Country Overview
Germany has two millennia of history, with its general location in Central Europe and borders nine other countries. These countries include; Austria, Belgium, Czech Republic, Denmark, France, Luxemburg, the Netherlands, Poland, and Switzerland. As well as bordering two seas, The Baltic and The North Sea. The capital city of Germany is Berlin, which is located in the North Western part of the country. Germanys population is currently estimated to be about 80.9 million and has a 0.4% growth rate (Frankfurt). Germany is approximately 137,846 square miles, which compares in size to the U.S. state of Montana. Montana is approximately 147,040 square miles, making Germany just a bit smaller. According to the BBC, the primary language of Germany is of course, German.
But about 0.09% of Germany speaks Sorbian, which is mostly in the Eastern parts of Germany. And in Nordfriesland about 10,000 people (or 0.01% of Germany) speak North Frisian (Languages – Languages). Christianity is the predominant religion in Germany with about 70% of the population following the religion, but other religions include Lutheran-Protestantism, Roman Catholic, and Calvinism (Religion in Germany). Germany has many more unmentioned religions, as do most countries, but they are not considered the majority – therefore, not worth discussion. And lastly, an important thing to note is that Germany uses the Euro for its currency. As of right now, one euro (€1) is worth about one dollar and twelve cents ($1.12.)
Industries & Markets
Germany is an extremely world-renowned business and manufacturing location. From the automobile industry like BMW and Mercedes-Benz, to engineering, chemicals, and even innovations from the digital world. Germany has constantly been right there on the front lines of industrial countries (Hartig). Germany’s largest cities are spread out mostly across the whole country. Berlin, of course being the first largest with its home to over 3.2 million. Hamburg next with a little more than half of Berlin’s population at 1.7 million, Munich just a few hundred thousand people less at 1.4 million, and lastly Cologne with its 1 million people.
A lot of the bigger cities have millions of people in them, and while these may be smaller numbers compared to the U.S. there are still millions of people that could possibly enjoy JHAL’s services. Germany is home to many large companies that are well known across the world, and even have some of the largest producers. To name a few, Germany has BSAF Corporation (which is the second largest chemical producer in the world), Allianz (world’s largest financial services providers), Siemens, Volkswagen, and as I mentioned before, BMW (Hintereder).
Government & Political Environment
Much like the U.S. Government, Germany has a Federal Republic. Though the U.S. is a Constitution-based Federal Republic, it has a strong Democratic tradition. Whereas Germany has a Federal Republic is as well but has more of a Republican ideology. Germany elects is leaders very similarly to the U.S. The literal meaning of the word, “republic” means, “a country that is governed by elected representatives and by an elected leader rather than by a king or queen” (Federal Republic). If you take a glimpse at a map comparing the U.S. to Germany, you can of course see that the U.S. has fifty states while Germany only has sixteen. As stated before, Germany is a lot smaller than the U.S. in terms of size, including its population. Germany has a constitution, as well as a Judicial Branch and a Legal System.
However, Germany has an Executive Branch Chief of State as well as an Executive Branch Head of Government, which differs from how it is in the U.S. We have one person that does this in the U.S. which is known as the President. Which Germany has a president as well, but they also have a Chancellor. Currently, Germany’s President is Joachim Gauck, and the Chancellor is Angela Merkel. A challenge when it comes to exporting our products to Germany, is that the German Government and its regulations offers a degree of protection to its established suppliers that are located locally within Germany (Doing Business in Germany). It is said that foreign companies should beware of exporting to Germany due to the fact that Germany has high standards when it comes to products. Germany has the products tested and certified in order to be sold in the country (Doing Business in Germany).
Business Norms
A normal work week in Germany is much like it is here in the U.S., where the average work week is between 36 and 40 hours a week for full-time jobs. The larger portion of full-time jobs have 7 or 8-hour workdays, 5, days a week with a lunch break that usually lasts 30 minutes or one hour. Germany’s labor laws say that employees cannot work more than 48 hours per week. Overall the average workday does not exceed 8 hours per day. Germans workers with six-day work weeks have a mandatory minimum of 24 days of vacation per year, and for workers with five-day work weeks get 20 days of vacation (Doing Business in Germany).
Germany also has what is called the, “Ladenschlussgesetz” (translation “Store-closing law”). This law means that on Sundays only restaurants, transportation, and museums are open on Sundays. The Ladenschlussgesetz forbids stores in retail and other non-essential stores from operating on Sundays. Germany also has one national holiday where all workers receive a day off on October 3rd, which is celebrated as German Unity Day. German Unity Day is a ceremonial day of the anniversary of the German Unification in 1990, when West Germany (Federal Republic of Germany) unified with East Germany (German Democratic Republic) for the first time since 1945. On this day, Germany became a single German State and has been celebrated since (“German Unity Day”).
Customs, Traditions and Etiquette
Germany celebrates a lot of the same, if not extremely similar holidays that the U.S. celebrates. With the exception of their “national” holidays like German Unity Day, while here in the U.S. we have the Fourth of July (which of course Germany does not celebrate). But for the most part, Germany and the U.S. celebrate similar holidays due to mostly Christian backgrounds. Also, as mentioned previously, a lot of stores and businesses are closed on Sundays in Germany due to Ladenschlussgesetz.
This may not raise a concern for JHAL though, because once again a lot of U.S. businesses are closed on Sundays as well. Most German workers also receive the more typical Holidays off like Christmas, New Years, Easter, Father’s Day, Mother’s Day, Groundhog Day, etc. Collectively, the holidays equate to give German workers 10 days off. Though some German holidays differ from holidays in the U.S., most of them are fairly similar. However, we will need to be cognizant of these differences if we choose to do business with any German company. There may be days when here in the U.S. we are doing business as usual, but in Germany they may be celebrating Erntedankfest which is Germany’s Thanksgiving. Though this should not be an issue for JHAL, since we will communicate very thoroughly back and forth with our future German business partners.
German businesspeople are typically very well with communication and find it to be one of the most important parts of business. German businesses find punctuality to be extremely important. Arriving at a meeting late, or even coming into work a few minutes behind schedule is considered extremely rude. German businesspeople also expect projects and work to be completed on time and completed error-free. Peter Hintereder from Deutschland.de, as an article on Business Etiquette in German culture.
The publisher FAZIT Communication GmbH, and Frankfurt-am-Main who writes for Deutschland.de, reports that hierarchy is also extremely respected in Germany. They wrote that, “the chain of command is closely followed when it comes to workplace decisions. Defer to your direct manager when it comes to decision-making. He or she will bring your question up to the next level of management if needed and so on” (Hintereder). This is extremely important to note because it is very similar to how it is here in the U.S. We all report to someone who is above us in our jobs, and that person then reports to someone even higher up in the chain. In America there are many “manager” titled jobs that manage smaller groups of workers, and then above them is another manager that manages them, and so on and so forth.
Now this may differ in smaller companies, but this is an important factor to note. Frankfurt-am-Main also reported that titles are very important in Germany. Often times you will see this on business cards, but Germans use a person’s title and surname for in-person and e-mail communication (Hintereder). If this is not used it may look ignorant not to recognize a German businesspersons’ title, as well as the fact that they may have a lot of power in the business. As mentioned before, respect of the chain command is extremely essential when working with German business partners. Also, when interacting with German businesspeople face-to-face eye contact is a key factor. Frankfurt also mentioned that a short and firm handshake is the most typical greeting, and you are to do this with everyone upon entering and leaving a meeting. It is also important to note not to shake someone’s hand with one hand still in your pocket, as this is seen as “edgy” and awkward. Non-verbal communication is also important when working with German businesspeople.
Coupe Olli from BusinessCulture.org, says that you want to make sure you stay an arm’s length away from each person, always maintain eye contact with the person you are speaking to, or the person whom is speaking to you. Also, make sure never to put your hands in your pockets when talking with someone (Olli). There are some gesture’s that the Germans find as rude, such as the “okay” sign, and never point your index finger at others, both are seen as rude or insulting. Olli also suggests that businessmen should wear dark-colored, conservative business suits with ties, and a white shirt. Businesswomen should also dress in dark suits and white blouses or conservative dresses. This attire is seen as proper and is for every season. Also, you want to make sure never to remove your jacket or tie before your German colleagues do (Olli). Lastly, when it comes to giving gifts to German business partners, these gifts should be small and good quality and not overly expensive. The most acceptable gifts to give at business meetings are office equipment, quality pens, or liquor with your company’s logo on it. Be aware of giving red roses since they symbolize romantic intentions, and if you were to give flowers they should be given in uneven numbers and unwrapped (Olli).
An initial meeting would be handled as follows; start off by being on time to the meeting. Germans often time use 24-hour time, and meetings are typically held between 10:00 am and 1:00 pm, after lunch between 3:00 pm and 5:00 pm. Upon entering, shake hands with each and every person in attendance to the meeting whilst maintain eye contact. The meeting will consist of mostly managers, so be sure to be aware that you are speaking with people who are most likely higher up in the “chain”. Be sure to address each person by their proper title, and if they do not give it use, “Herr” for “Mr.” and “Frau” for “Ms.”, followed by their title and family name. German businesspeople typically don’t use first names unless they are around close friends or family. German businesspeople may also seem unfriendly at first and may not want to have “small-talk”, they prefer to get right into the meeting. Be sure to follow instructions and listen to what your potential future German business partner is saying.
Looking into Mr. Gestland’s spectrum for the four cultural communication barriers, you would see that the U.S. and Germany are fairly close together in most cases. German business culture is what Mr. Gestland considered to be “deal focused”. German businesspeople are task oriented, direct, and are often times blunt unlike the “relationship-focused” countries. When it comes to the formal and informal side of business, the U.S. and Germany are on opposite ends. Germany has a very hierarchical culture and differences in rank matter in terms of expertise, as well as gender.
They always use appropriate titles, and often times ages can affect status. While here in the U.S., your age, your rank, gender, as well as expertise are less important. Luckily when talking about time and scheduling, the U.S. and Germany are in the same boat. We are what is called “clock and schedule worshippers”, or monochronic. Time matters in monochronic culture, scheduling is firm, agendas are tight, and few if any interruptions are preferred. And lastly, at the end of the spectrum we have the reserved and expressive cultures. Which again our two countries are fairly similar when it comes to this topic. German businesspeople are more reserved, while the U.S. sits right in the middle of being reserved but often times expressive. But this shows that we can be reserved, and often times we (Americans) are. We let each other talk, and we respect the higher up. Reserved cultures find interruptions to be rude, there tends to be very little conversation or “overlap” in meetings and are at ease with longer silence. Overall, the U.S. and Germany are very similar when it comes to the cultural communication barriers. There aren’t many barriers between our two countries and doing business with German businesses would be fairly easy for JHAL to do.
Conclusions & Recommendations
In conclusion, I believe that the German business environment is relatively similar to what JHAL is used to, and doing business with German companies would be favorable to JHAL. We currently get a lot of our goods imported from China, Japan, and Korea. Now, with that being said it would not be wise for the company to attempt to do business with those specific countries. I believe that most Asian Companies may not see it as beneficial for them to purchase products from JHAL, when these companies could buy straight from manufacturer and avoid additional transportation costs from JHAL. I think that in their eyes it would make little sense to have the products be produced in their home country, be shipped here, just to be shipped back.
I think that we are better off targeting other countries because it would be a waste of our time, budget, as well as resources. That is why, I have chosen to target Europe as a potential business partner instead. Specifically, Germany. After all of my research on Germany and German Business Culture, I would recommend that JHAL continue exploring this country as a potential sales territory in our future. Germany has an extremely low level of unemployment, and they also are one of the largest manufacturing companies in the entire world. Additionally, I believe there is a lot of potential in Germany for JHAL. As far as moving forward into expansion into Germany, there are a lot of positives as you may have read throughout this report. From the fact that Germany’s government is fairly similar to the United States, even to the fact that Germany is home to some of the world’s largest producers. Some barriers that we may need to hurdle over, are the tests and certifications that the German government requires for goods being exported into its country.
Though some of you may see this as a risk, fortunately our company’s products are a lot simpler than most and I do not believe that JHAL needs to worry about these testing’s and certifications because we offer such simple products. Our products do not pollute the air or have emissions to worry about as much as other companies like, Ford Motor Company. We are a very competitive company at JHAL, and we are great with our customers providing a service like no other. Also, I do not believe there are many company’s like us in Germany. The only thing that possibly could make doing business with Germany undesirable would be the biggest obstacle of having our products being shipped here from China, then being sent to Germany. It does make things a little more difficult, but I believe we can overcome this, as well as have a lot of business in Germany.
I would recommend that we should take the time and resources to look into current businesses in Germany that are similar to JHAL. Before we travel into Germany, I think that we should once again look into other companies that may want to use or buy our products. I think we should get into contact with them as soon as possible. But before arrival in Germany I think we should train the said employees that are being sent, so they know how to properly interact with German businesspeople. I would really consider that we look further into this, do more research and invest our time into working with German businesses. Upon approval, I will immediately be taking action and contacting businesses in Germany for a potential partnership opportunity with JHAL.
