Negotiating Trade Deals in Germany
Action Plan to Maximize Results from German Trade Partners
Apr 21, 2008
Multinational executives must carefully plan each step of the negotiation process in Germany.
Below are 10 tips that will help improve results when bargaining with German counterparts.
1. Adapt to German Mindset
Group consensus and teamwork are deeply important in Deutschland. Germans believe that if you serve your customers and society to the best of your ability, then you will automatically achieve your own personal goals. In contrast, an individualistic culture like America purports that concentrating on self-interest automatically leads to serving customers and society better.
Respecting the German perspective and adapting one’s communication style to meet those distinct needs goes a long way in breaking down perceptual and cultural barriers that defeat about 70% of international trade deals with prospective German partners.
2. Only the Most Senior and Qualified Should Negotiate in Germany
Authority is an essential component of the hierarchical corporate culture in Germany. German workers are conditioned to following orders from above, so it is imperative that German negotiators understand a foreign executive’s title and rank in relation to their own. An American negotiation team can improve its chances of success by sending its top executives with the most seniority to deal with German representatives.
3. Formal Education Counts
Education in Germany stresses applied sciences and engineering, so that a doctorate in mechanical or chemical engineering is more revered than a Masters degree in Business Administration (MBA). Germans see the latter as more of a North American generalist discipline. Therefore, sending a senior aerospace engineer to represent American interests in Frankfurt will garner more respect than a brilliant young programmer fresh out of Harvard Business School.
4. Schedule Meetings Weeks in Advance
Germans often plan every minute of their working day months ahead of time. Out of respect, foreign negotiators should schedule meetings with their German counterparts at least three weeks in advance.
5. Be on Time for Meetings
Because they are master planners, Germans are prompt and are insulted by anyone rude enough to show up late. Germans also dislike people who arrive for business meetings too early since this shows that the visitors have not planned their day well enough.
6. Prepare Detailed Agenda and Minutes
Partly because of an aversion to risk, Germans insist on detailed documentation to back up their decisions. Consequently, foreign negotiators should provide a well-organized, detailed agenda that leads logically to desired conclusions. After a meeting, the German audience also appreciates detailed minutes that document discussions, issues and action items.
7. Organize Written Documentation
Documentation presented to a German audience should include a detailed table of contents with headings and subheadings clearly numbered. An index is also appreciated. Below is an example from a German technical communications workbook:
Topic 3: Communication Strategies
3.2 Strategies of Arguments
3.2.1 Logic and Reason
3.2.2 Character and Credentials
3.2.3 Emotions
3.2.4 Selecting a Strategy
8. Carefully Select Examples
German communication is direct and precise, and does not accept verbosity or repetition. When providing case studies to illustrate a position, negotiators should carefully select one or two of the strongest and easily visualized examples for each point.
9. Respect the Native Language
While most German executives can communicate in English, German is the primary language for 95% of the population. As a courtesy, international negotiators should ask whether a native German translator is required. Another tactic is to have business cards printed in German or as bilingual cards, with the foreign business person’s title and academic degrees listed.
10. Be Formal and Serious
Germans expect their visitors to dress formally and conservatively, which traditionally means a dark suit. At meetings, visitors will be told where to sit since each seating place signifies rank and status. Foreign executives must maintain eye contact and stick to business at hand. German executives must be addressed by their titles, for example Herr Doktor Baumgarten, and never by their first names unless invited.
Where the visitors have scheduled a return trip home and negotiations are dragging out, the foreign negotiators can ask for a group decision that will enable them to plan the next level of discussions. By acting like German planners, the negotiators may well get maximum results from their German partners.
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