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Doing Business with Germany

101
IBUS 2040

Individual PT

Table of Content
1. Introduction
a. What is the paper about?
b. And what topics will it cover
2. Germany 101
a. Geography
b. Facts
c. Politics
d. Economy
3. Identifies the cultural traits of the chosen country.
a. Traditions
b. Greetings
c. Punctuality
d. Negotiation
e. Dress
4. Explains how culture influences the way business is conducted in the chosen
country
5. General Tips

Introduction
If a countries culture can be define as the state of intellectual development
among a people, the business culture might be had to be the state of commercial
development in a country. But business culture is not made by the commercial
development alone; attitudes, values and norms define and make part of a business
culture in a country. (Hart) Taking into consideration all of the characteristics and
costumes of a countries culture will help you understand and do business with
enterprises and make your negotiations much easier.
Most people believe there is a single homogenous European business culture
which is an erroneous idea. Each country has their own culture and rules of doing
business. On this report there will be tips and rules on how to do business in Germany
as a foreign partner in order to achieve success when working with Germans.
Germany is one of the twenty seven countries of the European Union, its located
on the center of Europe. It is aextremely powerful and important country since they are
number one in many aspects such as population, economy, financial stability, territory,
technology, R&D, and political power. They form part of United Nations, G20, G8 ,
OECD and NATO and more organizations of high importance and prestige..
Germany covers approximately 357,112 square kilometers of land . The country
is divided into 16 states. It is estimated to have a population of 82 million, which makes
it the most populous country of the EU. The capital of Germany is Berlin its largest city,
followed by Hamburg, Munich and Cologne. The most predominant religions are
Protestants (33%) and Catholic (33%). The official language is German, which is called
Deutsch. There are several dialects found on different regions of Germany.

Ethnologue.com has identified twenty seven dialects. There are few preferred foreign
languages that Germans are taught are English, French and Russian. Germany is
surrounded by many countries which make it a hotspot for trading and melting pot of
immigrants. Germany is boarding Denmark, Netherland, Belgium, Luxembourg, France,
Switzerland, Austria, Czech Republic and Poland. The main exports are machinery,
transport equipment, chemicals, technology, food and drinks. Since they join the
European Union their currency changed to Euro on 2002.
The government of Germany is a democratic federal multiparty republic. The system of
voting is done by proportional representation. There are two legislative houses the
Federal Council and the Federal Diet.
The majority of immigrants are Turkish Muslims, although Germany aging
population needs their labor, their presence is of great concern due to their economic
instability and the lack of effort to adopt German customs. Following the Turkish,
Serbo-Croatian, Italian and Russian form a 6.1% of the population. (Coneway)
From the economic perspective Germany is the third largest political economy
and second largest export nation. (UHY) Their GDP was 2,404 billion euro in 2009 and
it was increased with time to be have the strongest GDP of Europe and one of the
leadings economy in the world. The German economic model is to be a functioning
social market economy, in which free market economics are blended with solidarity and
social compromise. (UHY) Based on "The 100 Top Brands 2010"; of the world's 500
largest stock-market-listed companies measured by revenue in 2010, the Fortune
Global 500, 37 are headquartered in Germany. 30 Germany-based companies are

included in the DAX, the German stock market index. Well-known global brands are
Mercedes-Benz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche,
and Nivea.

Doing Business in Germany 101

Based on the history Germans have and their life style Germans are very
structural and serious when it is time to do business. Germans do not like the
unexpected, they do not welcome sudden changes. When dealing with Germans you
must be complete and detailed, whenever you communicate make sure you use
complete sentences. Be aware that in German language, the most important word in a
sentence is usually the final one, due to this structure they are used to listen for the end
of a sentence and then respond.
Germans have historically been closed to outside information, they tend to be
very conservative with the information they share (even inside their same organization.
They process the information from a analytical and conceptual manner. Every
conclusion and decision they make takes into account every stakeholder, Wayne
Conway says expresses that they are strongly committed to the universal belief of their
culture. Most people think of Germans as cold and unemotional, they are correct,
when business is involved is all about the facts. Emotional involvement is unacceptable

in negotiations. Once they have made a decision they rarely, almost never change their
mind therefore they have gain the reputation of hard negotiators.
Its a German characteristic to search out for an agreement and order in every
transaction. A very repeated phrase that is normal in the German business world is
Ordnung muss sein that means there must be order. This phrase reflects how they
respect rules and the law. If social order is disrupt Germans will be offended or see it as
incorrect. Germans tend to take their time to make their decisions, they take into
account every stakeholder that will be affected by the decision and every detail. Once
the decision is taken it is unalterable. Personal problems and matters are never involved
in business.

Germans are inclined to avoid anxiety and uncertainty. Due to this mindset they
follow the law and morality to give structure to their life style and the process of decision
making. Since they avoid risk so much they insure almost everything they can, from life
insurance, travel insurance to personal liability insurance for example. Expect Germans
to double check everything you turn in, they wont take any risks and want everything to
be secure.
Punctuality, appointments, and local time

Taking into account how structural their life style and decision process is here are some
facts of how they manage their appointments and time.

There is no place in the world that punctuality is important as in Germany. If you are late
for just three or five minutes Germans take it as an insult. Be careful and be on time on
every appointment whether for business or social engagements. When writing the date,
Germans writ the day firs, then the month, then the year, be very careful because this
can cause many misunderstanding. According to Terri Morrison here are some tips that
must be taking into account when dealing with Germans:

Appointments should be made well in advance. Give at least one week notice for
an appointment made by telephone. If you dont have that much lead time, as
short preliminary meeting may sometimes be arrange on a few day notice.

If tow Germans sing a business letter, or if more than one German is consistly
copied on email, this indicates that both of them must be in agreement before a
decision is made.

Do not schedule appointments on Friday afternoons, some offices close by two


or three pm on Fridays. Many people take long vacations during July, August,
and December, so check first to see if your counterpart will be available. Also be
aware that little work gets done during regional festivals, such as the Oktoberfest
or the three day carnival before lent.

Germans use a twenty four hour clock, so dont be shocked if they say the 14
hours.

Negotiating with Germans:

Germans take some time to take corporate decision since they want to check every
aspect of the contract or whats been agreed of. Be patience its a important tip. The
way German firms make decisions are not like in the US where most of the times its a
vertical. Most German firms have a team behind every decision with a series of advisors
that revise everything before a decision is made. When negotiating be as direct as you
can, they want everything to be black and white. During negotiations Germans might
criticize your company, government or way of doing business dont be shocked its
normal since they are upfront on every matter and dont take it personally.
Be prepared before negotiating, gather information, and remember Germans
care a lot of facts and data. Nigel Reeves mentions in his book The European
Business Environment , Germans are all about Data, data, data. But be careful they
seek for good quality data, and as mentioned above every aspect and data given will be
revised by various executives. So dont expect to be able to speed up the process of
negotiating since they believe that time must be invested into every job in order for it to
be successful. Even though they are very punctual with their meetings and
appointments, do not expect the same with products or delivery dates and sometimes
they will be late without an explanation or apology.
Since they dont mix friendship and business Germans also take a lot of time to
establish a close business relationship. Their apparent coldness at the beginning will
disappear over time once they get to know you. When you turn in a proposal or any
document to an executive that speaks your language, make sure to send a copy
translated to German (remember they double check with their peers which might not
speak your language).

Business Meetings/Lunch:
When you meet with Germans for business meetings you must take many things into
consideration. Here are some pin points that you must know before you set up a
meeting or go to a meeting:

Breakfast meetings are uncommon in Germany; it is of preference to discuss


business throughout lunch.

If a lunch is schedule be aware that business may be discussed before and


sometimes after a meal, but never during the meal. And if you are the one
hosting the meeting insist on paying the bill.

Always be on time on any type of social or meeting event.

Most Germans as mentioned before dont mix personal and business matters,
they dont tend to invite you to their personal house. If you are invited consider it
an honor.

Always use utensils to eat, there are few meals that Germans consider that are
ok to be eaten with the hands. When finish eating its important to leave utensils
at the position of 4 o clock, this means that you are finish and the waiter can pick
up your plate.

If you smoke make sure you offer everyone a cigarette before you light up yours.

Business Protocol
Greetings/Postures:
Greetings are very important when doing business they give a certain impression of
your personality. In some countries it is normal to give a handshake, others to kiss on
the cheek, or to bow. Here are some characteristics and tips on how to give greetings
when doing business in Germany:

When doing business its normal to shake hands before and after the meeting.

Most of the times its Germans will nod when they shake your hand, it represents
respect.

As mentioned before, Germans are not very affectionate. They tend not to smile
that often due to their formal structure of behavior.

If you want to get a business partners attention raise your hand with your palm
facing out and only your index finger extended. Do not wave your and as its
done in America.

If you are sitting in a meeting or office, do not rest an ankle over your knee.
Germans tend to cross one knee over the other, if you dont feel comfortable with
this position sit straight up.

Be aware, in Germany the eldest or highest ranking personal is the one who
enters first the business room. Do not rush into the business room until you are
sure who you are meeting with.

Its normal in most countries of America to chew gum and talk at the same time.
In Germany its a never do, never talk to someone while chewing gum.

As mentioned before its very important to carry a good supply of business cards.

Eye contact is very important, when having a conversation try to have direct eye
contact. If you fail to do so, Germans will perceive that you are untrustworthy.

Here is a shocking one, Germans find it insulting when people are having a
conversation with them with their hands in their pockets. Tip never put your
hands in your pockets for longer than it takes to retrieve an object.

The personal space for Germans is a little bit larger than most US and GB.
They tend to have six inches beyond handshaking distance when talking.

When you are called in to an office do not move your chair closer, some
executives might find this very insulting since they are protective about the
positioning of their office furniture.

Forms of Addressing Letters and the use of Titles


Here are some tips and rules when you are writing a letter or addressing to a
German. :

If you ever need to write a letter or send an email, be sure to write the name
followed by the surname.

If a person does not have a professional title in the U.S. is normal to use Mr.,
Mrs., or Miss, plus the surname, in Germany these titles are: Mr.= Herr,
Mrs.=Frau, and Miss= Fraulein (Fraulein, is used only for young women typically
under the age of 18, any business women should be addressed as Frau.

Even though you have met with a German business person for a few times or
exchanged emails, you shall not call them for their names, always use the
professional title and surname.

Gifts in Germany
When doing business in some parts of the world some tend to give a gift as a action of
thanks or appreciation. Here are some tips on which gifts or how gifts are seen in
Germany business world:

If you are to give a gift, take into consideration that Germans dot expect to give
or receive expensive fits. It is of preference to give a gift of good quality but not of
high cost.

Typically Germans give gifts such as good quality pens, imported liquor, or gifts
from your home region country.

In the case of clothing, be sure not to buy anything of apparel than a scarf. Its not
appropriate to give a perfume or soap since this items are consider personal.

If you are invited over for diner to your business partners house its is a good
detail and recommended to send flowers to their house, avoid red and white
roses. Dont be extravagant when sending flowers, remember it is just a gesture
of being thankful and politeness.

When taking liquor to a dinner or as a gift, do not bring or give a local available
wine this might be interpreted as saying that your host wine celar is inadequate.
It is recommended to give a wine from your home country or an imported high
quality wine.

One of Germany specialties is the brewery of beer. So if you are planning of


impress them with your home country beer be aware that they might be not
impressed or even like it.

How to dress for any Business matter in Germany:


Your appearance is of high importance no matter where you are doing business. It is a
worldwide law to be presentable and clean. In Germany they are very conservative and
traditional. Below there are some rules and tips on how to dress for any business
gathering :

For men, wear a dark suit, sedate tie, and white shirt. DO NOT use khaki or
seersucker suits, they are not acceptable.

For women, dark suits, pantsuits, and blouses of neutral color.

In some parts of Germany its very hot, you might want to take your jacket or
loose a little your tie but do not do so if your German colleague does not do the
same.

In case you are told to wear casual clothing do not use shorts. The German
typical casual attire is a comfortable shirt and straight up jeans.

Work Cited
"Doing Business in Germany." Professional Translation Services | Interpreters |
Intercultural Communication & Training. Web. 11 Jan. 2012.
<http://www.kwintessential.co.uk/etiquette/doing-business-germany.html>.
Hart, James A., and Dieter Schultze-Zeu. U.S. Business and Today's Germany:
A Guide for Corporate Executives and Attorneys. Westport, CT: Quorum, 1995. Print.
Morrison, Terri, and Wayne A. Conaway. "Germany." Kiss, Bow, or Shake
Hands: Europe : How to Do Business in 25 European Countries. Avon, MA: Adams
Business, 2007. Print.
Reeves, Nigel, Helen Kelly-Holmes, and DietmarBrunig.The European Business
Environment: Germany. London: International Thomson Business, 1997. Print.
"The 100 Top Brands 2010".Interbrand. http://www.interbrand.com/en/bestglobal-brands/best-global-brands-2008/best-global-brands-2010.aspx. Retrieved 27
March 2011.