Most of the power in German companies is vested in the hands of a few senior managers. Larger companies (AG & GmbH) have a Supervisory Board (Aufsichtsrat) which appoints the Management Board (Vorstand).
The management board is the final decision-maker on policy matters which affect management. The members of the Vorstand have shared responsibility for the overall management of the company and this means that the chairman of a company has considerably less personal power than in certain other countries — management at the top could be said to be collegiate.
However, below Vorstand level, companies tend to have a strictly hierarchical approach within which individuals’ specific roles and responsibilities are tightly defined and compartmentalised. This results in a methodical approach to most business issues where procedures and adherence to well-defined rules are respected.
This methodical approach has both good and bad points. On the plus side, everybody knows what is expected of them and has a process to help them achieve clearly identifiable goals. On the other hand, a criticism that is often levelled at German industry as a whole – and at German business people individually – is that they are inflexible and slow to change to new situations.
Written and Produced by Keith Warburton
Germany continues to retain its position as the driving force of the European economy. It holds a pre-eminent position within the massive economic and political block that is the European Union and it shows no signs of relinquishing its position of leadership and power anytime soon.
Possibly aided by a weakened Euro, Germany is the archetypal successful modern economy with a massively effective export engine at its core. German engineering and ingenuity finds its way to all corners of the world with those exports competing from a quality angle rather than on a price basis. Whatever Germany is doing, however it is doing it – it is extremely successful and, therefore, well worth studying.
On the flip side, Germany is also a highly attractive market for your products and services and if you are not currently doing business in Germany you should certainly consider doing so. Germany has a large sophisticated consumer base with high levels of disposable income and a large manufacturing base looking for components, inspiration and expertise.
One of the keys to success when doing business in Germany is an ability to understand German business culture and the profound impact that the local business culture has when interacting with German colleagues or clients. Lack of preparation could cost you dearly; inattention to detail could result in lost opportunities. Do your homework before engaging in Germany – it’s a must.
This country profile provides an overview of some of the key aspects of German business culture in a concise, easy to follow-format. The document includes information on: