Week 5 Literature Review
Hastings, Donald F. (1999). "Lincoln Electric's Harsh Lessons from International Expansion." Harvard Business Review, May-June, 1999, pp. 168-178.
Pfeffer, Jeffrey. (1995). “Producing sustainable competitive advantage through the effective management of people.” The Academy of Management Executive; Feb 1995.
Rigby, Darrell. (1998). “What's today's special at the consultants' cafe?” Fortune; Sep 7, 1998.
Stamps, David. (1997). “The self-organizing system.” Training; Apr 1997.
Dr. Smith – MBAD 7913
August 1, 2014
Article review and critique: “Lincoln Electric's Harsh Lessons from International Expansion” by Donald Hastings (1999).
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There were warning signs in the months leading up to the European financial downfall of the company. For quarters, the European office would submit overly optimistic sales and profit targets and then always fall short.
Hastings was faced with hard decisions. They way he saw it was that he could either go through a major round of layoffs or make extraordinary efforts to increase revenues and profits. Hastings opted for the second option, and turned to his US employees for help. Sales were increased and factory managers were asked to help identify and deplete any bottleneck they could find. Hastings also moved to England to be closer to international business.
Things did turn around for Hastings and Lincoln Electric. Hastings states that some of the harsh lessons that he and other executives learned was that they were overly confident in Lincoln Electric’s abilities and systems. Lincoln’s competitive advantage of highly skilled workers was not able to transfer to overseas work, and now the company is much more cognizant of overseas acquisitions and markets.
Positives: I enjoyed reading this article because it was written by Lincoln Electric’s CEO, Donald Hastings. Hastings was able to tell a story both factually and from his point of view. I think it was important to see that many companies believe you can use the same system and business plan in all markets. However, as demonstrated in this article, not all pieces of a company’s competitive advantage are transferable. Hastings also does a nice job at explaining that he along with other executives at the company were completely ignorant to the international market and workforce.
I also enjoyed reading about how Lincoln Electric identified areas that could be improved and used its strongest piece, the US workforce, to help improve the company overall. What was really important to me is that the company still found a way to reward employees. I think sometimes in business it is easiest to take away rewards and incentives which causes morale to go down, and talent to leave.
Negatives: The only negative I would say about this article is that it lacked input from other employees, specifically the manufacturing employees from the US. I would have liked to hear how these employees felt during the two to three years of financial downfall of the company, because they were actually very profitable. I would have also liked to hear their input when the company leaned on them to turn things around for problems in their international ventures.
Question: Do you agree with Hastings decision to move to the UK to get a better understanding of the workings in his foreign entities?
Article review and critique: “Producing Sustainable Competitive Advantage Through the Effective Management of People” by Jeffrey Pfeffer (1995).
Synopsis: In Jeffrey Pfeffer’s article, he discusses the importance of a company’s workforce and management of its workforce. Pfeffer believes companies can reach competitive success...