Facts 2 SWS V1

Facts about Germany
Prof. Dr. Daniel Werner
1
Topics – Structure of the Course
1. Germany
2. German Educational System
3. German Economy
4. The European Component
5. Foreign Trade Theory and Internationalization Strategies
6. Cross Cultural Issues
7. Corporate Culture
8. Mega Trends
9. Various Historical Facts about Germany
2
Topics – Goals of this Lecture
• Structured Knowledge on Germany in various Dimensions
• Information on German Educational System and Labour Market
• Cross Cultural Issues
• Exploring topics on international trade, comparative advantages and interrelations

of macroeconomic conditions and internationalization strategies of companies
• Understanding current Mega Trends and their implications on a Company
3
Germany
Preface
Germany?
4
Germany
Facts about Germany
Number of Inhabitants?
Approx. 80 mn.
Largest City and number of Inhabitants?

Berlin, approx. 3.4 mn.
Capital City of Bavaria?

Munich (1.4 mn.)
No. Inhabitants Frankfurt?

0.7 mn.
5
Germany
Facts about Germany
Germany is the _ largest Economy in the World?

Number 4
In terms of size, which country is larger, Germany or France?

France
Name of German President?

Frank-Walter Steinmeier
Highest Mountain?
Zugspitze (2,962 meter)
Longest River?
Rhein
6
Germany
Facts about Germany
Ruling party(ies) in Germany – Federal Government.

CDU, CSU & SPD (Grand Coalition)
Name of former German Capital City?

Bonn (310,000 inhabitants)
How many times is India larger than Germany?

approx. 10 times
Number of Federal States in Germany?

16
Please name five German companies!
Most important ressources?
7
Germany
Preface
Stereotypes?
8
Germany
Stereotypes?
German?
Books
Brezel
Beer
Wurst
….
Source: http://humor.gunaxin.com/around-world-12-stereotypes/147675
9
Germany
Stereotypes - Food?
Google: Search for “German Food”
Source: https://www.google.de/search?q=german+food&source=lnms&tbm=isch&sa=X&sqi=2&ved=0ahUKEwiu_L2Ul6HVAhVpDcAKHRk-C50Q_AUIBigB&biw=1920&bih=936
10
Germany
Stereotypes - Food?
• Beer!
• Wine?
• German Bread – Variety – Visit a Bakery Store!
• Meat?
• Sausage? – Bratwurst
• Sauerkraut …
• Haribo? - Goldbären
• Fanta?
• …?
Video https://www.youtube.com/watch?v=lwYoQzO4qpI + just check it out yourself!
11
Germany
Stereotypes - Food?
Your new region & food specialities:
http://www.genussregion.oberfranken.de/
(in German language)
12
Germany
Stereotypes - Economy?
• CARS! Mercedes, Porsche, BMW, VW
• Mechanical Engineering
• Adidas, Puma, Bosch, SAP, …
• Bayer, BASF, Siemens, …
• Precision, Punctuality, Quality, Costly?
13
Germany
Stereotypes – in General?
https://twitter.com/andrea_wulf/status/2483180338299
82208/photo/1?ref_src=twsrc%5Etfw
Baugenossenschaftsstraße
14
Germany
Stereotypes?
Punctuality
Efficiency – Structuring Things
Insurance for everything
Reserved – Sense of Humour?
Love for Football/Soccer
Hard Working
Germans love Rules
…?
 Welcome to Germany!
15
Germany
Dos and Don‘ts?
Discussion 
Source: http://ymw.edu.in/awesome-list-of-dos-and-donts-for-students/
16
Germany
Facts about Germany
Central Europe
… in the heart of Europe!
Many neighbours …
Federalism
Regional Differences
Mittelstand and Economy
Exports
Source: https://upload.wikimedia.org/wikipedia/commons/1/12/BRD.png
17
1. Germany
Politics, Society, EU and …
18
1. Germany
Politics, Society, EU and …
Official Name: Federal Republic of Germany

States: 16 Federal States
Capital: Berlin (3.4 mn. Inhabitants)
National Flag: Black Red Gold
Emblem: Sylized Eagle
State Holiday: October, 3rd
Currency: Euro
Languages: German (German ist Mother Tongue
to approx. 100 mn. People)
 Countries with German Speaking
Populations?
Source: http://www.germany.info/Vertretung/usa/en/04__W__t__G/06/01__Quick__Facts/__Quick__Facts.html & http://www.bpb.de/politik/grundfragen/deutsche-

demokratie/39421/wappen-flagge-und-hymne
19
1. Germany
Deutsche Sprache
German Native Speakers in:
• Germany
• Austria
• Switzerland
• Liechtenstein
• Italy (South Tyrol)
• Belgium (German Speaking Community in the East)
• Denmark (frontier to Germany)
• France (Alsace & Lorraine Regions)
• further small „Islands“ like in Romania, Poland, Namibia, Brazil, …
20
1. Germany
Germanic Languages
Germanic Language Family Tree:
• English
• German
• Dutch
• Swedish
• Afrikaans
• Danish
• Norwegian
 What about Indo-European or Indo-German Heritage?

Sir William Jones (1746 – 1794) discovered a relationship between Northern
Indian and European Languages …
21
1. Germany
Languages
Minoritiy Languages in Germany:
• e.g. Danish Community

• Sorbian Community (in Saxony – Slavic Language)
• Frisian Community (Northern Germany)
• Languages Spoken in Germany due to Migration, like Turkish …
22
1. Germany
Population – Migrational Background
Split per Nation
Source: http://www.bpb.de/nachschlagen/zahlen-und-fakten/soziale-situation-in-deutschland/61631/staatsangehoerigkeit
23
1. Germany
Population – Migrational Background
Foreign Population
in Germany per age
split
Source: http://www.bpb.de/nachschlagen/zahlen-und-fakten/soziale-situation-in-deutschland/61622/auslaendische-bevoelkerung
24
1. Germany
Population – Religions in Germany
Quelle: http://www.bpb.de/nachschlagen/zahlen-und-fakten/soziale-situation-in-deutschland/145148/religionszugehoerigkeit
25
1. Germany
The Basic Law
Basic Law: The legal and political foundation of the Federal Republic of Germany.
After Approval by the Parliamentary Council  Basic Law came into force on May
23, 1949.
Initially the Basic Law has been designed as a temporary solution and provisional
arrangement until a constitution for the whole of Germany could be implemented
(after WW2).
Reunification: GDR acceded to the area of validity of the Basic Law on October 3,
1990  de facto constitution of Federal Republic of Germany.
Source: Vgl. http://www.germany.info/Vertretung/usa/en/06__Foreign__Policy__State/04__Political__System/02__Basic__Law/__Basic__Law.html

26
1. Germany
The Basic Law
The Basic Law ties the legislative process to the constitutional order and binds
state administration to uphold the law.
Section 1 of the Basic Law is of particular relevance. It stipulates that respect for
human dignity is the most important aspect of the constitution: “Human dignity
shall be inviolable”.
To respect and protect it shall be the duty of all state authority. ”Among other
things, the other basic rights guarantee the freedom to act within the law, equality
before the law, freedom of the press and media, freedom of association and
protection of the family”.
Source: Vgl. http://www.germany.info/Vertretung/usa/en/06__Foreign__Policy__State/04__Political__System/02__Basic__Law/__Basic__Law.html

27
1. Germany
Political System & Federalism
Federalism and Federal States
(Inhabitants, State Capital, Votes in the Bundesrat)
Bavaria as the largest
State in terms of area.
North Rhine-Westphalia
as the most populous
State of Germany.
Votes in the Bundesrat

according to population
ration.
Source: Bundeszentrale für Politische Bildung

28
1. Germany
City States:
Berlin (Federal Capital City)
Bremen
Hamburg
Both cities with a long history in terms of the Hanse.
More information: http://www.hanse.org/en/
29
1. Germany
Germany is a Federal Country. Both the Central Federal Government
(Bundesregierung) and the 16 Federal States (Länder) have independent areas
of jurisdiction.
The Federal Government in Berlin is responsible for
• foreign policy,
• European policy,
• defense,
• justice,
• employment,
• social affairs,
• tax and health.
30
1. Germany
The Federal States (Länder) are responsible for
• internal security,
• Schooling,
• tertiary education,
• administration and local government.
Central government’s area of responsibility is mainly limited to legislation, in

which the federal states are involved through their presence in the Bundesrat.
It is the duty of the federal administration systems, on the other hand, to enforce
not only the laws that apply in their own particular state, but those of central
government as well.
Source: Vgl. https://www.tatsachen-ueber-deutschland.de/en/federal-state#background-page-11

31
1. Germany
Political System - Elections
Basic Principles:
• Free
Europe Municipal • Secret
• Equal
• Direct
…
On different levels!
State Federal

32
1. Germany
Electoral System – Political Parties
Political Parties in Germany – some examples:
• SPD
• CDU, CSU
• Green Party
33
1. Germany
Electoral System – Political Parties
Political Parties in Germany – some examples:
• Die Linke
• FDP – The Liberals
• …
 List of Political Parties:

https://en.wikipedia.org/wiki/List_of_political_parties_in_Germany
34
1. Germany
Electoral System - Bundestag
The German electoral system mainly leads to coalition governments.
Government of only one party only happened once since the existence of the
Federal Republic of Germany.
An alliance of parties is the general rule.
Current Bundesregierung – Grand Coalition of CDU/CSU and SPD.
Current Bundeskabinett:
https://www.bundesregierung.de/Webs/Breg/DE/Bundesregierung/Bundeskabinett/
bundeskabinett.html
Source: Vgl. https://www.tatsachen-ueber-deutschland.de/en/federal-state#background-page-11

35
1. Germany
Political System – 2017 Elections
Term: 4 years
Next scheduled elections

for 2021
Source: https://bundestagswahl-2017.com/ergebnis/
36
1. Germany
Political System – 2017 Elections
Source: https://bundestagswahl-2017.com/ergebnis/
37
1. Germany
Political System – Cabinet and Chancellor
Bundestag:
Elects Chancellor
& possibility for a resolution
of no confidence towards
the Bundesregierung &
vice versa.
Chancellor:
Decides about Ministers
and Ministries and gives
the guidelines for the
Bundesregierung.

38
1. Germany
Political System – The Federal Chancellor
 Former Chancellors
Relatively Stable
Governments.
 Former Coalitions
Source: http://diepresse.com/images/uploads/d/a/f/511407/kanzlergrafik20090928152402.jpg
39
1. Germany
Political System – The Federal President
The Federal President – Der Bundespräsident:
Head of State of the Federal Republic of Germany.
Tasks: Representation (also abroad)

Appointing judges and high-ranking civil servants.
Acts become legally binding with the signature of the President.
 President can dismiss the government and dissolve

parliament before end of the official term.
40
1. Germany
Political System – The Federal President
Frank-Walter
Steinmeier
Source: http://www.bild.de/politik/inland/deutsche-bundespraesidenten/von-heuss-bis-gauck-die-riege-der-bundespraesidenten-48750958.bild.html +http://www.heute.de/zuspruch-und-

grosse-erwartungen-an-den-neuen-bundespraesidenten-steinmeier-46537782.html 41
The System
42
The System
From Elementary School to

The A-Levels and the VET
System
Source: https://en.wikipedia.org/wiki/Education_in_Germany
43
The Vocational Training System
VET (Vocational Education Training Programmes:
Introduction - Video:
https://www.bibb.de/en/26756.php
Duration: 2 – 3 Years according to the dual model (theory and practice).
Dual Approach: 1 – 2 Days at a Vocational Training School (mostly public) and

rest of the week in the company. Theory at School – Practice at Company.
Vocational Training School to understand the theoretical foundations and

company work in order apply the theoretical knowledge in the context of the
company (operating the machines)  Employability.
44
Dual System:
Company
Vocational Training
- Contract School
- Salary
- Practical Training - Theory (1-2 days)
on the Job (2-3 - Public
days)
Chamber of Commerce
- Curricula
- Final Examination
45
Parties Involved:
• Chamber of Commerce (Curriculum)
• Vocational Training School
• Company
Berufsausbildungen / Trades:
• Approx. 350 officially recognised training programmes in Germany.
Qualification Levels on the example of Craftsmen:

• Geselle
• Meister
46
European Qualification Framework
Meister, Techniker
On par with academic

Education on EQF
Level 6.
Source: http://www.maintworld.com/var/ezwebin_site/storage/images/media/images/figure-151/3808-1-eng-GB/Figure-1.png
47
Salaries – IG Metall
Plus:
Compensation
for working in
shifts,
for working on
Sundays and
holidays
Source: https://www.igmetall.de/Metall_Elektro_Entgelttabellen_2015_f489e95249d048bd5012e9dd8b687e6e290902c9.pdf
48
Salaries – Comparisons
Comparison:
3.170 * 13 = 41.210
3.800 * 13 = 49.400
Division of Labour between

skilled worker (VET System)
and engineers (academic).
Source: https://de.statista.com/statistik/daten/studie/183075/umfrage/einstiegsgehaelter-fuer-hochschulabsolventen-nach-studienrichtung/ - CAMPUS LICENCE

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Vocational training in Germany – A Summary?
Dual Approach Unique (similar systems only in Austria, Switzerland, Northern

Europe, …)
Skilled Workers, VET System, Blue Collar Workers as a key success factor of
German Industry.
Frequent Exchange between Industry and Educational Institution – Update of the

Curricula.
 Vocational Training with a long tradition in Germany

 High social acceptance of vocational system
 High social acceptance of blue-collar work
 Even Apprentices get paid!
50
The Higher Educational System
Comparison:
Pre-Bologna
with Diplom.
and Bologna
System.
PhD with Research

Universities.
Source: www.camppus-germany.de
51
The Higher Educational System
Pre-Bologna: German Diplom [4 to 5 years and differences between Universities

of Applied Sciences and Research Universities - Diplom-XXXX and Diplom-
XXXX (FH)]
Bologna: Bachelor‘s and Master‘s Degrees in Germany (at both of the institutions
– students may switch from University to UAS)
PhD only at Universities or collaborative Doctorate of UAS and Research

University (with supervisors from both institutions – PhD awared by the Research
University)
Research Universities: Focus on Research, more theoretical approach
Universities of Applied Sciences: Focus on Practice Orientation and increasingly

applied research.
52
Studying in Germany
Role of the Student:
Student is managing him/herself
Student is responsible for his/her success
University provides the framework (!)
Student chooses specializations, topic of thesis, etc…
Due payment of fees, etc.
Student can fail - leaving university without degree is possible!
53
Studying in Germany
Flat hierachies at the university between Profs and Students!
Interaction in class desired.
Prof. more a coach rather than a teacher.
Questions and ideas? Most welcome!
Initiative always is with the student!
Student is searching for a job / internship / topic for the thesis … (not Prof. or
career service  their role: to support)
54
Studying in Germany
University wants to shape young
… independent personalities
… creative personalitites
… critical thinking personalities (interaction in class important!)
… proactive personalities (not only consuming mentality!)
… well-trained personalities
… responsible personalities.
55
Studying in Germany
University wants to prepare students for the job market
… therefore initiative has to be with the students already during the time at
university.
… services provided should ensure a good framework for studies and personal
development
… no exceptions  use the “system” and don’t try to bypass the system
… no artificial environment desired  to be prepared for the job market!
 On the job market: Competition & job readiness of graduates desired / and
precondition for the university to maintain good relations to industries.
56
Studying in Germany
Role of the Student – Meeting Deadlines:
• e.g. registering for the exams
• Re-registration http://www.hof-university.com/services/student-affairs.html
• Final Thesis
• Installment of Fees
• Professors not on campus during vacation
• Deadline for handing-in exams or for presentations … (no show or too late 
5 „no pass“).
57
Studying in Germany
Role of the Student – Responsibilities:
• Students regularly fail in Germany and leave University without degree.
• Hof University  generally 3 trails to pass an exam.
• 5  no pass.
• After having successfully passed in the 2nd or 3rd round the 5 won‘t appear in
your mark sheet anymore. Instead: Only the mark with which you have passed
will show up.
• What is better 5 or 4?
58
Studying in Germany
Role of the Student – Responsibilities:
• If 3rd trail fails  End at Hof University in that course and no possibility to
enroll at a German University in that particular course again.
• Once again: Not meeting deadlines  5!
• Plagiarism: 5!
• In Germany, we are very strict on intellectual property. Plagiarism as a serious

offence. If you copy – past a source without properly citing it  always 5 and
no disussion and chance to change the mark!
59
Studying in Germany
Our Mission [Role of the university (and role of the professor) - About Hof
University of Applied Sciences]:
• The success of our graduates in internationally active companies is the

stimulus for all members of Hof University.
• All students are excellently educated and cared for in our internationally
oriented Green Tech University.
• Our teaching is influenced by the ideas of strong-practice orientation, open-

mindedness and resource efficiency.
60
Studying in Germany
Our Mission [Role of the university (and role of the professor) - About Hof
University of Applied Sciences]:
Thanks to continuous exchange and cooperation with industry, applied research

develops high-end solutions for companies and thus guarantees the continuous
renewal of our knowledge for the benefit of our academia.
We stand for:
• Strong relationships with industry

• Internationalization
• The intelligent use of resources with emphasis on water and energy efficiency
61
Implications for a Company
Structure of the Educational System:
• USP’s of the Educational System?
• Availability of Skills in Germany?
• Implications on the Organizational Structure?
• Implications on the Processes of a Company?
• Implications on the Training Infrastructure of a Company?
• Implications for the HR Department of a Company?
• Implications on the Cost Structure of a Company?
62
3. German Economy
Economy & Economic Policy
Economy
63
3. German Economy
Benchmarking – GDP Worldwide
 Germany: With how

many inhabitants?
Source: http://de.statista.com/statistik/daten/studie/157841/umfrage/ranking-der-20-laender-mit-dem-groessten-bruttoinlandsprodukt/ - CAMPUS LICENCE

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3. German Economy
Benchmarking – Countries by Number Inhabitants
 Germany: 82 mn. „only“ …

Source: http://de.statista.com/statistik/daten/studie/1722/umfrage/bevoelkerungsreichste-laender-der-welt/ - CAMPUS LICENCE
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3. German Economy
Benchmarking – GDP EU
 82 mn. Inhabitants !!!

 66 mn. Inhabitants …
Source: http://de.statista.com/statistik/daten/studie/188776/umfrage/bruttoinlandsprodukt-bip-in-den-eu-laendern/ - CAMPUS LICENCE

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3. German Economy
Benchmarking – GDP per Capita EU
 approx. 135 %
Source: http://de.statista.com/statistik/daten/studie/188766/umfrage/bruttoinlandsprodukt-bip-pro-kopf-in-den-eu-laendern/ - CAMPUS LICENCE

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3. German Economy
International Benchmarking – GDP per Capita
GDP per Capita 2017 in USD
Germany: 44,469.90
USA: 59,531.70
Japan: 38,428.10
Brazil: 9,821.40
China: 8,827.00
Russia: 10,743.10
India: 1,939.60
Source: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
68
3. German Economy
GDP per Capita (PPP)
GDP per Capita 2017 in USD (Purchasing Power Parity)
Germany: 50,638.90
USA: 59,531.70
Japan: 43,279.00
Brazil: 15,483.50
China: 16,806.70
Russia: 25,533.00
India: 7,055.60
Source: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=SZ
69
3. German Economy
GDP per Capita (PPP)
Definition: Purchasing Power Parity
PPPs are the rates of currency conversion that equalize the purchasing power
of different currencies by eliminating the differences in price levels between
countries. In their simplest form, PPPs are simply price relatives that show
the ratio of the prices in national currencies of the same good or service in
different countries. PPPs are also calculated for product groups and for each of
the various levels of aggregation up to and including GDP.
Source: http://www.oecd.org/sdd/prices-ppp/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm
70
3. German Economy
GDP per Capita / EU Regions
Diverse Landscape!
Regional Disparities!
Differences:
North-South
East-West
 why?
 origin?
Source: http://ec.europa.eu/eurostat/de
71
3. German Economy
Economic Policy
Germany: A Federal Approach with Divison of Labour between
• central government,
• the federal states and
• municipalities.
+ Germany as a member of the European Union
 Federal Ministry for Economic Affairs and Energy (www.bmwi.de)

 e.g. Bavarian Ministry of Economic Affairs and Media, Energy and Technology
(https://www.stmwi.bayern.de/)
72
3. German Economy
Economic Policy
Characteristics of German economy:
• market economy,
• social market economy,
• strong welfare state,
• European Single Market,
• open economy,
• highly integrated into world economy,
• free competition (democracy)
73
3. German Economy
GDP Growth Rates – 2008 - 2018
Source: https://de.statista.com/statistik/daten/studie/74644/umfrage/prognose-zur-entwicklung-des-bip-in-deutschland/ - CAMPUS LICENCE

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3. German Economy
GDP Growth Rates
Source: https://www.statista.com/statistics/268121/gross-domestic-product-gdp-growth-in-selected-world-regions/ - CAMPUS LICENCE

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3. German Economy
General Data
GDP per Capita Germany: approx. 41,000 USD (2015)
Minimum Salary Germany: 8,50 EUR / h (not for compulsory internships)

2017: 8,84 EUR
Unemployment Rate Germany: 4.3 %
Youth Unemployment Germany: 7.7 % (lowest in Europe)
Retirement Age: 67
Average hours worked per week per full-time employee: 41.5
Average days of holiday: 29 (paid)
Number public holidays: 12 (Bavaria – for Hof)

76
3. German Economy
Share Sectors GDP
Economic Structure – GDP per Sector
Realities in Germany …
Your picture of Germany?
Where are the companies?
Where is the wealth being generated?
Sources: http://www.gelsenkirchener-geschichten.de/userpix/185/185_Nordstern002_1.jpg & http://www.hochfranken.org/hochfranken/Freizeit-_-Kultur,1/Stippvisite-zwischen-Frankenwald-

und-Fichtelgebirge,6.html & http://www.frankfurt.de/sixcms/media.php/688/Feh_skyline.jpg
77
3. German Economy
Share Sectors GDP
Agriculture:
Industry:
Services:
Source: https://www.statista.com/statistics/295519/germany-share-of-economic-sectors-in-gross-
domestic-product/ - CAMPUS LICENCE 78
3. German Economy
Share Sectors GDP
Sometimes a bit hidden:
 Hochfranken with third highest industrial density in European Union!
Sources:https://textile-network.de/de/Business/Neues-Produktionsgebaeude-fertiggestellt/(gallery)/1
79
3. German Economy
Share Sectors GDP - Benchmarking
Germany with a
Rather strong
industrial
(manufacturing) basis
Agriculture – low
contribution to overall
GDP
Source: https://www.statista.com/statistics/264653/proportions-of-economic-sectors-in-gross-domestic-product-gdp-in-selected-countries/ - CAMPUS LICENCE

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3. German Economy
Share of Manufacturing Sector to GDP
Statistics:
Industry and
Manufacturing!
Industry also Oil

Processing …
Germany and
Manufacturing!
Source: http://data.worldbank.org/indicator/NV.IND.MANF.ZS/countries/DE-GB-US-JP-FR-IT?display=graph
81
3. German Economy
General Data
Potential Sources for further research:
Statistisches Bundesamt https://www.destatis.de/EN/Homepage.html
Eurostat: http://ec.europa.eu/eurostat/de
Statista: http://de.statista.com/ (License by Hof UAS)
Fed. Ministry for Economic Affairs: http://www.bmwi.de
Germany Trade and Invest: http://www.gtai.de
States – e.g. Bavaria: http://www.invest-in-bavaria.com/
82
3. German Economy
Ease of Doing Business
Framework in Gemany:
• How to measure the „Ease of Doing Business“?
• Any indicator available?
• Which dimensions should be covered?  What is of your interest, if you intend

to start-up a company / business?
• How well is doing Germany in an international comparison?
Number of Countries worldwide: approx. 195
Germany: __ ?
(check next page)
83
3. German Economy
Ease of Doing Business
Source: http://www.doingbusiness.org/data/exploreeconomies/germany/
84
3. German Economy
Quality of Life
GDP, Ease of Doing Business, GDP per Capita as “hard” facts about the Economy.
What about Quality of Life?
 Bhutan: GNH
 Gross National Happiness as one of the goals of Economic Policy
(http://www.grossnationalhappiness.com/)
Alternative Indicators?
Social and Human Factors to be Measured?
 Human Development Index (HDI) by United Nations
85
3. German Economy
Human Development Index (HDI)
The Human Development Index:
• Focus on people and their capabilities, not economic growth alone.
• Basis to discuss national policy (countries with similar income don’t necessarily
have similar HDIs)  Why?
• HDI to stimulate debate about government policy priorities.
86
3. German Economy
Human Development Index (HDI)
The Human Development Index - measuring key dimensions of human
development:
• a long and healthy life,
• being knowledgeable (education)
• decent standard of living.
Source and more information: http://hdr.undp.org/en/content/human-development-index-hdi

87
3. German Economy
Human Development Index
Germany in 2015: Rank Number 6
For Further Information: http://hdr.undp.org/en/countries/profiles/DEU
Source: http://hdr.undp.org/en/content/human-development-index-hdi
88
3. German Economy
Tool: PESTEL Analysis
PESTEL ANALYSIS:
PESTEL stands for an Analysis on the following dimensions
P for Political,
E for Economic,
S for Social,
T for Technological,
E for Environmental
L for Legal.
89
3. German Economy
Foreign Trade
2015: Germany Number 3
2016: Germany Number ?
And again Benchmarking … 82 mn. …
Source: https://de.statista.com/statistik/daten/studie/37013/umfrage/ranking-der-top-20-exportlaender-weltweit/ - CAMPUS LICENCE

90
3. German Economy
Foreign Trade
Traditionally Foreign Trade Surplus

(Trade in Goods)
Net-Importer of Services
Balance: Surplus
 Every fourth job depending directly of

indirectly on foreign trade.
 Need to manage international

business!
Source: Statistische Bundesamt

91
3. German Economy
Foreign Trade – Trading Partners
EU Countries as important Trading

Partners (Free Trade Area)
USA (Discussion on TTIP)
China and Asia as more and more

important partners

92
3. German Economy
Foreign Trade – Trading Goods
Export Sectors: Generally the

most Competitive Sectors of an Economy
Statistics give insights into

Comparative Advantages of Germany!

93
3. German Economy
Foreign Trade
Potential Sources – Foreign Trade / Binational Relations:
German Embassy / Consulates (General Info and Link Lists)
Germany Trade and Invest http://www.gtai.de
Außenhandelskammern – (Binational Chambers of Commerce)

http://www.ahk.de/standorte/ahk-standorte/
Offices of German Regional Organizations – e.g. Invest in Bavaria Offices

http://www.invest-in-bavaria.com/so-helfen-wir/ueber-uns.html
94
3. German Economy
Demographics – A German Megatrend
Development Inhabitants Germany 1950 - 2060
Implications?
The Demographic
Change in Germany

95
3. German Economy
Demographics – A German Megatrend
Development – Age Structure Germany 1960 - 2060
Age Structure
& Implications?
Implications on
Business Models?
Implications for
Economy?

96
3. German Economy
Demographics
Demographic Development in European Regions
Not an homogenous development

in Europe
Regional Differences  e.g. Eastern

Europe, South Eastern Europe

97
3. German Economy
Demographics
Demographic Change as one of the most important Mega Trends for Germany
Demographic Change with various implications for German Economy, Labour

Market, Welfare State, Health Care System …
Demographic Change as a Threat?
Demographic Change as a Chance?
Video: https://www.stratfor.com/video/germanys-demographic-challenge
98
3. German Economy
SWOT Analysis
Strength Weakness
S W
O T
Opportunity Threat
99
3. German Economy
Made in Germany
• Background: History?
• Values?
• German Pavillion – Auslandsmessen

(http://www.german-pavilion.com/content/de/home/home.php)
Source: http://www.german-pavilion.com/content/de/home/home.php
100
3. German Economy
Made in Germany
“Made in Germany" not a German invention!
• Origin: British Merchandise Marks Act (August 23, 1887)
• Aim to label foreign products – to protect British Industry.
• Encourage British consumer to "buy British“. All foreign products had to be

labeled.
 German products under particular suspicion. Germany as an industrial

latecomer & Suspicion that Germany was copying British technology / design.
 The label "Made in Germany" ultimately stood for quality! “Made in Germany”
as a seal of quality.
Source: See also http://www.dw.com/en/125-years-of-made-in-germany/a-16188583

101
3. German Economy
Company Landscape - Global Players
The grand names of the German Economy - major German corporations:
• Flagships, Global Players  International Reputation.
• Brands like: Mercedes, Porsche, Audi, Volkswagen, Adidas, Siemens, Bosch,

BASF, SAP, Linde, ThyssenKrupp, …
• Many of them listed on the DAX (Deutscher Aktien Index).
• Frankfurt as the Financial Center of Germany with Deutsche Bank,

Commerzbank or ECB Headquarters.
102
3. German Economy
Most valuable German Brands
The flagships of the German
Economy.
Global Players and Multi-

nationals.
Source: https://www.statista.com/statistics/269853/most-valuable-german-brands/ - CAMPUS LICENCE

103
3. German Economy
Selected Facts:
• Volkswagen - Headquarters Wolfsburg – largest German firm in terms of Sales

– several brands under their roof like Audi, Škoda Auto, Seat, Bentley, Bugatti,
Lamborghini, Scania and Volkswagen Commercial Vehicles.
• Siemens AG: largest German employer in industry. Approx. 343,000 employees

worldwide.
• Ranking Service Sector: Deutsche Telekom (Bonn), Deutsche Post (Bonn) and
Deutsche Bahn (Berlin).
• Schwarz Group (Lidl, Kaufland) – Aldi in Retail or Metro in Wholesale.
104
3. German Economy
Selected Facts:
• ZF Sales: 18 bn. EUR

Employees: 71.000
http://www.zf.com/corporate/de_de/products/products.html
• Henkel Sales: 16 bn. EUR

Employees: 49.500
http://www.henkel.com/brands-and-businesses
• Beiersdorf Sales: 6,6 bn. EUR

Employees: 18.000
https://www.beiersdorf.de/marken/ueberblick
 Aware of them? ZF hidden in Supply Chain, Henkel or Beiersdorf famous with

their brands like Persil or Nivea.
Source: Figures Retreived from Company Homepages.
105
3. German Economy
Hidden Champions
Book: Hidden Champions – Lessons from 500 of the World’s Best Unknown
Companies
Author: Hermann Simon

Harvard Business School Press, 1996
ISBN 0875846521, 9780875846521
298 Pages
Hidden in a Niche
in the Supply Chain
Specialized
Family Owned Business?
…
106
3. German Economy
Hidden Champions
Term Defined by Hermann Simon:
• “Low-Profile-Super-Performers”
• World Market Leader in their Niches
• Great Innovators
• Small-and-Medium Sized Firms (SME)
• Often: Avoiding Outsourcing to Protect their Knowledge.
 unmatchable internal competencies (USPs – core competencies)
107
3. German Economy
Hidden Champions
Hidden Champion Definition & Criteria as per Hermann Simon:
• Among TOP-3 on the world market in the respective segment
• Turnover below 3 bn. Euro
• Low level of general awareness
Any Names / Examples?
108
3. German Economy
Hidden Champions – Examples / Who are they?
Known Names?
Source: http://www.faz.net/magazin/berufseinstieg/ingenieurkarriere-eine-uebersicht-deutscher-weltmarktfuehrer-13700238/ingenieurkarriere-deutsche-13700239.html
109
3. German Economy
Hidden Champions - Locations
Many Examples in
Oberfranken.
Source: http://aktuell.nationalatlas.de/wp-content/uploads/11_11_Weltmarktfuehrer.pdf
110
3. German Economy
Mittelstand
Hidden Champions!
Mittelstand
German Mittelstand
Mittelständisches Unternehmen.
What is Mittelstand?
Linguee.com: Middle Class

Mid-Sized Sector
Mid Tier
111
3. German Economy
Mittelstand – A Definition by Financial Times
 “Mittelstand”: can be used to describe an Characteristics:

individual organisation or a type of specialist
SME. It is essentially a family business, has Specialist SME
a strong stakeholder commitment, and a
focused product-service, usually in industrial Long-Term Orientation
sector niches, involvement. It is also
identified by the term “Micro-Multinational” Niche
reflecting its focused interests and extensive
international reach. (…) International Reach
Compared with similar SME companies Manufacturing

elsewhere in the world, the “German
Mittelstand” is highly active in the industrial
sector. (…) 
Source: http://lexicon.ft.com/Term?term=Mittelstand
112
3. German Economy
Mittelstand – A Definition by Financial Times
 The German Mittelstand companies have Characteristics:

a unique corporate culture driven by family
ownership. Long-term survival and Unique Corporate Culture
intergenerational transfer dominate
objectives. Profit is expected as a result of Stakeholder Orientation
attention paid to customers, and a focus on
long-term mutual sustainability with key Flat Hierarchies
stakeholders, leading to an implicit “life-long”
contract with the stakeholders. Flat Philosophy
hierarchies and informal channels of
communication implement the Mittelstand
philosophy. 
Source: http://lexicon.ft.com/Term?term=Mittelstand
113
3. German Economy
SMEs and Mittelstand
Facts on SMEs:
• Activites mainly in the industrial / manufacturing sector!  Supplying Capital

Goods to the international markets.
• 25 % active these fields  higher proportion as compared with other

industrial nations!
• France: 16,9 %
• UK 14,7 %
• USA: 13,8 %
 Important Difference!
Source: Firugres from http://www.bmwi.de/English/Redaktion/Pdf/wirtschaftsmotor-mittelstand-zahlen-und-fakten-zu-den-deutschen-

kmu,property=pdf,bereich=bmwi2012,sprache=en,rwb=true.pdf 114
3. German Economy
Mittelstand
 Important Difference!
 Typically German!
http://www.bmwi.de/English/Redaktion/Pdf/factbook-german-mittelstand,property=pdf,bereich=bmwi2012,sprache=en,rwb=true.pdf
115
3. German Economy
Mittelstand, Hidden Champions and SMEs
Film on German Mittelstand:
The Economist: https://www.youtube.com/watch?v=eUjqQZLbKgA
116
3. German Economy
some words regarding Innovation
Innovation and Innovation Ecosystem:
• Vocational Training Sector  Maintenance and Improving
• University of Applied Science  Employability & Applied Research
• Research Universities  Basic Research
• Ecosystem for Technology Transfer – the Example of Fraunhofer Society
• Other Research Organizations like Leibnitz, Max Planck, …
117
3. German Economy
Fraunhofer Society
Fraunhofer Society:
„Fraunhofer is Europe’s largest application-oriented research organization. Our

research efforts are geared entirely to people’s needs: health, security,
communication, energy and the environment.
As a result, the work undertaken by our researchers and developers has a

significant impact on people’s lives. We are creative. We shape technology. We
design products. We improve methods and techniques. We open up new vistas. In
short, we forge the future”
Source: https://www.fraunhofer.de/en/about-fraunhofer/profile.html
118
3. German Economy
Fraunhofer Society
Fraunhofer Society – Some Data:
Foundation: 1949
Headquarters: Munich
Employees: 23,000
Funding: 30 % Government – 70 % own revenues
Image Clips: https://www.youtube.com/watch?v=FfrCAOklueo
http://www.morgenstadt.de/en.html
119
3. German Economy
This Region - Hochfranken
Industrial Region – Hochfranken:
The Region around Hof -

a rural Region,
but also a region full of industry and Hidden Champions.
Typically Mittelstand!
What about culture?
Explore yourself!
Video: https://www.youtube.com/watch?v=K1cbSoU3PtE
120
3. German Economy
A look onto the map:
2 Counties +
Town of Hof
Source: http://www.unternehmerinitiative-hochfranken.de/wp-content/uploads/2014/01/karte28.jpg
121
3. German Economy
• Long tradition in the production of Textiles and Porcelain / Chinaware.
• Early Industrializer due to early rail connectivity in 1848
• Porcelain around Selb (Raw Material)
• Textile around Hof (Tradition and Knowledge)
 Still today 2nd highest density of industry per capita in the European Union
122
3. German Economy
Structural Change of the Porcelain Industry around Selb:
• Huge demand for porcelain after WW2

• Economic miracle of and in Germany
• Rising Wages in the 70‘ies and 80‘ies
• Substituting Labour through Capital whereever possible (Automatisation or
Industry 3.0)
• Labour-intensive industry and Limitations for further Automatisation
• Development of the Global South (Infrastructure and Industrialisation)
• Improvement of the worldwide transport infrastructure and means of
communication
• Cost of Trade went down.
123
3. German Economy
Structural Change of the Porcelain Industry around Selb:
• Increasingly more and more quality products (but still cheaper goods) from
developing countries reaching the German market
• Demand and consumer preferences changed (demand for porcelain in
particular)
• End of East-West Conflict
• New competition next door
• Structural Change already started and huge competition in the market
(increasing competition, shrinking margins, decreasing demand)
 Insolvencies, Outsourcing, Seeking future in niche markets

 Structural Change in Hochfranken – Unemployment rising
 New Structures emerge (machinery, new materials, new core competencies
emerge)
124
3. German Economy
Hochfranken – A region full of hidden Champions
some examples of companies having had a connect to the porcelain industry:
• https://www.netzsch.com/us/
• http://www.lappinsulators.com/oem/oem-startseite/?L=2
• http://www.bhs-tabletop.com/index.php/intro.120.html
for further information on the region and its industrial structure (only in German):
• http://www.hochfranken.org/
125
3. German Economy
Industrial Region – But what about Culture:
99 Highlights of a Region
http://www.hochfranken.org/highlights.html
Hofer Filmtage:
http://hofer-filmtage.com/en/
Stadt Hof:
https://www.hof.de/hof/hof_eng/living/kultur-freizeit-und-sport.html
Kultur in Oberfranken:
http://oberfranken.bayern-online.de/magazin/kultur/
126
General Information
Source: https://upload.wikimedia.org/wikipedia/commons/thumb/f/f3/EU28-2013_European_Union_map.svg/680px-EU28-2013_European_Union_map.svg.png &

https://europa.eu/european-union/sites/europaeu/files/docs/body/flag_yellow_high.jpg 127
General Information
EU: 28 countries as member states that along with their population belong
to the Union.
• EU states are all sovereign, independent countries
• they have pooled some of their ‘sovereignty’ in order to gain strength and the
benefits of size.
• Pooling sovereignty: Member States delegate some of their decision-making

powers to the shared institutions at European level.
 The EU between fully federal system of the USA and a loose,

intergovernmental cooperation system seen in the United Nations.
 The EU explained: https://www.youtube.com/watch?v=VvIPSY_Sbfg
Source: Vgl. http://www.gr2014parliament.eu/Portals/6/PDFFILES/NA0113090ENC_002.pdf

128
General Information
The EU has
• built a single market for goods and services that spans 28 countries with over
500 million citizens free to move and settle where they wish.
• created the single currency — the euro — now a major world currency, and
which makes the single market more efficient.
• the largest supplier of development and humanitarian aid programmes in the

world.

129
General Information
Decision-making at EU level involves various European institutions, in

particular:
• the European Parliament, which represents the EU’s citizens and is directly
elected by them;
• the European Council, which consists of the Heads of State or Government of

the EU Member States;
• the Council, which represents the governments of the EU Member States;
• the European Commission, which represents the interests of the EU as a

whole.

130
Traveling – The Schengen Area
The Schengen Treaty

& Schengen Area.
 Visa Issue
Source: Bundeszentrale für politische Bildung.

131
GDP per Capita – Disparities in Europe
Bruttoinlandsprodukt (BIP) pro Kopf
In Kaufkraftstandards (KKS), Index (EU-28 = 100), ausgewählte europ. Staaten, 2014
 Germany at 124
Source: Bundeszentrale für politische Bildung.

132
Regional Disparities in Europe
Regional Disparities at Different Levels:
Center Periphery
East-West-Dimension
North-South-Dimension
…
Source: http://ec.europa.eu/eurostat/statistics-
explained/images/thumb/8/8a/Gross_domestic_product_(GDP)_per_inhabitant,_in_purchasing_power_standard_(PPS),_by_NUTS_2.PNG/350px- 133
Gross_domestic_product_(GDP)_per_inhabitant,_in_purchasing_power_standard_(PPS),_by_NUTS_2.PNG
General Objectives of the EU
General Objectives of the EU:
• an area of freedom, security and justice without internal frontiers;
• an internal market where competition is free and undistorted;
• sustainable development, based on balanced economic growth and price

stability, a highly competitive social market economy, aiming at full
employment and social progress, and a high level of protection and
improvement of the quality of the environment;
Source: Vgl. http://europa.eu/scadplus/constitution/objectives_en.htm

134
Competencies of the EU
Exclusive competence (see Article 3 TFEU):
• customs union
• the establishing of the competition rules necessary for the functioning of the
internal market
• monetary policy for the member states whose currency is the euro
• conservation of marine biological resources under the common fisheries policy
• common commercial policy
• concluding international agreements ◦when their conclusion is required by a
legislative act of the EU
• when their conclusion is necessary to enable the EU to exercise its
internal competence
• in so far as their conclusion may affect common rules or alter their scope.
Source: http://ec.europa.eu/citizens-initiative/public/competences/faq?lg=en
135
Shared competence (see Article 4 TFEU):
• internal market
• social policy, limited to the aspects defined in the TFEU
• economic, social and territorial cohesion
• agriculture and fisheries, excluding the conservation of marine biological
resources
• environment
• consumer protection
• transport
136
Shared competence (see Article 4 TFEU):
• trans-European networks
• energy
• area of freedom, security and justice
• common safety concerns in public health matters, limited to the aspects
defined in the TFEU
• research, technological development and space
• development cooperation and humanitarian aid
137
Principle of subsidiarity
• Does the action have transnational aspects that cannot be resolved by EU

countries?
• Would national action or an absence of action be contrary to the requirements

of the Treaty?
• Does action at EU level have clear advantages?
The principle of subsidiarity to bring the EU and its citizens closer together.
Intention to guarantee that action is taken and will be taken at local level and
close to the citizens, wherever it makes sense.
BUT: It does not mean that action must always be taken at the level that is
closest to the citizen.
Source: Vgl. http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=URISERV:ai0017&from=DE
138
European Union Today
And in the
Future?
Brexit
Grexit
…
Source: http://europe.unc.edu/wp-content/uploads/2014/07/The-European-Union-2014-1024x672.jpg
139
Common Market
This European integration created the world’s largest common market,
characterised by the four fundamental freedoms formulated in the Treaty of Rome
signed in 1957:
• the free movement of goods between the EU member states,
• the freedom of movement of persons,
• the freedom to provide services within the EU,
• and the free flow of capital.
Source: Vgl. https://www.tatsachen-ueber-deutschland.de/en/advocate-european-integration

140
Integration Theory
Basic Questions:
Regionalism and multilateralism: Coexistence or conflict?
The WTO and the regional preferential agreements: When the WTO
permits departures from its principles?
141
Integration Theory
Degree of Integration:
Source: M. Mikic, Morschett, Schramm-Klein and Zentes

142
The benefits of the common market
Characteristics of a common market:
Source: Morschett, Schramm-Klein and Zentes 2009

143
The Euro
Sources: https://www.ecb.europa.eu/euro/coins/2euro/html/index.en.html &

https://www.ecb.europa.eu/euro/banknotes/denominations/html/index.en.html
144
The Euro
The Euro (EUR) is the currency of the European Monetary Union.
Second most important member of the international currency system, after the
US-Dollar (USD).
European Central Bank (ECB) is responsible for monetary policy with regard to
the euro. Headquarters: Frankfurt.
The euro is the official currency in 19 of the 28 EU member states.
The euro was physically introduced in “Euroland”, including Germany, on January

1, 2002, having served as a currency of deposit since the beginning of 1999.
Source: Vgl. https://www.tatsachen-ueber-deutschland.de/en/advocate-european-integration

145
The Euro Zone Members
19 countries as members of
The Eurozone.
Maastricht Criteria to join Euro

(inflation, debt, budget deficit)
Source: https://www.ecb.europa.eu/euro/intro/html/map.en.html
146
The Euro in the EMU
Trade stimulation through a common currency: The Euro in the

EMU:
Why a common currency?
– Reduction in transaction costs among member countries

– Encouraging international trade
– Completion of European integration
147
The Euro in the EMU
Convergence criteria for EU members to join the EMU!
• Budget deficit under 3% of Gross Domestic Product (GDP).
• National debt below the reference value of 60% of GDP.
• Inflation rate that does not exceed 1.5% of the average of the 3 member states
with the lowest inflation rates.
148
The Euro in the EMU
Convergence criteria for EU members to join the EMU!
• Long-term interest rate no more than 2% above the average of the best three
member states
• Exchange rate that has stayed within the normal fluctuation bands in the
(ERM)
 http://www.ecb.int/ecb/orga/escb/html/convergencecriteria.en.html
149
The European Central Bank
Basic tasks of the European Central Bank:
• the definition and implementation of monetary policy for the euro area;
• the conduct of foreign exchange operations;
• the holding and management of the official foreign reserves of the euro area
countries (portfolio management);
• the promotion of the smooth operation of payment systems …
Source: https://www.ecb.europa.eu/ecb/tasks/html/index.en.html
150
Central Bank Rate
Negative
interest rates
in Europe!
A new
development!
Pros and Cons?
Source: https://www.bundesbank.de/Redaktion/DE/Downloads/Statistiken/Geld_Und_Kapitalmaerkte/Zinssaetze_Renditen/S11BTTEZBZINS.pdf?__blob=publicationFile
151
5. Foreign Trade and Internationalization Strategies
The Theoretical Framework
152
The Theoretical Framework
Topics to be discussed:
• Why do Economies Trade?

• Factors of Production
• Comparative Advantages
• Trade Patterns
153
Why a new Market?
Motivations to enter the market of a developing economy?
• Entering a new market.
• Diversification and reducing dependency on existing markets.
• Taking advantage of comparative cost advantages.
• Getting access – to knowledge, to human ressources, obtaining

knowledge regarding the structures in the market …
154
Why a new Market?
The Stages of Internationalization:
Complexity Own
Production
Liaison
Office
Franchising
License
Export Level of Commitment towards

Partner Nation
Source: Own Diagram

155
6. German Companies and Human Resources
Introduction
156
Managening International Business
It is all about
• Differences
• Communication
• Understanding
 Working
successfully
togehter
 Ability to integrate
Source: https://sidlaurea.files.wordpress.com/2014/01/matrix-postcard-7-web.jpg
157
Background
Cross-Cultural Issues?
Cultural Standards and Dimensions!
Major Studies towards cultural dimensions and history:
History: In the 1970s research has been carried out by IBM among their
employees in order to identify cross cultural issues that influence the companies
business.
Academic Research:
 Geert Hofstedes Research
 Fons Trompenaars Research
158
Background
Cross-Cultural Issues?
Working in international Teams

Working abroad
159
Differences – Structures – Arriving
Source: http://assets.elementfrankfurtairport.com/lps/assets/u/Hotel-Gateway-Gardens---Element-Frankfurt-Airport-Hotel---Gateway-Gardens.jpg und http://www.livemint.com/rf/Image-

621x414/LiveMint/Period1/2013/07/29/Photos/Mumbai%20Airport%20Slum%203--621x414.jpg 160
Differences – Structures – Arriving
Source: http://www.fraport.de/content/fraport/de/presse/mediathek/bilddatenbank/frankfurt-airport/gebaeude.html und http://www.fullstopindia.com/wp-

content/uploads/2012/02/Delhi-Airport-Arrivals.jpg 161
By Bus to the meeting – Germany and India
Source: https://rajafj.files.wordpress.com/2010/09/crowded-bus-2.jpg und http://stadtbus-fulda.de/Photos/Photos%20von%20heute/Neoplan/Neoplan-Wg-164-innen.jpg

162
Differences – Structures - Arriving
Source: http://i.wfcdn.de/teaser/660/17146.jpg und http://spikersystems.com/FlashNet_Pointer/www/projects/Snapshots/India/India_files/image020.jpg

163
Finally the meeting …
and now:
Source: https://media.glassdoor.com/l/35/5e/6a/ac/mbrdi-building.jpg
164
Solving Problems … Benchmarking
165
Background
Video on Cultural Dimensions:
Short Clip on Cultural Dimensions

https://www.youtube.com/watch?v=EcrFudqIGr4
Long Clip with Prof. Geert Hofstede

https://www.youtube.com/watch?v=wdh40kgyYOY
 What about your personal experiences so far in Germany? Any cultural

differences? Unexplainable situations / patterns of behaviour?
166
Background
Geert Hofstede (2010): Cultures and Organizations – Software of the Mind:
6 Cultural Dimensions:
• Power Distance
• Individualism vs. Collectivism
• Masculinity vs. Feminity
• Uncertainty Avoidance
• Long-Term vs. Short-Term Orientation
• Indulgence vs. Restraint
167
Background
Hofstede’s Cultural Dimensions:
1. Power Distance: “The extent to which the less powerful members of institutions
and organisations within a country expect and accept that power is distributed
unequally.”
2. Individualism and Collectivism: “Individualism pertains to societies in which the

ties between individuals are loose: everyone is expected to look after him- or
herself and his or her immediate family. Collectivism as its opposite pertains to
societies in which people from birth onward are integrated into strong, cohesive
in-groups, which throughout people’s lifetime continue to protect them in
exchange for unquestioning loyalty” .
Source: http://geerthofstede.nl/dimensions-of-national-cultures
168
Background
3. Gender Roles: “ A society is called masculine when emotional gender roles are
clearly distinct: men are supposed to be assertive, tough, and focused on
material success, whereas women are supposed to be more modest, tender, and
concerned with the quality of life.
A society is called feminine when emotional gender roles overlap: both men and
women are supposed to be modest, tender, and concerned with the quality of life”
.
169
Background
4. Uncertainty Avoidance: The uncertainty avoidance dimension expresses the

degree to which the members of a society feel uncomfortable with uncertainty
and ambiguity. The fundamental issue here is how a society deals with the fact
that the future can never be known: should we try to control the future or just let it
happen? Countries exhibiting strong UAI maintain rigid codes of belief and
behavior and are intolerant of unorthodox behavior and ideas. Weak UAI
societies maintain a more relaxed attitude in which practice counts more than
principles.
170
Background
5. Short-term and long-term orientation: The long-term orientation dimension can

be interpreted as dealing with society’s search for virtue. Societies with a short-
term orientation generally have a strong concern with establishing the absolute
Truth. They are normative in their thinking. They exhibit great respect for
traditions, a relatively small propensity to save for the future, and a focus on
achieving quick results. In societies with a long-term orientation, people believe
that truth depends very much on situation, context and time. They show an ability
to adapt traditions to changed conditions, a strong propensity to save and invest,
thriftiness, and perseverance in achieving results.
171
Background
6. Indulgence and Restraint: Indulgence stands for a society that allows relatively
free gratification of basic and natural human drives related to enjoying life and
having fun. Restraint stands for a society that suppresses gratification of needs
and regulates it by means of strict social norms.
 For further Information:

http://geert-hofstede.com/
http://geert-hofstede.com/germany.html
 Group Work: Comparisons of your countries!

 How would you assess your culture to be?
172
Background
Fons Trompenars - Expressions of Culture through:
• Language
• Food - Cuisine
• Architecture
• Music
• Clothes – Way of Clothing
• Literature
• Climate
• Noise
• Physical Contact
173
The Culture Shock – Integrating …
• Symptoms of Cultural Shock
• Phases of Cultural Shock: The U-Curve
• Phases of Cultural Shock: The W-Curve
 Homesick?
174
The U-Curve:
Integration
Honeymoon
Degree of Adjustment
Cultural Shock
Time
Source: Own Diagramm
175
The Culture Shock – Integrating & Re-Integrating …
The W-Curve: Abroad Home Back to Day-to-Day Business
Integration
Honeymoon
Degree of Adjustment
Re-Integration
with Culture Shock
„Things have changed“ &
„I have changed“
Cultural Shock

176
Symptoms of culture shock:
Summing up the symptoms of cultural malaise we can evidently see that they can
appear in form of various different emotions (Wagner, 1996, p.13):
• Simple embarrassment
• Frequent complaints about the host culture & idealizing the own culture
• Homesickness
• Identity confusion
• Depression
• Frustration
• Strain on family ties
• Feeling confused and uncomfortable
• Stereotypes are being reinforced
• Friction
• Anxiety
177
Cross Cultural Communication
Personal Space & Comfort Zone:

178
Personal Space & Comfort Zone:
Personal Space Invasion
Differences Across Cultures

179
Non-Verbal Communication:
Attitude towards Physical Contact
Mode of Greeting
Body Language
Signals and Gestures
Facial expressions
Eye contact
Silence
180
My Culture Foreign Culture
Interculture

181
Message
Sender Receiver
Feedback

182
My Culture Foreign Culture
Message
Sender Receiver
Feedback
Cultural Aspects of
Communication
183
Direct communication:
What is being said?
Verbal aspects, Open critisism

content
Context is not important

184
What is being said:
In what way is something said?
Non-verbal aspects, Social harmony

subtle communication
Context is important
185
What is being said:
• Direct communication strategy: The conversation is very direct and to the

point in order to achieve the goal as early as possible. Often the most
explicit way is chosen.
• Indirect communication strategy: The aim of the conversation is achieved

through detours or "ensnared“. A very indirect and casual way of
communication is chosen. It is non-commital and consists of very less
facts.
186
The Context:
Text
Message
Message
Context
Low context reference High context reference

Direct Communication Indirect Communication
187
Corporate Culture
A Case Study:
Somewhere in Western Europe a middle-sized textile printing company struggled

for survival. Cloth, usually imported from Asian countries, was printed in
multicolored patterns according to the desires of customers. The firms are
producing the fashion clothing for the local market.
The company was run by a general manager, to whom three functional managers
reported: one for design and sales, one for manufacturing, and one for finance
and personnel. The total workforce numbered about 250.
The working climate in the firm was often disturbed by conflicts between the sales
manager and the manufacturing manager. The manufacturing manager had an
interest, as manufacruring managers have all over world, in maintaining a smooth
production process with minimal product changes.
Source: Hoftstede (2010): Cultures and Organizations, Page 303.
188
Corporate Culture
A Case Study:
He preferred grouping customers orders into large batches. Changing colours and
/or designs involved cleaning the machines, which cut into productive time and
also wasted costly dyestuffs. The worst was changing from a dark color set into a
light one, because every bit of dark-colored dye left would show on the cloth and
spoil the product quality. Therefore, the manufacturing planners tried to start on a
clean machine with the lightest shades and gradually move toward darker ones,
postponing the need for an overall cleaning round as long as possible.
The design and sales manager tried to satisfy his customers in a highly
competitive market. These fashion clothing firms were notorious for short term
planning changes.
Source: Hoftstede (2010): Cultures and Organizations, Page 303 f.
189
Corporate Culture
A Case Study:
As their supplier, the printing company often got requests for rush orders. Even
when these orders were small and unlikely to be profitable, the sa}es manager
hated to say no; the customer might go to a competitor, and then the printing firm
would miss out on that big order that the sales manager was sure would come
afterward. The rush orders, however, usually upset the manufacturing manager's
schedules and forced him to print short runs of dark color sets on a beautifully
clean machine, thus forcing the production operators to start cleaning all over
again.
Source: Hoftstede (2010): Cultures and Organizations, Page 304

190
Corporate Culture
A Case Study:
There were frequent disagreements between the two managers over

whether a certain rush order should or should not be taken into production.
The conflict was not limited to the department heads: production personnel
publicly expressed doubts about the competence of the sales people, and
vice versa. in the cafeteria the production workers and sales people would
not sit together, although they had known each other for years.

191
Corporate Culture
British – German – French approaches to solve the problem:
In course of one major studies the answers of French, German and British
students were reviewed how they would have solved the case study:
The results were striking. The majority of the French students diagnosed the case
as negligence by the general manager to whom the two department heads
reported. The solution preferred by the French was for the opponents to take the
conflict to their common boss, who would issue orders for settling such dilemmas
in the future. Stevens interpreted the implicit organization model of the French as
a "pyramid of people": the general manager at the top of the pyramid and each
successive level at its proper place below.
Source: Hoftstede (2010): Cultures and Organizations, Page 304/5

192
Corporate Culture
The majority of the Germans diagnosed the case as a lack of structure. The
scope of responsibility of the two conflicting department heads had never been
clearly laid down. The solution preferred by the Germans was the establishment
of procedures. Possible ways to develop these procedures included calling in a
consultant, nominating a task force, and asking the common boss. The Germans,
Stevens felt, saw an organization ideally as a "well-oiled machine" in which
management intervention is limited to exceptional cases because the rules should
settle all daily problems.

193
Corporate Culture
The majority of the British diagnosed the case as a human relations problem. The
two department heads were poor negotiators, and their skills in this respect
should be developed by sending them to a management course, preferably
together. The implicit model of an organization in the minds of the British, Stevens
thought, was a "village market" in which neither hierarchy nor rules but rather the
demands of the situation determine what will happen.

194
Corporate Culture
Management philosophies differ across countries:
• Max Weber (Germany) : Bureaucratic Approach

• Frederic Winslow Taylor (USA) : Scientific Management
• Henri Fayol (France) : Hierarchy matters
195
Corporate Culture
Organizational Framework:

196
Cross Cultural Experience at University
How about your experiences so far at the University / with Group Work?
• Any Cultural Stereotypes?

• The Germans, the Indians, the Mexicans, …?
• Someone „bossing“ around?
• Uncomfortable situations?
• Problems in communication?
 While working, cross national teams are matter of fact, if we like it or not, but
the problem needs to be solved …
197
8. Megatrends
Selected Topics
MEGA
TRENDS
198
8. Megatrends
Various Topics
• Industry 4.0
• Energy Change
• Demographics
• …
199
9. German History
Selected Topics
German
History
200
9. German History
Overview – Germany in the 17th Century
Source of German
Federalism
Latecomer in terms of
nation building
Umbrella: Holy Roman

Empira of the German
Nation
Source: https://de.wikipedia.org/wiki/Datei:HRR_1648.png
201
9. German History
Nation Building: Germany - a latecomer
Napoleonic Wars:
War with Prussia
1806 „Kingdom of Bavaria“
Continental Blockade of Britain
 Finally Surrender in Russia & Waterloo
 1815 Congress of Vienna with Restoration of the Old System
202
9. German History
Germany after Congress of Vienna:
After Napoleon and

Vienna
- A bit less of
Federalism
- Two major powers:

Prussia
Austria
Source: https://en.wikipedia.org/wiki/Congress_of_Vienna#/media/File:Europe_1815_map_en.png
203
9. German History
• War with France 1870/71

• 1871 Proclamation of Germany as a Nation
• Location: Versailles after the German-French war of 1870/71
• Germany and France: Rivality and Hostility at that time
Source: http://www.bpb.de/geschichte/deutsche-geschichte/kaiserreich/138914/aeussere-und-innere-reichsgruendung
204
9. German History
Nation Building – Germany after 1871
Germany as a
Nation – The setup
after 1871
Prussia as the
dominating power
Austro-Hungarian
Empire a an own
nation
Source: http://media.diercke.net/omeda/800/100754_058_1.jpg
205
9. German History
Industrial Revolution: Again a latecomer?
UK as the first and leading industrialized nation & Belgium as an early mover
Germany industrialized between 1830‘ies and 1870‘ies.
Coal as natural resources in the Ruhr-Area and e.g. Saarland.
Industry to establish nearby.
Saxony also as a center of German Industry.
Hof being close to Saxony also as an early industrializer (energy demand from
Sokolov – Czech / Austro-Hungarian Empire).
206
9. German History
Industrial Revolution: Again a latecomer?
Industrialization & Division of Labour.
New Class Emerges: The Worker.
Karl Marx and Friedrich Engels with thougths on the new realities of society and
misery of the workers class.
Industrialization & Impact on Environment.
German Reich becomming a political and economical important nation.
207
9. German History
The Kaiserreich & Colonies
Chancellor Bismarck and his attempt to secure peach through many treaties and
coalitions.
Young Kaiser Wilhelm II taking over in 1888 with huge ambitions.
1890 Otto von Bismarck stepping back from his post as

Reichskanzler/Chancellor.
Germany starting (and again as a latecomer) with colonial policy:

• German South West Africa - Namibia
• German East Africa - Tanzania
• German West Africa - Cameroon & Togo
• Samoa, New Guinea
• Quingdao, China
208
9. German History
Pre World War 1
A complex scenario of treaties and coalitions in Europe (Bismarck)
Colonialism in Europe (Germany with some colonies in Africa and Asia)
Rivality among the European Super Powers
Austria-Hungary with a multi-ethical diverse Empire being a major ally of

Germany
 Assassination of Austrian Archduke Franz Ferdinand in Sarajevo, 28th June,

1914
 Mechanism of Alliances lead to the outbreak of WW1
209
9. German History
Pre World War 1
Declarations of War – A Time line:
• 28 June 1914: Assassination of Archduke Franz Ferdinand of Austria in

Sarajevo by a Serbian national.
• 25 July mobilization in Russia & Russian Support for Serbia.
• 28 July Austro-Hungarian Emprie declared war on Serbia.
• 1 August: Germany to declare War on Russia.
• 1 August: Russia urged its Triple Entente ally France to open up a second
front in the west.
• 3 August: France to mobilize  Germany declared war on France.
• Germany then invaded neutral Belgium and Luxembourg before moving
towards France from the north.
• 4 August: United Kingdom to declare war on Germany.
• …
210
9. German History
World War 1
War from 1914 to 1918
Two (mulit) front war
Trench warfare in the West
East: Treaty of Brest-Litovsk was a peace treaty signed on 3 March 1918 (Lenin
and Russian Soviet Federative Socialist Republic)
Entry of USA into War in 1917
Start of the end of the Ottoman Empire …
Surrender of Germany, 11th November 1918
211
9. German History
World War 1
Treaty of Versailles (1919):
Powers negotiate the terms of surrender
Germany with a high economic

burden of reparation payments
New borders & new countries

within Europe
Source: http://www.bundesheer.at/omz/grafiken/vollbild/habsburg1302.png
212
9. German History
World War 1
Consequences of Treaty of Versailles:
End of the Kaiserreich - Abdiction of Wilhelm II already in 1918.
Democracy with a difficult start in Germany  Delegation to participate in the

negotiations of the Treaty of Versailles.
Civil war-like scenes in parts of Germany.
First constitutional assembly of the new parliament in the city of Weimar (so
called Weimar Republic).
Slow stabilization of the situation in the 1920‘ies.
213
9. German History
Weimar Republic
Situation after WW1 politically:
Difficult start for the democrathy - period of the so called „Weimar Republic“
1920‘ies a time of hyperiflation in Germany (reparations, …)
Economic problems, unemployment and surge of extremist parties (left and right
wing)
Destabilization of Democrathy also through Great Depression (1929)
Fundamental and Structural Economic Problems and high unemployment in the

country.
214
9. German History
Weimar Republic
Surge of the NSDAP (National Socialist Party):
Governments changing frequently in Germany during Weimar Republic (16

Governments in 14 years).
NSDAP winning more and more elections and establishing strong own structures.
Election of 1933 – NSDAP as the great winner
 Adolf Hitler becoming Chancellor (Reichskanzler)
 Transforming the country and abolishing democratic structures step-by-step.
 1936: Olympic Games in Germany
 1938: Reichskristallnacht – Systematic Actions against Jewish citizens.

215
9. German History
Adolf Hitler
Biography:
• Adolf Hitler was born on 20 April 1889 in the small Austrian town of Braunau
• At the age of 15, he failed his exams and was told to repeat the year but he
left without a formal education instead.
• At the age of 18, he moved to Vienna with money inherited after his father's
death in 1903, in order to pursue a career in art, as this was his best subject at
school. However his applications for both the Vienna Academy of Art and the
School of Architecture were rejected.
• It was supposedly at this time that Hitler first became interested in politics and
how the masses could be made to respond to certain themes. He was
particularly impressed with the anti-Semitic, nationalist Christian-Socialist
party.
Source: Vgl. http://www.history.co.uk/biographies/adolf-hitler
216
9. German History
Adolf Hitler
Biography:
• During the First World War he volunteered to fight for the German Army and
gained the rank of corporal, earning accolades as a dispatch-runner. He won
several awards for bravery, including the Iron Cross First Class.
• In 1919, Hitler attended his first meeting of the German Workers' party, an
anti-Semitic, nationalist group.
• It soon became clear that people were joining the party just to see Hitler make
his speeches, which would leave the audience in a state of near hysteria and
willing to do whatever he suggested.
• He quickly rose through the ranks and, by 1921, was the leader of the re-
named National Socialist German Workers' Party (Nazi).
Source: http://www.history.co.uk/biographies/adolf-hitler
217
9. German History
Adolf Hitler
Biography:
• On 8 and 9 November 1923, Hitler staged the Nazi Beer Hall Putsch. He
hoped to force the Bavarian government to work with the Nazis and march
together on Berlin. The attempt failed but, although Hitler was tried for treason,
the judge gave him a very light sentence.
• While in prison, Hitler wrote 'Mein Kampf', which formulated his political ideas.
He reorganised his party on his release from jail, but it was not until the world
depression hit Germany that the Nazis were able to attract significant
followers.
• By 1930, the Nazis were polling around 6.5 million votes. In the presidential
elections of 1932, Hitler came second. On 30 January 1933, President
Hindenburg was forced to appoint Hitler as Chancellor, given his popular
support.
Source: http://www.history.co.uk/biographies/adolf-hitler
218
9. German History
Third Reich
Germany starts to strenghten its military capacities after 1933 (despite the
regulations of Treaty of Versailles)
Axis Powers (Italy – Mussolini; Germany and Japan)
First Concentration Camps in Germany (mainly for opposition and Jewish people)
1938: Munich Aggreement – Attempt to save peace in Europe? (Permitting Nazi

Germany to annex portions of Czechoslovak Republic, the so called
Sudentenland)
1938: Annexing Austria & Invasion to Czechoslovakia – Integrating parts of

Czechoslovakia to Germany.
219
9. German History
Third Reich
Jews in Germany: Nazi anti-Jewish policy functioned on two primary levels: legal
measures to expel the Jews from society and strip them of their rights and
property while simultaneously engaging in campaigns of incitement, abuse, terror
and violence of varying proportions. There was one goal: to make the Jews leave
Germany.
Increasing discrimination & taking more and more action against Jewish citizens.
… boycott, disappropriations, occupational bans, wearing yellow badges (david

jew star) …
 Holocaust: Leading the genocide of Jewish people in Europe

 Approx. 6 mn. Jewish Casualties
 Systematic killing of people through „industrial“ structures
Source: http://www.yadvashem.org/yv/en/holocaust/about/01/persecution.asp
220
9. German History
Das Konzentrationslager KZ
Source: http://www.br.de/nachrichten/inhalt/kriegsende-1945-befreiung-konzentrationslager-schock-100.html, http://www.spiegel.de/panorama/justiz/ermittler-sind-50-frueheren-

aufsehern-des-kz-auschwitz-auf-der-spur-a-892902.html http://www.swr.de/swr1/rp/programm/kz-hinzert-im-hunsrueck-alle-schlimmen-dinge-passierten-dort/- 221
/id=446640/did=14957198/nid=446640/184angr/index.html http://bergen-belsen.stiftung-ng.de/de/geschichte/konzentrationslager.html?tx_sng%5Bimg%5D=9
http://www.bpb.de/cache/images/1/155661-st-original.jpg?DC6CC
9. German History
World War 2
1. September 1939: Start of World War 2
German troops invading Poland
Declarations of War
Poland falls after 5 weeks
Initially „Cold War“ in the West – 1940 France …
… (France, Africa, Russia, Japan enter war, USA …)
222
9. German History
World War 2
Territories under German

Ocupancy 43 – 45
Devastation of vast parts of

Europe!
Estimated 60 mn. Casualties

during WW2.

223
9. German History
World War 2
20th July 1944: Attempt of German Resistance to kill Adolf Hitler (von
Stauffenberg)
Multiple attempts to kill Hitler
Resistance: Scholl – LMU Munich, …
30th April 1945: Suicide of Adolf Hitler in Berlin
8th May 1945: Unconditional Surrender of Nazi Germany – End of WW2 in

Europe
224
9. German History
World War 2 - Impact
Source: http://bilder.bild.de/fotos/blick-ueber-das-zerstoerte-dresden-1945-43463933-39749848/Bild/3.bild.jpg &http://www.dresden01.de/wp-content/uploads/2008/02/feb4.jpg

225
9. German History
World War 2
Potsdam Conference:
Infrastructure especially
In the cities and industrial
Regions destroyed
Refugees esp. from former

Eastern German Provinces
(e.g. Eastern Prussia,
Silesia, Czechoslovak
Republic, …)
Source: https://www.hdg.de/lemo/img_hd/bestand/objekte/nachkriegsjahre/besatzungszonen_karte_1987-03-061.jpg
226
9. German History
World War 2
Status of Berlin:
Berlin with Sectors

of all 4 victor powers.
Russian Troops conquered

Berlin during the last days
of WW2
Source: https://www.hdg.de/lemo/img/galeriebilder/nachkriegsjahre/besatzungszonen-postleitzahlen_karte_H-1998-04-0005.jpg
227
9. German History
Post War History
Division of Germany
Russia & Eastern Germany
West Occupation Areas

managed by USA,
UK and France
Berlin also as a divided city

(Berlin Blockade)
 East-West-Conflict
Source: https://www.hdg.de/lemo/img_hd/bestand/objekte/nachkriegsjahre/besatzungszonen_karte_1987-03-061.jpg
228
9. German History
Post War History
Eastern Germany:
Under the influence of the Soviet Union

Reparations to the Soviet Union
Rebuilding activities also in the East
Establishing a socialist system in the East
 Birth of the German Democratic Republic on 7th October 1949
Source: http://www.bpb.de/politik/grundfragen/deutsche-demokratie/39421/wappen-flagge-und-hymne
229
9. German History
Eastern German Scenario
Source: http://www.diercke.de/content/bundesrepublik-deutschlandddr-bis-1990-978-3-14-100800-5-83-8-1
230
9. German History
Rebuilding GDR and building a socialist system:
 Reparations towards Soviet Union
Source: http://www.bpb.de/geschichte/deutsche-geschichte/marshallplan/40082/rezeption-durch-ddr-publikum &

231
9. German History
Establishing a Socialist System in the GDR:
Economic Planning according to 5-Years Plans

Focus on Public Enterprises
Part of the Warsaw Pact
SED – Socialist Unity Party
The East German Mark
…
 Central Problem: Huge Migration towards Western Germany!
232
9. German History
Source: http://www.derzwickauer.de/trabant601_universal_de_luxe_1966.jpg & http://www.mdr.de/damals/archiv/plattenbau124_v-variantBig16x9_w-576_zc-915c23fa.jpg?version=14665

233
9. German History
Post War History
Western Germany:
Bulding new structures (basic law being formulated)

Marshall Plan being discussed vs. Morgenthau Plan
1948: Währungsreform birth of the Deutsche Mark
Rebuilding Germany and integrating German refugees
Building new democratic structures and first elections in 1949
 Federal Republic of Germany was born on 24th May 1949

 2 Germanies (East and West) as a reality
 Integrating Federal Republic of Germany into the Western Block (European
Community, NATO, G-7, …)
Source: http://www.bpb.de/politik/grundfragen/deutsche-demokratie/39421/wappen-flagge-und-hymne
234
9. German History
Post War History
Economic Miracle of Western German Economy:
Massive aid from the USA for Europe through Marshall Plan
Economic Growth surges in Germany
Rebuilding the Country
Economic Stimulous through Korea War in the 50‘ies
Strengthening Democratic Structures
 Start of European Integration

 Friendship with France (The Élysée Treaty –
Charles de Gaulle and Konraad Andenauer)
Source: http://www.dw.com/en/50-years-of-franco-german-friendship/av-16549326
235
9. German History
New Currency
Source: http://www.sueddeutsche.de/geld/waehrungsreform-wunder-ueber-nacht-1.213544-7 & http://www.geschichtsatlas.de/~ga4/tmp37.bmp &

http://www1.wdr.de/stichtag/stichtag7590.html 236
9. German History
Post War History
Das Wirtschaftswunder:
Rebuilding Infrastructure in Germany

Rebuilding Industry
1955: 1 Million VW Beatle Produced
Chancellor Adenauer and Economic Minister Ludwig Erhard (Social Market
Economy)
Deutsche Mark as Currency and symbol for Economic Miracle
Inviting Migrant Workers (from Southern Europe, Turkey)
Standard of Life increasing …
237
9. German History
Wirtschaftswunder
Source: http://www.thomas-edler.de/hauptstuhl/h_fotos/h_wandel/im%20Wandel.htm & http://media1.faz.net/ppmedia/aktuell/398979574/1.2282807/default/ein-mann-ein-versprechen-

auch.jpg & https://img4.picload.org/image/piraarr/vwkaferfamilienausflug0001.jpg 238
9. German History
Wirtschaftswunder
Source: http://www.wirtschaftswundermuseum.de/mediapool/82/820701/resources/big_11178065_0_443-431.jpg & http://web.ard.de/themenwoche_2010/wp-

content/files_mf/128870856320101102_essensmode1_d.jpg & http://tackerfilm.de/shop/img/filecache/a2b565a9d57f82e1b1cee935b4edb4f3.jpg 239
9. German History
Wirtschaftswunder
Source: http://ernst-may-gesellschaft.de/fileadmin/Redakteure/Seiten%20Anlagen/Werkverzeichnis/1954-1970/Neue%20Vahr%201961%20650x400.jpg &

http://www.shz.de/regionales/themen/zwischen-fluechtlingselend-und-fresswelle-id951721.html 240
9. German History
Wirtschaftswunder
Source: http://i.auto-bild.de/ir_img/3/3/9/0/9/6/BMW-Isetta-729x486-60e43e7eca529a6a.jpg & http://www.planet-

wissen.de/geschichte/deutsche_geschichte/wirtschaftswunder/introwunderkaefergjpg100~_v-ARDAustauschformat.jpg 241
9. German History
Post War History
East – West – Conflict : The two Germanies
Western Germanies economy prospering also through Marshall Plan Aid and
Eastern German economy with less growth.
 Heavy Migration from East to West leading to the closure of the border,
especially after 1953
 13. August 1961 – Building the Berlin Wall
 Approx. 3,8 mn. Left GDR before 1989
242
9. German History
Building the Wall
Source: http://www.fr-online.de/image/view/2686644,1206264,highRes,Mauerbau+%2528media_692497%2529.jpg
243
9. German History
Building the Wall
Source: http://polpix.sueddeutsche.com/polopoly_fs/1.2205494.1415174713!/httpImage/image.jpg_gen/derivatives/860x860/image.jpg
244
9. German History
Building the Wall
Source: http://www.grenzlandmuseum-swinmark.de/48701/48727.html
245
9. German History
1968
68‘er Generation in Germany:
Context:
• War in Vietnam
• Cold War
• Massive Nuclear Threat
• Assassination of Martin Luther King
• Prague Spring
• Flower Power and Woodstock
• The Beatles in India
• …
246
9. German History
1968
68‘er Generation in Germany:
Context in Western Germany:

• Economic Miracle after World War 2
• Rising Standard of Living
• Youth is questioning the role of the partents during the Nazi Regime
• Youth is questioning the system itself
• Youth is questioning old hierarchies
 Massive Students Protests at Universities (Reforming the System 

Participation of Students for decisions at Universities introduced)
 Red Army Fraction – far-left militant group to fight the system in Western
Germany (from the 70‘ies onwards)
 Conflicts between youth and establishment
 Grand Coalition in Germany
247
9. German History
1968
68‘er Generation in Germany

(Protests, new forms of individuality,
Conflict of generations)
Source: http://www.dhm.de/archiv/ausstellungen/erf/raum/erstesog/alltagbrd/bild114.htm, http://www.deutschlandfunk.de/1968-als-

erinnerungsort.1148.de.html?dram:article_id=179864
248
9. German History
Post 1968, the 70ies and 80ies
Germany after 1968:
Society was actively analyzing the Third Reich

Flat Hierarchies
Green Party in Germany
Questioning of Nuclear Power Generation
Environmental Protection (Green Technologies)
Civil Rights and Individual Freedom
Reforming Higher Educational Institutions
…
249
9. German History
Post 1968, the 70ies and 80ies
Germany after 1968:
• Oil Price Crisis

• Chancellor Schmidt
• Chancellor Kohl
• Green Party establishes
• Kraftwerk & Techno
• …
250
9. German History
German Reunification
Cold War and changing political framework
Glasnost and Perestroika in the Soviet Union
Helmuth Kohl (German Chancellor) seeing possibilities for a reunification.
2 + 4 talks (East and West Germany + UK, France, USA and Russia)
People in Eastern German prostesting against the system and wanting

reunification.
1989: Opening of the frontier  collapse of the old system in the GDR
1991: Reunification of Germany
251
9. German History
Building Berlin Wall:

https://www.youtube.com/watch?v=MIk9ij8h19w
Monday Demonstrations:
https://www.youtube.com/watch?v=DTBnOoBEJP0
Open Border and Hof:

https://www.youtube.com/watch?v=OiS9n_GUYxw
252
9. German History
Source: http://www.taz.de/picture/89397/948/plaue_gerli.jpg
253
9. German History
Source: https://www.wir-waren-so-frei.de/index.php/Detail/Object/Show/object_id/6680/set_id/434
254
9. German History
Source: http://www.prag.diplo.de/Vertretung/prag/cs/02/Das__Palais__Lobkowicz/botschaftsfluechtlinge.html?offset=12 & http://www.bpb.de/politik/hintergrund-

aktuell/69294/prag-30-september-1989-29-09-2009
255
9. German History
Source: http://www.friedlicherevolution.de/fileadmin/user_upload/comarevolution/blog/frontpicture/KB_Prag_30_09_klein.jpg
6http://www.br.de/franken/inhalt/zeitgeschichte/botschaftsfluechtlinge-100~_v-img__3__4__xl_-f4c197f4ebda83c772171de6efadd3b29843089f.jpg?version=d1819
256
9. German History
Source: http://www.frankenpost.de/storage/pic/abfall/hupautomatik-alt-1/358226_1_fpvb_grenzoeffnung2_200508.jpg?version=1309785604
257
9. German History
Source: http://media0.faz.net/ppmedia/aktuell/86635893/1.3250790/article_multimedia_overview/trabi-stau-an-der-deutsch.jpg &

http://www.tvo.de/storage/thumbs/520x292c/r:1416244190/122783.jpg
258
9. German History
Source: https://www.frankenpost.de/lokal/kulmbach/kl/fp+25+jahre+grenz%F6ffnung./Zahltag-fuer-Zehntausende;art3969,3717751
259
9. German History
Source: http://static.panoramio.com/photos/medium/61437572.jpg
260
9. German History
Reunification and the Economy:
Socialist Plan Economy in the East and

Social Market Economy of the West being merged
Eastern German companies turn out not to be competitive in the new framework.
Eastern Germanies companies belong to the state  massive privatization
Privatization handled through the Treuhandanstalt (which over night became one
of the world‘s largest employers!)
Massive structural change in Eastern Germany.
Politicians talk about „blooming landscapes“ to emerge in Eastern Germany –

reality for many people is different.
261
9. German History
Source: http://de.statista.com/statistik/daten/studie/249689/umfrage/vergleich-von-west-und-ostdeutschland-vor-der-wiedervereinigung/ - CAMPUS LICENCE

262
9. German History
Reunification and the Economy:
Huge monetary transfers from West to East.
Massive structural aid.
 Rising unemployment in the East, Migration of many young people to the more
prosperous regions of the West.
 Eastern German Firms overtaken by West German or foreign companies.
 Eastern Germany losing its company headquarters  enlarged workbench for

the West as one of the citiques.
 Capacity Building in the Economy and Administration with experts from the
West.
263
9. German History
Treuhandanstalt
The Treuhand trust was created in the summer of 1990 to take control of
previously state-owned East German companies waiting in line to be integrated
into the new unified nation.
Their number totalled 12,000, and collectively they employed four million people.
Such are the figures that will forever be associated with the Treuhand agency, but
behind them there are human dramas, stories of success and a dramatic attempt
to turn a national economy inside out.
Source and for further information: http://www.dw.com/en/treuhand-took-the-heat-

for-privatization-of-east-german-economy/a-5985015
264
9. German History
Treuhandanstalt
It soon became apparent that the strength of the GDR economy had been
gravely overestimated.
Monetary and social union put the value of the East and West currencies on the
same level overnight, although the latter was worth four times as much.
Jan Priewe of Berlin's University of Applied Sciences (HTW) believes that move,
which was purely political, but which saw wages of 1,000 East marks become
wages of 1,000 West marks, was the beginning of the end of the GDR economy.

265
9. German History
Treuhandanstalt
"Measured against company productivity, it was too much, but measured against
prices in unified Germany, it was too little," Priewe said, adding that there was
worse to come when wages were subsequently increased in GDR companies.
It meant their products were overpriced and unpopular with consumers, which in
turn ultimately led to vast-scale bankruptcy and company closures. Within a very
few months, the gross national product in the East had fallen by one third.

266
9. German History
Treuhandanstalt
Despite serious efforts to sell companies, the economic situation in eastern

Germany made it impossible to find buyers.
The only way the Treuhand agency could off-load the massive state holding
companies that dotted the landscape was to sell them at subsidized prices.
Eager to get rid of what it was holding, the Treuhand was easy prey for hustlers.
Countless small and medium-sized companies fell into the hands of dubious
profiteers, and there was talk of a "GDR clearance sale."

267
9. German History
Treuhandanstalt
The transition from socialism to capitalism in East Germany has proved to be a

highly demanding task for politicians and businessmen and a major challenge to
the adaptive capacities of the administrative system.
The Treuhandanstalt, the Federal agency established as institutional trustee

(Trust Agency, or THA), was at the centre of this historical transformation
process.
This quasi-non-governmental organization was set up by a government order of

the penultimate Council of Ministers of the German Democratic Republic (GDR)
and, on 1 March 1990, it took over the entire nationalized economy of East
Germany.
268
9. German History
Treuhandanstalt
Thus it started to operate before the economic integration of the former socialist
system into the West German market economy was set in motion and made
irreversible with the Treaty on Monetary, Economic and Social Union of 18 May
1990.
At the time of its establishment, the THA was said to be the world's largest
industrial enterprise. It owned approximately 45 000 permanent establishments,
which belonged to some 8500 industrial enterprises with approximately 4 million
employees.
Source and for further information: http://www.politik.uni-

osnabrueck.de/POLSYS/Archive/Treuhandanstalt.htm
269
9. German History
German Reunification – The status quo so far:
Source: http://mauerfall.insuedthueringen.de/fileadmin/user_upload/titelbild/2-einig-vogtland.jpg
270
9. German History
German Reunification – The status quo so far:
25 years after reunification still regional disparities between East and West (but
also between North and South).
Standard of Living and Salaries becoming more and more equal.
Good infrastructure, environment recovered, …
271
9. German History
Hof and German Reunification
After WW2 – Hof had lost its traditional hinterland of Saxony and Thuringia.
Hof as a comparatively highly industrialized region now „at the end of the world“.
Frontiering with Eastern Germany and Czech Republic & one of the bigger
German cities being directly located at the frontier.
New Structural Aid schemes came up.
Hof and Hochfranken with Textile and Porcellain Industries.
1980‘ies: These industries came under preassure (structural change)
1989: Sudden Fall of the Iron Curtain
Consequence: Huge Wage Differencials within a few kilometers!

272
9. German History
East German flocking-in to the Region.
Emotional Scenes to be observed.
Many observeres were expecting a good future for the economy of the region.
But: Weakened indsutrial basis due to the structural change process which had
already started.
And: Investments went straight to Eastern Germany or Eastern Europe not

anymore to Hof, as subsidies in the East were higher and wages lower.
 Massive structural change and adjustment processes (textile and porcellain

almost disappeared)
 Region with the need to grow on own capacities.

273
9. German History
Hochfranken today is number 3 in the European Union regarding density of

industry per capita.
Structural change process is over - new structures appeared.
Region with SMEs, Mittelstand and Hidden Champions.
Further information (in German only): http://www.hochfranken.org/
274
9. German History
Mödlareuth – an example of a divided village around Hof.
Source: http://moedlareuth.de/geschichte.html
275
9. German History
276
9. German History
277
9. German History
278
9. German History
279
9. German History
Integration of Eastern European Economies:
Massive Structural Change Processes also in Czech Republic, Poland, Slovakia,

etc. in Central / Eastern Europe.
Change from Socialist Models and Planned Economies to Market Economies.
Countries have joined European Union.
Still regional, but diminishing, disparities between East and West in the EU.
Also huge disparities among the old members (Portugal and Czech Republic with
equeal indicators in terms of GDP)
280
9. German History
Situation today: Hof in the Heart of Europe
Sister Cities: Plauen and Cheb
Member of the Euregion Egrensis and Metropolregion Nürnberg
Reactivation of the train connection Hof – Aš (Czech Republic)
Hof as a logistics Hub with crossing High Ways (A9, A 93, A 72)
281
9. German History
Source; http://euregio-egrensis.org/pictures/dc50e49c1e92d3208e3de6adf87a0359.jpg & http://www.oberpfalzbahn.de/__we_thumbs__/987_9_LinienplanOPB2015-12alsjpg.jpg &

http://www.stadt-hof.de/hof/hof_deu/rathaus/partnerschaften.html& https://www.google.de/maps/search/hof+im+herzen+europas/@50.5590945,10.8256915,5.84z 282

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Facts about Germany

Prof. Dr. Daniel Werner

• Structured Knowledge on Germany in various Dimensions

• Information on German Educational System and Labour Market

• Cross Cultural Issues

• Exploring topics on international trade, comparative advantages and interrelations

• Understanding current Mega Trends and their implications on a Company

Largest City and number of Inhabitants?

Capital City of Bavaria?

No. Inhabitants Frankfurt?

Germany is the _ largest Economy in the World?

In terms of size, which country is larger, Germany or France?

Name of German President?

Ruling party(ies) in Germany – Federal Government.

Name of former German Capital City?

How many times is India larger than Germany?

Number of Federal States in Germany?

Please name five German companies!

Most important ressources?

Video https://www.youtube.com/watch?v=lwYoQzO4qpI + just check it out yourself!

• Adidas, Puma, Bosch, SAP, …

• Bayer, BASF, Siemens, …

• Precision, Punctuality, Quality, Costly?

… in the heart of Europe!

Mittelstand and Economy

Official Name: Federal Republic of Germany

Source: http://www.germany.info/Vertretung/usa/en/04__W__t__G/06/01__Quick__Facts/__Quick__Facts.html & http://www.bpb.de/politik/grundfragen/deutsche-

German Native Speakers in:

• further small „Islands“ like in Romania, Poland, Namibia, Brazil, …

Germanic Language Family Tree:

 What about Indo-European or Indo-German Heritage?

Minoritiy Languages in Germany:

• e.g. Danish Community

• Languages Spoken in Germany due to Migration, like Turkish …

Split per Nation

Source: Vgl. http://www.germany.info/Vertretung/usa/en/06__Foreign__Policy__State/04__Political__System/02__Basic__Law/__Basic__Law.html

Source: Vgl. http://www.germany.info/Vertretung/usa/en/06__Foreign__Policy__State/04__Political__System/02__Basic__Law/__Basic__Law.html

Votes in the Bundesrat

Source: Bundeszentrale für Politische Bildung

Berlin (Federal Capital City)

The Federal Government in Berlin is responsible for

Central government’s area of responsibility is mainly limited to legislation, in

Source: Vgl. https://www.tatsachen-ueber-deutschland.de/en/federal-state#background-page-11

Source: Bundeszentrale für Politische Bildung

• FDP – The Liberals

 List of Political Parties:

An alliance of parties is the general rule.

Current Bundesregierung – Grand Coalition of CDU/CSU and SPD.

Source: Vgl. https://www.tatsachen-ueber-deutschland.de/en/federal-state#background-page-11

Next scheduled elections

Source: Bundeszentrale für Politische Bildung

Head of State of the Federal Republic of Germany.

Tasks: Representation (also abroad)

 President can dismiss the government and dissolve

Source: http://www.bild.de/politik/inland/deutsche-bundespraesidenten/von-heuss-bis-gauck-die-riege-der-bundespraesidenten-48750958.bild.html +http://www.heute.de/zuspruch-und-

From Elementary School to

VET (Vocational Education Training Programmes:

Duration: 2 – 3 Years according to the dual model (theory and practice).

Dual Approach: 1 – 2 Days at a Vocational Training School (mostly public) and

Vocational Training School to understand the theoretical foundations and

Qualification Levels on the example of Craftsmen:

On par with academic

Division of Labour between

Source: http://www.germany.info/Vertretung/usa/en/04WtG/06/01QuickFacts/Quick__Facts.html & http://www.bpb.de/politik/grundfragen/deutsche-

Source: Vgl. http://www.germany.info/Vertretung/usa/en/06ForeignPolicyState/04PoliticalSystem/02BasicLaw/Basic__Law.html

Source: Vgl. http://www.germany.info/Vertretung/usa/en/06ForeignPolicyState/04PoliticalSystem/02BasicLaw/Basic__Law.html