Different Environment Factors And Business Practices Of Germany

Presented To Presented By

Dr. Ashutosh Mohan Abhishek Mishra

Assistant Professor Vikas Kumar

FMS BHU Shweta

Rupam

FMS BHU

Brief Introduction

• Area: 357022 km², Population: 82 million (2013).

• Density : 230 people per square kilometer.

• Federal Republic of Germany

• State: Democratic parliamentary federal democracy since 1949

• Capital city: with 3.4 million inhabitants

• National flag: Three horizontal stripes in black, red, gold

• Emblem: Stylized eagle

Berlin,

Contd…

GDP - Per capita- $45084.87

Nominal - $3.747 Trillion

PPP – $3.325 Trillion

Currency- Euro

Official Language- German

At the Trade Show

• Business Attire: German trade shows are conducted in a more formal manner than in the India. Therefore, formal business attire is appropriate.

• Business Cards: Business cards are not given out as freely in Germany as in the India. By giving the business card, the German is "granting permission" to contact him/her in the future. The business cards you collect should be treated as confidential, private property.

• Introduction: Title etiquette is sensitive in Germany. Listen carefully to which titles are used during introductions and be sure to use them, too. Germans use titles (Mr., Mrs., Dr., etc.) and last names for everyone except for closest friends who have mutually agreed to using first names.

• Shake hands hello and good-bye with everybody using a firm grip (not crushing), and making good eye contact.

Contd……

• Business Titles: German business titles are usually functional or academic (Dr.). They do not necessarily correspond to U.S. business titles.

• Qualification Prospects: Usually, very highly placed business people attend trade shows in Germany. Do not rely on the job title to indicate responsibility levels.

Negotiations

• Attitudes and Styles – To Germans, negotiating is usually a joint problem-solving process. While the buyer is in a superior position, both sides in a business deal own the responsibility to reach agreement. They may focus equally on near-term and long-term benefits. The primary negotiation style is cooperative, but people may be unwilling to agree with compromises unless it is their only option to keep the negotiation from getting stuck.

• Sharing of Information – German negotiators may spend considerable time gathering information and discussing details before the bargaining stage of a negotiation can begin. They may ask numerous questions to obtain additional information. They will not take it negatively if you ask about sensitive details, even if they may not want to answer, though they usually share at least some of their information .

• Pace of Negotiation – Expect negotiations to be slow. The methodical and carefully planned approach Germans use in preparing for the negotiation and gathering information takes considerable time, as does the effort needed to work out details of an agreement. Remain patient, control your emotions, and accept the inevitable delays.

Contd..

• Bargaining – Germans are not fond of bargaining and strongly dislike haggling. Many of them do not appreciate aggressive sales techniques and view negotiations as a ‘necessary evil’ rather than a process to enjoy. Although the bargaining stage of a negotiation can be extensive, prices rarely move by more than 15 to 25 percent between initial offers and final agreement. Business people in this country do not make concessions easily.

Contd..

Agreements and Contracts

Oral agreements and statements of intent may already be legally binding and are usually dependable, though they do not substitute for written contracts. Actions that have been agreed upon are usually implemented immediately, even if a final contract is still pending.

Written contracts are serious matters in Germany and tend to be lengthy. They often spell out very detailed terms and conditions for the core agreements as well as for many eventualities. Legal aspects may be reviewed repeatedly. Signing the contract is important not only from a legal perspective , but also as a strong confirmation of your partners’ commitment.

Communications

• Body Language: Generally, business people have a more reserved style with few broad hand gestures. At first, greater personal distance is maintained. Later, it can be surprisingly close. Touching, such as a pat on the arm or back, is restricted to intimate friends. Do not put your hands into your pockets and do leave your suit jacket on even if it is warm.

• In Writing: In all written correspondence, be sure to use the name with all titles as they appear on the business card.

• Schedules: "Punctual" in Germany means about 5 minutes early. Germans take appointments and meetings as important commitments that should not be changed lightly.

Cont….

• GesturesA polite nod accompanied by a firm handshake is a common greeting, both in a business as well as social context; eye contact is made and held during a face-to-face conversation.

• TouchingHugs and embraces are common in a social context; the occasional pat on the back may be seen in a work environment.

Business Meeting Etiquette

•Germans are still quite formal and like their hierarchies. Therefore, titles and last

names are commonly used when not knowing a person and in business relationships .

•A man should be addressed as Herr (Mr.) and woman with Frau (Mrs.) . In business

settings it is good to use the honorific plus the professional designation. In more casual

situations where the last name is unknown, titles alone (Herr and Frau) can be used.

•The primary purpose of a first meeting is to get to know one another and to evaluate

the person, to gain trust, and check the chemistry.

Contd…

•Germans usually discuss business after a few minutes of general discussion.

•Meetings adhere to strict agendas, including start and end times.

•Send company profiles, personal profiles, etc., to German colleagues before your visit to

establish credibility.

•Written or spoken presentations should be specific, factual, technical and realistic.

•Make sure your printed material is available in both English and German.

Business Meal

• Attitudes to business meals

Business entertaining usually takes place in restaurants. The Germans enjoy linking gastronomic pleasures with interesting conversation about potential business. Actual business, however, is not supposed to be conducted during lunch or dinner. Sharing a meal is intended to help establish a personal acquaintance, and is a time to enjoy good food, wine and discussion.

• Restaurant Etiquette

• Do not begin eating until the host starts or someone says “Guten Appetit” (have a nice meal).

• Do not rest your elbows on the table.

• Do not put your left hand in your lap when you eat. In fact both hands must be visible at all times.

• Indicate you have finished eating by laying your knife and fork parallel across the right side of your plate, with the fork over the knife.

• The most common toast with wine is “Zum Wohl!” and with beer is “Prost” .

Contd..

Political Analysis

• Germany is a federal parliamentary republic , and federal legislative power is vested in the Bundestag (the parliament of Germany) and the Bundesrat(the representative body of the Länder , Germany's regional states).

• The German federal state is a complex entity . It consists of a central Federal Government and 16 federal states.

• The German electoral system makes it very difficult for any one party to form a government on its own.

• This has only happened once in 56 years. Analliance of parties is the general rule.

• The Basic Law for the Federal Republic of Germany is the constitution of Germany.[4] It was formally approved on 8 May 1949,and, with the signature of the Allies of World War II on 12 May, came into effect on 23 May

• Head of State : President of Germany

• Head of Government : Chancellor of Germany

• Cabinet

Contd….

Foreign Relations

• Germany maintains a network of 229diplomatic missions abroad and holds relations with more than 190 countries.

• It is the largest contributor to the budget of the European Union (providing 27%)and third largest contributor to the United Nations (providing 8%).

• Germany is a member of the NATO deffence alliance, the Organization of Economic Co-operation and Development (OECD), the G8, the G20,the World Bank and the International Monetary Fund (IMF)

Economic Analysis

• Social Market Economy

• Largest Economy In Europe

• Average per capita among the highest among the world.

• Large portion for funding for Greece , Cyprus and more recent Ukraine

• Low unemployment rate – 5.5%

• GDP- $3.629 trillion

• GDP growth – 0.6%

Well known brands

Contd…

• Trading partners

France

Netherlands

USA

Great Britain

Exports are one third of national output.

Export goods : motors vehicles , machinery , chemicals , computers , and electronic products.

Import goods : machinery , agricultural products , data

70%1%

29%

Contribution to total GDP (%)

Service

Industry

Agriculture

Contd…

Social Analysis

• Population: 82,282,988 • Population growth rate: -0.061 %

Birth rate: 8.21 births/1000population Life Expectancy: 79 years 2nd• most populous European country Population density: 230 per sq km• Median age (male): 42.6• Median age (female): 45.2• Age Structure:0-14 years: 13.7%

15-64 years: 66.1%65 years and over: 20.3%

34%

34%

3.70%

28.30%

Religious Freedom

Protestant

Catholic

Muslims

Unaffiliated or others

Contd..

• Ethnic makeup:

Native German : 91.5 %

Turkish : 2.4%

Others : 6.1%

mainly Greek, Italian, Polish, Russian, Serbo- croatian, Spanish

Contd…

• Ethnic makeup:

Native German : 91.5 %

Turkish : 2.4%

Others : 6.1%

mainly Greek, Italian, Polish, Russian, Serbo- croatian, Spanish

Contd..

Technology Analysis

• German Reputation

• Excellent engineering and strong innovation

• 2.8% GDP share for research and development

• Plans to increase that to 3.0 % by 2015

Contd…

Automobiles

• Germany is known for its quality engineering of automobiles

• Home of three of the main premium car brands.

BMW

Mercedes

Audi

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Hofstede's CulturalDimensions

Hofstede’s Analysis

Contd..

• Environmental technologies

• Leading research and development and patents worldwide

• Also leading exports worldwide

• 17% waste and recycling technologies

• 17% water and wastewater technologies

• Global pioneer in applying renewable energies and environmental technologies

Danke