Business Customs in Germany
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Business Customs
Business Customs in Germany
Germany is a European country about the size of Montana with a population of about 81 million people (“,”). Germany has come into its own as an economy of force in recent history. In fact, today the economy of Germany is the fourth largest in the world (Export). A strong presence of American troops and the creation of the European Union have made Germany a preferred expansion location for many American corporations. Due to its location, population, and financial position; Germany makes an excellent base for all European operations.
As a global business manager, you will need to ensure that you are familiar with business customs and accepted practices. Success in the global market depends on an understanding of the people you will be working with when. This paper will cover some of the most important customs needed to successfully interact with German business people and earn respect in the German business world.
Negotiations
Due to the precision of German contracts, there is a great deal of negotiating that occurs. Negotiations in the German culture require a great deal of patience and an understanding of the ability to understand German communication styles. It is important to establish rapport and trust with those whom you are working with but this is difficult due to the intensely private nature of most German people (Katz).
Time is extremely important in German culture. To be prepared for a successful negotiation, a person must plan in advance how they will use their time and ensure that they have specific details to back up all of their statements. It is important not to over-embellish anything because it will breed distrust in you. Ensure that you know your most important goal and ensure that you know what you are willing to compromise in order to achieve the stated goal (Katz)
When entering into the negotiations it is important to know that a higher authority will be required to approve of the terms of the contract. Ensure that you have the needs of both organization clearly defined so that both parties will benefit from the exchange. The end result will have to be a win-win in order for you to achieve your stated goal (Katz)
Skilled negotiators listen attentively and ask questions to ensure that they have a clear understanding of the concerns and needs of the organization. In addition, it is important to repeat what you think you heard and summarize key points to ensure complete accuracy. There can be some communication barriers that can have a negative impact on the end result. Watch for body language and look for nonverbal cues to indicate there may be a problem (Katz)
Most Germans will approach negotiations with you with a great deal of caution until you have worked together for a long time. Once the relationship has been established, loyalty will develop and that will ease the negotiation process. Never try and rush the establishment of a business relationship in Germany; doing so will only result in the other party becoming suspicious of your intentions (Katz).
Understand that Germans bluntly state concerns and when this happens it should be a sign that the working relationship has moved in a positive direction. However, Germans to not handle criticism will and it is imperative that you never cause a person to become embarrassed, especially in public, Germans are very blunt; however, it is always a good idea to ensure that your responses are softer in nature. Due to the direct nature of German communication, there is the positive of knowing that what was said was what was meant, this means that you do not have to concentrate on the possible hidden message – there usually arent any (Katz)
Germans do not like business to become emotional; if things are moving in that direction, take immediate steps. It may appear that the rapid fire questioning style of the German culture is confrontational, but it is merely just the fact that Germans value asking questions as a way to gather knowledge. There is a German saying, “He who asks – leads”. (Katz)
Germans cannot stand “haggling” in negotiation. The German culture does not typically allow for a lot of change in terms being offered and an increase in the offer price will usually be limited to 25%. Concessions are not given easily in the German culture. (Katz)
Business Meetings
In Germany, most meetings are quite formal and follow a strict agenda that is decided upon by both parties prior to the start. Planning is extremely important in the German culture as they are very detail-oriented and adherence to the agenda makes them feel more comfortable. It is perfectly acceptable to ask questions about what the expectations of you are prior to the meeting because German executives believe that will show your willingness to plan and be prepared which a highly valued characteristic.
When a German believes that you are moving away from an agenda topic, they will likely interrupt you and let you know that bluntly. Germans will not waste time at the beginning of the meeting to get to know you on a personal level as they do not feel a need to establish a personal relationship in order to conduct business with you. However, they will ask pointed questions about your education, position, and amount of time that you have been with your company. It is helpful to provide that information in advance of the meeting. This does not mean that personal relationships with German counterparts are impossible; it just means that these relationships will take a long time to develop if they do at all. It is important not to take this lack of interest personally. Germans just have a great distance between their business and personal lives.
Punctuality and structure for both business and personal engagements are of significant importance to Germans because it symbolizes security to them. When a person arrives on time it is a sign of proper planning in ones professional and personal life. Never arrive too early and never arrive more than 15 minutes after the scheduled appointment without calling to offer an unavoidable excuse. It is considered a sign of disrespect that is so severe that it can completely sever a business relationship or add significant strain (Kwintessential).
Business Attire
In Germany, business dress is very conservative. Germans believe that dress should show reverence to the profession. Men typically wear dark suits, conservative ties, and white dress shirts (“,”). Women should dress conservatively with very little jewelry or