Abstract: Becoming Global, Staying Local: The Internationalization of Bertelsmann, 1962-2010

Hartmut Berghoff

Abstract

This paper looks at the history of Europe's largest media company, Bertelsmann AG. Bertelsmann has long been family-run and is still today family-owned and -controlled. The company employs over 100,000 worldwide and consists of several divisions, including publishing and broadcasting. This paper first examines theories of internationalization of family businesses and then applies them to Bertelsmann. Their internationalization pathway began only in the 1960s with a market entry into Spain. Later on the geographical scope was broadened; in the 1970s Bertelsmann began to play a strong role in the U.S. media market. The essay demonstrates that despite the tighter growth restrictions on family firms, Bertelsmann managed to internationalize dynamically. It found ways to incorporate foreign capital as well as management talent without losing control of a widely diversified and geographically dispersed company. Bertelsmann was able to become global and to stay local in a double stance. First of all, it remained firmly rooted in its home region in Germany, where its headquarters are still based today. Second, it has found ways to become local in foreign countries, mainly by choosing indigenous managers and giving them ample leeway within a decentralized structure.