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Abstract

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 DM560 million in 1991 to a profit of DM678 million 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: (1) developing a global strategy through a network of alliances; (2) globalisation of its organisation; (3) globalisation of costs to match the structure of global revenues; (4) development of managers willing and able to operate in a global company; (5) development of a service culture to meet the expectations of its global customer-base. It also describes the different and often contradictory views of managers on each of these issues.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Time period

The events covered by this case took place in 1991-1996.

Geographical setting

Region:
World/global
Country:
Germany

Featured company

Lufthansa
Employees:
10000+
Industry:
Airline

About

Abstract

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 DM560 million in 1991 to a profit of DM678 million 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: (1) developing a global strategy through a network of alliances; (2) globalisation of its organisation; (3) globalisation of costs to match the structure of global revenues; (4) development of managers willing and able to operate in a global company; (5) development of a service culture to meet the expectations of its global customer-base. It also describes the different and often contradictory views of managers on each of these issues.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 1991-1996.

Geographical setting

Region:
World/global
Country:
Germany

Featured company

Lufthansa
Employees:
10000+
Industry:
Airline

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