Automobile Supplier Network Organisation in East Germany: A Challenge to the German Model of Industrial Organisation

Steven Casper

Industry and Innovation, 1997, vol. 4, issue 1, 97-113

Abstract: Lufthansa's system of corporate governance, based on consensus decision-making and company guidance at the Vorstand(Executive Board) level, was institutionally adapted to the airline industry environment as long as technological change was essentially continuous, but placed Lufthansa at a comparative disadvantage in the 1980s when regulatory and technical changes in the industry required more radical shifts in the strategy and organisation of the company. After a failed attempt to develop the aviation equivalent of 'diversified quality production' a la BMW, Lufthansa's survival in the 1990s seemingly hinged on its ability to find alternative routes to Vorstand-level control of its operations. These developments are analysed using a theory of 'comparative institutional advantage'.

Date: 1997
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DOI: 10.1080/13662719700000006

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