The Business Culture of Germany
International Business
The Business Culture
of
Germany
Geography and Demography
Located in: Central Europe
Bordered by: The Baltic Sea, The North Sea, The Netherlands, Poland, Denmark , France, Czech Republic, Switzerland, Austria, Belgium, Luxembourg
Landscape: Low and high mountain ranges are interspersed with upland plains, terrace country, hilly regions and lakelands as well as wide, open lowlands. From north to south Germany is divided into five regions with different topographical features: the North German Plain, the Central Upland Range, the terrace panorama of the southwest, the Alpine foothills in the south and the Bavarian Alps.
Climate: Temperate and marine, cloudy, wet and cool winters and summers; occasional warm winds
Population: 82,424,609 (July 2004 est.)
Capital: Berlin
Languages: 99% of the population speaks German, although there are many dialects spoken in the various regions.
Ethnic groups:
The "Other" segment is made up of Greek, Polish, Italian, Russian, Serbo-Croatian and Spanish migrants.
Religions:
. The Catholic and Protestant churches contributed to social and political development.
2. Today, they publish documents and take part in debates on issues like peace and disarmament and labor market policy, abortion and protection of the environment.
3. The relationship between church and state is that of a partnership, regulated by concordats and agreements.
4. Around three million Muslims from 41 countries, most of them from Turkey form 2% of the population.
5. The Jewish communities have nearly 100,000 members and the largest Jewish community in Germany exists in Berlin with more than 11,000 members.
Politics
Germany is a constitutional federal democracy, whose political system is laid out in the 1949 'constitution' called Grundgesetz (Basic Law).
Parliament consists of Federal Assembly(Bundestag) and Federal Council(Bundesrat).
The head of government, the Bundeskanzler (Chancellor), is elected by the parliament.
Chief of state: President Johannes RAU (since 1 July 1999)
Chancellor: Gerhard Schroeder(SPD)
Major political parties
Alliance '90/Greens
Christian Democratic Union or CDU
Christian Social Union or CSU
Free Democratic Party or FDP
Party of Democratic Socialism or PDS
Social Democratic Party or SPD
History
The German language and the feeling of "Germanhood" go back more than a thousand years, but the state now known as Germany was unified as a modern nation-state only in 1871 in Versailles, when the German Empire, dominated by Prussia, was forged excluding Austria. This was the second German Reich.
The first Reich(the Holy Roman Empire of the German Nation) existed until dissolved in 1806 as one of the consequences of the Napoleonic Wars.
The Third Reich was that of the Nazis, which lasted only 12 years, from 1933 to 1945.
After being subdued by France in the Napoleonic Wars, France was to be perceived as Germany's arch-enemy in the successful Franco-Prussian War of 1871 and in World War I. Germany subsequently invaded France. After initial advances, the war amounted to a slow war in the trenches, killing many on both sides. The war ...
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The first Reich(the Holy Roman Empire of the German Nation) existed until dissolved in 1806 as one of the consequences of the Napoleonic Wars.
The Third Reich was that of the Nazis, which lasted only 12 years, from 1933 to 1945.
After being subdued by France in the Napoleonic Wars, France was to be perceived as Germany's arch-enemy in the successful Franco-Prussian War of 1871 and in World War I. Germany subsequently invaded France. After initial advances, the war amounted to a slow war in the trenches, killing many on both sides. The war ended in 1918, Germany's emperor was forced to abdicate, and after a quenched revolution the Second Reich was succedded by the democratic Weimar Republic.
In the following Peace Treaty of Versailles, Germany was held responsible for the war. Economic hardship due to both the peace conditions and to the world wide Great Depression is mostly pointed to as explanation why anti-democratic parties, both right-wing and left-wing, were increasingly supported by German opinion leaders and voters. In extraordinary elections of July and November 1932, the Nazis got 37.2% and 33.0% respectively. On January 30, 1933, Adolf Hitler was appointed Head of Government, and by the Enabling Act on March 23, 1933, a wide majority of the parliament disbanded the constitution of the Weimer Republic.
The following year, Hitler achieved absolute control. He also succeeded the Head of State. Hitler's policy of annexing neighbouring lands eventually led to the outbreak of World War II in Europe on September 1, 1939. Initially, Nazi Germany had many military successes, and gained control over most of Europe's mainland, including a large part of the Soviet Union. After the Soviet Union and the United States entered the war, the momentum in the war switched. On 8 May 1945, Nazi Germany surrendered after Adolf Hitler committed suicide. The war resulted in large losses of territory, 10 millions of Germans expulsed, and 45 years of division, while the country was split up into West and East Germany.
After the fall of Communism in Europe, Germany was in 1990 again united; together with France the new Germany is playing the leading role in theEuropean Union. Germany is at the forefront of European states seeking to exploit the momentum of monetary union to advance the creation of a more unified and capable European political, defense and security apparatus.
Economy
. World's fifth largest economy; Slow growth(1%)
2. Generous social benefits due to aging population.
3. Unemployment is the biggest long-term problem.
4. Integration of East German economy is costly process. East Germany still not as affluent and competitive as West Germany
Challenges:
. Reducing employment.
2. Bridging gaps between East and West Germany - "Aufbau Ost"
Major branches of Industry
. Automobile industry
2. Mechanical engineering and plant construction
3. Chemical industry
4. Electrical and electronics industry
5. Textile, clothing and leather goods
6. Food and beverages
7. Ship-building
8. Textiles
9. Machine tools
0. Iron and steel
1. Coal
2. Cement
Figures
. GDP: Purchasing Power Parity - $2.271 trillion (2003 est.)
2. GDP per capita: purchasing power parity - $27,600 (2003 est.)
3. GDP Composition per sector(2002 est.):
Agriculture - 1%
Industry - 31%
Services - 68%
4. Population below poverty line - NA
5. Unemployment rate - 10.7%(2003 est.)
6. Fiscal Year - Calendar year
Cultural Dimensions
Hofstede's dimensions
. Low power-distance
2. Individualism
3. High uncertainty avoidance
4. Masculinity
Hall's Dimensions
. Low-context communication
2. Monochronic
Kluckhohn and Strodtbeck's dimensions
. Mastery over nature
2. Time orientation towards the future
3. Nature of humans - evil
4. Relationship among people - individualist
5. Mode of activity - Doing-achieving
6. Conception of space - Private
Trompenaars' Dimensions
. Universalist
2. Individualist
3. Neutral
4. Specific
5. Achievement-orientation
6. Future-oriented
7. External control of nature
Regional Differences
Erstwhile East Germany
. Possible mentality of entitlement
2. Lack of entrepreneurial spirit
3. Limited English competency compared to West German counterparts
North Germany
. Heavily industrialized
2. More liberal
3. Protestant
South Germany
. More rural
2. Conservative
3. Catholic
Miscellanoeus notes
After and because the Holocaust, Germans believe that to not interfere when a crime/unethical act happens is worse than committing the crime/unethical act itself.
Management Culture
. High degree of formalization with respect to rules, tasks etc.,
2. Detailed planning and organization to mitigate risks
3. Authority of manager based on competence and knowledge
4. Factual and issue-related attitude
5. Product, quality and customer-oriented
6. Extremely sensitive to government regulation, policies and procedures
Business Hours
Offices: Mondays to Fridays - 9 AM to 6 PM with a 1 hour lunch break
Banks: Mondays to Fridays - 8:30 AM to 1 PM and 2:30 PM to 4 PM
Thursday till 6 PM
Stores: Mondays to Fridays: 9 AM to 6:30 PM
Saturdays (shopping centers) : 9 AM to 4 PM
Business Etiquette - Do's and Don'ts
Appearance
. Dress conservatively.
2. Stick to dark suits and light shirts/blouses.
3. Khakis and other informal wear for men are inappropriate for business. Even in sweltering temperatures, Germans will often remain in their suit jackets and ties.
4. On the street, jeans and sneakers can be acceptable leisurewear, although this kind of clothing is usually reserved for the gym or the beach.
5. For a social gathering, informal typically means tastefully coordinated clothes, although not necessarily a jacket and tie for men.
6. An invitation stating "formal dress" usually means formal eveningwear.
Behavior
. Arrive on time for every appointment. Arriving 15 minutes late might jeopardize business relations.
2. If you must be late for any reason, it is important that you call to notify and apologize to the person who is expecting you. Also, you must have a plausible reason for being late.
3. Always make appointments to meet associates. If you need to phone someone and you think it might be a long or detailed call, it is advisable to make an appointment.
4. Use "Herr" and titles unless specifically asked to drop them. Also, if speaking in German, stick to the respectful forms of "you" unless specifically asked not to. This is true both in conversation and for email.
5. Do not use humor in the business context
6. Give them larger personal space
7. If in a group meeting, let the oldest person enter or be seated first.
8. Shake hands at both the beginning and end of every meeting. The handshake may be accompanied by a slight bow. Look directly into a person's eyes while shaking his hand.
9. When being introduced to a woman, wait to see if she extends her hand.
0. Women must refrain from wearing strong perfumes or ostentatious jewellery.
1. Any display of wealth is frowned upon, especially in East Germany.
2. Do not phone a German exec at home without permission.
3. Do not refer to World War II or the Holocaust in your conversation.
4. Do not ask personal questions about family, pay etc.,
5. Acceptable gifts at business meetings are items of office equipment, good quality pens or non-German liquor.
6. An invitation to a German manager's home is a special privilege and should always be followed by a thank-you note.
7. When invited to a home, good quality chocolate, a scarf for your hostess or flowers (an odd number) are acceptable as gifts.
8. Never give 13 flowers.
9. Avoid scheduling or asking for meetings during the months of July, August or around national holidays as these are the times during which Germans vacation.
20. If you are staying overnight, very often you will be invited to go out for dinner with your business partner. In this event, he will also pay for the dinner. It is polite to offer to pay when the check arrives, but if your business acquaintance declines, accept his invitation and thank him for the generous gesture.
21. The customary way to answer a phone at a German company is to state the name of the company, the name of the person answering the phone, and a greeting.
22. Support all statements with facts and figures. Keep the language simple and direct. Avoid glitzy promotion. Instead stick to technical data.
23. If in doubt, seek clarification immediately. This will be appreciated.
24. Practice diplomacy whenever you can, especially if the other party is not prepared or in a position to do it himself/herself. Any attempts to be aggressive or confrontational with a sizeable German company are counter-productive.
25. Do not expect decisions to be made at the negotiating table. Decision-making is protracted and intractable.
26. Do not directly address a person without being introduced first. Germans prefer third-party introductions.
Interview with Jaya SV at Daimler-Chrysler, Bangalore
Jaya went to Stuttgart for a month on business.
"They are so serious, I feel like I'm giggling all the time even if I am just trying to be friendly. Germans can't do small talk! But they are very thorough in their work. And the autobahn is the best driving experience ever. It is highway heaven."
Interview with Jayesh Menon at Honeywell, Bangalore
Jayesh went to Mannheim for 2 weeks on business.
"I hated the food. It's very difficult to get vegetarian food. And everyone keeps drinking beer, even at lunch. But work was good. Everything got over on time. So I could leave work early and didn't have to work weekends. So I got to see the country a little bit. Very beautiful. Very, very clean."
References
. http://adcapita.com/AdNews/Germany/Overview.htm
2. http://www.cyborlink.com/besite/germany.htm
3. www.executiveplanet.com
4. www.germany-info.org
5. http://workabroad.monster.com/articles/germanetiquette/
6. http://www.worldwide-tax.com/germany/gerbusiness.asp
7. http://www.cia.gov/cia/publications/factbook/geos/gm.html#Econ
International Business Germany