Cross-cultural Negotiation: An American’s Guide To German Business Practices

Developing an Understanding of Germany 1. Historical Background and Cultural Orientation 2. Social and Business Protocol 3. Business Practices

History: Germanic tribes date back to 3500 BC. Otto Von Bismarck united Prussia and Austria in the 19th century. In 1871, Prussian King William I crowned Kaiser, and modern Germany was born. The 20th century brought WWI and II, Nazi Germany, and the cold war division of East and West Germany. In 1990, East and West Germany were reunited. Today, Germany has one of Europe’s strongest economies, despite former East Germany’s struggle to catch up with its western counterpart.

Cultural Orientation: 1. Cognitive Styles: How Germans Organize and Process Information 2. Negotiation Strategies: What Germans Except as Evidence 3. Value Systems: The Basis for Their Behavior

Cognitive Styles: analytical and conceptual committed to universals of their culture closed to outside information and reluctant to share information friendships are difficult to develop

Negotiation Strategies Objective facts are the basis for truth. statistics, reports, tests Feelings are not accepted in negotiation. no “gut” reaction/ decision

Value System: strongly individualistic but consider cultural history in making decisions slow decision-making process, unalterable decisions rules and regulations + strong internal discipline = stability and reduced uncertainty hierarchical society classes some biases to foreigners, refugees, East Germans biases to women regarding power and pay

Social and Business Protocol: Dress Greetings and Introductions Titles and Forms of Address Gestures Gift Giving

Dress: for business, parties, dinners, theatre MEN: dark suites white shirts neutral color ties no khakis WOMEN: dark suites white blouses

Greetings and Introductions: Give a brief but firm handshake. Wait for woman to initiate handshake. NOTE! Do not keep one hand in your pocket while shaking with the other. Introductions: Lower-ranking individual are always introduced first. Men stand when a woman enters a room and remain standing until she is seated.

Titles and Forms of Address: Only close friends and family members are on a first name basis. Business colleagues are addressed Mr. or Mrs. + surname: Mr. = Herr Mrs. (Ms.) = Frau Miss = Fraulein Professional titles are always included: ex. Herr (or Frau) + Dr. + surname NOTE: Business cards should include any degree above the Bachelor level.

Gestures: Speak in complete sentences. To get someone’s attention raise your hand, palm out, and only extend your index finger. Never beckon. When sitting have one knee over the other not one ankle over the opposite knee. Eldest/Highest-ranking official enters the room first. Men enter rooms before women. NOTE: Germans usually do not display emotion or affection publicly, and they tend to stand far apart during business negotiations.

Gift Giving: Quality but not expensive gifts should be given. Appropriate Gifts: quality pens, pocket calculators, and imported liquors If invited to a home, bring an unwrapped bouquet consisting of an odd number of flowers. NOTE: Germans often enjoy odd facets of Americana such as zydeco music and cowboy novels.

Business Practices: 1. Appointments 2. Negotiating 3. Business Entertaining

Appointments: Punctuality: BE ON TIME!!! Making an appointment: via fax or telephone: make it 1 to 2 weeks prior to meeting via mail: make it at least one month prior to meeting Appointment times: Mon.. through Thurs. 11:00am to 1:00pm and 3:00pm to 5:00pm Not after 2:00pm or 3:00pm Fri. afternoons. July, August, and December are popular vacation months. Little work gets done during regional festivals such as Oktoberfest. NOTE: Inquire about the language used during the negotiation. You may need a translator.

A German’s goal is to produce a high quality product. Negotiating: A German’s goal is to produce a high quality product.

Prior to Negotiating: Germans usually begin talking business immediately. If small talk occurs, some good conversation topics include: sports (soccer, hiking, skiing) and German breweries Although Germans protect their privacy, they will open up as trust is established. Avoid asking personal questions in the beginning.

During the Negotiation: Be prepared! Have data and technical expertise to support your claims. Avoid compliment/ complaint juxtaposition. Be aware of “hidden” series of advisors and decision-makers. Emphasize your product’s superiority, and downplay glamour. Germans HATE hype and exaggeration. Keep humor out. Hold some negotiable offers in reserve. Germans are notorious for requesting last minute concessions. Contracts are usually very detailed. A warranty for quality assurance is often included.

Business Entertaining: Breakfast meetings never occur in Germany. Luncheons are commonplace. Discuss business before or after the meal but never during. Use utensils at all times. An invitation to someone’s home is a rare honor. Bring an appropriate gift to show your appreciation.

Quick Tips: 1. Be punctual. 2. Put it in writing. 3. Cut out the glitz. 4. Respect the hierarchy. 5. Slow down.