The Lincoln Electric Company is a longtime maker of welding equipment in Cleveland, Ohio, whose industry performance has been legendary. Its operations have focused around its well-known piece rate incentive system, which permits it to gain significantly greater utilization of its capital assets than competitors, with a resulting competitive advantage on costs. In the mid-1990s, however, Lincoln experienced some difficulties in establishing new facilities outside of the U.S. and ended up modifying its organizational system when it opened facilities in Asia. What factors might contribute to the difficulties that even a well-managed firm might face in transferring its management and production systems to international locations?
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