ESSAY ON: Lufthansa: Consequences of Poor Decisions

Number of Pages 13

This research paper: A 13 page paper discussing a Thunderbird case (A07-99-0028) describing events and conditions surrounding Lufthansa's 1985 decision to purchase 20 Boeing 737s to be delivered in 1986. Chairman Heinz Ruhnau made some exceedingly poor decisions that had no basis in fact and then was called to account for them before the Board. Ruhnau believed that the all-time-high dollar would fall in the ensuing year and it did, but Ruhnau's belief was not based on fact. He chose to hedge half of Lufthansa's exposure in case he was wrong, but he chose the wrong instruments to use. Further, he ignored European Airbus, Boeing's primary competitor in passenger aircraft. The paper examines the facts of the case as well as the positions of both Ruhnau and Lufthansa's Board of Directors, concluding that the Board likely has no choice but to replace Ruhnau as Chairman. Bibliography lists 1 source.


File: CC6_KSLufthansa.doc


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