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  1. 1. CROSS CULTURAL MANAGEMENTSTYLE IN GERMANY Presented By: Abhishek Malhotra MBA II-B 6270
  2. 2. GERMANY Germany German: Deutschland), officially the Federal Republic of Germany (German: Bundesrepublik Deutschland), is a federal parliamentary republic in western-central Europe. The country consists of 16 states, and its capital and largest city is Berlin. With 81.8 million inhabitants, it is the most populous member state in the European Union. Germany is one of the major political and economic powers of the European continent and a historic leader in many theoretical and technical fields. A region named Germania, inhabited by several Germanic peoples, was documented before AD 100.
  3. 3.  Germany has the worlds fourth largest economy by nominal GDP and the fifth largest by purchasing power parity. Subsequently, it is the second largest exporter and third largest importer of goods. The country has developed a very high standard of living and features a comprehensive system of social security, which includes the worlds oldest universal health care system. Germany has been the home of many influential philosophers, music composers, scientists and inventors, and is known for it rich cultural and political history. Germany was a founding member of the European Community in 1957, which became the EU in 1993. It is part of the Schengen Area, and since 1999, a member of the euro area. Germany is a great power and member of the United Nations, NATO, the G8, the G20, the OECD and the Council of Europe. Germany is associated with big players like the Mercedes Benz, BMW, Volkswagen, Zeiss cameras, Lufthansa Airlines etc.
  4. 4. Culture and Language of Germany Religion Approximately 34% Protestant, 34% Roman Catholic, 4% Muslim, with Jewish and other non-Christian minorities. German culture began long before the rise of Germany as a nation-state and spanned the entire German-speaking world. From its roots, culture in Germany has been shaped by major intellectual and popular currents in Europe, both religious and secular. Historically Germany has been called Das Land der Dichter und Denker (the land of poets and thinkers). The federated states are in charge of the cultural institutions. There are 240 subsidized theatres, hundreds of symphonic orchestras, thousands of museums, and more than 25,000 libraries spread in Germany. These cultural opportunities are enjoyed by many: there are over 91 million German museum visits every year; annually, 20 million go to theatres and operas; 3.6 million per year listen to the symphonic orchestras. The UNESCO inscribed 33 properties in Germany on the World Heritage List. German is the official and predominant spoken language in Germany. Recognised native minority languages in Germany are Danish, Sorbian, and Frisian. The most used immigrant languages are Turkish, Kurdish, Polish, the Balkan languages, and Russian.
  5. 5. Society Germany is a modern, advanced society, shaped by a plurality of lifestyles and regional identities. The country has established a high level of gender equality, promotes disability rights, and is legally and socially tolerant towards homosexuals. Gays and lesbians can legally adopt their partners biological children, and civil unions have been permitted since 2001. During the last decade of the 20th century, Germany changed its attitude towards immigrants. Until the mid-1990s the opinion was widespread that Germany is not a country of immigration, even though about 20% of the population were of non-German origin. Today the government and a majority of the German society are acknowledging that immigrants from diverse ethnocultural backgrounds are part of the German society and that controlled immigration should be initiated based on qualification standards
  6. 6. Communication and Behavior If you do not speak German, be careful of addressing a person in English. While Germans can speak very good English, some may well feel offended by the presumption. Germans dont expect to be greeted by strangers ("since I dont know this person there is no need to get into superficial pleasantries"). Germans usually prefer third-party introductions whenever possible. Praising is not part of German business protocol and will often cause embarrassment. Football, recent holidays, work and beer are good conversation topics. World War II, the Holocaust and personal inquiries (salary, cost of personal objects, family) are to be avoided. German etiquette regarding who should pay the bill at the end of a meal is quite peculiar. The person who extends the invitation will be the person who pays. They do not expect you at all to fight for the bill. Your persistence will result in a serious offence. In Germany, a small gift is considered polite, especially when contacts are made for the first time. Substantial gifts are not usual, and certainly not before a deal has been reached. Gifts are expected in social events, especially to express your gratitude after being invited to a dinner party at a home. Avoid selecting anything obviously expensive. A bouquet of flowers (not in red) to the house lady will be a good choice. After returning home, remember to send a hand-written card to your hosts for their invitation. Punctuality in German business culture is sacred. Arriving 15 minutes late will be considered a very serious offence and could mean a shaky start to any potential business relations.
  7. 7.  The best time to schedule a business appointment is between 10:00 am and 1:00 pm or between 3:00 pm and 5:00 pm. Avoid scheduling appointments on Friday afternoon, as some offices will close by 2:00 pm or 3:00 pm on Fridays. Dress in corporate business is formal, dark and conservative for both men and women. Dress codes in the IT sector are more casual. Bring a plentiful supply of business cards. Unless you will be exclusively dealing with Germans, it is not necessary to have the reverse side translated. Germans should be addressed by the academic title given on their card In your card, include your full title or position, any university degrees you have earned and professional organisations membership. Germans will arrive at the meeting well informed, and expect the same from you. German executives tend to be analytical thinkers, requiring lots of facts and examples from the other side to support their position. German businesspeople tend to be traditionally cautious of new ideas and concepts. Institutional change comes very slowly and often quite reluctantly. Unlike North Americans, Australians and Spaniards, which are typically "high risk- taking" cultures, German businesspeople tend to be traditionally cautious to new ideas and concepts. Flexibility and spontaneity are not common traits in German business culture. When you are preparing promotional material, be aware that German executives are not impressed by glitzy advertising, illustrations or memorable slogans. Germans dont find it hard to say "no", "I cant", or "This is impossible". Decision-making is slow, protracted and every detail relating to your proposal will be carefully examined.
  8. 8. DressingBusiness dress is understated, formal and conservative.Men should wear dark colored, conservative business suits.Women should wear either business suits or conservative dresses.Do not wear ostentatious jewellery or accessories.
  9. 9. Overview of German Managementand Practices German management, as it has evolved over the centuries and has established itself since World War II, has a distinct style and culture. Like so many things German, it goes back to the medieval guild and merchant tradition, but it also has a sense of the future and of the long term. The German style of competition is rigorous but not ruinous. Although companies might compete for the same general market, as Daimler-Benz and BMW do, they generally seek market share rather than market domination. Many compete for a specific niche. German companies despise price competition. Instead, they engage in what German managers describe as Leistungswettbewerb, competition on the basis of excellence in their products and services. They compete on a price basis only when it is necessary.
  10. 10.  The German manager concentrates intensely on two objectives: product quality and product service. He wants his company to be the best, and he wants it to have the best products. The manager and his entire team are strongly product oriented, confident that a good product will sell itself. But the manager also places a high premium on customer satisfaction, and Germans are ready to style a product to suit a customers wishes. The watchwords for most German managers and companies are quality, responsiveness, dedication, and follow-up. If there is a third objective beyond quality and service, it is cooperation--or at least coordination--with government. German industry works closely with government. German management is sensitive to government standards, government policies, and government regulations. The German management style is not litigious. Neither the government, the trade unions, nor the business community encourages litigation if there is no clear sign of genuine and deliberate injury. Firms do not maintain large legal staffs. Disagreements are often talked out, sometimes over a conference table, sometimes over a beer, and sometimes in a gathering called by a chamber of commerce or an industrial association. Differences are usually settled quietly, often privately.
  11. 11. Making Appointments Never underestimate the importance of punctuality in German business culture. Arriving even five to ten minutes later than the appointed time is perceived as late, especially if you are a subordinate. Fifteen minutes would be considered a very serious faux pas and could mean a shaky start to any potential business relations. Be prepared to make an appointment for most things. Germans dont usually feel comfortable discussin g especially serious things “on the go”, so dont expect to be able to just drop into the office unannounced for any detailed discussions. Make your appointments well in advance. [Making appointments for a more detailed telephone conversation is also not unusual]. Give at least one or two weeks notice for an appointment made by telephone; allow at least a month for an appointment made by mail. If you dont have much preparation time, its sometimes possible to arrange for a brief, introductory meeting within a few days notice. If you must be late for any reason, its important that you call and notify the person who is expecting you. Moreover, you should give a plausible explanation for the delay. The preferred times for business appointments are between 10:00 a.m. and 1:00 p.m. or between 3:00 p.m. and 5:00 p.m. Avoid scheduling appointments on Friday afternoons, as some offices close by 2:00 p.m. or 3:00 p.m. on Fridays. Casually changing the time and place of an appointment is not appreciated. Allow for at least 24 hrs, if you can, to change or cancel appointments. Be prepared to offer a plausible explanation. Be sensitive to vacation and festival periods here. Germans generally have six weeks of paid vacation, which means someone is almost always “in Urlaub” [“on holiday”]. Therefore, be prepared to take this into consideration when making appointments or planning visits. For instance, Germans commonly take long vacations during July, August, December and Easter, when schools break.
  12. 12. Welcome topics ofconversation “Small talk” with strangers does not have a significant social function in German culture as it does in very relationship-oriented cultures [e.g. Mediterranean, South American, African, Middle Eastern countries] or the large immigration countries. In especially the latter cases, small talk and the art of conversation with strangers evolved out of a need to bridge considerable physical, cultural, and therefore psychological distance between individuals. Communities therefore grew from relationships built on common interests and needs [i.e. “Settlement community”] rather than from established familial and friendship ties [i.e. “Village community”]. Be prepared to take the first step as the newcomer to introduce yourself to an established group when you arrive in a new environment [e.g. office, student dormitory, social gathering, new neighborhood, etc.]. Unless you are specifically invited to join a group, do not automatically expect the established group to send out the “welcome wagon”. If you are a North American or Australian of non-European ethnicity, be prepared for Germans to assume quite openly that you are from a part of the world based on how you look. Despite the fact that Germany is a de facto “multicultural” society today, it is, like most European countries, a traditionally non-immigration, mono-cultural country. Moreover, despite the “multi-kulti” trend in the media today, the psychological distinction between “German” and “foreigner” is very much based on ethnicity. Therefore, North Americans and Australians of “visible ethnicity” should be prepared for a typical line of questioning from perfect strangers that attempts to establish where you are “really from”.
  13. 13.  Giving compliments is not part of German business protocol and can often cause embarrassment and awkwardness. Employees would, of course, be appreciative of praise from superiors, but do not expect it. Compliments, especially from strangers or very casual acquaintances can, in fact, be taken with suspicion [“What does he/she really mean to say or want?”]. Germans traditionally use “Wie geht es Ihnen?” [“How are you?”] as a literal question that expects a literal answer, in contrast to the common English usage of “Hows it going?” to simply meaning “Hi”. It may, therefore, be considered strange or superficial to ask the question and keep on moving without waiting for an answer. Many people, when asked, will, in fact, give you a very detailed answer, including why they are not doing well at that moment! The “Americanization” of the usage of “Wie geht es Ihnen?” as a casual greeting is nonetheless catching on, something many people find irritating and label “superficial”. If you are an invited guest, or coming for the first time from a potential partner company in a very relationship-oriented culture like the Middle East, Africa and the Far East, be prepared for a different margin of hospitality. The German fact-oriented culture makes a very clear distinction between time spent to cultivate business and personal relations. Sports, particularly soccer [the national sport] Travel, recent holidays Current events, politics [if you know what youre talking about] Work and professions Your previous experiences and travels in Germany and other parts of Europe Among those who imbibe, beer is often a good topic of conversation. Germany produces some of the finest beers in the world, and seasoned drinkers enjoy comparing and contrasting the qualities of the various brews available.
  14. 14. Negotiating in Germany Punctuality is necessity in Germany. Arrive on time for every appointment, whether for business or social. Being late, even if it is only by a few minutes, is very insulting to a German executive. In business situations, shake hands at both the beginning and the end of a meeting. Business is viewed as being very serious, and Germans do not appreciate humor in a business context. Bring plenty of business cards. Businesspeople from the Far East and Arab countries should provide the English translation of the information on one side of their cards, as well as the Romanization of their names, for easier initial communication. Unless you will be exclusively dealing with Germans, it is unnecessary to have the reverse side translated into German. Germans, like other Europeans, write their first names before their family names and should be addressed by the academic title given on their card [e.g. “Dr.”]. Include your full title or position, and any university degrees you have earned or optionally professional organizations with which you are affiliated. When designing your card, keep in mind that German businesspeople will want to learn as much about your background and qualifications as possible.
  15. 15.  Unless you are in the IT branch of business, meetings normally follow a formal procedure presided over by the chairperson of the meeting. Follow the example of the senior participants as to how informal or formal you should act, dress, and sit. If it is the very first meeting for you in Germany or in a particular company and you are unsure about in-house procedures, do not hesitate to ask your host in private what you should expect or do. Do not think that this would put your host in any uncomfortable or awkward position; neither should you yourself feel embarrassed about having to ask. Germans are very straightforward and direct, especially in the business environment. It is part of their normal communication behavior for someone to openly ask for clarification. This is to prevent complications later when it is revealed by accident that someone had not understood instructions or expectations. The German side will arrive at the meeting well-informed, and will expect the same from you. Even at initial meetings where, in your culture, you may spend most of the time getting acquainted and building a personal relationship between you and a potential business partner, expect the Germans to address issues, problems and facts through very technical communication behavior. If this is not your intention in the initial meetings, make a point of clarifying your intentions and expectations beforehand, so that both sides are aware of the other sides expectations and likely communication behavior. Because Germans are schedule-oriented for a most efficient management of business time, expect their business communication behaviour to be very agenda-based. Germans tend to be intensely analytical thinkers, requiring lots of facts and examples from the other side to back up their position. Objective facts are the basis for truth in German business culture, and legalistic, rational reasoning is the cornerstone of business negotiations and communication. Ultimately, personal feelings and relationships cannot be relevant to business negotiations, as this can compromise the fairness or integrity of the deal.
  16. 16.  Contracts, therefore, if not holy, are certainly final after signing. Maneuvering for further concessions is not possible, unless both sides agree on it. Failure to honor the terms and conditions of a signed contract can lead to legal action taken against the partner. Businesspeople from cultures that traditionally regard contracts as mere “statements of intent” which later respond to the realities and nature of the partners relationship should not expect German enterprises to be able to adapt too much to this way of thinking. Attempts to continue negotiations or revise fixed terms will create distrust and suspicion and may be grounds to terminate the agreement. German businesspeople tend to be traditionally cautious of new ideas and concepts. Institutional change comes very slowly and often quite reluctantly. Therefore, German businesspeople do not respond as much to the “sell” as North Americans, Australians and Spaniards, which are typically “high risk-taking” cultures. Tone down the “hype” and provide lots of logical argumentation and concrete examples to back up your proposal based on much more facts and data than you would use in your home culture. Detailed planning has enormous value in German culture and is a principal characteristic of German business co-operation
  17. 17. Individualism In Germany people stress on personal achievements and individual rights. Germans expect from each other to fulfill their own needs. Group work is important, but everybody has the right of his own opinion an is expected to reflect those. In an individual country like Germany people tend to have more loose relationships than countries where there is a collectivism where people have large extended families
  18. 18. Do it the German Way!!!