German business culture | Communicaid Blog | Cross Cultural Training and International Communication Skills

Sep 09

Benefits of Doing Business in Germany

Cross Cultural Training, Cultural training for Relocation, Culture, Culture training for Business & Management, Culture training for Human Resources, Culture training for the Public sector No Comments »

Strategically positioned at the heart of Europe and a key player in both the EU and NATO, Germany has the fifth largest economy in the world. Its strongest exporting sectors – chemicals, vehicles, machinery and household goods – set standards of quality and efficiency not just within Europe but globally, making doing business in Germany a priority for international organisations worldwide.

Brandenburg gate Asier Villafranca i Benefits of Doing Business in Germany

While politically Germany is a federation of regions, each with unique traditions and customs, German business culture is characterised by a set of core drivers that affect business interactions with German nationals in a number of ways.

Task Driven and Fact Focused

German businesspeople will usually prioritise tasks over relationships so the German workforce tends to be very committed, focused and professional. This is evident in the extremely high standard of technology in German flagship companies. When doing business in Germany you and your organisation can count on dealing with highly skilled individuals who will give their best to ensure all objectives and deadlines are met. All aspects of operations undergo careful planning which greatly reduces risk and uncertainty of doing business in Germany. Furthermore, the general preference for hard facts and extremely linear and logical thought processes when making decisions and planning guarantees end products of the highest standard.

Direct Communication Style

German business culture relies on a direct style of communication. As a result, while German businesspeople can be perceived as blunt and possibly rude, when doing business in Germany you will almost always get a prompt and honest answer to your questions. What may be perceived as a direct criticism should be instead seen as a constructive and objective comment, aimed at the project in question rather than the person responsible for it. Meetings, negotiations and other business interactions with German nationals will develop in a straightforward manner. Emphasis is usually placed on reaching a common solution that is at once technically efficient, cost effective and satisfying to all parties involved.

Excellent English Skills

Whatever the position of your German counterpart within the organisation, he or she will most likely be highly proficient in English. This helps eliminate the cross cultural risks of not sharing the same language when doing business in Germany, so global organisations relying on English as an international language can profit from the excellent English skills in Germany. Although they tend to have excellent English skills, your German business counterparts will appreciate you speaking German, particularly if you are selling them your product. As the famous German Chancellor Willy Brandt once said “If I’m selling to you, I speak your language. If I’m buying, dann müssen Sie Deutsch sprechen!”

The benefits of doing business in Germany stem from its strong economy and business sectors, the high level of skills of Germany’s workforce, as well as from the core values of German business culture. If your organisation is doing business in Germany, its success will depend on a sound understanding of these values and on the ability to decipher their influence on business interactions which you can gain through cross cultural awareness training courses and initiatives.

© Communicaid Group Ltd. 2010

Tagged with: Courses - Cultural Training • Cross Cultural Training • Doing business in Germany • German business culture • German cultural values • intercultural communication • intercultural training • Intercultural Training Germany • working successfully with Germans • Working with German colleagues

Aug 31

Challenges of Doing Business in Germany

Cross Cultural Training, Cultural training for Relocation, Culture, Culture training for Business & Management, Culture training for Human Resources, Culture training for the Public sector 2 Comments »

Most people associate German business culture with efficiency, quality and high technical standards. With the fifth largest economy in the world and a great degree of openness to international trade and business, Germany has established itself as a key economic power on the global stage making doing business in Germany more attractive than ever.

Germany Flag wrangel i1 Challenges of Doing Business in Germany

Doing Business in Germanywithout adequate cross cultural awareness, however, is a risky proposition. The cultural values of German business culture at the root of the country’s economic success can also prove a source of cross cultural misunderstanding for global companies doing business in Germany. Cross cultural awareness training courses highlight the cultural risks your organisation is likely to encounter when doing business in Germany.

These stem from a number of factors, some of which are described in more detail below.

Hierarchical Company Structures

German business culture places a great value on hierarchy. German businesses therefore follow a strict hierarchical structure, where decisions tend to be made at the top and communication is usually vertical. Status is acquired and assigned on the basis of merit, and the highest positions in a German company will be held by the most technically qualified and experienced employees. For international organisations doing business in Germany this hierarchical structure can affect negotiations and meetings which may seem to take longer than expected. You may perceive the plethora of procedures and policies as excessively slowing things down and creating mistrust. In truth, your German counterparts are most likely looking closely at all details and waiting for decisions to be made at the appropriate level. While decision making processes may be slow, the final result will be of the highest quality, as German products are renowned to be.

Strong Departmental Rivalry

When doing business with German companies, you should be aware that you may come across strong departmental rivalry. This may be actively encouraged by German managers in order to get the best out of their employees and staff. While it arguably contributes to a competitive product and high levels of efficiency, it means that you should be sure of communicating and sharing information with exactly the right parties and people within the German company with which you are doing business. Make communication channels clear from the start and ensure you are aware of who the key decision makers are on the German side.

Direct Communication Style

German businesspeople tend to communicate in a very direct manner. They will give you their opinion openly and straightforwardly and they will expect the same from you and your colleagues. Humour does not tend to be valued or used in business, so be aware that using humour can be inappropriate and unprofessional. You and your organisation need to be aware of this cross cultural difference as your German counterparts can otherwise be seen as blunt and undiplomatic. In negotiations, you should read any criticism as a constructive contribution to improve the outcome, rather that an attack of the person in charge. If you are working under a German manager, don’t expect praise, as a good job done is the minimum you will be required to do.

Understanding German business culture and developing the cross cultural skills to decipher its influence on business relationships with your German counterparts makes the difference between a profitable venture and a failed one when doing business in Germany. Cross cultural awareness can help you tip the balance of negotiations with German businesses in your company’s favour, greatly contributing to your company’s global success. Cross cultural awareness should form part of the know-how of all internationally focused organisations and can be developed and harnessed through Communicaid’s bespoke cross cultural training solutions.

© Communicaid Group Ltd. 2010

Tagged with: Courses - Cultural Training • Cross Cultural Training • Doing business in Germany • German business culture • German cultural values • intercultural training • Intercultural Training Germany • working successfully with Germans

May 13

International Mergers and Acquisitions: Maximising the Cultural Benefits

Cross Cultural Training, Culture, Culture training for Business & Management, Culture training for Human Resources, Culture training for the Public sector 2 Comments »

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The recent announcement that Deutsche Bahn has acquired Arriva paves the way for the creation of one of the largest transport groups in Europe.

Deutsche Bahn operates in 130 countries around the world and is widely known in Europe for its operation of Germany’s national rail services and some key passenger and freight rail services in the UK. Arriva, a large transport services organisation, provides bus and rail services in twelve countries throughout Europe. The resulting merged group will therefore encompass a significant number of European cultures and languages.

This multicultural environment is likely to present challenges for the newly merged group that Deutsche Bahn and Arriva need to recognise and deal with in order for the merger to be a success. Developing multicultural project teams, managing virtual communication across Europe, negotiating organisational cultures and dealing with a number of different languages are just some of the challenges they may face. These challenges lie in different cultural values and behaviours that result in diverse business practices.

Examples of challenges rooted in cultural differences might be the greater amount of administration that is preferred in German companies, an indication of the Germans’ tendency to avoid uncertainty and risk and keep control of details. Another example is the high levels of hierarchy displayed by businesses in France while in Denmark there are more flat hierarchies and it is not unusual for decisions to be made by consensus. The indirect communication style in the UK is another example of cultural difference which may cause confusion for Germans. Conversely, the British may perceive the German preference for a direct communication style to be aggressive or rude. These are just a few examples of how cultural difference can impact international business and M&As.

Research has shown that 60-80% of international mergers fail because the companies involved have not put measures in place to deal with cultural differences like these or integrate both national and organisational cultures. Developing a ‘third culture’ that is understood and accepted by employees throughout the company is one of the best ways of ensuring a successful international merger. Communicaid’s cross cultural awareness training courses for mergers and acquisitions can help employees to develop the cultural awareness and intercultural sensitivity required to understand their colleagues’ cultural values and preferences. This in turn will provide them with the opportunity to develop an integrated approach to the company’s culture, essential for any international merger’s long-term success.

Armed with an understanding of these cultural differences, managers working for Deutsche Bahn or Arriva can really harness the broad diversity that this newly formed venture has to offer. Undertaking an intercultural training course such as Managing International Teams or Managing International Mergers and Acquisitions will give international managers involved in a merger or acquisition the insights they need to develop an effective working culture that plays to the strengths of their multicultural teams and maximises the cultural benefits of their company’s acquisition.