Lincoln Electric Essay

capital of Nebraska Electrics CEO Massaro was correct in his assessment that, markets in developing countries would grow faster and yield a high return. This strategy was critical and in alignment with the organizations endeavor to reach 50% foreign sales revenue. As president of Lincoln Asia, Mike Gillespie faces a great challenge with his decision to encrypt the Indonesian market. If Mr. Gillespie does decide to enter Indonesia, he must also decide whether to do it alone or done a conjugation venture, and how to structure employee compensation.It looks uniform Gillespie conducted enough corporate anthropology research to identify viable consumer product necessarily that Lincoln Electric will be able to provide (stick consumables vs. automatonlike consumables segments). I understand that investing in Indonesia offers many benefits to the organization, mostly towards increase profit margins and market share of consumable products (for further information regarding the strate gic planning for entering Indonesia see Exhibit 1).However, in my opinion, Gillespie does not boast enough data to make an informed decision regarding this move. Fear of a rekindled Civil War, uns tabularize inflation rates, and other activities in the country revealed some(prenominal) economic and governmental instability. Other issues to be considered include labor issues of Indonesia 1. I would recommend further market and pagan analysis to aid his decision-making. If Gillespie decides to enter Indonesia, it is my passport to enter with a teammate.I encourage this recommendation because, through his own market analysis and consultation it was identified that due to the political structure a local anesthetic match with in-depth acquaintance, and political connections would be requisite for success. I understand that a joint venture will falloff Lincoln Electrics profit margins, but in my opinion, the joint venture will minimize investment risk, especially if a partner is able to provide capital towards the cost of building a facility. Gillespies choice in partners should be based off of a predefined posture of criteria.These criteria should include current relations/contracts with Lincoln Electric, current market share, knowledge of local market and culture, political and affair contacts. The partner should also realise the ability to withstand any financial risk toward this investment. See table 2 for a breakdown of both potential partners and how they compare to the criteria. I would recommend a joint venture with both companies (Tira and SSHJ). The reason for this recommendation is due to the diverse benefits, which both companies can bring to the venture.However, I aim concerns regarding the loyalty of either partner to the Lincoln Electric brand. If we apply the fond exchange theory to this situation, one could speculate that when more than one partner is included in a business relationship, the loyalty of each business partner may decrea ses due to competition and fear of favoritism 2. It is Gillespies intention to implement a piecework compensation structure and I support this decision. It is also the intent of Lincoln Electric to exceed minimum net profit requirements and prevailing rates.Gillespie has concerns regarding the ability for all employees to meet minimum net exploitation piecework compensation. It is my recommendation to set the minimum daily quota at the minimum wage rate. I would also implement an aggressive performance bonus paying(a) out monthly vs. annual. I would highly recommend further cultural analysis with a focus on time perceptions and labor perceptions of the local culture. The compensation structure should be adjusted as time goes on and favorable trends in compensation are identified.