German Business Culture for Entrepreneurs or Employees

Mehmet Akif Özmen | Chairperson at MHR & Partners

Germany is one of the most preferred countries for foreign entrepreneurs and talents with its attractive business opportunities. People who want to establish a company in Germany, invest in Germany, work in a German company and live in Germany should first of all know the German business culture. In order to quickly adapt to the German business world, to get successful results and to be in a safe communication and interaction, it is extremely important to get to know the German business culture closely. In this article, we discuss the most prominent features of German business culture, especially for those who want to establish a company, invest or work in a company in Germany.

German business culture is known for its strong emphasis on punctuality, efficiency, work discipline and precision. Meetings and negotiations are often formal, detail-oriented and well organised. Open and direct communication is favoured. Decision-making processes can be slow due to the search for consensus. Care is taken to maintain a work-life balance. In business life, hierarchy is respected and work is taken seriously. Respect for human dignity, fairness, loyalty, quality, professionalism, reliability and transparency are fundamental German values. In general, in the German business mentality, negotiations are conducted fairly and it is rare for agreements to be changed or broken at the last minute. Ethics, like corporate social responsibility, is at the centre of everyday German business practices. Let us now take a closer look at the characteristic features of German business culture.

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What are the Main Characteristics of German Business Culture?

Punctuality: Being punctual is extremely important in German business culture. Being late for appointments and meetings is seen as disrespect. If you think you will be late for work or a business meeting, call early to let the person you are meeting with know in advance. Any changes to appointments must be made at least one day in advance.

In Germany, punctuality is a sign of reliability and you can be judged harshly if you are late even once. We therefore strongly recommend that you arrive for any appointments earlier than the agreed time.

Open and Direct Communication: German business culture places a strong emphasis on open and direct communication. In meetings, communication is formal and employees speak to each other in a polite but effective manner. It is a common standard to wait for a person to finish speaking before speaking and to treat everyone with respect and dignity.

Germans have a direct way of speaking to each other and are not overly friendly or animated in their communication. This style can sometimes confuse foreigners. It is normal for your manager to speak to you briefly and should not be considered rude. Germans like to get the job done rather than waste a lot of time talking about something. For this reason, communication that seems short is actually very productive.

Germans care a lot about their language. They approach someone who speaks German more sincerely. Therefore, even if you do not speak German at all, starting a conversation by saying “Hello” in German in the first meeting creates an effect. In general, they are distant in the first meetings. They expect you to take the first step. Preferred topics of conversation are sports, travelling, current events, politics and the flow of work. They avoid talking about the second world war and genocide. They do not like to be asked about their private life. Asking about their salaries and income is a taboo.

Shaking hands and greetings: If you have just arrived in Germany, the safest thing to do is to shake hands strongly and confidently with every new person you meet. When shaking hands in Germany, shake hands with your right hand, but make sure that your left hand is not in your pocket. Because this can be perceived as rude. Make eye contact when shaking hands. Shaking hands is common not only in the business world but in all areas of life. Any contact other than a handshake is not considered normal.

Always greet business partners, German colleagues and customers of German origin by shaking hands and using official titles. This is particularly important when meeting for the first time, for example in a new workplace. They like to speak by adding prefixes to their surnames, such as Mr and Mrs. In German business culture it is common to maintain formalised communication even though they have been working together for many years. The first name is often preferred among family friends and close colleagues.

Work Attire: Formal dress is worn in most workplaces in Germany. Men usually wear dark suits and ties, while women wear simple trouser or skirt suits. Women generally avoid wearing expensive and flashy jewellery. Simplicity is valued. In young or emerging sector companies such as advertising agencies or new technology companies, especially those located in more cosmopolitan cities such as Berlin, it is also common to see people dress informally for work.

When going for a job interview, always opt for more formal and high quality clothing when attending a job negotiation for your company. It is definitely frowned upon to show up to your first day in trainers and casual clothes when you should be wearing a suit.

Formalities in Negotiations: Meetings and negotiations are usually formal and business attire is expected. If you are trying to offer a service or product to the German business community, make sure you justify everything you say. Germans do not appreciate flamboyant behaviour and emotional language. Make sure you have the data to prove what you claim.

Germans negotiate in a fair, open and transparent manner. Claims should be supported by data and appropriate prices should be offered or requested. Germans are not used to excessive price negotiations. They want to know clearly what a product is worth and what you want for it in order to be able to plan.

Consensus orientated: German companies place great importance on consensus in decision-making. Since it takes time to build consensus among team members and stakeholders, decision-making processes are often slow. It is important to be late, to be well thought out at once, but to be solid and lasting.

Germans always conduct business in a civilized manner, preferring to find a compromise between the two parties rather than aggressively or oppressively imposing their views on the other party.

Work – Life Balance: In German culture, private life is highly valued and there is a strict separation between private and professional life. Most offices close from Monday to Thursday at 17:00 and on Friday at 16:00. Friday afternoon appointments should not be requested. Working hours are shorter and holiday entitlements are higher than in the rest of the world.

However, Germans focus only on their work during working hours and avoid activities that distract them from their work. They do not use social media and do not talk about personal life issues. At the end of the working day, they are uncomfortable being called and written to about work. The German work ethic means that employees always go to work on time and do their work all day and are rewarded with fair pay and good working conditions.

Hierarchical Organisational culture in Germany is hierarchical and as a meritocracy, those who reach the top are to be respected as individuals who have worked hard. Most large organisations are led by a CEO or Board of Directors with a strong management team underneath. With regard to decision-making, decisions largely come from the top and employees in Germany are expected to do what they are asked to do. However, your manager gives you responsibility for a task or a project and expects everything to be done in a favourable time. He or she expects you to take the initiative and accomplish the task. When problems arise, you must provide feedback in a timely manner.

Fairness and Loyalty: Germans tend to operate fairer business practices than you may encounter in other countries and cultures. This sense of fairness includes equal pay, good working conditions and fair disciplinary practices. Employees are often loyal to their employers and share their desire to create high-quality products and provide reliable services.

German companies also reward loyalty to both their employees and their customers. A business in Germany is likely to choose the same customer for many years, taking advantage of the benefits offered by loyalty rather than continually seeking cheaper services elsewhere.

German businesses tend to focus on building long-term relationships with customers, suppliers, employees and partners.

Diversity, Equality and Respect for Human Dignity: The first article of the German Constitution begins: “The honour and dignity of man is inviolable. All state power is obliged to respect and protect it.”

Article 3 continues as follows: “All human beings are equal before the law. Men and women have equal rights. The State shall encourage the realisation of the equality of men and women and shall endeavour to remedy any disadvantages. No one shall be victimised and no one shall be privileged on account of sex, ancestry, race, language, nationality and origin, creed, religion or political opinion. No one shall be victimised because of disability or handicap.”

In Germany, there tend to be more women on boards of directors than in most other countries. In 2015, government guidelines were issued recommending that at least 30 per cent of non-executive boards should be female. This improved gender balance tends to translate into a more nuanced and people-centred approach to problem solving and less oppressive or authoritarian practices.

Quality: German businesses are known for their high quality products and services and place great emphasis on quality control. Everyone in Germany wants every job, big or small, to be completed optimally, on time and with high satisfaction for the end consumer. Germans attach great importance to the quality of their products and services. Therefore, if you want to work for a German company or do business with a German company, you must take your work very seriously and not compromise on quality.

Productivity: German businesses value efficiency and productivity and aim to minimise waste and inefficiency. One of the main characteristics of German business culture is the early start of the day. People set off for work at 6:00 in the morning.

Precision: Attention to detail is highly valued in German business culture. Decisions are usually made after good research, meticulous information gathering and careful deliberation.

Transparency: Transparency is very important in a German company. This means that corruption is rare. Giving compliments and gifts to get you a good deal is frowned upon. They do not like it when you try to buy their preferences.

When doing business in Germany, you need to obey the law and carefully avoid unregistered transactions. Tax justice is one of the most sensitive issues.