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Comparative Analysis of the German and American Business Cultures

As a soon to be graduate holding bachelor degrees in both Management Information Systems and German, I recently began to ponder in more detail how exactly my degrees would work together in my career. How could my understanding of the German culture work along side my knowledge of business processes and information systems? After studying a semester in Germany and working on several international project groups the answer to this question was very clear. My understanding of the German culture not only assisted me in understanding my German Mitarbeitern, but also my French, Spanish, Polish, etc. associates. Although one could write unending volumes on the analysis, integration, history, etc. of cultures, it is my intent to write about that which I know the most about; the German and American business cultures.

As previously stated, I had the opportunity during the Spring and Summer semesters of 2005 to study at the Fachhochschule Augsburg in Augsburg, Bavaria, Germany – about forty-five minutes north-west of Munich. Additionally, during the Summer of 2003 I had the opportunity to study at the Universität Klagenfurt in Klagenfurt, Austria. During my two terms in the German-speaking world I would have the chance to work on several international project groups including a market research team for SBS Technologies and a team devising a marketing plan for the Estonian Tourism Board in Germany. I also would attend an intense weeklong study of the marketing tactics of Pago, an Austrian premium juice brand based in Klagenfurt, and a series of lectures intended for German business students on the subject of management. Also, as previously stated, I have studied the German language and culture at The University of Alabama since the Fall of 2002 taking a semester long advanced course on the German business culture. On the American side of the cultural divide, I have studied business since the Fall of 2002 at The University of Alabama working on an untold number of American project groups and have worked for, at varying positions, two large American firms, Target and Deloitte, and one smaller American firm, Huntsville Hospital in Huntsville, Alabama. These and other rich and diverse experiences along with the assistance of two remarkable sources, Geert and Gert Jan Hofstede’s Cultures and Organization: Software of the Mind and Patrick LeMont Schmidt’s Die Amerikanische und die Deutsche Wirtschaftskultur im Vergleich, in my opinion qualify me to speak on the subject of the American and German business cultures.

The fall of the Iron Curtain in the early nineties and the technological advances prevalent during that decade brought with them the hope of relative global peace and expanded economic prosperity for not only the developed world but also the less-developed and developing world. Sadly, the nineties and early two-thousands were marked by conflicts between major world cultures, brought to a focal point for the American people during the attacks on New York and the nation’s capital in the later part of 2001. The events of the most recent two decades have brought to light the need for peoples, nations, organizations, and businesses to understand and successfully integrate and cooperate with cultures foreign to one’s own.

The American and German cultures can, from a distance, seem very similar. In fact, the two cultures have had several periods of major interactions, which has resulted in both cultures borrowing tendencies and traditions from the other. In the United States, around fifteen percent of the population can trace their ancestry to Germany or the former Germanic regions of Europe. The German influence on American culture can be seen in the many American traditions and institutions rooted in German culture, such as Christmas trees, gingerbread cookies, and the organization and structure of the American education system and military (both based on Prussian traditions from the eighteenth and nineteenth centuries). The German culture was greatly influenced by the American culture in the post-second world war period of the fifties and sixties. Modern German music and film all display heavy American influences. Additionally, the German Lust for cigarettes and soda, more specifically Marlboro and Coca-Cola, can all be attributed to American cultural influences.

With the numerous similarities between the two cultures how could complexities and misunderstandings between the two cultures arise? Scientists have noted that humans are most afraid of things that look mostly like them but with marked differences. For example, a gorilla walking upright like a human, a clown with exaggerated human facial features, and a humanoid robot with lifeless human attributes, all cause emotions of fear to arise in the majority of people. The same precept holds true to cultures. The German and American cultures seem completely compatible with only superficial cosmetic differences until suddenly a situation arises where the two cultures diverge and polar opposite responses to the situation are displayed. This is when culture shock occurs and misunderstandings and detrimental conflicts between the two cultures are born.

The first step in analyzing and, eventually, understanding the American and German cultures is to overcome the stereotypes and prejudices associated with these two cultures. The United States and Germany have both been heavily active in the international political scene since the mid eighteen hundreds. The two nations have been on opposing sides in both world wars and, although cooperative during the cold war era, are once again at opposing sides in the Middle East, especially when Israel and Iraq are in play. These conflicts have resulted in years of governmental propaganda, on both sides of the Atlantic, vilifying and degrading the opposing culture. Because of this propaganda and short interactions between Germans and Americans via tourism and business, strong stereotypes have developed. Generally, these stereotypes are brash generalizations about the opposing culture or over-exaggerations of a misunderstood cultural tradition (e.g. all Germans wear Lederhosen and eat Weißwurst or all Americans are fat and eat at McDonalds at every meal).

After overcoming stereotypes, the second step in analyzing and coming to fully understand a culture is to know a culture’s key measurements. The main factors used to measure cultures come from the research carried out by Geert Hofstede on cultural information collected globally from IBM’s employees in the seventies. The key cultural measurements used by Hofstede are: power distance, individualism verses collectivism, masculinity verses femininity, and avoidance of uncertainty. By measuring these four factors one can determine, generally, how an organization or individual from a particular culture will react to certain situations. One can also better understand how people from this culture think and what values they hold most dear. With these measurements in mind, firms can better manage and interact with peoples of cultures different from one’s own.

Power distance is the measurement of the relationship between management and employees and how employees deal with the realization that power is unequally dispersed. Both Germany and the United States have low power distance scores, meaning fewer supervisory personnel, a favoritism towards decentralization, and that subordinates expect to be consulted by management about important decisions. Presently, the German and American cultures share a tendency towards smaller power distances; however, recent trends have seen power distances in the United States increasing, which could lead towards cultural differences in this area in the near future.

A second cultural measurement developed by Hofstede is a culture’s tendency towards individualism or collectivism. In individualistic cultures, loyalty to an organization is only provided so long as it is favorable towards one’s self-interest (thus mobility between occupations and firms is high) and the individualistic self is celebrated and encouraged. Both the German and American cultures are individualistic; however, the German culture is much less individualistic than the American (the American culture is the most individualistic in the world). The effects of the disparity between the individualism of the American and German business cultures can best be seen in people attitudes towards occupational mobility. In the American business culture it is acceptable to give a “two-weeks notice” before quitting a job and moving to a new position with another firm. In Germany, one would be expected to give at least several months notice and assist the firm in finding one’s replacement. Additionally, an American would have no problem with breaking from the group’s position publicly, where a German would rarely break from the group’s position, as they had collectively come to the decision. Another great example of the difference between the two cultures is each culture’s response to accepting praise. In the American culture, each individual would take responsibility for a section of the problem as to individually receive the praise for that section. In the German culture, individuals would work as a group to solve the problem and would collectively take the praise for the solution.

Masculinity verses femininity measures a culture’s tendency towards assertiveness and aggressiveness verses modesty and passiveness. Both Germany and the United States score moderately masculine on this measurement. This means that both cultures favor larger organizations, decisive and aggressive management, and that both cultures increase job satisfaction through job content rather then through additional social contact or cooperation. Although ranked similar on masculinity verses femininity, the German and American business cultures do display some marked differences. Germans display a feministic tendency towards desiring more leisure time over increased wealth. Americans tend to live for working (the idea that the “business of America is business”), an extremely masculine tendency. On the measurement of the acceptability of women in the workplace Americans tend more feminine with a higher share of women in the workplace whereas Germans lean towards masculinity with fewer women in the workplace. Masculinity verses femininity is a great example of how the American and German business cultures are very similar and yet strikedly different in key aspects.

The fourth measurement of a culture developed by Hofstede is the measurement of a culture’s avoidance of uncertainty, or how a culture deals with the fact that life is uncertain and no one can know for a fact what will happen in the future. On this measurement Germany scores moderately high and the United States scores moderately low. Culturally this means Germans are more inclined towards rules, whether they actually work or not, and prefer employees that are experts and offer technical solutions. Opposingly, Americans favor employees who are generalist and use common sense to come to their conclusions and have a weaker inclination towards making unneeded, dysfunctional rules. The Germans cope with their need to avoid uncertainty by placing a high value on punctuality. In the pocket in front of each seat in a German train a Zugbegleiter is placed marking the exact time the train should arrive at each station. When a train is arriving even a minute late to the station the conductor will announce the “late” arrival to the passengers with a grave tone and apologize for the Verspäterung.

In addition to the four measurements developed by Hofstede, for the American and German cultures, language also plays an important part in the development and characteristics of the two cultures. The German language, as does a majority of world languages, has two forms of the word meaning you, du and Sie. Du is used between family members, close friends, and children. Sie is used for everyone not fitting into the du category. This concept is very difficult for Americans as the American language only has one word for you. Problems arise from the different you’s when the two cultures meet in the workplace. Americans with only one concept of you treat everyone equally and are as open a close to everyone from colleagues at work, to peers, to random people on the street. To an American, the word friend means either acquaintances, colleagues, or actual friends. Germans prefer a near complete separation of the personal sphere and the professional sphere. Colleagues can work together for years and still refer to each other with Sie instead of du. Friend in German has one meaning; a friend is a individual one is close with which one can openly speak about personal issues and share intimate secrets. Germans are very confused when Americans call them friend, but remain slightly distant not share deeply personal thoughts. Americans are confused when German act very distant and seemly unfriendly at work by being very formal. Once this difference in language is realized Americans and Germans can begin to work past their linguistic differences.

Increased trade between the United States and Germany will only continue to increase into the future. To facilitate this increased economic activity, Americans and Germans must begin to overcome the long held cultural stereotypes kept by each nation and begin to learn to understand their neighbor across the ocean. Though the American and German cultures are different in many ways they share many more similarities. Americans and German should embrace these similarities and use this common ground to bridge the misunderstandings between the cultures. Once understandings are overcome the two nations can begin an era of cooperation not seen between the two countries in a very long time. It is my hope that in the near future both peoples can stand in unison in complete cultural understanding of one another.

Works Referenced
Hofstede, Geert. Cultures and Organizations: Software of the Mind. New York: McGraw-Hill, 2005.
Schmidt, Patick LeMont. Die Amerikanische und die Deutsche Wirtschaftskultur im Vergleich. Montreal: Meridian World Press, 2003.