briscoe amp. Schuler 2004: 428): The intention was to stop regarding the Asia Pacific as a market to which we could export, to which we could sell our surplus production. So what we tried to do was to bring Lincoln to Asia rather than just sending American or Australian products into Asia, and decided that the right thing to do was to produce within the region for the region, products that were appropriate to the region, rather than simply trying to sell products that were right for the US or Europe. A regional administrative center was launched in Singapore. The regionaloffice was given the task of managing strategic planning, financial control, and technical support to the production departments. The regional office had a significant level of independence from the head office. The main control comprised monitoring the region’s financial performance.

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