Doing Business Ion Germany Essay, Research Paper
DOING BUSINESS IN GERMANY
Like many other northern Europeans, Germans tend to take a deal-focused, low-context and monochronic approach to doing business. North Americans and Australians find Germans relatively formal, southern Europeans often describe them as reserved and most Asians consider them very direct.
Of course there are important north/south and east/west differences in German business customs, not to mention significant individual variations. Keeping this in mind, the following profile describes the important general tendencies in business behavior you are likely to encounter whether your meeting takes place in Hamburg or Munich, Leipzig or Cologne.
Language of Business
Many German managers are comfortable conducting business in foreign languages, especially English. Larger companies usually have competent English speakers on staff. However, since the language of business is the language of the customer, a professional export sales team should include a fluent speaker of German.
If the purpose of your meeting is to negotiate a purchase, a joint venture or strategic alliance, check with your counterparts about the possible need for an interpreter.
Making the Initial Contact
Banks play a powerful role in the German business world. Since it is always useful to have a referral you may want to ask your international bank to arrange an introduction. However, in contrast with more relationship-focused business cultures such as Japan, Korea, Brazil or Saudi Arabia, making direct contact is also a viable option in Germany.
Send a letter in good business German along with basic information about your company and the purpose of the meeting. Request an appointment with two to three weeks’ advance notice. If you are making a ‘cold’ approach it would be appropriate to address correspondence to the department concerned rather than to a specific individual. Once you have been introduced or have a referral you may address your letter to the appropriate person.
If you do not speak the language, offer to bring along someone to interpret. Your counterpart will usually respond that this will not be necessary but it is polite to make the offer.
Avoid asking for a meeting during the months of July, August and December as well as during the Easter holidays. Also avoid Friday afternoons and late afternoon appointments on any day.
Most Germans tend to be deal-focused in business. That means they are generally ready to negotiate based on the perceived merits of the deal and do not feel the need to develop a close personal relationship with the other party before talking business. Rather, rapport-building takes place while the two sides are discussing the deal. Visiting negotiators can usually expect to get down to business after just a few minutes of general conversation.
Orientation to Time
Germany is a strongly monochronic culture. That is, Punktlichkeit is very important, schedules and meeting agendas are rigidly adhered to and business meetings are rarely interrupted. Being on time may actually mean arriving a few minutes early: tardiness signals unreliability. If you are half an hour late for a meeting you may be half a month late with your delivery! Therefore, should you be unavoidably detained be sure to phone your counterpart as soon as possible to reschedule the meeting.
In Frankfurt or Dusseldorf expect to follow a prepared meeting agenda whereas in Paris or Lyon business discussions are often less structured. Your meeting will rarely if ever be interrupted by phone calls or unscheduled visitors.
Formality, Hierarchy and Status
German society retains a certain level of social formality which is reflected in business protocol. Formal behavior is a way to show appropriate respect to people with high rank, professional titles and higher academic qualifications, especially in southern Germany. This can be very important since more German managers have Ph.D’s than anywhere else in the world. About 40% of the board members of the 100 largest corporations have a doctor’s degree.
Address Dr. Wilhelm Schmidt as “Dr. Schmidt” or “Herr Doktor.” His female colleague with a Ph.D would be “Frau Doktor.” It is polite to address less exalted business contacts with Herr’, Frau’ or Fraulein’ followed by their last name. This includes secretaries. Whereas in the U.S. for example female secretaries are usually addressed by their first name, in Germany it is Frau Braun,’ not Waltraudt.’ Also remember that women about 20 or older should be addressed as Frau whether married or single.
As the case with most other European tongues, the German language employs two different personal pronouns for you. Sie is the formal pronoun appropriate for business relationships while the informal Du is reserved for close personal friends, small children and pets. Stay with titles, family names and Sie unless and until your counterpart suggests moving to a less formal mode of address.You can expect to work with a German business counterpart for many years without shifting to first names.
German formality is also expressed in meeting and greeting protocol. Handshakes are expected whenever you meet or leave someone and this greeting is not always accompanied with a broad smile. Many Germans save their smiles for friends and family, regarding smiling at strangers as a silly, even false mannerism.
Business Communication Style
Relatively reserved, not given to enthusiastic public displays of emotion — although southern Germans are somewhat more expressive. As opposed to Latin Europeans and Latin Americans, most Germans eschew wide gestures, animated facial expressions and conversational overlap. Interrupting another speaker is regarded as very rude.
Germans generally pride themselves on speaking their mind. Clarity of understanding is the prime goal of communication. Whereas relationship-focused negotiators often use indirect, oblique communication, Germans value direct, frank, explicit, low-context language. They sometimes suspect Arab, Asian and Latin American negotiators of trying to mislead them with vague, ambiguous responses when in reality these high-context people are simply trying to maintain harmony and avoid giving offense. Conversely, business visitors from cultures which favor indirect verbal language should realize that Teutonic bluntness is not meant to offend them.
These days many German executives responsible for international business are aware that Japanese, Thais, Arabs and others value indirect, roundabout ways of saying things. But they may be less aware of such differences within northern Europe. Recent research by Dr. Malene Djursaa of the Copenhagen Business School shows that German negotiators are somewhat more low-context (direct) than the Danes and considerably more direct than the English. This means that negotiators from even closely-related northern European cultures may not be fully prepared for Germanic abruptness and readiness to “get to the point.”
Expect Germans to answer the telephone by giving their last name rather than saying “hello.”
Germans tend to be uncomfortable with the effusive compliments that are common in some other cultures. Similarly, foreigners are unlikely to be overwhelmed with flattery — with one exception: Germans are quick to show appreciation for a visitor’s efforts to speak their language.
The Space Bubble
The normal interpersonal distance in a business context is about an arm’s length. Germans tend to stand and sit further apart than Arabs and Latins and may feel ill at ease when their space bubble’ is invaded. Germany is also a low-contact culture, so expect little physical contact beyond the obligatory handshake.
If a German suddenly raises his eyebrows at you during a business meeting he is may be complimenting you for having come up with a good idea or a clever remark. This could confuse Britons — to whom raised eyebrows often signify skepticism — as well as Arabs to whom raised brows is may be a nonverbal way of saying no.’
Hand and arm gestures are restrained. It is rude (as well as against the law) to tap one’s forehead while looking at another person. This is a potential problem for business visitors from the UK and Spain where the same gesture means “I am very clever” rather than “You are an idiot.”
Making a Sales Presentation
Germans respond best to thorough, detailed presentations supported by copious facts. They look for plenty of history and background information rather than fancy visuals. Use references and testimonials whenever possible.
Be wary of including jokes in your presentation. Humor rarely translates well and sales presentations are a serious business in Germany. .
Determining Your Bargaining Range
Most Germans respond better to realistic initial quotations than to the classic high-low’ tactic. They may react negatively to what they perceive as bazaar haggling. Consider building a small margin into your opening bid to cover unexpected developments, but take care to avoid over-inflating your initial offer.
Like the Japanese, German negotiators are known for very thorough preparation. They are also well known for sticking steadfastly to their negotiating positions in the face of pressure tactics.
Germans take their time to deliberate and to confer with responsible colleagues before making an important decision. Expect them to take more time than Americans but perhaps less than the Japanese and most other Asians.
Look for heavy emphasis on the legal aspects and the fine points of the written agreement. Germans tend to depend more on the wording of the contract than on the relationship with their counterpart to solve any problems and disagreements that may develop. Contract terms are considered “cast in concrete,” so attempts to renegotiate the contract soon after it has been signed may not be welcomed..
A dark suit and conservative tie for men, suit or dress for women.
Meeting and Greeting
Expect a firm handshake (one or two vigorous pumps) with direct eye contact. Some Germans believe that a soft handshake reflects weakness and that lack of eye contact indicates shiftiness, unreliability or even dishonesty. To avoid giving the wrong impression, East and Southeast Asian visitors accustomed to a gentler grip and less intense gaze behavior should prepare themselves accordingly.
The exchange of business cards is less formal than in East and Southeast Asia but less casual than in North America. Present your card after greeting your counterpart and shaking hands.
This is not a gift-giving culture. German negotiators are likely to feel uncomfortable if presented with an expensive gift. If you do wish to bring something small, choose a tasteful logo gift or an item your country or region is famous for. Asians should not be surprised if their German counterpart unwraps the gift in their presence.
Wining and Dining
Many Germans prefer to maintain a clear separation between their professional and private lives. Although they are excellent hosts, Germans may place less emphasis on business entertainment than visitors from many relationship-focused cultures.
Do not expect to talk business over Fruhstuck: the “power breakfast” has yet to make an impact in the Federal Republic. When you go out to lunch or dinner, expect to talk business before or after rather than during the meal unless your local counterpart takes the initiative.
Your German host may consider it impolite to repeatedly urge guests to eat or drink, so be sure to speak up if you wish to have something that is offered. Do not wait to be asked three times, as is often the custom in the Middle East, Brazil and other traditional cultures.
If invited to a German home for dinner, be sure to accept. Avoid arriving early but do show up within ten or 15 minutes of the time given.
A hostess gift is appropriate, but avoid bringing wine unless it is a good vintage from a top wine-producing area. Flowers make a good Mitbringsel but avoid red roses (for lovers only) and canna lilies or chrysanthemums (for funerals only). Bring an uneven number (except for 6 or 12) but never 13 and remember to unwrap the bouquet before presenting it to your hostess. If all those floral taboos have you confused, a box of high quality chocolates is an excellent alternative.
A man precedes a woman when entering a bar, restaurant or other public place and walks to the lady’s left when outdoors. It is polite to stand when a woman, older person or an individual of high rank enters the room.
Germans take business very seriously and expect their counterparts to do the same. Competence more than connections is the key to business success in Germany.