GERMANY: ANALYSIS OF SOCIAL-CULTURAL IMPACT ON BUSINESS PRACTICES
Germany: Analysis of Social-Cultural Impact on Business Practices
Executive Summary
Business practices in different regions are always inevitably vulnerable to influence from their own social, political, and cultural practices. This is mainly because businesses operate within societies which involve dealing with people and their individual and collective cultures. The impact of people’s culture can be felt on a large scale as in the case of whole continents or as minimally as small towns in the smallest of countries. People’s practices and cultures ultimately influence the way in which they think and view issues and eventually the way in which they think about business and how they do it. Social-cultural environments influence business practices in a country in multiple ways. This includes the choice of business partners, the kinds of businesses done, the ways in which those businesses are done, the levels of loyalty and finesse in business etiquette involved, the speed of business practices, and the language in which it is done among other things. This paper analyses the effect of social-cultural practices on the business practices with specific reference to Germany. An introduction to the country, Germany is given and a presentation of some of its social and cultural practices made. The impact of these practices on business practices in the country is analysed.
Introduction
Culture and social practices have an overall influence in every part of a region’s existence. It exerts an influence on all the sectors of life including mainly its trading practices. This is where business and social-cultural practices begin to interact. Businesses operate within societies which involve people and their individual and collective cultures. The impact of people’s culture can be felt on very a large scale as in the case of entire continents, regions, and countries or in lesser scales such as certain families or even individuals. This is because a person’s culture informs the way in which they make decisions and the kinds of decisions they make. This paper analyses the effect of social-cultural practices on the business practices with specific reference to Germany.
German Assertiveness in Business
German culture is very assertive. As a result, it is a very direct culture. People will tend to say exactly what they think and are less apt to tip-toe around critical issues they want to communicate. This may make the culture quite abrasive in some instances. There is generally no shying away from confrontation (Morrison & Conaway 2006). Germans place truth and directness before diplomacy. They hold the value that the truth or objective facts on an issue should not be deterred by the need to be diplomatic. Certain cultures may often interpret this culture of directness as rudeness; this is true of polite cultures such as those of the Japanese and various African cultures. In Germany, however, this is a respectable and indeed fundamental value in doing business (Solomon & Schell 2009). There is a lack of self-depreciation in expression as is in Eastern and African cultures. This has led many to view German businessmen as rude and arrogant. However, many Germans see this direct self-expression as a way of giving factual rendition of truth devoid of sensitivity to any other external factors. The need to clearly and confidently express oneself is more apparent than the need to protect other people’s feelings (Doing Business in Germany 2012). This cultural reality allies more with the evolutionary theoretical model that favours incremental changes.
General objectiveness in individuals is appreciated and celebrated among Germans. Decisions tend to be structured around facts and objective information other than sensitivity to people’s feelings or other social factors. This value is extended to most business practices. Business decisions will generally be made using objective facts. In some societies, especially in the East, business decisions are influenced by other social factors such as age, sensitivity to other people’s feelings, and general view of society. In German culture, it is better to say nothing than make assertions that have no support. Prior planning is highly regarded (German Business Culture 2011).This culture is linked to the evolutionary theoretical model. This cultural uniqueness most likely came into being as a result of incremental changes in the German society.
Reuvid (2002) observes that there is general feeling that German businessmen lack, humor, and this has resulted in a view of the entire culture being seen as those that lack humor. This, however, he asserts is not so. Rather, there is a time and place for humor according to Germans and that is usually not in serious business.
Indonesian culture in contrast is a harmony-oriented culture where the respect and feelings of people are more important than the statement of facts or the search for answers. There is a strong group orientation and discussions are always favoured to individual decisions. Negotiations are kept as cordial and agreeable as possible with the end goal being to agree, individuals are expected to control their feelings, avoiding rudeness and pushiness and instead remaining humble and agreeable.
Integration of Immigrants
A majority of people are apprehensive when dealing with Germans. However, the generation on baby boomers have given rise to a generation of younger Germans who are more globally-oriented as compared to their parents. Globalization has generally had an influence on the accommodation of Germans for other people of the world in business and other areas.
Due to the large influx of immigrants in the 1980s and early 1990s the country has ended up with a blend of different kinds of people. During this time numerous immigrants from Sri Lanka, Lebanon, West Africa, and neighboring countries came to Germany as a result of an Asylum provided by the country those persecuted politically (Microsoft Encarta, 2007)
There was a period of increased resistance from German citizens to theses immigrants who they saw as competition for resources. This caused an international focus on the xenophobia that was going on in Germany. Gradually the number of immigrants decreased. However, presently there remains a lot of immigrant sin Germany mainly from Turkey .Modernization and intense urbanisation has led to a lot of integration and better assimilation of foreigners into German cultures. Consequently this is more apparent in bigger cities in Germany as compared to smaller towns. The presence of different peoples in Germany has resulted in a better atmosphere for business and socialization. The country is made up of Malay people, Chinese and Indians. In contrast, Indonesia is largely made up of people of the same nationality (Indonesians) although they are divided into many different ethnic tribes. Religious diversity is also more in Indonesia with Buddhism, Hinduism and Islam being dominant religions as opposed to the largely Christian and atheist Germany. Indonesian culture is more welcoming and assimilative of foreigners as opposed to that in Germany. Although the official language is Malay, English is often used for commerce which makes business better and easier to both start up as a foreigner and to access.
Anything that has to do with the steady immigration of people may be thought to agree more with the evolutionary theoretical model. However in the case of Germany , the immigration of individuals happened all at once and not slowly over a large span of time. It therefore brought about revolutionary reactions such as what was witnessed in increased xenophobia and mis- treatment of foreigners in the early nineties .
Corporatism Culture
German culture tends to demand efficiency and expertise in whatever area. As such, proper presentation is always expected in meetings or in business pitches. Individuals are expected to back assertions with comprehensive information. Lack of proper preparation with facts and comprehensive information may lead to not being taken seriously (Doing Business in Germany 2012). This culture of corporatism, efficiency and high quality standards allies strongly to the evolutionary theory. This culture most likely developed as a series of small changes that gave rise to a structured culture of corporatism and efficiency. This value for efficiency in German society has also affected the management of German companies. Since value is placed on expertise, management of companies and leadership tends to be entrusted to technicians and experts as opposed to administrators, accountants, or other administrative employees. Their diligence and competence is regarded with high esteem among colleges. Information flow is from top-down because superiors are expected to be more knowledgeable than their juniors. Each department tends to protect its own power in its area of control. A strict hierarchy present in German culture puts pressure on leaders to provide clear and strong leadership and to be more knowledgeable than their juniors.
Authority is respected and highly regarded (Doing Business in Germany 2012). Human resource department appraisals are also made based on diligence and competence as opposed to other qualities used in other countries. However, it may be difficult to conduct appraisals because individuals expect that when they are given work, they should be trusted to do it and not be investigated regarding their performance. Due to the high regard for expertise, educational achievement is regarded highly in Germany and is, thus, quite expensive. The culture maintains a high respect for technical merit (Doing Business in Germany 2012).
Individual orientation in German society affects the way in which businesses are structured, usually this structure involves a strict hierarchy set by defined roles, compartmentalisation. Every individual is responsible or something for which he takes credit or blame depending on performance. German structures are seen as tight and inflexible and, therefore, slow to adapt to a needed change (Doing Business in Germany 2012).
Very little Confucianism is at play in German socialization. Much unlike Southeast Asian countries, social constructs like absolute obedience to family, benevolent leadership, and harmony are not emphasized (Rosenhauer 2009).
Because of the high regard for diligence and efficiency among Germans, punctuality is highly valued. Respecting time is seen as a way of respecting business partners as its shows a respect of their time. Professionalism is highly regarded, as formality is considered a sign of respect. The higher in rank an individual is, the more formality is expected when dealing with him in business settings. Employees are expected to be professionals at places of work. In this respect, unprofessional behaviors are not kindly regarded. Emotional outbursts, for instance, are frowned upon and can easily get a person fired ( Lamson 2010). The German culture has embraced corporatism and has moved away from a communist system. Corporatism advocates a close collaboration between employers and workers under the direction of the State in all matters regarding conditions of work, wages, prices, production, and exchange (Microsoft Encarta 2007). This, therefore, dictates how business practices are conducted.
German culture differs with many other cultures especially those from outside Europe. Indonesia for instance which is based in South East Asia differs significantly from German cultures in different ways. In the corporate setting Indonesian culture is governed by Confucianism where people are motivated by the prospects of rewards for hard work. The culture is organised around obedience to parents and a desire for harmony in the society as opposed to professionalism and corporatism. There is a great and intense respect for tradition in Indonesia as opposed to Germany where tradition is not really a thing that features much. Urbanisation has almost fully eradicated thought s about earlier traditional life in Germany.
Indonesian culture is more focused however on relationships, respect for elders and tradition. Corporatism does not thrive as it does in Germany. Rather the focus is on family-owned businesses and a culture of entrepreneurship. Businesses are used as a way in which families compete . there is therefore a fierce amount of competition. Negotiations are geared towards agreements and confrontation is highly avoided with individuals being expected to control their feelings.
Beer Culture
Germany’s beer culture had been one o fits most defining cultural trademarks in Europe, much in the same way the French are known for wine. Perhaps no other product in Germany is viewed with as much emotion as beer. It is the drink of the nation, consumed y the wealth, middle class and those who are considered poor. The beer culture is almost inherent in Germans as it is deeply rooted in its traditions. The barley used to make the beer is and has been part of Germany’s agricultural heritage. However the evolutionary theoretical model may apply in the increased organisation and sophistication of the Beer culture.. The drinking of beer acts as a source of identity to Germans and as a way of national bonding. Indeed it is considered as a cultural heritage. There are numerous beer businesses in Germany. This impacts the economy of the country in a considerable way. Moreover, there are many other businesses that have come up as a result of the existence of the beer businesses. Beer as products provides numerous jobs in the country both directly and indirectly. The beer culture in Germany has naturally given rise to an entertainment culture since alcohol and entertainment tend to go hand in hand. Redeberger Gruppi (2012) notes that:
“Germany has a broader range of beer brands and varieties than any other country. Almost 5,000 beer brands and 40 different types of beer provide the German beer enthusiast with an almost inexhaustible choice of flavors, attitudes to life and variety. A beer lover could try a different German beer every evening for almost 13 ½ years – and still not have sampled all of them”(Redeberger Gruppi, 2012).
Every German knows something about beer. It represents purity, continuity and tradition; therefore it makes a very reliable product for business.
Reflection
German culture is good for business. Its business practices favour the prospering of business. The impact of German culture on its business practices cannot be avoided. This culture by its nature has become and will likely continue to infiltrate many areas of business. The fact that modes and styles of communication are a big part of the social culture n Germany, there is always a direct impact of the same on business since business has communication as a key pillar. The culture’s increasing inclusivity and accommodation of foreigners makes it ideal or global business. The rooted beer culture also makes a relaxing atmosphere in the country and a balanced society where people are able to relax after serious business. The large beer market is also able in itself to create ample opportunities for domestic and international opportunities in business, both directly and indirectly. Finally the assertive culture that is seen as a trademark of German business men, although sometimes abrasive helps to make business communication efficient and fact-based as opposed to externally influenced.
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