3. Busiess practice

Germany’s powerful economy has been in the doldrums since the 1990s. Restrictive labor laws and high taxes made Germany an unwelcome place for foreign investment. Unemployment has remained relatively high. Many observers believe that Germans are unwilling to allow their industry the flexibility to compete in the global market.

German manufacturing has a reputation for high quality, which German consumers demand. Most Germans get at least six weeks of paid vacation per year, plus numerous paid holidays and sick days with partial pay.

In business matters, Germans do not like the unexpected. Sudden changes—even if they may improve the outcome—are unwelcome.

Good working relationships can be easily formed, but be careful not to lapse into over-familiarity. Formality is important in office dealings, and endearments and diminutives - using the short form of someone's name - are not acceptable.

A visiting person should respect the hierarchy: never split or undermine superiors in German organizations, and do not bypass people by going higher to complain or search for decisions. Propose constructive alternatives rather than offering criticism. Differences of opinion are best dealt with in face-to-face discussions rather than via a third party or on paper.

Appointments. Appointments should be made well in advance. Give at least one week’s notice for an appointment made by telephone. If at all possible always confirm appointments in writing. Nowhere in the world is punctuality more important than in Germany. Be on time for every appointment, whether for business or social engagements. Arriving just four or five minutes late can be insulting to a German executive, especially if you are in a subordinate position.

Meetings in Germany are used to implement planning, brief participants and agree decisions. The pace may be slow if technical issues are presented in detail, and the agenda will be followed in order. The discussion will seek consensus and common ground, reliable partners and long-term profit. Jokes to lighten the atmosphere are not generally appreciated in meetings.

Whether you know German or use your own language, speak in complete sentences. Germans are in the habit of listening for the end of a sentence and can be annoyed if it doesn't materialize. The person who speaks the most softly in a meeting usually is the person who has the most authority.

Appropriate topics of conversation include hobbies, soccer, the places you have traveled in Germany, and the duration of your stay. Topics to avoid include World War II and personal questions. Avoid asking personal questions of a German executive. If a businessperson wants you to know if he or she is married or has children, he or she will find a way to communicate this to you. Family life is kept separate from work in Germany.

During a business meeting, expect the doors to be closed. Be sure to walk to your contact’s left. By doing so, you will be giving the person a position of respect. Sit down only after you have been offered a seat.

When writing the date, Germans write the day first, then the month, then the year (e.g., December 3, 2010, is written 3.12.10 or 3/12/10).

Working hours in Germany tend to be from 8am to 5pm or 5.30pm. Do not schedule appointments on Friday afternoons; some offices close by 2:00 or 3:00 p.m. on Fridays. Many people take long vacations during July, August, and December, so check first to see if your counterpart will be available. Also be aware that little work gets done during regional festivals, such as the Oktoberfest or the three-day Carnival before Lent. In the former East Germany, businesses did not usually schedule appointments on Wednesdays. This has been changing since reunification.

Time is money in the minds of most German businessmen, and generally speaking at a business meeting they will want to get down to the heart of the discussion quickly. A certain amount of small talk is in order, but is best kept until the end of the meeting, When you are presenting to a German audience, they will expect to hear the full technical details of your idea. They prefer logical arguments rather than emotionally persistent type of proposals and the content is more important for them than body language. They also look for well worked-out proposals, with evidence that it has been tried or piloted successfully elsewhere. They feel perfectly capable of making up their own minds on the evidence presented. The attention span in German meetings is usually long - up to an hour. They will ask detailed questions and expect in-depth answers. They also have a great respect for the truth as they see it, and this may lead them to appear unusually outspoken at times.

Negotiating. Data, data, data: Germans depend upon objective facts. Emotional involvement is unacceptable in negotiations. Once a position is decided upon, Germans rarely budge, which gives them the reputation for being tough negotiators. A strong faith in their social democratic ideology influences Germans' perceptions of the truth.

The pace of German corporate decision-making is methodical—much slower than in the United States or Great Britain. The decision-making process in German firms can be a mystery to outsiders. In addition to the official chain of command, German companies often have a parallel “hidden” series of advisers and decision-makers. The approval of this informal “kitchen cabinet” is mandatory. Directness is appreciated. Germans may bluntly criticize your product or your company; do not take it personally. Germans can not hype and exaggeration. Be sure you can back up your claims with lots of data. Case studies and examples are highly regarded.

The German reputation for quality is based (in part) on slow, methodical planning. Every aspect of the deal you propose will be pored over by various executives. Do not anticipate being able to speed up this process. This slowness extends through all business affairs. Germans believe that it takes time to do a job properly.

Many of German negotiators view being forced to compromise as a personal failure. As some observers have noted, “Germans come in expecting 110 percent. They might settle for just 100 percent.”

The Civil Code declares contracts even non-written contracts legal, for example, in situations such as purchase, rent, booking a journey etc. Written contracts are serious matters in Germany and tend to be lengthy. Legal aspects may be reviewed repeatedly. In most German companies, only high-ranking managers have signature authority. 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. German law makes offers binding unless otherwise noted. It is best to mark your offers with ‘good until…’ or to add a ‘subject to change’ clause.

Germans also take a lot of time to establish a close business relationship. Their apparent coldness at the beginning will vanish over time. Once they get to know you, Germans are quite gregarious.

Even if the German executives speak your language, all promotional materials and instruction manuals should be translated into German. Germans smile to indicate affection. They generally do not smile in the course of business, either at customers or at coworkers. Compliments tend to embarrass Germans; they expect to neither give nor receive them.

Without intending to be impolite, Germans tend to be more direct when it comes to expressing views or making statements and will expect the same from you. Therefore be careful not to use typical English sentences like - we may be able to deliver - when what you really mean is - there is no way we can deliver. Your counterpart will only understand that you can deliver.

For example: when an English contact once said “we 11 go away and think about it”. The German delegation were horrified because they thought that that meant they had been "dismissed" and that it spelt the end of the negotiations. Always remember that if your contact is speaking English, this is not their mother tongue - you should always summarise meetings at the end in order to avoid any misunderstandings.