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GBCA-Germany

GLOBAL BUSINESS CULTURAL ANALYSIS – GERMANY

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Abstract

The relationship between Germany and America has deep influence over different areas

from the establishment of new world after World War I & II to the American Revolution

including economics, science, religion and politics. However, one of the interesting areas to

consider is the business relationships between America and Germany because due to the

increasing impact of commerce and trade over the economical development of a region, it

become crucial for the global communities and nations around the world to increase coordination

and business relationships with one another. This paper discusses and evaluates the cultural

diversity in Germany. Cultural values of an individual could not be determined by consideration

of a single incidence or single variable rather it needs the evaluation of certain patterns or series

of events. The paper explores different aspects of the German culture including communication,

values, religion, ethics, economic conditions and language. Each of these factors has certain

impact over the lives or attitudes of the individual citizens of the country that might affect their

lives in either positive or negative manner. It also addresses the overall business environment of

Germany and how Americans are doing their businesses in Germany. It also provides a detailed

comparison between the business environment and approaches in both countries.

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Germany is a well-known region of the world and it is very famous for Hogan’s Heroes

an American sitcom. The basic thought behind taping this sitcom was to present the Germany in

a positive manner to the world. However, it was widely criticized for introduction of Wars,

forced-labor of Polish, murder of War prisoners and extermination of the Jews during the World

War.

Germany is also famous for one of its historic landmarks, the Berlin Wall, which has

separated the West Germany from East Germany. It has not only separated two regions, but has

widely affected the aspirations and dreams of people towards earning of a better lifestyle. The

people living in East Germany were remained ignored in all aspects of life and therefore, they

had strong motivation for seeking a life of equality and opportunity in the West region of

Germany (Peichl & Ungerer, 2016). The major obstacle in their way was the Berlin Wall, which

was further supported by the armed Nazi forces, death sentence and the culture of total

dictatorship in the West region.

The World War I had badly damaged the reputation and image of Germany and also

caused economical and structural damages throughout the whole Europe. Therefore, after the end

of this war, majority of the European nations started struggle to get back to their stable position.

Therefore, France and Britain demanded Austria and Germany to pay for the damages that the

other countries faced due to the war, but both of them had no money as it was spent on the War.

Moreover, after the end of World War II the situation was still worst and therefore, a British

economist named John Maynard Keyes came forward to prevent the world from the same

economic turmoil as faced in WWI and it was resulted in the establishment of International

Monetary Fund (IMF). All the nations, who were willing to become part of this fund was

required to make certain deposits with the fund and these deposits were aimed to help a nation in
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its financial need. This fund had provided a number of loans to the member countries after the

World War II, especially those, which needed funds for rebuilding of their economy (Hexner,

1950). It also guide nations in establishment and implementation of certain well defined and

standardized economic policies to retain their value of currency at some optimal level, but

unfortunately, today the fund is highly criticized for working as a bail-out center for countries.

After World War II, countries in the European region realized that the only way get back

their sustainability and sovereignty is to reject the idea of extreme nationalism from the region.

As a result a number of reforms and treaties were initiated in this regard including the

establishment of European Economic Community and European Atomic Energy Community

under the Treaty of Rome. However, the present European Union came into being as a result of

the Maastricht Treaty by the end of 1993 (Oshri, Sheafer, & Shenhav, 2016). EU is a political

and economic union between 28 member states primarily located in the European Region.

Germany is one of its pioneer members and therefore replaced its currency “Deutschmark” by

the Euro in 2002. The organization has certain well defined laws and regulations that apply to all

the member countries. The adaptation of Euro caused certain countries to realize a trade surplus

through using their own currency, i.e. Germany, while other few countries were given a sudden

boost, which were earlier floundering under their native currency, i.e. Greece. East Germany

endured altogether attempting to catch-up with West Germany's progressed economy.

Fundamentally, had the Euro not supplanted Germany's local currency, and had that local

currency been permitted to coast in light of free market interest for German items, the individuals

of Germany would have appreciated a more favorable rate for exchange, which would discover

them setting an expanded interest for imported merchandise, in this way permitting the market to

actually right Germany's growing trade surplus (MORII, 2010).

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Major Elements and Dimensions of Culture in Germany

Culture is the unique programming and identity of a person’s mind that broadly

distinguishes him/her from the members of other group or community. It is the specific learned

norms of a group’s values, beliefs and attitudes (Ba Banutu-Gomez, 2014). Differences between

two or more cultures create significant problems for the people of both sides and especially it

makes the business tough to manage. Therefore, it is important to learn the fundamental norms

and values of a particular culture before entering into such regions or cultures, so that people

belonging to such culture could see respect for the beliefs and values. Therefore, it is important

to take into account some of the following factors in context of the Germans culture that could

shape that particular culture and are fundamental to understanding it.

1. Communication

Communication plays an important role in almost all fields of life, but for businesses it acts

like a life blood. The importance of communication become two fold in a global business

economy because there people from different cultural backgrounds and different regions are

required to communicate with each other. Standard German is the official language of Germany,

which is spoken by almost 95% of the population of the country as their first language, whereas

minority and other immigrants languages that are spoken in Germany includes Upper Sorbian,

Danish, Romani, Lower Sorbian, North Frisian, Kurdish, Turkish, Tamil, Arabic, Greek, Dutch,

etc…. Similarly, just like majority of the countries around the world most of the German also

learn English as their first language at schools, while French and Latin are second and third

foreign languages in the region. It is also observed that the benefits of globalization could be

achieved only, if the stakeholders are able to communicate effectively with one another and
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therefore, it called for the use of one common language. Research studies showed that English

contributes about 40% of the world output and therefore it could be selected as a standard

international language for communication among people from diverse backgrounds (Ba Banutu-

Gomez, 2014). A representative survey was conducted in 2013 by an English research firm

YouGov, which showed that about 60% population of the country would want that English

language should be established as an official language of the entire European Union. It is

therefore very important for an American company to realize that before entering into a new

region, it would be very necessary for it to have an understanding of the primary language of that

region (KNAPPERT, 1978). In order to obtain a detailed understanding of a foreign language, it

is necessary to obtain an understanding of both the verbal and non-verbal communication norms

and standards of the proposed country.

1.1. Verbal Communication

Verbal communication refers to the use of sounds and words for expression of feelings or

communication of certain message to a person or intended recipient of the message. It acts as a

primary tool for communication between two persons. There are two basic types of verbal

communication, i.e. public speaking or interpersonal communication. Public speaking may

involve more than two parties in the process of communication, while interpersonal

communication is always a two-way exchange process in which both the parties must talk and

listen the message. Verbal communication is comparatively more effective because it can help

the sender to convey his message to multiple audiences simultaneously. It includes everything,

i.e. one-syllable sound to a long discussion and complex explanations regarding serious issues.

Verbal communication can be used in both formal and informal setup including arguing,

informing, discussing and inquiring about different aspects of a matter or situation. Verbal
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communication is effective only, when the receiver of the message and the sender of the message

has equal knowledge and equal understanding of minds, so that he/she can understand the

message in the same manner as it is intended by the sender (Vijayavalsalan, 2012). Therefore, for

an American business to successfully operate in the German environment, it would be necessary

to have understanding about the native language of the country and can speak in the native or

primary language in such a way that could increase the motivation level of the native population

and could make them feel proud for their language and ethical norms. However, verbal

communication in Germany is more formal then in the US. They use certain words that show

respect to individuals with high academic qualification, similarly they do not address their

business partners with their first names (Turner, 2015). They prefer to use clear and direct

communication and value language in frank and direct manner, while on other hand they are

quite suspicious of ambiguous or indirect comments.

1.2.Non-Verbal Communication

Non-verbal communication is a process of communication that involve interaction or

communication of messages to other through non-verbal signals or cues. German is one of the

world’s major languages with more than 121 million speakers. The reason behind its popularity

is that it belongs to the same family of languages as English and therefore, it is relatively easy to

learn for English speakers because much of the grammar and vocabulary is similar between both

languages. German usually use such gestures that are commonly used in the United States as

well, i.e. German use their little figure to point, while in the US people usually point something

or someone with the index figure (Dubinskiy, 2013). They use their thumb as a starting point for

numbering. German prefer to make a direct eye contact during face to face conversation because

they see it as a symbol of honesty and integrity, while the same non-verbal body language is
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preferred in the United States for expressing honesty and integrity in the personality . Therefore,

it is considered as a plus point for the businessmen from United States to start business there in

Germany because they have lots of common non-verbal cues and understandings.

2. Religion

When moving to another country, it is necessary to have certain knowledge about the

primary religion of that region because religion is one of the important aspects that keep people

tied to their values and beliefs. The religion aspect of a culture also affects the business and

corporate market, i.e. companies need to diversify their marketing strategies and product

portfolio according to the preferences of a particular religion, it affects the customer demands

and the way they accept goods and services of foreign companies. There are two major religions

in Germany, i.e. the Protestants and Roman Catholic. Moreover, Germany has a tolerant and

open attitude towards people from different cultural backgrounds and religions because there is

no formal state religion of belief and people moving from other regions can freely practice their

religion.

2.1. Protestant

It is a form of Christianity and originated as a result of the aftermath of thirty years’ war in

the fifteenth and sixteenth centuries and the movement of reformation, which was initiated as a

result of the perception of certain people about errors in the Roman Catholic Church, particularly

from the East and North regions of the country. Protestants rejected the doctrine of

transubstantiation and denied the belief of papal supremacy, but they have also certain

disagreements with each other about the real presence of Christ in the Eucharist. Apart from this,

the Protestants have a number of other disagreements with the Roman Catholic Church and
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among which the most significant and basic one is that Roman Catholic teachings interpret bible

in a literalist fashion while the Protestants believe to use historical critical method for the

interpretation of bible.

2.2. Roman Catholic

Roman Catholics is the other largest religion practiced in Germany, which traces its origin in

the religious efforts of the Saint Boniface in the mid eighth-century. Which was later on converts

lots of other people and aggressively spread eastward. The Roman and German Catholic had also

extended its influence into Russia and southern Baltic Coast through arms forces under the

supervision of the Knights of the Teutonic between the twelfth and thirteenth century. However,

later on in 1517, the papal authority of the church was challenged by Martin Luther as he thought

that the church in involved in commercialization of the faith. In this way Luther changed the

course of the European and world history by establishing a new faith in Germany known as

Protestantism. People living in the South and West, especially in areas like Westphalia-

Northrhine and Bavaria are Roman Catholic. Moreover, the recent development in the religion of

the Germany occurred in the form of increasing number of communists, which were formally

known as German Democratic Republic (DDR) showing a high percentage of self-confessed

atheists.

3. Ethics

Ethics is one of the most important factors of the global business world. Morals and Ethics

may vary from region to region because it depends upon the unique moral values of a particular

culture. Therefore, before deciding to do business with other countries or regions, it is very

important to get information about what is stand ethical and what is considered as unethical to
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them (Rossouw, 2011). In order to conduct a good business relationship or transaction, all parties

to a business relationship must consider and respect the ethical values of each other.

However, in a global business environment, it is necessary to implement or adopt global

ethics rather than local or such ethics that are confined to a particular region or area only because

business around the world operates on a global scale and therefore, it is important to have some

standard ethical rules and regulations that could assure its long term sustainability and growth.

On the other hand, it is also observed that there are still many businessmen, who are willing to

make significant ethical compromises for securing a business deal, but such actions may

compromise their company’s reputation in the long run. Hence, it is advisable to avoid

adaptation or use of situational ethics, more particularly in a developing country because such

instances or activities could destroy the global organizations (Rossouw, 2011). There should be

such a culture, where an employee could be confident enough that if he failed to secure a

contract or significant transaction just because of his unwillingness to avoid any sort of ethical

compromises, his employer will support him up. Even though good business practices have been

mandated since the beginning of time, businesses still have a reputation of being unethical.

Whether or not initiating codes of ethics along with the ethical standard of business would aid in

ethical conduct "many answered ―"no" in the Germany and United States (Steinmann & Löhr,

1992).

4. Values and Attitudes

Residents of a particular region can be recognized by their cultural values and norms and the

values of Germans are also quite prominent in their culture and attitudes. Germans give high

importance to privacy, structure and punctuality in their lives. German individuals grasp the
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estimations of thriftiness, diligent work and innovation and there is great emphasis on ensuring

that "the trains keep running on time." According to a report of online business decorum,

Passport to Trade 2.0, which is manage by the University of Salford in Manchester, England,

"Germans are most agreeable when they can compose and compartmentalize their reality into

controllable units. Time, hence, is overseen deliberately, and logbooks, calendars and plans must

be regarded."

Germans are stoic individuals who make progress toward compulsiveness and exactness in

all parts of their lives. They don't concede deficiencies, even tongue in cheek, and seldom pass

out compliments (Wesner, 2010). At first their disposition may appear to be hostile, yet there is a

sharp feeling of group and social conscience and a craving to have a place.

5. Manners

German culture greatly emphasis upon adaptation of good manners and values in their

lifestyle and day to day activities. It demand respect for the elders through courtesy and

politeness in attitudes and communications, while call for love and affection for the youngsters.

Boundaries are usually drawn between individuals in social and formal setting through touch,

distance, facial expression and eye contact. Different behavioral codes and attributes have been

established for representing different types of relationships, while failing to follow these

protocols and rules is considered as rude or unethical. The business setup of the country put great

emphasis upon the apparent personality of an employee, i.e. one should plan an appropriate time

to arrive on exact time at all the business meetings and professional appointments. Arriving too

early to the business place is also considered as displeasure (Zimmerman, 2007). Hence, it is
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essential to arrive at the business premises at exact time. An individual should make a courtesy

call for arriving late on a meeting or not at all, so that inconvenience to others could be

prevented. Germens do not like to discuss personal information on business premises or meetings

because they think that business should be kept separate from personal relationships.

6. Customs

The customs of a culture differ substantially from region to region and therefore one can

offend a person for having no information about his/her traditions and customs. For a business

firm to operate in an international marketplace, it is very crucial to have knowledge about the

customs of that particular region. Customs are refers to the way or manner in which individual

behave and interact with one another. Members of the firm belonging to other region or have

certain diverse backgrounds are strictly expected to follow and respect the overall culture of the

organization. Majority of the business organizations have made it mandatory for their employees

to use business dressing in their working hours or business settings. It is appreciated to address

elders and colleagues by their titles. It is also observed that people should use a firm hand shake

along with a constant eye contact in their business dealings in Germany because it is considered

as a sign of confidence, while kissing or hugging is not allowed. Body contact is also quite

limited. However, even then they are expected to keep appropriate boundaries in this regard.

Germans are quite conscious about their privacy and do not bare its violation on any cost. There

should be locked doors. German prefer to conduct formal meetings and unlike USA it do not

appreciate conducting business meetings at dinners or lunch because an informal environment

usually lead to non-serious discussions and conclusions. Germans will not be influenced or

pressured to make any serious business decision and therefore, majority of the business deals are
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handled or executed through gathering of supportive documentations and other facts necessary

for the understanding of such decisions.

7. Social Structures and Organizations

Just like other parts of the world Germany also has a well organized social structure. Its

social class was categorized or divided on the basis of monetary wealth and income. Just like

religion, the social structure and class difference has also divided the nation into two groups. The

East Germany is declared as a socialist state of workers and peasants, where all the power and

political influence is exercised by the working class ("From East Germans to Germans?: the new

postcommunist elites", 2000). The People exercise their power through controlling and executing

different means of production. Whereas, West Germany was comprised upon entrepreneurs and

wealthy people, who were enjoying power of money and have a totally different lifestyle from

that of the East Germans.

7.1. Social Classes

There are three types of social classes in Germany, which are identifiable as upper, middle

and lower classes. These classes are organized on the basis of distribution of monetary and

wealth resources. The upper class of the country consists upon administrations, royal families,

scholars and other wealthy people. These people are usually living in the West part of the

country and enjoying a significant level of power and authority over others and have some extra

privileges. The middle class of the country consist upon those people who have some suitable

jobs and enjoying a stable lifestyle with all basic necessities and facilities of life (Zimmerman,

2007). These can be found evenly throughout the Germany, but majority of such population also

rest in the West and those who live in other parts of the country are continuously striving to
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achieve a certain suitable life style in the West Germany. Whereas, the lower class population of

the country consists upon the working class or people living underclass or poor life style. This

class mainly found involved in doing disrespectful work and mostly involved in the work of

construction or other daily wage workers. People belonging to this class mostly live in the East

part of the country and therefore have been remained under-privileged and un-addressed in

majority of the situations and even basic necessities of life ("From East Germans to Germans?:

the new postcommunist elites", 2000). The social division or classification in Germany is same

like American social classification. Therefore, for American businessmen, it would work as a

favorable edge to establish and maintain some easy relationships with different classes of people

for the execution and development of their business activities and infrastructure.

7.2.Crime

Just like other countries or regions of the world, Germany is also highly exposed to all sort of

crimes ranging from murders to tiny thefts. According to a report, the country has been famous

for its drugs smuggling activities, but recently the gangs have changed their focus towards the

thefts of cars, burglary and fraud. It also exhibit that about 10% of the gangs in Germany are

represented by the Turkish immigrants and recent findings shows that Turkish gangs and their

activities has been significantly decreased in the recent few years (Donaldson, 1996). Apart from

this the country has certain well established laws and regulations, i.e. administration offence act,

criminal code, etc… to avoid or discourage bribery and corruption in the business or corporate

sector. Therefore, it is quite a suitable place for doing business, but some of the foreign

companies allow gift giving and bribes as part of their culture, which poses significant threat to

the reputation and financing of such companies. However, the overall culture and traditions of

the country discourages such factors.

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8. Education

Education has a significant important in the German culture because it put great influence

over the social status and titles of the residents. Advanced degrees and courses are most

prevalent and recognized by the people of the country and especially the doctoral degrees. Many

peruse apprenticeships alongside going to classes. Professional preparing is offered to youngsters

with low unmistakable scholarly abilities. Guardians in the US can send their children to tuition

based schools, while in Germany non-public schools are extremely uncommon. Germany's title

acknowledgment likewise overflows into the educational systems. Children of conspicuous

guardians are given special treatment not in light of their execution. In the US guardians can self-

teach their kids, yet self-teaching is not permitted in Germany.

8.1. Kindergarten

In Germany, every child has a legal right to attend Kindergarten between from the age of

three to six years. The compulsory education started after the age of six year. It is not a part of

the regular public schooling of the country and therefore, it is not free and the tuition is mainly

based upon an individual’s income level.

8.2.Grundschule or Volksschule

This level of schooling is equivalent to combine primary or lower secondary education in the

Switzerland and Germany. The term Volksschule generally refers to the facility or imposition of

government over the individuals regarding compulsory education. The country requires

mandatory attendance of the individuals over a period of nine years.

8.3.Secondary Education
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Provision of Secondary education in Germany is the primary responsibility of the states,

while the federal government plays a very minor role in its implementation. The secondary

education of the country mainly comprises upon five types of schools, i.e. Gymnasium, Abitur,

Realschule, Mittlere Reife and Hauptschule.

8.4.Higher Education

There are hundreds of institutions that allow higher education in almost all academic fields or

faculties. There are public sector universities and colleges, which are funded by the state, while

private sector universities are also rapidly increasing day by day. State level school accept people

from all nationalities as long as they meet the entrance requirements and can get proper residence

permit or visa and also have the necessary German Skills.

Integration of these Cultural Elements

Global culture is reserved by the acknowledgment and incorporation of remote societies and

their qualities inside the more extensive range of the organization. This permits organizations to

use the quality of having a vast array of cultural experiences available to them as they adapt to

evolving markets, expanded rivalry, and new business wanders. In this culture regard and trust in

nearby learning is shown, which permits neighborhood business pioneers to form the business

hones into nearby similarity of the Corporate values and utilize them as expansive parameters or

rules.

The successful integration of the local cultures into a highly sophisticated corporate culture

of multinational corporations is a basic approach towards creating a successful business culture,

which respect and value both the foreign and local culture of the country simultaneously.
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1. Communication

Communication plays an important role in the successful integration of all other cultural

aspects into the corporate culture of multinational organizations. First of all every foreign

organization, it is very important to know about the cultural values and differences in other

regions, especially where one ought to do business. Cultural competence is very important factor

for the clear and concise delivery of a message. Hence, the final portion or factor that could be

emphasized in such a situation is the language because companies understand that people from

different countries and cultural backgrounds speak different languages and therefore, in order to

help them in effective communication, it is important to implement such a language in the

organization, which could be understood by the majority or all employees (Ba Banutu-Gomez,

2014).

2. Religion

Religion can be integrated through establishing such a corporate culture that not only respect

the two major religions practiced in Germany, but also provide a free space to the other

minorities to practice their religion. The corporations should allow them leaves and provides

them certain privilege on their religious festivals and events, which will not only motivate them

to work for the unified objective of the organization, but also increase job satisfaction and

employees empowerment.

3. Ethics

Ethics is one of the integral parts of any culture and therefore, its integration is a highly

complex and important task for the successful implementation and execution of a foreign

business in Germany. It is also observed that the interpretation of right and wrong is highly
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influenced by the socio-economic status of people in their society. People belonging to a low

economic status may handle situations and view things differently, i.e. with a quite narrow

perspective, while people belonging to high economic status might even ignore these

perspectives of the culture, which are being criticized by the people with low economic status.

Moreover, decision regarding what should be considered as right and what should be considered

as wrong might be effected by the means of survival, i.e. if a person is caught in a life or death

situations, he can change his moral judgments or decisions just because of his means of

existence.

4. Values and Attitudes

The values and attitudes of a culture plays an important role in the integration of two

different cultures and traditions. It is very important factor for the successful integration of local

culture into the culture of foreign enterprises. The American businessmen should focus upon the

key values and attitudes of Germans to successfully carryout their business in the country

because it not only affects the organizational culture and employees attitude towards their

particular jobs, but also significantly affects the overall market demand and customer

preferences.

5. Manners

Manners also have a significant impact over the way foreign enterprises do business in the

other international destinations or countries. Manners of employees and general public both can

affect the operations and sustainability or a foreign corporation in a new and diverse country.

This can be integrated through high level of knowledge and experience with employees and

especially with the general public of the country and try to establish such policies and produce
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such products and services that better suit the country’s basic requirements and address the needs

of the customers.

6. Customs

Just like manners, custom also has a significant impact over the attitudes and demands of

employees and general public of the country, therefore it is highly advisable that the foreign

companies, especially the American enterprises should consider the specific German customs

and traditions before planning or drafting their strategies and organizational structure in

Germany.

7. Social Structure and Organizations

Social structure and organizations of different aspects of the society represents that how a

country and its population perceive different aspects of their culture and how they apply or use

these factors into their day to day lives. The integration of these factors is very important for a

foreign enterprise to successfully run their business in a distant location or other regions.

American enterprises should focus upon the integration of unique organizational and social

aspects of the German culture in implementation of their organizational culture in Germany, so

that employees could better communicate the company image in their social settings.

8. Education

Education plays an important role in defining the competencies and values of an

organization. The American companies should focus upon hiring highly qualified people as their

employees and give equal opportunity to the Germans in their organization. As German respect

educated people and especially individuals with doctoral degrees, therefore employment of such
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individuals would enhance the reputation of organization in the general public, which will

ultimately affect the success and brand image in the market.

Comparison between United States Culture and Business

Relationship straightforwardness is vital in Germany's incorporated economy. While

making less expensive items so as to pick up an upper hand may be some locale's methodology,

Germany is seeking for outstanding quality with little or no cost. Porsche autos, motherboards,

machine devices and gear for shopper merchandise are on the highest priority on their rundown

of fares. They create 21st century items by putting a considerable measure of cash in innovative

work. Development is their top worry in trading. German is the second biggest exporter. Esteem

and consumer loyalty is the key in building a business relationship. In this article relationship

straightforwardness is characterized as ―an individual's subjective view of being educated about

the applicable activities and properties of the other party in the association. Certainties and cases

about items must be demonstrated and available with insights keeping in mind the end goal to

fabricate a straightforwardness relationship. Statements of purpose are essential to the partners.

Correlations between the universal statement of purpose of the United States and Germany

delineates what is imperative to the partners in the states concerning groups/group; clients;

workers, stockholders/partners and providers. The United States puts a higher incentive on

groups, clients, workers, and partners than Germany. Additionally in the class of morals and

trust, the United States notices them in higher rates than Germany. Germany values

development, quality, and being pioneer in the business. Statements of purpose from the 25 best

firms in the United States and Germany's main 25 companies states ―Conducting moral

operations or sympathy toward morals was said in just a single of the 25 German statements of

purpose. United States organizations scored higher in ethicality than the German organizations.
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German laborers work under forty hours seven days, while U.S. laborers work at least 40 hours

seven days. German laborers from time to time change occupations because of the preparation

necessities, while U S specialists change employments frequently. U S organizations must

acquaint themselves with the representative contracts in Germany since they are not quite the

same as the US. It is harder to fire a worker in Germany than it is in the United States. German

laborers are paid a month and a half or more in excursion pay for the year, while US specialists

procure a normal of 3 weeks every year in addition to wiped out time. The greater part of

German's organizations are alluded to as Mittelstand extending in little to medium. German is a

pioneer in ventures, for example, transportation, chemicals, family products, and apparatus.

1. Hofstede Analysis

Source: https://geert-hofstede.com/united-states.html
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The Analysis explores and contrasts the USA culture with that of Germany through the

lens of 6-D Model. It is evaluated that everybody is unique, but even then the social bindings and

culture has connected the people in such a way that they will not deviate too much from the

norms and traditional culture. The power distance dimension shows that Americans are suffering

from comparatively more power inequalities than the German culture, although Germans are

widely divided into East and West regions, but still the Hofstede Analysis shows high value of

inequality in the American society, which shows that the less powerful members of the society

accepts that power is distributed unequally and their rights has been violated by the more

powerful members. The individualism dimension of the analysis shows that USA culture gives

more freedom and independence to its members as compared to the German culture, as it is the

American premise that liberty and justice is for all. While in Germany there is a culture of joint

families and elders are respected by obeying their decisions. The masculinity dimension of the

model shows that Germans are more open towards the degree of competition from female

members of their society and also give them equal opportunities to work for the progress of the

country as compared to the USA culture.

USA also scored low in the next dimension of this model, which is the uncertainty

avoidance. This shows that Germans are more open to accept new ideas and innovation in their

culture and other business environment as compared to the USA because this dimension

typically exhibits the degree of fare about uncertainty of future that restricts a person from taking

any sort of innovative and bold measure. The long term orientation aspect of the model also

shows favorable results for the German culture. Reason behind such a high deference between

the USA and German culture over this particular dimension is the long haul history of Germans

in the World War I & II. Besides that German is a very old nation and has a vast historical
 23
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background, which is still evident in their culture and civilization. The last dimension of this

model is indulgence, which shows high score for the US-Citizens because the country has been

facing lots of drugs problems since last several years. There is a high tendency in the US culture

for weak controls over the impulses.

Implication of the United States Businesses in Germany

Ethnocentrism has been found to essentially impact customers' buying choices when

there is the alternative of purchasing domestic goods versus foreign products. The idea has been

studied for a very long time, however has gone to the front edge of examination again because of

many organizations attempting to enter worldwide markets with their products or services.

Buyers that are ethnocentric are frequently not open to the possibility that foreign manufactured

products can offer more esteem and higher quality than some household made items. This idea is

an immense potential boundary to exchange for organizations to advance their items on a

universal level. Organizations should persistently examine ethnocentric inclinations inside

specific demographics abroad, if they wish to develop in the worldwide commercial center. It is

essential for organizations to create promoting procedures outfitted towards customers with this

attitude; particularly in territories that have been found to have a high convergence of

ethnocentric buyers. If there is an approach to outfit the ethnocentric outlook, maybe whatever

item is being promoted could be seen with a similar prevalence allowed over a nearby item. With

the end goal for that to happen one would need to genuinely comprehend the way of life and

have the capacity to adjust to the earth. The import and fare of merchandise are administered by

an arrangement of standards and directions. Every nation has its own arrangement of principles

and controls before the way toward bringing in or sending out items can start. Worldwide

exchange is basic to the American economy. Exports and imports of merchandise, made in
 24
GBCA-Germany
America help to limit the exchange deficiency as well as makes employments in America

("Export.gov - Doing Business in Germany", 2017).

Globalization has assumed a constantly expanding part in our economy since the fall of

the Berlin Wall in 1989, however since the latest overall monetary downturn; worldwide

exchange has taken a hit. Germany's ethnocentrism is focused on their fixation for prevalence.

Germans exceeded expectations in music, rationality, religious philosophy, arithmetic, science,

and expressions of the human experience. Specialists take awesome pride in their occupations

and completed items. With a specific end goal to be fruitful, a worldwide business should

dependably be vigilant for new open doors for global exchange. If not they may confront similar

troubles the world's administrations are conceivably confronting. Germany's economy in contrast

with the world is the sixth biggest in obtaining power equality (CIA). Gross domestic product for

Germany in 2012 was around 3.19 trillion and per capita GDP was 39 thousands. Germany

encountered a low development rate of 0.9% in 2012. Most as of late Germany's procurement of

some of Greek's obligation in a period of budgetary emergency is noteworthy concerning their

moderate developing economy.

As per The World Bank, Germany is on number 20th position in the ―Ease of Doing

Business contrasted with 185 different economies (The World Bank). It additionally positions

number 106 in the capacity to begin a business in Germany. This high positioning portrays the

bureaucratic and controls new organizations confront entering the market. Contending

comprehensively is an extraordinary desire for US business people. Once the business person

enters the Germany business condition they will receive rewards in the area. Markets

opportunities for U. S. organizations in Germany are overpowering. Germany's remarkable labor

force and high profitability is a plus point for any canny U.S. businessmen. The United States
 25
GBCA-Germany
and Foreign Commercial Service Market Research Library reports: "The best market contestants

are those that offer creative items including high caliber and present day styling. Germans are

receptive to the advancement and high innovation apparent in U.S. items, for example, electronic

parts, PCs, social insurance, PC programming and therapeutic gadgets, manufactured materials,

and car innovation. Germany boasts one of the most astounding internet access rates in the EU

and new items in the multi-media, cutting edge and service areas offer awesome potential as

expanding number of Germans to join the Internet era. The above market openings propose that

the states of Germany would be awesome for the innovative work of new social insurance and

medicinal gadgets and PC innovation. German representatives are exceptionally research

oriented and highly analytical in nature. It drives the world in mechanical designing, remarkable

quality in items and fantastic in hard working attitudes. Germany is eager to pull in new global

organizations and have as of late brought down their corporate property charges. Despite the fact

that business wanders in Germany may appear somewhat dangerous in light of low wages and

the moderate recuperation delayed consequences of the current Greek obligation emergency

Germany is as yet an extraordinary place to work together (www.dw.com), 2017). All business

endeavors are characteristically a hazard versus remunerate attempt and an effective business

visionary is one who recognizes and seeks after endeavors which give the most extreme measure

of reward with the base measure of risks. The legitimate framework in Germany incorporates

three rule assumes that are in charge of financial approaches. These figures incorporate the

Chancellor, the Minister of Finance and the Minister of Economics. Germany is vigorously

managed and their bureaucracy is quite difficult.

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GBCA-Germany
SWOT Analysis

1.1.1. Strengths

There is a high political stability in Germany and it is considered as Powerhouse of

Europe. There is very little corruption in Germany because they have been ranked at 8 number

out of 10 on the corruption perception Index (e.V., 2017). The country has a strong reputation in

technology with 277 international patents per one million inhabitants, which is highest in the

world. It has well established chemical, bio-technology and electrical engineering industries. The

country has three largest rivers of Europe and enjoying a central location in the Europe,

surrounded by 10 European countries. Germany is the 3rd largest economy of the world and

largest single economy of the European region. Due to high literacy rate, the country is enjoying

exceptionally motivated and skillful work force, which is also recognized internationally.

1.1.2. Weaknesses

Germany is paying highest wages in the world, i.e. 27.9 euro in Western Germany and

17.4 euro in Eastern Germany, therefore, its labor cost is quite high and businessmen are

reluctant to establish their business facility in a high cost area (Hager, 2010). There is a very

strict labor union culture in Germany and about 65% of the German’s revenues come from

labor taxes, which is about 13% higher than an average OECD country. The country has

weak financial planning regarding budgeting and spending of their resources and their

experience regarding exports is quite low, which caused them trade deficit.

1.1.3. Threats

The currency of the country, i.e. Euro is on verge of another recession and it falls into the

category of developing countries around the world that can pose a significant threat to its
 27
GBCA-Germany
sustainability and going concern. The government debt of Germany continues to increase

with the Euro zone crises, which also threaten the economic stability of the country in the

long run ("Central Government Debt : Total central government debt (% GDP)", 2017).

1.1.4. Opportunities

Germany is on a leading position in the manufacturing of technological and automobile

products in the world ("Total employment in manufacturing - Industry and Services: Key Tables

from OECD - OECD iLibrary", 2017). It ranks at the 5th position in the world’s most attractive

investment places following USA, China, UK and India (Foster, 2010). Germany has the largest

market in the Europe having 82 million inhabitants and having a GDP of more than $2.4 trillion,

which make it the strongest economy of the Europe and third in the world. Germany strongly

welcomes the foreign enterprises and as a result more than 22,000 foreign enterprises are

currently working in Germany, employing about 2.7 million people.

FDI Analysis

Foreign Direct Investment is reported as 1.4% of the overall GDP of Germany by the

International Monetary Fund ("Foreign direct investment, net inflows (% of GDP) | Data", 2017).
 28
GBCA-Germany

The German FDI Policy is based upon three main international legal frameworks that are:

 The European Treaty.

 Treaties that have been concluded by the EU.

 National BITs.

The multinational entities of Germany have concentrated the major part of its FDI in the EU

member states because of the importance of the European Treaties in the FDI policy of the

country. These treaties guarantee free movement of people and goods and services among all the

member countries of the organization and therefore Germany has focused its attention over this

area. The country has also a number of trade contracts with other countries, especially with Japan

and USA because the EU flow with these countries are not restricted by any way and are not

governed by BITs. The global recession and crisis in European region has badly affected the

attractiveness of Germany for FDI, however, in 2015 the country has managed its stability and

increased its FDI to USD 31.7 billion and become the eleventh country of the world receiving

FDI influx and the fifth privileged destination for multinational companies in 2016-2018

("Foreign investment in Germany - Santandertrade.com", 2017).

 29
GBCA-Germany
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