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Business Culture: Decision Making

Cultural Context 

German businesspeople will always approach decisions having planned the process and their approach. Their strict attention to rules and details is surpassed only by their passion and vigor in discussing them, which is apparent in the direct, often strong debate that results during meetings and negotiations. This heated conversation reflects the German passion for detail and accuracy.

Hierarchies in German companies of all sizes can be rigid and complex, meaning that protocol is plentiful and decisions rarely happen quickly. German companies tend to train specialists rather than generalists, meaning foreigners will almost always be dealing with someone who knows their area of business exceptionally well. This is part of the justifiable pride Germans take in "Made in Germany" business offerings.

New ideas and concepts are not easily accepted in German companies. Change comes slowly and only when sufficient logical and fact-based information has been provided. The hard sell has little place in German business dealings, meaning foreigners are far better positioned with clear, logical, strong arguments backed by education and technical knowledge.

Power Structures

Strong hierarchies in German businesses mean a clearly delineated management level that has the authority to make decisions and will stand behind those decisions. The larger the deal, the higher the decision maker will be in the company—Germany's largest companies leave the decision making power in the hands of a few.

Relationships between managers and subordinates are somewhat formal, and German professionals manifest a pronounced respect for technical ability: even if people in a company don't agree with a decision, they will respect one another's sound judgment in making it.

It would be best for foreigners to assemble teams with educational and technical ability that match those of the German team members. If it is not possible to physically include technical experts in the decision making process, presenting their findings in written form and quoting the academic credentials of those whose research has been consulted is an excellent idea.

Key Contacts

German companies will usually send at least one specialist from each department affected by the proposal or tentative agreement to decision-making discussions. These people will be expected to contribute to the conversation by providing supplemental advice, but not necessarily weighing in on the final decision.

It is important that foreigners listen carefully to the information provided by these specialists and take it into consideration. Although hierarchical lines are strictly drawn, talking down to a German subordinate will be viewed negatively because of the technical expertise that person has to offer.

Responsibility is generally transferred from managers to team members. Thereafter, the team member is expected to act with little or no supervision. Be sure that instructions or explanations are clear and precise, and refrain from micromanaging once a process is underway.

Communicating Styles

Germans are direct communicators who tend to skip the small talk and get straight to business. They are meticulous planners who pore over every detail and aren't afraid to question anything that seems out of place or unclear. It is important to remain patient and be well prepared to back up your position. Opt for clear, direct communication, as indirect communication will be viewed as suspect and irritating.

Germans are comfortable asking direct questions about errors or inaccuracies, but are sensitive about how similar feedback is delivered. It is imperative that foreigners understand the individualistic social constructs in Germany and how important public pride can be. With this in mind, questions posed in a direct but diplomatic fashion will be well received.

Seemingly contrary to the German preference for strict professionalism and protocol, emotionalism is not entirely uncommon during any phase of the business process. This usually manifests as a heated debate, or as an irritated response to a sudden change in order or agenda. Outright emotional outbursts, however, are seen as signs of weakness and/or a lack of professionalism.

Interruptions are commonplace in discussions with German businesspeople. It is not uncommon to be interrupted if your German counterparts feel they've garnered enough information from your response to formulate an opinion. In this case they may interject during your answer with a new question. Be patient and go on to answer the next question. This type of interruption may also occur if the other person feels you are getting off topic.

Implementing Agreements

Surprises have no place in German business. Logic, facts, and honesty will lead to the completion of a deal—sales techniques, persuasion, and charm will not. Rather than pushing for an agreement, back up weaker areas of a proposal with additional facts and information.

Agreements are points of culmination for German businesspeople, who like to see their exacting work sorting the details put into written words. As intensely analytical thinkers, Germans require all the facts and plenty of examples to ensure their point is made and that everyone understands the terms. Once an agreement is made, signed, and delivered, it is exceptionally difficult to make a change, and attempting to do so would be viewed negatively.

Further concessions aren't impossible, however, provided that they benefit both parties, so be prepared to demonstrate mutual benefit if seeking to change the terms of an agreement. Failure to honor the terms of a signed contract will almost certainly lead to legal action.