Lufthansa: The Challenge of Globalisation

Management Science and Operations, Strategy and Entrepreneurship

1996

In the first half of the 1990s, Lufthansa - the German airline - had undergone some radical strategic and organisational changes that had reversed a loss of 560 million DM in 1991 to a profit of 678 million DM in 1994. However, in 1995, it was very clear to its management that this turnaround was merely a first step and a much more fundamental change was necessary to assure the company's future in a radically changing global airlines industry. The most important future challenge was to make Lufthansa a truly global company. But, managers differed widely in their views on what the term "global" really meant. The case focuses on five aspects of globalisation - (i) developing a global strategy through a network of alliances, (ii) globalisation of its organisation, (iii) globalisation of costs to match the structure of global revenues, (iv) development of Managers willing and able to operate in a global company, and (v) development of a service culture to meet the expectations of its global customer-base- and describes the different and often contradictory views of managers on each of these issues.

Managing Globalisation, Corporate Transformation

Airline

1996

CS-96-050

Germany; Worldwide

Effem (Mars)

GHOSHAL S

No