GLOBAL BUSINESS CULTURAL ANALYSIS – GERMANY 25
GBCA Comprehensive Outline: Germany
What are the major elements and dimensions of culture in this region?
Values and Attitudes
Manners and Customs
Social Structures and Organizations
How are these elements and dimensions integrated by locals conducting business in the nation?
Values and Attitudes
Manners and Customs
Social Structures and Organizations
How do both of the above items compare with U.S. culture and business?
Compare and Contrast Germany with U.S.
What are the implications for U.S. businesses that wish to conduct business in that region?
Analysis of Facts from the Three Questions Above
It is imperative to conduct a business cultural analysis of a countryprior to doing business. In this paper, the analysis focuses onGermany. It is aimed at evaluating the different elements anddimensions of culture that are evident in the country. These rangefrom communication, ethics and education among other aspects. Thepaper also evaluates how the elements and dimensions are used byGermans when doing business, comparison with American businessculture and the implications for U.S. businesses that intend to dobusiness in Germany.
Germany is known for its richhistory in terms of business and this has been observed through manychanges that have occurred over the past few decades. Even thoughthis nation has undergone certain devastating struggles, todayGermany boasts as one of the largest economies across the globe aswell as being the second most populated nation in Europe. This paperis mainly going to analyze German’s culture elements anddimensions, how such dimensions tend to affect the various ways thatbusiness in this nation is conducted, how the German business cultureand business compares with U.S., and the implications for U.S.businesses that wish to do business in Germany.
1What are the major elements anddimensions of culture in this region?1.1History
Germany has not always been a single country. In 1949, with theemergence of the cold war, the nation was divided into two states.These were the Western and Eastern Germany. The Western side wasreferred to as the “Federal Republic of Germany” and it sidedwith the North Atlantic as well as European Commission. The Easternside was referred to as the “German Democratic Republic”, and itformed alliance with the Soviet Union. However, in 1990 both sideswere united to form a single country.
Following the unification, Germany became a major player in theEuropean Union. Due to the differences in the economies of Westernand Eastern Germany, it was not easy to unite both economies. WesternGermany was successful, while the East had been in decline for years.In order to mend the differences and ensure that both sides wouldremain united, a treaty was created that dealt with the financial andeconomic matters, resulting in the formation of a strong economy.
Communication is a very important factor to consider when doingbusiness. It is especially significant when dealing with a foreigncountry, because countries have different communication cultures. Inorder to successfully do business with a foreign country, it isnecessary to be aware of the country’s culture. The knowledgeenhances understanding, ensures that disparities are recognized,appreciated and put into consideration prior to any businesstransactions.
For instance, communication styles and gestures used in othercountries differ from those used in Germany. Issues and gestures thatmight be normal and acceptable may probably be considered taboo inthe country. Such communication errors could result in seriouseffects on the success of a business negotiation procedure. Despitethe fact that German is a culturally aware country, it hasexpectations in reference to other countries being aware of theirunique communication culture.
1.2.1 Verbal communication. The main language used inverbal communication is German, which is the first language employedby most Germans. It is characterized by unmediated as well as directcommunication. Germans prefer direct communication as it ensures thatbusiness discussions are direct. This means that they go straight tothe point. Such direct communication is considered an effective wayof saving time and that the discussions only comprise of substanceinformation (Berg & Holtbrugge, 2011). It is also a strategy ofavoiding any form of misunderstandings between both sides doingbusiness. Germans are able to achieve such direct communicationbecause they place more emphasis on the task instead of therelationship that could be formed amid the business partners.
There are important hints to put into consideration whencommunicating with Germans. They are straightforward in theircommunication, meaning that they speak their mind. There are nohidden meanings or agendas in what a business partner says (Marcus &Gould, 2014). They also handle the communication from their businesspartners in the similar manner. This means that anything a businesspartner says is accepted as said, because Germans believe there areno hidden meanings in communication.
Germany does not use hints. If an individual fails to be direct whenmaking their request, chances are that the request will not begranted. The same case applies when one is disinterested insomething. It is better to communicate directly in place of givinghints (Ehrenreich, 2010). A direct no is accepted in the country,contrary to the common yes that could also be used to refer toprobably or maybe. Failure to use direct communication could resultin business misunderstandings with Germans. For example, byresponding with a yes, it indicates that an agreement has been formedbetween both parties and the tasks outlined will be performed. It isespecially the case in business contracts (Hutzschenreuter &Voll, 2015).
When conducting business, Germans rarely use humor, irony or sarcasm.The country considers such communication as obstructive incomprehending the seriousness of arguments. It could also causeconfusion and unexpected business outcomes. The same case applies tothe use of exaggerations and pretense when communicating, or theexcessive use of compliments. Such communication strategies inGerman’s culture are considered artificial, and unwarranted.
It is important to note that any discussions relating to the SecondWorld War or the holocaust ought to be avoided. These are considereduncomfortable issues by Germans, specifically among the oldpopulation. Supposing that the issues come up, they should bediscussed neutrally to avoid offending the Germans. In fact, whendoing business with Germany, it is advisable to introduce suchdiscussions when certain that one’s company is capable of amendingany damage that may arise.
1.2.2 Non-verbal communication. Germany has a low contextculture, which makes communication is mainly verbal (Sternberg &Wennekers, 2015). Nevertheless, nonverbal communication plays acrucial role in the German business culture. Some non-verbalcommunication factors to put into consideration include proxemics,kinesics and chronemics.
Proxemics refers to the distance that is maintained between twoindividuals when communicating. The distance should be approximatelyan arm’s length. Germans have a tendency to stand as well as sitapart and not close to each other, as compared to individuals fromother cultures (Stonehouse et al., 2012). They are also likely tofeel uneasy when they sit too close together. The country has a lowcontact culture. Hence, minimal physical contact is to be expectedapart from the usual handshake. They do not automatically becomeclose to an individual, rather they chose to maintain the distanceall through the communication.
Kinesics is the use of gestures. There is a minimal use of hand orarm gestures when communicating. Also, it is considered rude to touchone’s forehead during a conversation, especially when directlylooking at another individual. Supposing the German raises hiseyebrows during a conversation, it is a sign of compliment, forinstance, for raising an important point or a clever comment. Also,people from other countries should avoid making remarks while usingtheir fingers. For example, use of the index finger as well as thumbto make a circle as a sign of agreement, is viewed as a rude form ofnon-verbal communication. During the start and conclusion ofmeetings, firm handshakes are used in line with eye contact. The firmhandshake should not be substituted with a soft handshake as thelatter can be misunderstood as a sign of weakness. Poor or lack ofeye contact might also be interpreted as dishonesty, lack ofreliability or shiftiness.
Chronemics refers to time keeping. Germany has a monochromic way oflife, which means that time keeping is very important. This appliesto all aspects of business meeting, meaning the amount of timeallocated for a meeting should be clear and adhered to (Pistorius, etal., 2012). Also, the amount of time taken to present ideas shouldalign with set agendas. When organizing for business meetings, it isimportant to ensure all schedules as well as agendas are followedstrictly. It is equally significant not to avoid business meetings.Individuals are expected to arrive for business meetings in time oreven ahead of time. Arriving late is likely to be interpreted as anindication of unreliability.
Germany is rooted on Christian traditions hence, the main religionis Christianity. More than half of the country’s citizens areChristians. The main denominations are Protestants and Catholics. Twothirds of Germans are Protestants, while a third are members of theRoman Catholic Church (Logsdon & Wood, 2012). The largeprotestant group can be attributed to the protestant reformation. Thereformation resulted in a massive break away of some Christians fromthe catholic faith to join the protestant movement.
As a result, religion was distributed based on the choices of localrulers during the 15th to 16th centuries. This in turn affected theconcentration of different denominations in some regions. Forinstance, most regions in Western and Southern Germany comprise ofCatholics. The Northern and Eastern regions are made up ofpredominantly Protestants. Other religions in the country are theEvangelical Churches and minority religions, like Islam, Buddhism aswell as Judaism.
Ethics are a significant cultural consideration when doing businesswith individuals from another country. They differ from country tocountry. What is considered ethical in Germany might not be viewed asa relevant ethical consideration in the United States. However, toensure that the business relationship is not jeopardized, businesspeople are encouraged to adopt the ethical practices of prospectbusiness partners.
Germans are careful planners, which is evident in the way theyconduct their businesses. They ensure that all business rules areadhered to, and have a low level of flexibility. Whatever agreementsare made during a business negotiation must not be changed, becauseGermans dislike surprises (Ahmed et al., 2013). Business isconsidered a serious affair. As a result, respect is a very importanttrait in order for a business to be successful. The businessrelationship ought to be founded on respect, which is achievedthrough openness as well as readiness during business negotiations(Singh, Fassott, Zhao & Boughton, 2011).
1.5Values and Attitudes
Germany has shared values as well as attitudes, which are adhered toby every civilian. Germans tend to prioritize punctuality, structureas well as privacy (Martin et al., 2012). Other values embraced byGermans include working hard, being industrious and thriftiness. Itis common for civilians to organize their duties into units that canbe controlled. Thus, time is considered an important factor. Agendasand planned meetings ought to be respected.
Additionally, Germans can be described as individuals who seekperfectionism and accuracy, rarely accept faults nor givecompliments. Initially, their attitude can be misinterpreted asunfriendly due to their directness in communicating. Nevertheless,they have a high regard for community.
1.6Manners and Customs
Manners and customs differ across cultures. It is important forpeople intending to do business in another country to familiarizewith the different manners and customs that they will encounter. Thisenhances the success of the business relationship. Some of themanners that are highly regarded in German include being punctual,professionalism, dressing appropriately and privacy.
Punctuality refers to adhering to the time that is set when arrivingfor meetings or during business discussions. Time should be properlyplanned to ensure that one neither arrives too early or too late fora business meeting. Despite being strict with time, Germans frownupon arriving too early. One should be no more than ten minutesearlier. In case of unavoidable delays, it is expected that oneshould make a call in advance and explain their reason for the delay.As such, business decisions are made fast because Germans focus ondiscussing important issues pertaining to the business.
Once a business meeting has been arranged with Germans, it is crucialto maintain a high level of professionalism. This means that all theissues discussed must be relevant and related to the business agenda(Taylor et al., 2012). Personal questions ought to be avoided as muchas possible. Unlike other cultures that may initially begin abusiness partnership by forming a personal relationship, Germans donot value such relationships. They are more concerned about one’sbusiness credentials. Also, compliments during business meetings areunwelcome as they are considered unnecessary.
Germans have a tendency to dress well regardless of the occasion,because they are concerned about their appearance and presentability.It is especially the case when attending business meetings. Formaldressing should be considered for attending business negotiations.However, when choosing to dress informally, the dressing must beconservative and tidy. Men are expected to dress in a dark coloredsuit, in addition to a conservative tie and shirt that is white incolor. Women should also wear suits, which do not have bright colors.A dress may be worn, but it must not be revealing. The dress codeshould be maintained all through the meeting regardless of theweather. It is considered bad manners for one to remove their tie orcoat before the German business partners.
There are different ways through which privacy is observed byGermans, especially during formal meetings. Doors remain closed allthrough the business negotiations. Assuming that an individual leavesthe room during a meeting, it is appropriate to knock and wait to beallowed in the room. Business issues are not discussed during breaks,as they are reserved for when the meetings will take place. It alsoensures that third parties do not get to know about the businessdeals.
It is necessary to avoid any form of surprises or unplanned changesin business agendas that have already been discussed. The Germancustoms are reluctant to accepting surprises regardless of ananticipated positive outcome from the surprise. Business isconsidered as a serious affair thus, it is good manners for allparties to strictly adhere to the agreements that are made duringmeetings.
1.7Social Structures andOrganizations
Germany is made up of flatter organizational structures, whereorganizational roles are properly defined. However, seniority is notemphasized because the country is decentralized (Del Junco &Bras-dos-Santos, 2013). Work roles are clearly defined within anorganization. Since the country is highly individualistic, it isuncommon for employees to work as a team.
Workers are expected to stay within the limits of the roles assignedto them. In addition, organizations are discouraged from takingrisks. Hence, employees are expected to avoid uncertainty atworkplaces. Businesses tend to carefully plan for all their endeavorsbecause emphasis is placed on the competency of the individualsworking in an organization.
Similar to other developed countries, Germany places great emphasison the need for every child to be educated. Education is associatedwith social status as well as titles. People who have a high level ofeducation are likely to enjoy a higher level of social status. Also,because many organizations tend to focus on the competency of anemployee, education enhances the employability chances of anindividual.
Homeschooling is not permitted in the country. Parents enroll theirchildren to private or public learning institutions. However, privateschools are rare and most children end up studying in public schools.Private institutions are mainly a reserve for the children ofprominent members of the society. The highest level of educationqualification is degrees, in specific doctoral. Students are alsofree to attend apprenticeship programs.
2How are these elements anddimensions integrated by locals conducting business in the nation?2.1Communication
Locals doing business in Germany are highly likely to communicate inGerman. Because a high percentage of the population communicates inthe language, it is the main mode of communication. Also, many localsare more conversant with German, as compared to other languages,making its use an ideal choice. Verbal communication by locals isdirect. They go straight to the point when discussing issues. Thetask is considered as the most important business aspect, whichexplains the use of direct communication. In non-verbalcommunication, important distances are maintained between individualsexchanging ideas. For instance, locals tend to sit apart and notclose to each other. When meeting, a firm handshake is used, whilegestures are restricted, except when necessary.
The country is deeply rooted on Christian beliefs. Thus,Christianity is an important factor considered by locals doingbusiness. Business engagements are affected by religious issues. Whenplanning to do business, the locals begin by reviewing the religiousbeliefs of the individuals that they intend to do business with, andhow the beliefs have been included in the business. Religion isconsidered a significant factor, which is often included in thestrategic plans of businesses. As a highly Protestant nation,Protestantism plays a crucial role in how locals do business. Manyare likely to follow their Christian teachings in deciding on thekind of business to engage in, the business deals that are made andwhat course business negotiations take.
Business ethics have been identified as an important business factor.Considering that the ethical ideals practiced in Germany tend todiffer from those of other countries, locals ensure that they followthe main ethical practices. Locals are less likely to exerciseflexibility when doing business. The country has a low level offlexibility, which affects how business decisions are made. As such,it is almost impossible for locals to change the business agreementsthat are settled upon during negotiations. Business rules arestrictly followed, such as the need to ensure that both partiesrespect each other. Thus, openness and readiness to discuss businessissues is highly practiced by locals. Openness is expressed throughthe direct communication approach used by Germans.
2.4Values and Attitudes
Owing to the fact that Germans have shared values and attitudes, itis common for locals to follow the cultural elements when doingbusiness. Punctuality and privacy are some of the values that areintegrated in business. Locals ensure that they arrive in meetings ontime and maintain the level of privacy required all through thebusiness meetings. Also, Germans tend to work hard towards achievingthe agendas that have been decided upon, or the roles they areexpected to complete in a business. Due to the highly individualisticnature of the country, industriousness is common among locals as theyare likely to be doing business as individuals and not groups. Also,locals avoid complimenting each other when doing business, as theyare considered unimportant.
2.5Manners and Customs
Germans have a strict adherence to their manners and customs. It ishighly likely that locals will attend business meetings slightlyearlier than the designated time. In case of any unavoidable delays,they call in advance to explain their reason for being late. Localsare likely to attend meetings properly prepared to present theiragendas. Each agenda is allocated a specific amount of time.Professionalism is expected all through the business meetings. As aresult, only issues relating to the business are discussed andpersonal information is avoided at all costs. Locals dress well forbusiness meetings. They are likely to be wearing a suit and tie, andconservativeness in dressing is observed. The business conclusionsmade remains unchanged (Mayrhofer & Scullion et al., 2012Mayrhofer, 2014).
2.6Social Structures andOrganizations
Due to the flat organizational nature of Germany’s culture, localsare likely to engage in business activities where their roles areproperly defined. Also, it is less likely that locals will beinvolved in businesses that require them to work as teams. Becausethe country is individualistic, many individuals prefer to conductbusiness on their own. Hence, teamwork is not common among locals inbusiness. In addition, locals avoid business risks. As a low riskcountry, businesses are discouraged from taking business initiativesthat may jeopardize a business. Germans tend to avoid businesses thatpresent uncertainties, and hence will be clear and straightforwardwhen making business decisions.
The high emphasis that is placed on the competency of individuals,as a factor to be considered in organizations, encourages many localsto advance their education. As discussed, business negotiations focuson business facts exclusively. It is necessary for locals to be wellknowledgeable about the business ideas that they are presenting. Theknowledge is attained through education, which ensures that one gainsthe needed skills to do business.
3How do both of the above ItemsCompare with U.S. Culture and Business?3.1Compare and Contrast Germany withU.S.
The analysis of the major elements and dimensions of culture andbusiness in Germany, as well as how they are incorporated by localsin business, makes it possible to point out apparent disparities amidthe U.S. and Germany.
The first disparity is apparent in communication. German is the mainlanguage of communication used by Germans. Locals tend to use thelanguage when conducting business. On the contrary, English is thenational language used in America. As such, it is possible that alanguage barrier may impede the ability of Americans doing businesswith Germans. Although Americans may learn a few German words, theywill require an interpreter. The use of an interpreter is likely toslow down the business negotiation process as well as reduce theeffectiveness.
Another difference is evident in non-verbal communication. In theUnited States, ideas and exchanged freely. Americans are encouragedto express their feelings during business discussions, use gesturesfreely and do not place emphasis on reflecting on what is said.However, in Germany it is crucial to be careful concerning what onesays. Since communication is direct, people must reflect on what theyare saying to ensure honesty. A distance is maintained between oneindividual and the other when communicating. This may pose achallenge for Americans that wish to do business with Germans. Thus,Americans should ensure that they learn about German culture inadvance.
A difference in the values of German and the U.S. is evident in thesignificance placed on privacy. Americans do not place importance onthe need for privacy. Hence, it is possible for doors to remain openduring business negotiations. Offices comprise of an open plan, whichmeans that employees are within the range of each other. Also, thecountry has an open-door rule, meaning one is not necessarilyrequired to knock prior to entering a room. Contrary, Germans insiston the need for privacy. Thus, doors must remain closed, especiallyduring business meetings. The country employs a closed-door rule,which implies that it is mandatory to knock and wait to be allowedinside an office.
Both countries are predominantly Christians. Also, Germany and theUnited States allow for freedom of religion. As a result, it ispossible for a U.S. business individual to do business with Germans,as they share similar religious beliefs. Incorporating the beliefs inthe strategic plans of businesses is also easily achieved by bothnationalities. Also, sharing similar religious ideals enhances mutualrespect, which makes business agreements successful.
Another point of comparison between both nations is on the sharedvalues. Both countries are highly individualistic. Thus, people lookafter their own wellbeing and not the collective success of asociety. This makes it possible for business partnership between anAmerican and German to become successful, as both focus on theirpersonal benefits. As a result, it becomes easier to directly discussthe benefits of the business. Conflicts are also less likely to occurbecause each business partner ensures their wellbeing is placed as apriority.
Evaluating cultural dimensions and elements makes it possible toidentify the disparities and similarities between U.S. and Germany.However, the hofstede analysis is an effective tool in achieving anenhanced comparison of America and German’s business culture.Hofstede focuses on five cultural aspects, which are individualism,masculinity, uncertainty avoidance index, long term orientation andpower distance index.
The score on individualism is high in America and Germany. Germanyscores 67% on individualism, and is considered to be moreindividualistic than America (Henderson et al., 2012). However, bothcountries are highly individualistic as minimal emphasis is placed onthe wellbeing of society. Instead, civilians are more concerned abouttheir personal gains. Business negotiations include presenting thebenefits to be gained by a German business that intends to dobusiness with America. The latter must demonstrate that Germans arelikely to profit from the business partnership as individuals.
Another comparison is in the masculinity score. German is rated at66% on masculinity (Kaynak & Kara, 2014). America also has a highmasculinity score. The Hofstede analysis demonstrates that societyplaces emphasis on material goods. For instance, both countries havea tendency to fight for better pay that matches their livingstandards. Civilians are concerned about their personal development,which is evident in business. When entering into business agreements,the focus of Americans and Germans is to ensure that the businessgenerates more money for the parties involved.
Differences are apparent in the level of uncertainty avoidance. MostGerman businesses are not risk takers. They endeavor to avoid anyform of ambiguity in workplaces (Martin et al., 2012). As such, theymust plan carefully prior to entering into any business agreements.They also expect that their business partners have clear plans, factsas well as statistics to support proposed businesses. Contrary,Americans are risk takers. They engage in businesses that may havehigh levels of uncertainty.
The emphasis placed on punctuality, honesty and context duringbusiness negotiations by Germans depicts that the country has a longterm orientation. Germans have a strong inclination towards makinginvestments, thriftiness and attaining results. They focus on thefuture (Dunkel et al., 2014). America scores low on long termorientation because the success of a business is determined byshort-term objectives. Many Americans are not as pragmatic whencompared to Germans.
In regard to power distance, America has a higher power distance thanGermany. Germany scores 36%, which depicts the country asdecentralized (Del Junco & Bras-dos-Santos, 2013). The workstructures are flat and there are less senior positions in thebusiness sector. Instead, loyalty is emphasized as an important traitamong employees.
4What are the Implications for USBusinesses that wish to Conduct Business in Germany?4.1Analysis of Facts from the ThreeQuestions Above
Despite the cultural differences evident between the United Statesand Germany, the similarities support the possibility for successfulbusiness partnerships between individuals from both countries.Germany and the U.S. have business ambitions that make them possiblebusiness partners. However, Americans must consider some of theissues that are likely to affect business engagements.
One is the apparent language barrier, which calls for earlypreparation by the Americans. Also, they should familiarizethemselves with the different non-verbal cues that they should useand those that should be avoided. Issues such as time keeping,privacy, professionalism and dressing cannot be taken for granted.Americans ought to arrive in time for meetings, follow the requiredprotocol and ensure that they present their business ideas within thestipulated time frame. Observance of these customs enhances thepossibility that Germans will be more open to conducting businesswith Americans.
According to Singh et al. (2011), in order for a business to besuccessful, respect, courtesy as well as business etiquette ought tobe practiced. In order to create a strong business partnership withGermans, Americans must be honest in order to enhance the level oftrust created. Another significant factor is to emphasize on themutual benefits that both parties are likely to gain from thebusiness partnership. Understanding the different cultural aspects ofGermany is very important. However, Germans also understand that itmay take a lot of time to learn all that is required of doingbusiness in Germany (Sinkovics, Yamin & Hossinger, 2013). TheGermans demonstrate a level of patience to individuals from othercountries, endeavoring to do business in the nation. They are likelyto forgive mistakes made by foreigners.
Another factor that favors Americans intending to do business inGermany is that, the German government policies welcome foreigndirect investment (Stahl & Cerdin, 2014). The policies aresupportive of overseas nations that intend to do business in Germany,which enhances the likelihood of making profits as a foreigninvestor. In specific, there are laws as well as rights thatsafeguard businesses working within the private sector (Fisch &Oesterle, 2015). Many Americans that intend to do business in Germanyare likely to operate in the private sector, and with the rights theycan be assured that their businesses will be secure.
4.2.1 Strengths. The strengths of doing business in Germanyinclude the fact that the economic and political environment favorsforeign direct investment. The government ensures that foreigninvestors have a safe economic environment. As such any individualdoing business in the German economy is protected (Stahl &Cerdin, 2014). The country has a low business risk due to the highlevel of political stability enjoyed in the country (Knoerich, 2013).Also, the country has invested in innovative technologies, whichallows for companies to easily penetrate into the market (Winkler,Dibbern & Heinzl, 2012). Hence, an American wishing to dobusiness in Germany can take advantage of the technology.
4.2.2Weaknesses.Foreign investors may be unable to successfully penetrate into theGerman market. The country scores high in regard to its masculinity.As such, the society has a high level of money and materialpossession. Germans tend to place more significance on their productsand not those of foreign investors (Kaynak & Kara, 2014). Theyare more focused on advancing their local products. Hence, anoverseas country may fail to penetrate the market as anticipated.
4.2.3Opportunities.Business decisions are made at a faster pace in Germany. Duringbusiness negotiations, they go straight to the point and discussimportant business issues. It is an opportunity for Americans,because it hastens the speed at which an American can invest in thecountry. Also, Germans demand for extra performance in the productionof goods (DeMooij & Hofstede, 2014). This means that provided theAmerican business is able to provide high quality products, thensuccess is guaranteed.
4.2.4Threats.The high individualistic nature of Germans could act as a threat forAmericans. Despite the fact that both nations are individualistic,Germany has a higher score than the United States. As such, it islikely that Germans are more concerned about the money they will gainfrom the business partnership, as opposed to entering into businesswith an American.
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