GERMANY
NEGOTIATION & DECISION-MAKING
 
 
 
 
 

NEGOTIATION

Negotiating
 When introductions are made it is important to exchange business cards as Germans look to these for full information about a manager as well as his or her company.  It is important to be well informed and to remember that exaggerations and feelings are not important in German negotiations, objective facts are what count.  While German companies will quickly criticize the opposing side in a negotiation, they are quite sensitive to being criticized.  Also, never interrupt a German business person as this is seen as rude and unacceptable.  Finally, a negotiator must remember that German's are not large risk takers and lack flexibility, but will make concessions when necessary to come to an agreement.
Description Of Negotiator
A good German negotiator will come to a meeting fully prepared with the facts.  The negotiator will bring all of the supporting information and data to back up his claims as Germans are "intensely analytical thinkers."  Contracts or agreements of any kind should be looked upon as quite serious commitments and if a final decision is made during the negotiation, it should be made very cautiously by upper management.  A German negotiator will remain formal throughout the presentation and look to the examples set by senior management for guidance.

 

DECISION-MAKING

Risk Tolerance
German managers are somewhat risk averse and look to the objective facts for guidance in making decisions.  To deal with this risk aversion a negotiator should bring a "carefully planned, logically organized proposal to the meeting." 
Autocratic Leadership vs. Participative Leadership
German culture bases decisions on autocratic leadership where a decision will be made by an upper level member of the hierarchical structure.  In fact, in meetings it is wise to look to senior management's actions as an example of how one should act. 
Collectivist vs. Individualistic
While German society lies in the middle between individualism and collectivism, participation within the company is typically done for the overall benefit of the organization. 
Objective Approach vs. Subjective Approach
German managers take a very objective approach to decision making. Emotions and feelings will not get any negotiator very far in the negotiation process.. 
Moral Idealism vs. Utilitarianism
Managers in Germany take a more utilitarian approach to making decisions basing their decisions on the overall good of the company. 

 

Dr. Schroeder answered the question of what makes negotiations in Germany different from other places by stating the following:

"Negotiations with (and among) Germans  can be tedious. Toys  R  Us  (Im a Shareholder) learned this when seeking to obtain sites for stores, particularly where zoning and local competition is involved. Argue probably is a more descriptive word. Negotiations continue until someone (e.g. a person in authority) makes the decision. A general  agreement or accord (i.e. a consensus) is not necessarily a requirement ."

"Younger Germans  ( i.e. Post War Baby boomers) are accustomed to hypermarkets and supermarkets. This is one reason that Toys R Us  has found that its business model has met with success."

"In spite of many differences and difficulties that U.S. firms and entrepreneurs find in doing business with  Germans and in Germany, the opportunities are many  in this nation with a population of over 80 million . Its people characteristically are industrious and prosperous, they want the best of what is available , and are willing to pay for it."

"Some of the keys to being successful in business in Germany are to think like a German, to act like a German and to be there in Germany."
 
 

Sources
Deresky, Helen. International Management: Managing Across Borders.Third Edition.Prentice Hall.2000. p116 and 189-190.
Interview with Dr. Ronald Schroeder of the Loyola University Small Business Development Center
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