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
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in Germany. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in Germany and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: