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:

Greetings:

• 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.

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.