2013

GERMANY BUSINESS ANALYSIS

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Business communication MGT 101 June Harper Research Report Germany Business Culture Analysis Presented By Mudassar Ejaz

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TABLE OF CONTENT 1.0 Executive Summery............................................................................. 4 2.0 Introduction........................................................................................... 5 3.0 PEST Analysis...................................................................................... 6 3.1 Political....................................................................................... 6 3.2 Economy..................................................................................... 6 3.3 Social.......................................................................................... 6 3.4 Technology................................................................................. 6 4.0 Hofsted Analysis.................................................................................... 7 4.1 Individualism/ collectivism........................................................ 7 4.2 Power Distance........................................................................... 7 4.3 Uncertainty Avoidance............................................................... 7 4.4 Achievement/ Nurturing............................................................. 7 4.5 Long Term Orientation or Short term Orientation..................... 7 5.0 Business.................................................................................................. 8 6.0 Business Culture..................................................................................... 8 6.1 Value of Structure and Rules...................................................... 8 6.2 German Punctuality...................................................................... 8 6.3 Separations of Public and Private Sphere..................................... 8 6.4 Directness of Communications.................................................... 8 7.0 Social Environment................................................................................... 9 7.1 Music and Dance........................................................................... 9 7.2 Sports............................................................................................ 9 7.3 Oktoberfest................................................................................... 9 8.0 Summery.................................................................................................. 10 9.0 Recommendations.................................................................................... 11 10.0 References................................................................................................. 12

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1.0 Executive summary This report is about doing business in Germany with Mercedes Benz, an automobile industry. The team has to do work in Germany, needs to know about the Germany culture, business ethics, their customs and traditions which are helpful to do successful business. Germany has democratic government with stable political situation, strong economy, best technological support and highly developed social system. In German culture people are treated equally regardless of their position or status in the company. They like to develop new ideas and achievement is considered as most important. Germany is famous for music and their traditional festivals. German people love to play soccer. People are very formal in business communication and have strict agenda and rules regarding to the business meetings. Business dress is compulsory for both men and women in meetings. Germany is rich in literature and architecture. While working in Germany certain things must be keep in mind. Here are some recommendations as follows: It is necessary to have language course before going to Germany for job. So it makes easy to overcome the communication problems. Germany is male dominant society, so the new female workers from different cultures must acknowledge this. In business meetings men has to wear dark business suits and women also have to wear business suits, but no jewellery is allowed. The most important rule remember is that when entering in a meeting room the elder and high rank people goes first and if there are men and women of same age and rank the female has to follow the men.

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2.0 INTRODUCTION The purpose of this research report is to conduct a business analysis of the Germany to investigate, how German people communicate in business environment. Mercedes Benz is the organization in which all the team members have to perform their duties. It is an auto mobile industry which deals in manufacturing of the different types of cars. It was founded in 1886 by Mr. Karlz Benz. This report helps us to identify the culture, ethics, and the values of the German business environment. This report has certain limitations .We have been limited in respect of the distance not allowing for face to face discussion with the management of the Mercedes Benz. The information provided on this report is totally based on the different web sites containing the information about Germany. The biggest limitation is the time. We have to present in week 13 under the limitation of the 2000 words according to right procedure and appropriate format. Our team has not been in Germany before, so the information gathered through different websites, journals and on line books. A few German people are connected to get the desire information that is living in Australia. This report is based on the Hofsted analysis, Pest analysis, and culture and business values in Germany. This report gives a brief idea about the German business culture and what that we have to keep in mind to work efficiently in Germany.

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3.0 PEST ANALYSIS

3.1 POLITICAL German was founded in 1949 under constitutional document known as the Grundests. Since 1949 Christian democratic union and social democratic party has dominated and governed the republic. Government consist of three significant wings. The legislature The executive The judiciary

All of these are represented by the federal government and federal constitutional court. President is the formal executive is the head of the state. The head of the Government is the chancellor. Elections are held after every four years and chancellor is elected by the majority of the newly elected members of Bundestag on the recommendations of the president. Chancellor is responsible for the implementation of Government. (A short guide to German political system2012) 3.2 ECONOMY Germany is the fifth largest economy of the world. Germany has to import raw materials from all over the world. Their main imports are the food, tobacco and the petroleum products. Two third of the energy requirements are meet from the imports. Despite of these imports Germany is the second largest exporter of the world especially in the field of engineering auto mobiles, metals, chemical goods and high skilled labour. Wind turbines and the solar systems are also the major part of their exports. (World Economic Outlook Database2012) 3.3 SOCIAL Germany has developed social system of pension, health, unemployment insurance. This social system finance is contributed by employers and the employees. The basic flat health insurance rate is 15.5%. It is contributed by equally by employee and the employer. Pension is compulsory for every employee and its rate is 19.6% of the gross wages and it is also equally shared by the employer and the employee. Employer and the employee both contribute equally in 3.0% in the form of unemployment insurance. (German social structure2004) 3.4 TECNOLOGY Germany is well positioned in the technology sector in the world and enjoying the 28% of the total world market. They have good achievement in the field of nanotechnology, biotechnology, computer sciences and especially in the field of automobiles engineering, aerospace and logistics. With these entire technologies Germany claim that its immensely grown nuclear technology is less risky as compared to the rest of world. (Germany is considered as a technically heavyweight 2012)

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4.0 HOFSTED ANALYSIS Germany country has top three brands included in their area. Therefore Hofsted framework plays a valuable role in knowing the real culture and people thinking and their approaches. Hofsted framework is explained below. (Explore the German culture through 2012) 4.1 Individualism/collectivism Germany has a society which likes individualism more as compare to collectivism. they have small families, mostly family members are concerned only with their father mother and children relationship rather than aunt and uncle. People do their work with lot of loyalty including duty and responsibility. Employer and employee are trust worthy with each other, if any mistake is happened by the employee communication is most likely used and based on loyalty a chance is given. (Explore the German culture through2013) 4.2 Power distance Germany is a low power distance country. People are not measured with the status or reputation they have in their hands. Leadership can be challenged easily if others are not satisfied. In the business world personal and participative meetings are very common. every decision is finalized by having best expertise on it. (Explore the German culture through2013) 4.3 Uncertainty avoidance Germany country is listed among the uncertainty avoidance country listed in the 65 rank among the whole world. a strong preference is given in thinking, planning and presenting all aspects of the business thoughts. Germany law system has also included this in their book. to avoid any uncertainty Germany people mostly like to go in detail for getting the best results. (Explore the German culture through2013) 4.4 Achievement/ nurturing People of Germany enjoyed working by giving their best efforts on it and they love to have achievements in their life. They set goals and targets for particular time and try to focus on it. Performance is highly valued in such society whether it is of a school student or from business world. Top managers and employers have self esteem towards their goal. (Explore the German culture through2013) 4.5 Long term orientation or short term orientation Germany people love their culture and tradition; they give a very high value to it. they are not much interested in saving more money, but they want to have quick results. they set short goals in their life and move towards step by step. Therefore, Germany have short term orientation environment. (Explore the German culture through2013)

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5.0 BUSINESS They are very formal in communication and have established protocol or sets of rules which make difficult to build and maintain business relationships. Business meetings are very much strict to agenda and especially very much strict to starting and ending time of meeting. They give great importance to written communication for keeping record of business discussions and decisions. There are certain specific rules to enter the meeting room, the eldest and the high rank personals entered first and men must enter before the women if they are of same age and rank. Men wear dark colour and conservative business suits for meeting and women have to wear business suits or conservative dress. Women are not allowed to wear jewellery in business meetings. (Germany, culture, custom are 2013) German pays much more attention in technical education rather than other type of education.. Therefore the companies are usually lead by the persons having technical education rather than lawyers and accountants. Engineers are highly regarded in Germany.( the fact that Germany has 2012 ).Germany is famous for manufacturing luxuries cars. Mercedes Benz was first founded in January 1886 by Mr. Karl Benz. Benz invented the world's first threewheeled car, and patented (Patent No.: DRP 37435), almost the same time, another cofounder of the Mercedes-Benz Gottlieb Daimler invented the world's first four-wheel car. (German luxury car manufacturer 2013) Since then, they understand the needs of the business and they develop the fleet of cars according to the needs of the customers. They are successful in business because they managed the fleet according to care, security and comfort of the customer as well as the financial power of different buyers. 6.0 BUSINESS CULTURE 6.1 Value of structure and Rules In Germany companies have lot of rules, regulations and strict procedure and policies. The employees have to follow these rules and regulations. These principles leave little room for flexibility of an employee. (Understanding German business culture2007) 6.2 German punctuality German gives great importance to the punctuality and has a strong effect on the relationships. Business appointments are precisely planned and expected to be set on the time decided. Punctuality is a matter of good manners. (Understanding German business culture2007) 6.3 Separations Of Public And Private Sphere Germans are very strict separations between their various spheres (business and private) of life. Their behaviour and closeness of the relation depends upon the sphere of the life and the relation to the other person. Due to this culture people from the other cultures might think that the Germans are very remote and cold and even over unfriendly. (Understanding German business culture2007) 6.4 Directness Of Communications Germans are very direct and explicit in the communications. They can formulate important statement directly and openly without any Window dressing. On the other hand in return they

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dont easily understand and response to the verbal subtleties like in direst hints, message between lines and other non verbal signals. They can therefore miss the decisive content of an interaction. (Understanding German business culture2007)

7.0 SOCIAL ENVIRONMENT 7.1 MUSIC AND DANCE

Germany is well versed in music market, as it ranks fifth in the world. Dance, Rock music and pioneered trance music have exerted a strong influence. Artists such as Scorpions, Nena, Rammstein and Tokio hotel have attained international fame. Many rock music festivals are organized annually. Rock am ring is considered as one of largest music festival.(As Germany is the largest music2009) 7.2 SPORTS Sports play an important role in Germans life. Statistics reveal that 27 million Germans are members of different sports club. Soccer ranks as the number one popular sport. It attracts thousands of spectators who attend Bundesliga matches and millions watching it on television. Tennis and Marksmanship are considered as second most popular sports. More than a million members are registered in Tennis and Marksmanship. Handball, volleyball, ice hockey and basketball are some of the other popular games. Germany has been the strongest contender in the Olympic Games history. In the 2006 winter Olympics, Germany finished in the first place, whereas during the 2008 summer Olympics, Germany finished in the fifth place. (Sports forms an integral part of German2009) 7.3 OKTOBERFEST Oktoberfest is one of the famous festivals in Germany. The festival usually is held in Munich. It is locally known as Weisn. The festival normally starts on the first Saturday after 15th September and it goes on until the first Sunday in October. (Important facts about Oktoberfest2010) Beer consumption usually surpasses five million one litter mugs. Numbers of visitors are estimated to be 6.2 million. (Some interesting Oktoberfest fun facts2011)

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8.0 Summery
Germany is the fifth largest economy of the world, with high developed social system and ruled by the democratic Government. Germans are very good with the use of the technology especially in the field of the Auto mobile industry. People are treated equally in a business organisation but respect for the superior is essential. Performance in the work has great importance. Employee earns their respect through hard work and also gets personal satisfaction and sense of achievement by the appreciation from the superiors of the Company. German give great value to their culture but the business and the personal relationships are the separate entities. German people are punctual and direct in communication and follow the strict rules, regulation and policies in business. In business meeting it is essential to wear dark colour business dress. Women are not allowed to wear jewellery in business meetings. German society especially in business world is considered male dominating. In business decisions making written communication is preferred rather than oral communication. Women are the part of the business team but not involved in the decision making. German people love to play soccer and tennis. Music and different festivals are the essential part of their social system. Annual Beer drinking festival Oktoberfest is the very famous in world.

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9.0 RECOMENDATIONS
Based on the analysis contained in this report, the following recommendations are made to the persons planning to do business in Germany. It is suggested that if you dont speak German, be careful in addressing a person in English. It is necessary to have language course before going to Germany for job. So it makes easy to overcome the communication problems. Germany is male dominant society, so the new female workers from different cultures must acknowledge this. In business meeting punctuality has strong effect on the business relations. If you are not on time you lose a good business opportunity. In business meetings men has to wear dark business suits and women also have to wear business suits, but no jewellery is allowed. The most important rule remember is that when entering in a meeting room the elder and high rank people goes first and if there are men and women of same age and rank the female has to follow the men. Germans are not expected to greet by the strangers. Germans usually like third party introduction whenever possible Praising is not the part of the business culture, it often cause embarrassment. Have patience doing business with German companies because decision making in business is very slow and decisions are made after the detail study of the information relating to the proposal.

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Reference List
1. Explore the German culture through,2012. Available From < http://geert-hofstede.com/germany.html> 2. As Germany is the largest music, 16 October2009. Available From <http://angelascountry.blogspot.com.au/search?updated-min=2009-0101T00:00:00-05:00&updated-max=2010-01-01T00:00:00-05:00&max-results=6> 3. Sports forms an integral part of German, 16 October2009. Available From<http://angelascountry.blogspot.com.au/search?updated-min=2009-0101T00:00:00-05:00&updated-max=2010-01-01T00:00:00-05:00&max-results=6> 4. Important facts about Oktoberfest,02 September2010.Available From <http://www.allthingsgerman.net/blog/festivals/10-important-facts-aboutoktoberfest/> 5. Some interesting Oktoberfest fun facts,2011.Available from<http://nbyc.us/Oktoberfest-Fun-Facts.php> 6. Germany, culture, custom are, 2013. Available From<http://www.kwintessential.co.uk/resources/global-etiquette/germany-countryprofile.html> 7. The fact that Germany has, 2012. Available From<http://www.worldbusinessculture.com/German-Business-Style.html> 8. German luxury.car manufacturer, 2013. Available From<http://www.autoevolution.com/mercedes-benz/> 9. A short guide to German political system,19 March2012. Available From< http://www.rogerdarlington.me.uk/Germanpoliticalsystem.html> 10. "World Economic Outlook Database, April 2012". International Monetary Fund. May 2012. Retrieved 11 May 2012 11. German social structure, 11 November 2004. Available From<http://www.photius.com/countries/germany/society/germany_society_social_st ructure.html> 12. Germany is considered as a technically heavyweight, 2012. Available From< http://www.kampuslanding.com/technological-development-germany.html> 13. German Culture n.d., A Brief Overview of German Culture, Buzzle, 20 April, 2013. Available From<www.buzzle.com/articles/german-culture.html> 14. Understanding German business culture,12 September 2007. Available From <http://www.expatica.com/de/essentials_moving_to/essentials/working-withthe-germans-focus-on-the-task-at-hand-23880_10093.html>

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