Questions and Answers to Lincoln Electric Case Study by Harvard Business School

Compensation: Lincoln Electric's incentive system, in its current form will not be effective in Indonesia. However, the best incentive system is currently indeterminate because LECO's knowledge of this particular labor force is very preliminary. It would be best to draw on their partner's experience and adopt their incentive policies, at least for the meantime. An advantage of a joint venture is that it will allow LECO to experiment with the incentives program on a smaller scale before full implementation. According to feedback from local sources it seems that the incentives will have to move in the direction of more valued, indirect, compensation. Relying on greed as the basis for motivation may be appropriate in western business environments, but it is far from a universal application. Gillespie must first understand the workforce enough to determine what motivates them and this requires experience LECO does not yet have.…