Background To Business in Germany

The fact that Germany has survived the post-2008 recession well is a testimony to the underlying strength of the German economy and, more interestingly, the strength of its much-vaunted manufacturing base.

Interestingly, unemployment rates in Germany are now lower than they were pre-2008 and exports are considerably higher.

For a number of years, people were warning that the German model was unsustainable – both labour and social costs were said to be way too high – and that the country would need to make radical policy changes to withstand the growing competition from low-wage economies such as China and India. Yet, despite these challenges and despite the cost of the post-cold-war integration of the former East Germany, the country’s economy seems in rude health.

It is, therefore, worth re-assessing the German business model to see what can be learnt from it – especially as post-war German success was achieved without too much attention being given to the science of business management which had been the vogue in the U.K. and even more so in the U.S.A.

In Germany, much greater attention has been paid to academic, technical education and its value to business in general. Therefore, companies tend to be run by technical experts rather than lawyers and accountants and this is reflected in the high regard in which engineers are held by other Germans.

Diligence and competence are characteristics which are held in high esteem by colleagues and are seen as the key indicators of performance. Appraisal systems based on the softer competencies as favoured by many U.K. and U.S. firms are still not common in traditional German companies.

A brief overview of some key concepts to consider when doing business in Germany

Written and Produced by Keith Warburton

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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:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips