Here are 5 cultural norms and values that prevented even a giant multinational corporation like Wal-Mart from successfully launching international operations in Germany.
With a relatively wealthy population of 82.4 million consumers, Deutschland is a leading powerhouse economy. Germany is also the world's greatest exporter.
Yet Germany may pose the strongest language, cultural and perceptual barriers to foreign businesses that want to establish global subsidiaries within the nation known for precision engineering.
If the world's largest retailer had taken the time to analyze the German mindest, it could have avoided a very painful lesson when Germans rejected Wal-Mart's American-style greeters and baggers.
An analysis of German culture based on model dimensions developed by Hofstade and Trompenaar help shed further light on German business culture demands.
Most Germans are introverts. In general, Germans have a very large and protected private space but a tiny public space as far as work goes. Most German bosses work behind closed doors, so employees have to first knock and be invited in before they can see their superiors. Note that this mindset is the exact opposite to how Americans work.
Because they are introverted, Germans are hard to get to know personally. Particularly to foreigners not adapted to Deutschland's unique culture, Germans come across as cold, distant - even abrupt and prickly.
But anyone who can break through strong language, cultural and perceptual barriers by adapting to the ways of Germany will have a friend for life. Those lucky few quickly learn that Germans are renowned for their outrageous, fun-filled parties during after-work hours.
Germans are known as masters of planning, since they prefer to follow an orderly sequence of tasks thus accomplishing one activity at a time. This way, Germans do things right on the first attempt and save time otherwise required for rework.
Germans often plan their schedules months in advance. Any foreign culture that wants to do business in Germany had better show up early for any appointment with a German executive.
Germans frown on showing emotions in public. In addition, Germans are suspicious of messages that sound too good to be true. That’s because Germans focus on logic and detailed facts.
Germany scores high in communitarianism principally because Germans prefer participating on a team.
Most Germans see business as "a group of related persons working together". In contrast, 74% of Americans see their company as a set of functions, tasks, people, machines and payments in which individuals compete. Germans strive for consensus, so that unions in Germany are much more cooperative with management than in the U.S.
In other words:
Germans do not like to take risks. That’s why Germans carefully document business details exhaustively before coming to a decision.
Any foreign multinational wishing to do business in Germany must prepare thorough documentation that explains their products and services in painful detail. And because 95% of Germans speak their native language in business, that typically requires formal translation of documents from the home country's language into German.
Besides, Germany already has its own discount retail store chains. Is it any wonder that the highly closed German culture rejected Wal-Mart and its American-style greeters and baggers?