Cross-cultural Negotiation:

1
Cross-cultural Negotiation

• An Americans Guide To German Business Practices

2
Developing an Understanding of Germany

• 1. Historical Background and Cultural
  Orientation
• 2. Social and Business Protocol
• 3. Business Practices

3
History

• Germanic tribes date back to 3500 BC.
• Otto Von Bismarck united Prussia and Austria in
  the 19th century.
• In 1871, Prussian King William I crowned Kaiser,
  and modern Germany was born.
• The 20th century brought WWI and II, Nazi
  Germany, and the cold war division of East and
  West Germany.
• In 1990, East and West Germany were reunited.
• Today, Germany has one of Europes strongest
  economies, despite former East Germanys struggle
  to catch up with its western counterpart.

4
Cultural Orientation

• 1. Cognitive Styles How Germans Organize and
  Process Information
• 2. Negotiation Strategies What Germans Except as
  Evidence
• 3. Value Systems The Basis for Their Behavior

5
Cognitive Styles

• analytical and conceptual
• committed to universals of their culture
• closed to outside information and reluctant to
  share information
• friendships are difficult to develop

6
Negotiation Strategies

• Objective facts are the basis for truth.
• statistics, reports, tests
• Feelings are not accepted in negotiation.
• no gut reaction/ decision

7
Value System

• strongly individualistic but consider cultural
  history in making decisions
• slow decision-making process, unalterable
  decisions
• rules and regulations strong internal
  discipline stability and reduced uncertainty
• hierarchical society
• classes
• some biases to foreigners, refugees, East Germans
• biases to women regarding power and pay

8
Social and Business Protocol

• Dress
• Greetings and Introductions
• Titles and Forms of Address
• Gestures
• Gift Giving

9
Dress for business, parties, dinners, theatre

• MEN
• dark suites
• white shirts
• neutral color ties
• no khakis

• WOMEN
• dark suites
• white blouses

10
Greetings and Introductions

• Greetings
• Give a brief but firm handshake.
• Wait for woman to initiate handshake.
• NOTE! Do not keep one hand in your pocket while
  shaking with the other.
• Introductions
• Lower-ranking individual are always introduced
  first.
• Men stand when a woman enters a room and remain
  standing until she is seated.

11
Titles and Forms of Address

• Only close friends and family members are on a
  first name basis.
• Business colleagues are addressed Mr. or Mrs.
  surname
• Mr. Herr
• Mrs. (Ms.) Frau
• Miss Fraulein
• Professional titles are always included
• ex. Herr (or Frau) Dr. surname
• NOTE Business cards should include any degree
  above the Bachelor level.

12
Gestures

• Speak in complete sentences.
• To get someones attention raise your hand, palm
  out, and only extend your index finger.
• Never beckon.
• When sitting have one knee over the other not one
  ankle over the opposite knee.
• Eldest/Highest-ranking official enters the room
  first.
• Men enter rooms before women.
• NOTE Germans usually do not display emotion or
  affection publicly, and they tend to stand far
  apart during business negotiations.

13
Gift Giving

• Quality but not expensive gifts should be given.
• Appropriate Gifts
• quality pens, pocket calculators, and imported
  liquors
• If invited to a home, bring an unwrapped bouquet
  consisting of an odd number of flowers.
• NOTE Germans often enjoy odd facets of Americana
  such as zydeco music and cowboy novels.

14
Business Practices

• 1. Appointments
• 2. Negotiating
• 3. Business Entertaining

15
Appointments

• Punctuality BE ON TIME!!!
• Making an appointment
• via fax or telephone make it 1 to 2 weeks prior
  to meeting
• via mail make it at least one month prior to
  meeting
• Appointment times
• Mon.. through Thurs. 1100am to 100pm and 300pm
  to 500pm
• Not after 200pm or 300pm Fri. afternoons.
• July, August, and December are popular vacation
  months.
• Little work gets done during regional festivals
  such as Oktoberfest.
• NOTE Inquire about the language used during the
  negotiation. You may need a translator.

16
Negotiating

• A Germans goal is to produce a high quality
  product.

17
Prior to Negotiating

• Germans usually begin talking business
  immediately.
• If small talk occurs, some good conversation
  topics include
• sports (soccer, hiking, skiing) and German
  breweries
• Although Germans protect their privacy, they will
  open up as trust is established.
• Avoid asking personal questions in the beginning.

18
During the Negotiation

• Be prepared! Have data and technical expertise to
  support your claims.
• Avoid compliment/ complaint juxtaposition.
• Be aware of hidden series of advisors and
  decision-makers.
• Emphasize your products superiority, and
  downplay glamour.
• Germans HATE hype and exaggeration.
• Keep humor out.
• Hold some negotiable offers in reserve.
• Germans are notorious for requesting last minute
  concessions.
• Contracts are usually very detailed.
• A warranty for quality assurance is often
  included.

19
Business Entertaining

• Breakfast meetings never occur in Germany.
• Luncheons are commonplace.
• Discuss business before or after the meal but
  never during.
• Use utensils at all times.
• An invitation to someones home is a rare honor.
• Bring an appropriate gift to show your
  appreciation.

20
Quick Tips

• 1. Be punctual.
• 2. Put it in writing.
• 3. Cut out the glitz.
• 4. Respect the hierarchy.
• 5. Slow down.