Lufthansa Technik AG: An Case Study
The aforementioned explanation that show the highest internal validity also appear to be the most effective solutions that address the problem statement and leads to the plausible solutions. The two suggested solutions are mutually exclusive and suggest very different subsidiary management strategies to solve the problem of inefficiencies among subsidiaries, while both solutions are grounded in theory and supported with the empirical research. Each solutions will be evaluated from the perspectives of effectiveness, theoretical support, possible negative side effects, feasibility, social acceptability and attractiveness to the organization to provide full overview to the consideration of the management team.
Solution 1
The first solution is …show more content…
In order to translate these theoretical assumptions to the practice, the Lufthansa Technik AG is advised to implement the following steps:
● Include all subsidiary CEOs in defining the role of subsidiaries in the Lufthansa Technik AG business in order to clarify the status of each autonomy and mitigate the effect of unbalanced level of autonomy of subsidiaries;
● Increase HQ control in the areas such as subsidiary objective setting, performance control, monitoring communication between the subsidiaries and managerial transfers between …show more content…
Tsai (2002) discusses the concept of ‘coopetition’ that combines simultaneous cooperation and competition between organizational units, and this concept can also become the remedy for the problem of suboptimal subsidiary management. Birkinshaw & Hood (1998b) name the competition with other subsidiaries among the three main drivers of subsidiary development. Luo (2005) states that the headquarters of MNEs choose to encourage competition between subsidiaries as coordinated competition in marketing, quality management or cost reduction may improve efficiency. Luo (2005) also emphasizes that the exchange of resources between coopeting subsidiaries will lead to reciprocal communication and the subsidiaries with strategic interdependence will share organizational knowledge. Tsai (2002) also argues benefits of coopetition for organizational
Solution 1
The first solution is …show more content…
In order to translate these theoretical assumptions to the practice, the Lufthansa Technik AG is advised to implement the following steps:
● Include all subsidiary CEOs in defining the role of subsidiaries in the Lufthansa Technik AG business in order to clarify the status of each autonomy and mitigate the effect of unbalanced level of autonomy of subsidiaries;
● Increase HQ control in the areas such as subsidiary objective setting, performance control, monitoring communication between the subsidiaries and managerial transfers between …show more content…
Tsai (2002) discusses the concept of ‘coopetition’ that combines simultaneous cooperation and competition between organizational units, and this concept can also become the remedy for the problem of suboptimal subsidiary management. Birkinshaw & Hood (1998b) name the competition with other subsidiaries among the three main drivers of subsidiary development. Luo (2005) states that the headquarters of MNEs choose to encourage competition between subsidiaries as coordinated competition in marketing, quality management or cost reduction may improve efficiency. Luo (2005) also emphasizes that the exchange of resources between coopeting subsidiaries will lead to reciprocal communication and the subsidiaries with strategic interdependence will share organizational knowledge. Tsai (2002) also argues benefits of coopetition for organizational