Today’s post, which is partially based on materials from Dick Locke’s seminars on International Purchasing, is edited by Dick Locke, Sourcing Innovation contributor and President of Global Procurement Group.
This post is going to examine some of the cultural differences that you may encounter (as an American or Canadian Sourcing / Procurement Professional) if you are doing business with Germany. We start by discussing each of the eight key cultural considerations outlined in our introductory post and then highlight a few other points that you should be aware of.
As per our initial post, this discussion is high-level and general in nature and, as Dick Locke points out in his classic text on Global Supply Management, while it is too easy to stereotype a country, individuals in each country will vary from the stereotype. You need to take time to get to know the people you will be dealing with because their behavior may be nothing like the usual behavior of the country in which they reside and there is always a chance that you might run into people who are trained to act like you … while in your presence.
Germany, one of the most influential nations in the EU, has a very distinct culture that is simultaneously easy and hard to sum up, but if I had to try, I’d start with one of the sayings they like to hear most. Alles lief wie am Schnürchen. (Everything went like clockwork.)
- Power Distance
When discussing power distance in Germany, we need to discuss context. There is a very strong push for social equality in Germany, which makes the power distance very low. However, hierarchy is mandatory in a German company, and this often results in exaggerated deference to one’s superior or CEO.
- Uncertainty Avoidance
A core value of Germans is ordnung which roughly translates to order or system. They despise uncertainty, and, even moreso than the Japanese, will like to dive into the details again and again and again. This is a culture that will read boring, factual, serious advertisements no matter how long they are … the more facts, the better! (In comparison to Japan where the average advertisement length is a mere 15 seconds.)
Germans are highly individualistic. While they may never disagree with the group in a formal meeting, this is a result of their hierarchical corporate structure which is encumbered by manuals, systems, and extremely well defined hierarchical paths. Outside the office, you’ll likely have difficulty getting any of them into a queue. (While the Brits like their lines, Germans generally don’t. Remember the story about pedestrians waiting for a green light to cross a road that’s closed to traffic …)
- Polychronic vs. Monochronic Time
Germans are the most punctual of all peoples. It is a great offensive to even be two minutes late. You can just as easily set your watch by meetings as you can trains.
- Personal / Impersonal
Germans are a very private people who do not wish to become immediately familiar with strangers. They don’t like small talk, like to get close before greeting (so never, ever shout across a room), and reserve smiles for true friends. In a company, the boss is a very private individual who generally sits alone behind a closed door. However, they do tend to form very deep friendships, and are very personable if you reach that point.
- Buyer / Seller Rank
While the buyer is generally treated with respect, this does not necessarily imply that the buyer will receive a higher rank, as implied by a number of sources, including Hofstede and Lewis. First of all, to keep the respect, the buyer will have to follow the rules of German business. (One of those rules is always be prepared, even though they will always be more prepared than you with counter-counter-counter arguments.) Secondly, and perhaps more importantly, this is not a society where customer service gets high marks. Retail store hours are dismal compared to the rest of the world (if you fly in Friday night and forget your toothbrush, better buy it at the airport … or do without until Monday morning). Last time Mr. Locke had an outdoor business lunch, he was charged a deposit on plates and silverware!
- Importance of Harmony
While Germans are among the most frank, direct, and blunt people in the world, they also are a stickler for consensus before a decision is made. So, in a way, harmony is very important, but only in the decision itself … during the process, they may flat out disagree with each other and argue every option until every point has been considered and debated, repeatedly.
- Importance of Face
In Germany, face is important from a cultural perspective. While they may openly disagree with you, they will likely save any arguments they have between each other for private meetings. And while they will be quick to criticize you, as that’s just their way of being helpful (as they don’t want you to make mistakes or follow a sub-optimal process), they can be quite sensitive to criticism themselves (as that means they overlooked something and did a less than acceptable job; in Germany, it is expected you will always do your best). Thus, you should go to great lengths to avoid criticizing a proposal from them unless you can prove you are right, and present your argument in the logical, flowing manner that they are comfortable with. In other words, if you disagree, Beweise her oder Maul halten! (Put up or shut up!)
The most important thing to remember when attempting to do business in Germany is that, to them, business is serious. It’s not a joke (and jokes will not go over well). They have a strong belief in honest, straight-forward negotiations and expect you to have the same. This doesn’t mean that you can’t be aggressive, as long as you are open about it and can logically argue why your proposal is fair.
Finally, as I strongly recommended in my first post, if you plan to start doing business with any new international country, including Germany, you should do a thorough job on your homework. You can start with:
- Dick Locke’s course on the Basics of Smart International Procurement (which is offered through Next Level Purchasing and counts towards the SPSM2 certification or ISM Continuing Education Hours), or
- a customized seminar from Dick Locke’s Global Procurement Group. Dick Locke and his associates each have decades of experience doing business with over two dozen countries, including the fifteen biggest importers and exporters to and from the United States, and Germany. A single day with an expert like Dick Locke could save you months of headaches.
Again, a big thank you to Dick Locke for serving as editor for this special series of posts and providing some up-to-date materials and information for the purpose of this series.