• In 1547, relations between the Roman Catholic Church and the German state were changed by the Reformation, which began with Martin Luther’s translation of the bible.
• From 1618 to 1648 Germany was devastated and divided by the 30 year war.
• In 1866 Frederick the Great took control of Germany following the 7 weeks war against Austria and in 1871 King Wilhelm I of Prussia was proclaimed German emperor.
• In 1867, the North German Confederation was abolished and the Second German Reich, lead by Chancellor Otto Von Bismarck was created.
• Wilhelm II dismissed Bismarck in 1890 and embarked upon a “New Course”. His chaotic foreign policy led to the diplomatic isolation of Germany and defeat in the First World War, causing the collapse of the second German empire.
• Adolf Hitler became the Chancellor of Germany on 30th January, 1933 and his invasion of Poland on 1st September 1939 led to the Second World War.
• Germany surrendered unconditionally to Allied and Soviet military commanders on 8th May 1945 and on 5th June, the four-nation Allied Control Council became the de facto government of Germany.
• For the purposes of control, Germany was divided into four national occupation zones. The Federal Republic of Germany was created on 23rd May 1949, with Bonn as its capital.
• The division between West Germany and East Germany was intensified when the Communists erected the Berlin Wall in 1961.
• On 3rd October 1990, the German Democratic Republic acceded to the Federal Republic and Germany became a united and sovereign state for the first time since 1945.
• Over 95% of the population speaks German as their first language.
• The German language is one of the top ten most spoken languages in the world.
• Minority languages in Germany include Serbian (0.09%), Danish (0.06%) and Romani (0.08%).
• Immigrant languages include Turkish (1.8%) and Kurdish (0.3%).
• Germany has a population of 82,422,299 (July 2006 estimate).
• More than 90% of the population is designated as ethnic German.
• Germany has 7 million (2006 estimate) foreign residents, including asylum seekers, guest workers and their dependents.
• Germany’s ethnic make-up is German 91.5%, Turkish 2.4%, other 6.1% (made up of Greeks, Italians, Poles, Russians, Serbo-Croats, Spaniards).
Business Activity in Germany: Key Sectors
• The most important branch of economic activity in Germany is industry.
• Germany is among the world’s largest and most technologically advanced producers of iron, steel, cement, chemicals, machinery, motor vehicles, machine tools and electronics, as well as a world leader in the shipping business.
• Car-making is one of the most important sectors in German industry.
• Machine and plant construction is also key for Germany’s economy.
Joint Ventures & Partnerships
• In Germany, joint venture legislation falls into the responsibility of the Bundeskartellamt (Federal Cartel Office).
• A joint venture must exercise “genuine entrepreneurial” activities.
• Organisations which carry out functions such as purchasing or distribution on behalf of their parent companies are not considered joint ventures.
• Joint Ventures must have sufficient assets and personnel to carry out their activities.
• Mergers are prohibited by the Bundeskartellamt if they are “expected to create or strengthen a dominant position”.
Trading with Germany: Business Relationships
• Germans value order, privacy and punctuality.
• There is a strict separation between private life and work in Germany, so it takes time to forge more personal relationships.
• Close adherence to targets and time schedules is considered to be vital for business in Germany.
• As a rule, Germans are suspicious of hyperbole, promises that sound too good to be true and displays of emotion.
• German business culture has well-defined and strictly observed hierarchy.
• Germans tend to be averse to risk in their management style.
• Professional rank, status, academic titles and background are important to convey an individual’s expertise in their area of work.
• Written communication is used a lot in German business to back up decisions and to maintain a record of discussions.
• The customary way to answer a phone at a German company is to state the name of the company, the name of the person and a greeting.
• Germans have a strong sense of individualism.
• This is coupled with a keen sense of responsibility for “the good of the community”.
• German culture prizes planning and forward thinking.
• In business, Germans do not like surprises.
• Business is viewed as being very serious, so Germans do not generally appreciate humour in a business context.
• Germans are very direct and honest people.
• Germans speak in a curt manner – this is not meant as an act of rudeness.
• When making or answering a phone call, introduce yourself by saying your name.
• It is seen as impolite to cross your arm over people who are shaking hands.
• It is rude to chew chewing gum in public, particularly in meetings.
• Technically it is against the law in Germany to insult others, so avoid swearing at someone in public.
• Be tactful regarding the subject of the Second World War.
• Do not under any circumstances show any symbols or make any references to Nazis – it is the ultimate insult in Germany!
• Talking with your hands in your pockets is also considered impolite.
• Germans manage time carefully, so calendars, schedules and agendas must be respected.
• Do not turn up late for an appointment.
• Be 5 – 10 minutes early for important meetings.
Business Ethics: Giving Gifts
• In Germany, it is uncommon for business associates to present each other with gifts.
• However, for more social occasions, it is customary to give gifts.
• If presenting a gift to a German business associate, choose one that is small and of good quality, but not overly expensive.
• Acceptable gifts at business meetings are items of office equipment, good quality pens with your company’s logo or non-German liquor.
• If invited to a German home, it is appropriate to bring a gift of flowers, wine, chocolates or a small gift that represents your home or region.
• Flowers should be given in uneven numbers and should be unwrapped.
• Avoid presenting 13 of any kind of flower and do not present red roses.
• If you bring wine, this should be imported, preferably French or Italian.
Business Practice: Cross-cultural Communication with Germany
• In general, Germans are typically conservative as far as physical gesturing is concerned.
• Germans value larger personal space around them than other European countries.
• Common courtesy such as handshakes and politeness go a long way in Germany.
• Germans tend to make eye contact often, so try to maintain this.
• Expressive use of the hands is minimal in most conversations.
• Do not expect to be able to reach German business associates at the office after 5pm from Monday to Thursday or after 4pm on Fridays.
• When answering the telephone to German business associates, it is common to identify yourself with your last name.
• Welcome topics of conversation include sports such as football, cycling, skiing, tennis and hiking, travel, current events and beer.
• Avoid intrusive questions about personal matters.
• Allow German business associates a good amount of personal space.
• Maintaining eye contact demonstrates attention and interest in a conversation.
• Direct eye contact is expected during a toast.
• Waving or shouting at a person who is far away may attract negative attention.
• In Germany, men walk and sit to the left of women and other men senior to themselves.
• Germans show their appreciation of a presentation at the end of a business meeting by rapping their knuckles on the table.
• Appearance and presentation is very important to Germans, particularly in business.
• German business dress is generally understated, formal and conservative.
• Formal dress is observed even in warm weather, so do not remove your jacket or tie before your German colleague does so.
• Women are recommended to refrain from wearing heavy make-up or large jewellery or accessories.
• Business entertainment is mostly conducted in restaurants.
• When dining with potential German business partners, wait for the host to bring up the subject of business.
• The most honoured seat is at the head of the table with important individuals seated first to the left and then to the right of the head of the table.
• Germans do not tend to stay long after dinner and guests are expected to make the first move to leave.
• Remain standing until invited to sit down – you may be shown to a particular seat.
• Do not begin eating until the host / hostess begins or until someone says “guten appétit”.
• Say “das schmeckt” to indicate that you are enjoying your food.
• Try to keep your hands visible throughout the meal.
• Cut as much of your food with your fork as possible, especially potatoes.
• It is seen as polite to finish everything on your plate.
• The host makes the first toast and the guest should return the toast later in the meal.
• Business meetings are taken very seriously in Germany and may go into considerable detail.
• Precise and detailed agendas are produced for business meetings and are followed rigorously.
• Meetings always aim for decisive outcomes and results.
• It is important to provide solid facts and examples to back up proposals.
Setting up a Meeting
• Appointments in Germany are mandatory and meetings are generally scheduled well in advance.
• Never set up a meeting between a lower ranked company employee and a higher ranked German business associate.
• Be aware that the process of setting up a meeting can take time, but once the planning is over, the project will most likely move quickly.
• If you write to schedule a meeting, the letter should be written in German. The
letter should be addressed to the top person in the function area, including their proper business title.
• Try to avoid business meetings in the months of July and August or around the times of national holidays.
• Germans are competitive, ambitious and hard bargainers.
• In German business, a person’s word is their bond – verbal agreements are generally considered binding.
• Business negotiations tend to be analytical and factual.
• Decision-making is held at the top of the company and is often a slow and detailed process.
• Avoid confrontational behaviour, high-pressure tactics or contradictory statements.
• Jokes, anecdotes, a “hard sell” approach or spontaneous presentations are generally not considered appropriate.
• Once a decision is made, it will not be changed.
• Following a business meeting, Germans generally produce massive written communications.
• To Germans quick action reinforces the importance of the meeting, so always prepare and distribute minutes or information within 24 hours of the meeting.
• A few days after the meeting, make a follow-up telephone call – this effort is important to Germans and will be appreciated.
• Contracts are followed very strictly in Germany.
• Business will continue to be very formal until a firm working relationship has been established.
Hints and Tips
• Lower your voice a little and behave graciously and you will enjoy a warm response from German business people.
• Always greet women first in Germany.
• Do not be offended if someone corrects your behaviour.
• Be careful when giving compliments – don’t do this too often.
• Do not lose your temper publicly.
• Stand when an elder or higher ranked person enters the room.
• Women must establish their position and ability immediately to conduct business successfully in Germany.