Lufthansa Strategy Essay Sample

July 22, 2017 Management

Human Resource Management is one of important internal factors. If Lufthansa wants to execute in a planetary manner successfully. they have. foremost. to change their HR scheme along with different civilizations or retain some of their ain civilization and history. In this instance. HRM systems in Lufthansa will be illustrated in footings of Hagan’s HRM theory. which embodied occupation design. staffing issues. preparation and development every bit good as wagess systems.

I. Job design: The subordinates of Lufthansa have become more independent to plan their ain alone direction schemes and can do their ain determinations straight. Therefore. employees have more freedom to hold their ain sentiment and they can straight pass on with the directors. In other words. this independent inclination can salvage more clip and allow determinations made more quickly.

II. Staffing issues: Lufthansa intended to engage non merely people from different civilizations to convey more gross. due to its globalization disposition because regional staff can do clients experience more familiar and it can besides cut down costs of engaging German staff. but besides German staff in order to protect their ain civilization. However. a big figure of non-German staffs may lend to other possible menaces with regard to the position of Lufthansa’s direction. For illustration. because of mixed-culture. Lufthansa will weaken their direction coherence and lose its ain civilization and manner. In add-on. is will besides lose German employment owing to exporting occupations.

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III. Training and development: Presents. the staffs in Lufthansa are from non lone German but besides other states ; hence. it is of import for directors to hold the experiences of working in other states in order to accommodate new fortunes expeditiously because they recognize more about each staff’s characteristic and behaviour before developing them.

IV. Rewards systems: Because Lufthansa intended to travel globally. it must pass more investings sing to employees than other local air companies in order to last. Although Lufthansa has to pay much less rewards for Indian staff than those for the German staff. the wages are still higher compared to local wage degrees. Furthermore. owing to different civilizations. people in Germany do non hold the penchant to make service occupations ; hence. it seems that Lufthansa has to give a nice wage to German staff so as to pull more German employment.

However. non merely can the aforesaid Hagan’s theory be used to explicate what HRM strategies Lufthansa possesses. but besides Hofstede’s theory. peculiarly in the Fieldss of individuality versus Bolshevism. power distance. can help directors of Lufthansa to understand how cultural differences affect HR in their organisations and direction.

I. Individualism vs. Bolshevism: In this instance. sing to Lufthansa. its subordinates work more separately than jointly and these subordinates can put their ain concern schemes. As a consequence. they can merely concentrate on accomplishing their ain mark. Besides. because Lufthansa recognised that it is really hard for all employees and directors to garner and discourse together to do determinations. If people in each subordinate act and are treated as separate persons. it is much clear for directors to oversee which portion of the organisation is successful and what must be changed. However. this sort of scheme can besides emerge hazards to some extent. First. if each subordinate works separately. directors in other subdivisions may non cognize what another subsidiary’s end and determination are. The whole system of Lufthansa might be got involved into being out of control because subordinates may get down to make everything on their ain. Consequently. because of different production schemes in each subordinate. Lufthansa will possess possible hazards in footings of its internal system.

II. Power distance: employees do non believe that directors have more power and should be respected and will hold the solution. In this instance. staffs feel more interested and much challenge when working because they have rights to hold his or her sentiment freely and they have opportunities to speak to their directors straight. They do believe directors are ever right because non all directors can understand the operation of each subordinate. Therefore. Lufthansa has low power distance.


As for the external factors that influenced Lufthansa. at that place existed assorted positions that are necessitated being considered. peculiarly in the country of German service civilization and its confederations with other air companies in other states.


Equally far as the service civilization of Lufthansa is concerned. its accent was ever on the footing of proficient facets. such as dependability. promptness and safety ( Barlett and Ghoshal. 2000 ) . However. harmonizing to Porter’s five forces model. it can be seen that this sort of service aim is easy to be regenerated by other similar air houses. In other words. the grade of the menace in footings of new entrants is highly high. Consequently. the subsequent change for Lufthansa is indispensable. Lufthansa has developed a new way with respect to its service position. that is. from a fixed feature to much more flexibleness. Furthermore. due to the prevalence of globalization. clients with distinguishable nationalities have to be considered sing to Lufthansa’s service scheme. Again. from Porter’s five forces framework’s point of position. ‘bargaining power of customers’ should be positioned a important function as it is obvious that in footings of air companies themselves. ‘customers’ are their principle inducement to set up houses. As a consequence. conventional service aims of Lufthansa. which are dependability. promptness and safety. look to be deficient to run into demands of current clients.

As perceived by Barlett and Ghoshal ( 2000 ) . it is clear that Lufthansa has shifted its service formation from mechanism to client orientation. Due to the presence of Porter’s diamond theory. the service facet sing to direction scheme of Lufthansa. there existed grounds that if Lufthansa intended to spread out its operation and heighten its position successfully compared to other air houses. appropriate version of its service scheme is indispensable. Furthermore. this customer-oriented service could therefore go a specific competitory advantage with regard to Lufthansa’s house scheme. Despite the fact that some may reason the rating of this shifted service leaning. Lufthansa seems to ask changing its attitudes towards clients owing to the great menace of globalization. Merely does Lufthansa see to underscore more on its service change. it could be clearly understood that confronting other rivals. peculiarly in the Asiatic country where existed predomination of client orientation. Lufthansa can possess an advantageous status to set up its ain repute and base steadfastly in the air industry universe.


In 1997. the deregulating in Europe is complete. For international air hoses. this is both chances and menaces. European deregulating let the European air hoses have the chances to entree to all the European airdromes and more freedom to run in the place states and between any two European states. However. sometimes the chances could be menaces. The impacts of European deregulating non merely caused to be limited by the big air hose companies who control the landing slots at their domestic airdromes. but besides to increase the competitions because of the lower barriers to come in the industry and the companies’ construction and in- flight service are easy to retroflex. Lufthansa was hammering to hold spouses either through equity investing or confederations with other bearers from different parts which have resembling service degrees and complementary accomplishments. They were larning to swear. non because they do but in order to swear. For these strategic confederations. Lufthansa have – Seek better agglomeration economic systems

– Locate near clients

– Obtain the more spillovers

– Have the possibilities to larn partners’ managerial. scientific and fiscal resources. regardless of their location


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