Lufthansa Undergoing Change

1. Definition of Globalization

Globalization can be defined as the “spread of economic, political, social and cultural values beyond the national borders to the world”. Thomas Friedman pointed out the result of the globalization in his masterpiece work by stating “the world is flat”.[i]

What kind of implications does this process has on members of society as well as on organizations? The driver of globalization is an unleashed, borderless economic growth that leads to an increase in the standard of living for billions of people. Goods and services are traded worldwide without any borders; global trends influence consumers around the globe and organizations operate at an unseen scale in all regions of the world.[ii]

Globalization challenges organizations in a new dimension and there is no possibility to ignore those developments without facing the risk of bankruptcy. Globalization offers infinite opportunities for organizations in terms of new markets and customers segments, which goes hand in hand with an increase in revenues and profit. But at the same time, this development can also be a serious threat to established companies. New competitors arise globally, trends are changing at an unseen pace and customers are more demanding than ever before. At the same time, organizations face the threat of losing their national identity and top employees in a global war for talent.[iii] Germany is clearly one of the winners of globalization. But to become so successful in international trade the country had to undergo drastical changes in their industrial landscape. The German economy transformed from a heavy manufacturing industry to a specialized industry, which is globally reputable for mechanical engineering and services. The German development can be observed in many other developed countries as well (Figure 1).[iv] Those developments changed entire regions within Germany; the Ruhr area for example was after the Second World War the heart of the German industry...