Formal Written Report Assignment

Managing within the German Business

Culture

What U.S. Managers Should Know About Dealing

with Workers in Berlin, Germany

Prepared for

Dr. Anna Rogers

CEO of Central Global Communications Corporation

Baltimore, Maryland 21228

Prepared By

Roy Givner

Occupational Safety and Health Manager

Berlin, Germany 10785

December 7, 2013

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Table of Contents

Introduction………………………………………………………………………………………………………………………. 3

Purpose and Scope………………………………………………………………………………………………… 3

Background and History………………………………………………………………………………………… 4

Business Structure…………………………………………………………………………………………………. 4

Motivation…………………………………………………………………………………………………………….. 5

Respect and Deference………………………………………………………………………………………….. 5

Hierarchy or Egalitarianism……………………………………………………………………………………. 6

Planning………………………………………………………………………………………………………………… 6

Time Management………………………………………………………………………………………………… 7

Cultural Differences………………………………………………………………………………………………. 7

Conclusion…………………………………………………………………………………………………………………………. 8

References…………………………………………………………………………………………………………………………. 9

Managing Within the German Business Culture Roy Givner

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Introduction

As an Occupational Safety and Health manager assigned with the task of reviving business in a

profoundly different environment, I must ascertain the overall structure of the branch and its

workflow capacity. In a functional business, where the new site needs to be able to accomplish

systematized tasks that conform to overall corporate practices, a skilled labor force and their

ability to perform these tasks is clear. For this reason, the Occupational Safety and Health

director of Central Global Communications Berlin, Germany office has requested a report

detailing what U.S. managers should know about working with employees from this country.

Purpose and Scope

To remain successful on the international stage, CGC’s knowledge of Germany’s business

culture is crucial and the implementation of cultural diversity training should be mandatory.

Managers should be aware of the following, what factors do or do not motivate German workers,

how do they show respect or deference, is their culture based on hierarchy or egalitarianism, do

they normally do one task at a time or many tasks at once? In addition, being on time, cultural

differences, and their beliefs and behaviors are equally important.

This report will examine these topics and my research will show that by addressing these issues,

CGC’s managerial staff can seamlessly integrate corporate practices into the German business

culture.

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Background and History

Germany has survived the post 2008 recession, which is evidence of the core strength of the

German economy and, largely, the strength of its impressive manufacturing base. Remarkably,

Germany’s unemployment rates are lower now than they were before 2008, as well as, exports

being substantially greater. Additionally, for numerous years individuals warned that, the

German model was unsustainable due to high labor and social cost and they inferred the need for

radical policy changes in order to withstand growing competition from such low-wage markets

such as China and India. However, even with these challenges and regardless of the cost of the

post 'cold-war' assimilation of the former East Germany, the country's financial system seemed

stagnant (Culture, 2012).

Business Structure

Furthermore, the majority of German companies are small to medium in size, known in German

as the Mittelstand. The term Mittelstand, refers to small and medium-sized businesses, and a

common work ethic. These firms employ about 78 percent of the German work force and make

up 53 percent of Germany’s Gross Domestic Product. There are approximately 3.5 million

Mittelstand companies in the country although Eighty percent of them have ten or less

employees and in most of these companies, the manager is the owner (Company, 1997-2013).

Of course, Germany is also home to some of the largest and best-known firms in the world. SAP

is a giant in the field of business software. Luthansa is Europe’s largest airline and the world’s

fourth largest in terms of passengers carried. Deutsche Bank AG (the e is not silent),

headquartered in Germany’s financial capital of Frankfurt, employs more than 100,000 people in

over 70 countries, and is one of the world’s largest banks. Similarly, the automobile, a German

Managing Within the German Business Culture Roy Givner

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invention, gave birth to auto manufacturing and Germany's auto industry is a major component

of the German economy. Audi, BMW, Mercedes-Benz, Porsche and Volkswagen are brands

known and respected all around the world (Company, 1997-2013).

Motivation

The first factor CGC managers should know about dealing with German workers is recognizing

what motivates them. Part of this answer is that it takes time for Germans to accept outsiders into

their community. Managers from the outside need to prove their ability to do the job and gain

employee trust immediately. According to Going Global, “Building employee loyalty, gaining

acceptance for one’s leadership style and changing employee behavior starts from the first day.

A new manager must consistently demonstrate with confidence the values and behaviors that

she/he would like to see throughout the company. She/he needs to build connections between the

work being done and the greater whole and express the value of and benefit of learning from

mistakes and taking risks (within reason, of course)” (Weiner, 2009).

Respect and Deference

The second factor that managers need to address is how do the show respect or deference? As

written in the website World Business Culture, “Diligence and competence are characteristics

which are held in high esteem by colleagues and are seen as the key indicators of performance.

Appraisal systems based on the softer competencies as favoured by many U.K. and U.S. firms

are still not common in traditional German companies” (Culture, 2012). In addition, addressing

your colleagues according to their title and surname should be done until you are personally

encouraged to use a first name or another ritual. Germans value formality and authority, so titles

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are important. Furthermore, Germans display great deference to people in authority, so it is

imperative that they understand your level relative to their own (Kwintessential, 2013).

Hierarchy or Egalitarianism

The third factor to consider by managers when dealing with German employees is whether they

are used to a strong hierarchy or an egalitarian setting. The website World Business Culture

states,

“Companies tend to have a strictly hierarchical approach within which

individual's specific roles and responsibilities are tightly defined and

compartmentalized. This results in a methodical approach to most business issues

where procedures and adherence to well-defined rules are respected. In Germany,

much greater attention has been paid to academic, technical education and its

value to business in general. Therefore, companies tend to be run by technical

experts rather than lawyers and accountants and this is reflected in the high regard

in which engineers are held by other Germans (Culture, 2012).

Planning

The fourth factor to examine is whether German workers prefer to do one task or many tasks at a

time. As written in Kwintessential,

“In many respects, Germans can be considered the masters of planning. This is a

culture that prizes forward thinking and knowing what they will be doing at a

specific time on a specific day. Careful planning, in one's business and personal

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life, provides a sense of security. Rules and regulations allow people to know

what is expected and plan their life accordingly. Once the proper way to perform

a task is discovered, there is no need to think of doing it any other way. Germans

believe that maintaining clear lines of demarcation between people, places, and

things is the surest way to lead a structured and ordered life. Work and personal

lives are rigidly divided. There is a proper time for every activity. When the

business day ends, you are expected to leave the office. If you must remain after

normal closing, it indicates that you did not plan your day properly”

(Kwintessential, 2013).

Time Management

The fifth factor that CGC managers should consider is the importance of being on time and its

meaning to German workers. With this in mind, Germans consider punctuality a serious subject.

The website Kwintessential writes, “When doing business in Germany, remember that

punctuality is a serious issue. Business people work hard and are under a lot of pressure.

Germans typically plan their time very carefully. It is considered bad etiquette to be late or early

as it shows disrespect for peoples' time” (Kwintessential, 2013).

Cultural Differences

The sixth and final factors for managers to be aware of are cultural differences, and the beliefs

and behaviors of German workers. Simply stated, Culture, as written in International

Management by Wendy H. Mason, is defined as, “the body of beliefs, norms, and values shared

by a group of people, culture presents the biggest challenge to businesses working

internationally” (Mason, 2013). Moreover, culture is a fundamental element in how all other

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parts of business function together. In addition, international managers of should be conscious of

the significance of context in various countries. Furthermore, Mason explains, “Context indicates

the level in which communication occurs outside of verbal discussion. High-context

communication depends heavily on gestures, body language, and other nonverbal cues. Much of

what is communicated is implicit, or unspoken, and assumed to be understood through other

cues. Low-context communication is explicit and precise, relying little on nonverbal

embellishment for meaning. Many of these, and other cultural practices, is learned through

socialization” (Mason, 2013).

Subsequently, culture impacts management procedures as well, to include, negotiation tactics,

decision making, and rewards and recognition systems. Similarly, Wendy H. Mason writes,

“when conducting business, members of some cultures sit right down to business after shaking

hands. In other countries, it is considered rude to mention business at all until after both parties

have spent a significant amount of time establishing a relationship. Other management soft skills,

such as motivation, making decisions, and rewarding employees, depend on cultural factors as

well” (Mason, 2013).

Conclusion

Hence, all of the research I have done and included in this report supports the conclusion that

Central Global Communications Corporation should invest in cultural diversity training for its

entire managerial staff. Additionally, the factors examined in this report clearly point out the

benefits and that CGC can gain by exhibiting its cultural awareness to our German colleagues as

well as the goodwill it will foster throughout our future international endeavors.

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References

Company, H. F. (1997-2013, December 4). Business and the economy in German-speaking Europe.

Retrieved from The German Way and More: http://www.german-way.com

Culture, W. B. (2012, October 31). German Business Structures. Retrieved from

WorldBusinessCulture.com: http://www.worldbusinessculture.com/German-Business-

Structures.html

Kwintessential. (2013, December 4). Germany - Language, Culture, Customs and Business Etiquette.

Retrieved from Kwintessential: www.kwintessential.co.uk

Mason, W. H. (2013, December 4). International Management. Retrieved from Reference for Business

Encyclopedia of Business, 2nd ed.: http://www.referenceforbusiness.com

Weiner, S. (2009). Managing in Germany: How does one motivate and engage employees? Retrieved

from Going Global.com: http://old.goinglobal.com/hot_topics/germany_weiner_employee.asp