Germany has been the richest, strongest, most efficient, orderly, productive, scientifically and technically advanced, and most populous country in Europe. The unification between East and West Germany at the end of the Cold War has had a profound impact on the country and the ramifications of this change have impacted business there. Most of those changes have been on the former East Germany as it has shifted from having a command economy to the relatively free market where performance and quality are the keys to success.
It was feared that East Germany would become a drag on the West. While the East is like having a poor relative it has also created opportunities for others. Germany continues to be the leading economic power in Europe today and a dominant economic force worldwide. Its currency has been among the strongest and most stable of any European nation, and it is one of the world’s leading exporters of manufactured goods.
Germany is considered a model of socialism and capitalism, which is supported by a large and prosperous middle class. Labor/management relations have been generally harmonious because German law has given workers much participation and protection. Education plays a major role in preparing students for skilled positions in the work place and its literacy rate is very high.
Banks are dominant being the principal provider of funds for business ventures. Most businesses have been in business for many years, surviving wars, subsequent reconstruction, economic crisis and have generally prospered as this “Miracle of Europe” has fueled much of the European economy. However, Germans are very conservative and do not have many entrepreneurial or innovative enterprises when compared to the U.S.
The government of Germany has made a major investment in the nation’s business community that has led to the imposition of many regulations. The relationships between the government and the business community are much closer than in the U.S. While the U.S. economy is increasingly driven by high tech and information industries, Germany’s expertise is in the “smokestack” industries. Their great strength is that they know what they are doing because they have done it that way for a long time. Because they are so well-practiced in their areas of expertise quality and craftsmanship seems to come easy.
Germany is a difficult country to precisely define because it continues to change. In many ways it is similar to the U.S., but the business person can not assume that they can do business the U.S. way or that they feel the same way about how to do business as the American businessperson. In the next several pages represent a summary from several sources describing the Germany way of doing business, business practices, leadership styles, negotiating styles, communication styles. It would be helpful for the American businessperson to understand these differences and adapt in order to do business there.