German Business Culture
Trade Intelligence from Geert Hofstede’s Cultural Model on Germany
While 74% of U.S. bosses view corporations as a set of machines, workers & tasks, 59% of German leaders see their company as a group of related persons working together.
Geert Hofstede’s cultural dimensions model helps international trade consultants understand Deutschland’s underlying norms and values that influence the distinctive way Germans conduct business.
Germany’s High Individualism Score
Germany scored 67 points on individualism, the tendency of people to look after themselves and their immediate family only. That score is 56% higher than the world average score for individualism, but 26% lower than the United States.
According to Alfons Trompenaar, United State’s high individualism arises from the fact that people in the U.S. shoulder a great deal of personal responsibility. Americans prefer to achieve goals alone and negotiate on the spot.
Trompenaar agrees that Germans place high priority on looking after themselves and their immediate family. At work, however, Germans jointly assume responsibilities and achieve goals in groups. Negotiating decisions is often referred to committees.
Trompenaar conducted a survey that asked managers from different cultures: "Do you prefer working in a group or working on your own?"
- A majority of 88% of Germans favour working in a group over solo efforts.
- In contrast, 58% of Americans wanted to work alone and make independent decisions.
Germany’s High Masculinity Score
Germany scored 66 points on masculinity, a cultural characteristic in which success, money and material possessions form the dominant values in society. That score is 32% higher than the world average score for masculinity, and 6% higher than the U.S.
According to Hofstede’s model, Germans place greater importance on earnings, recognition, advancement and challenge. The CIA World Fact Book points to Germany as the European Union’s largest economy, with an estimated trade surplus of US$240 billion in 2007.
- In addition, Deutschland is the world’s number one exporter and is also the world leader in mechanical engineering.
- When combined with fringe benefits, German wages are the highest in the world.
Germany’s Uncertainty Avoidance Index
Germany scored 65 points on Hofstede’s uncertainty avoidance index. This index measures the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions to avoid such risks. That score is only 2% above the world average score for uncertainty avoidance, but 41% higher than the U.S. where Americans are much more comfortable with risks associated with change.
Thanks to their need for security, Germans insist on written rules and detailed codes of conduct. Visiting Americans comment that Germany seems to have a rule for everything. For example, the civil service in Baden-W?rttemberg has a written rule that after staff members are on sick leave for six weeks, head office must send them a bouquet of flowers.
Germany’s Low Power Distance Index
Germany’s lowest score was 35 points on Hofstede’s power distance index. This index measures the extent to which less powerful members accept that power is distributed unequally in German institutions and organizations. Germany’s power distance index score is 36% below the world average score, and 14% lower than the U.S.
What this means is that Germany is a decentralized society, with relatively flatter organization structures and a comparatively smaller proportion of supervisors.
German workers are remarkably loyal to their companies. One question on Trompenaar’s survey asked whether an employee would reveal confidential company information to a close friend who otherwise would face financial ruin. Over 75% of German employees said that they would comply with their legal duty to respect company confidentiality.
References
This article presents independent calculations and insights based on geert-hofstede.com and research from International Management, Culture, Strategy and Behavior (6th edition, Hodgetts-Luthans-DOH) as well as Charles Hampden-Turner and Alfons Trompenaars’ The Seven Cultures of Capitalism.
