Cross Cultural Group Presentation Essay

What is important about Germany? Germany is an industry leader in areas such as automobiles and healthcare, to name a few. With globalization and reducing trade boundaries Germany has in fact become a trade partner for many Indian firms. Thus understanding business etiquettes, culture and protocol will supplement international businessmen and enhance cross cultural negotiation. The Rational German: Based on research findings, Germany’s geographical location and history have had a substantial effect on its culture and thus on the way that Germans negotiate. Some historical events helps us understand more about Germany, its people and the effects on negotiations: Pre-Unification Era: Before Charles V formed Prussia, Germany was largely comprised of small princely states (similar to India) in conflict with each other over resources. This brought upon the Germans a constant state of uncertainty and continuous battle. This however also made the Germans tough and seasoned negotiators. Unification & Prussia: This era was also responsible to developing many traits of the German culture which are insightful for deriving value out of a negotiation. With the formation of Prussia came – economic stability, growth and social structure. Germans preferred the certainty of an economically stable state and developed a keen sense of hierarchy. As the German state began to develop – so did the socio-political structure. Germans thus over the years formed very bureaucratic agencies of governance through methodical planning and reason. World Wars: Both the world wars left Germany crippled. However, Hitler’s action made certain that Germany would have to heavily rely on diplomatic relations before considering the use military force. It also made Germans develop a sense of fairness when dealing with people from other cultural backgrounds. Points to Ponder: Now that we understand where German people come from, we think it’s essential to shed some light on the salient features of the culture and how they impact a negotiation: Business Relationship: Germans traditionally believe in building trust over a period of time. This is usually an outcome of dependability, analytical thinking and intellect. Germans, unlike Indians, enter negotiations with a sense of trust. This is important from an Indian point of view as ability to generate and maximize value from a negotiation takes place over a long period of time. Interestingly enough trying to establish rapport in a hurried manner may arouse suspicion from a German counterpart. Trust one built, goes a long way in a business relationship, as Germans tend to be wary of uncertainty. Hence it is important to think strategically in long term and develop a mutually beneficial relationship from the start. One of the easiest ways to establish credibility with a German during a negotiation is to rely on a third party who has already established a level of trust and dependence on the German side. Displaying authority on the subject matter at hand, by professional qualifications will let the negotiating party earn respect in the eyes of their German counterparts, thus providing an upper hand will negotiating. Even though Germans are reserved and formal in nature, it’s possible to build long lasting relationships with them. A sure indicator of a relationship in the making is when a German decides to tell you embarrassing stories about himself. However it’s best not to repeat the stories to others as Germans tend to very proud people and can get hurt very easily. They also might expect you to be equally candid once the relationship has been built. During negotiations Germans tend to give more air time to the person who they think is technically sound in that matter. Hence it’s often a great idea to have your degrees printed out on the visiting card in order to establish a sense of authority when negotiating with them. Also Germans have a grounded belief that the workers in their country are better than the most the world and its best not to challenge this assumption. Business Communication: Although German is the official language of the country most of the business people speak British English. Most of the younger generation is well travelled and is fluent in business conversation. It is advisable to talk in short, complete sentences and in a slow firm voice to keep any negotiation without bringing in confusion. Germans tend to very direct in their communications and sometimes this can be misunderstood as being rude. Being very direct Germans dislike vague statements and diplomacy during any formal business discussions including negotiations. In fact too much diplomacy is likely to confuse a German. They will ask explanations, but is it possible that a German will walk out of a negotiation if the deal is unacceptable and/ or against company policy. It is also possible that a blunt â€Å"NO† can come your way, without substantial explanations. Germans tend to use body language very sparingly. Excessive use of body language may confuse your German counterpart. This can be an obstacle, especially during group negotiations as it will be difficult to judge the direction of the negotiation. Facial expression although limited can act as an indicator to judge if the proposal you have put forth has been liked or disliked. Maintaining eye contact is very crucial when talking to any German and is considered as a sign of trust and sincerity. This eye contact can border on staring. The American OK sign, with thumb and index finger forming a circle, is an obscene gesture in Germany, as is putting the thumb between index and middle finger in a fist. These should be strictly avoided. Initial Meeting Following are some of the points which should be noted when starting a negotiation: * â€Å"Shall we start with business† – will be used often as a conversation starter and is not considered rude in the German context. * Meetings need to be scheduled at least a week in advance and should not be cancelled at a short notice * There has to be reasonable explanation given when arriving late for a meeting and this is taken very negatively. * Planning is crucial when negotiating with Germans as it is very probable that they will be well prepared in any negotiation. Negotiating with Germans Style and Attitude of Negotiating: Unlike Indians, Germans believe in arriving at a win-win proposition. They tend to start negotiating respecting the other party and with a sense of trust, which they expect to be reciprocated. Interestingly, except for dispute resolution, any form a negotiation for a German is a joint problem solving activity rather and they expect both the parties to be involved equally in arriving at the solution. Many a times, a German would concentrate on dwelling over the technical aspects of a solution before entering the negotiation. Although co-operative in nature Germans may be unwilling to compromise completely unless this is their only option. While negotiating it is advisable to avoid open confrontation but remain calm, friendly and persistent. In case of a dispute resolution, one might try to find common ground by providing logical arguments based on data. Since many German negotiators will be thorough in their planning and data collection before the negotiation, it is sensible to have the same level of preparedness when you’re the opposite party. Many a times, during the negotiation a German might want to have additional data about certain aspects of the negotiation, which will help them analyze the solution better. Refusing to provide that data may reflect as lack of trust. Germans would prefer if data sharing was open and transparent and would not hesitate to reciprocate in the same manner. Germans are slow negotiators. The meticulous planning and data collection done before hand results in a very rigid and structured negotiation approach. Thus Germans would prefer going into sequential negotiating – debating each singular point, rather than packaging certain issues. This compartmentalized approach can be detrimental towards value maximization. Hence Germans find it difficult to negotiate with people from the south asia and middle east. At such times it is advisable to clearly state which objectives are linked and interdependent. Bargaining Traditionally Germans do not like the idea of bargaining and consider negotiation as a necessary evil. Business people do not give drastic concessions in this country so when if the bargaining stage in the negotiation is long drawn the variance in the final price would be not very far away from the original price. Even though German people may not agree, they tend to be aggressive during negotiations. These outcomes are more likely to be based on negotiation strategy developed during planning the negotiation. Threats, warnings and walkouts may be occasionally used. In this case it’s better to open with an offer which is already a part of your estimated ZOPA. Extreme offers can upset a German. Germans many a times employ defensive tactics such as blocking, asking probing or direct questions, or keeping a rigid position. Opening with written offers and introducing written terms and conditions may be effective as this will allow for proper preparation and could help shorten the b argaining process. Germans will likely find both benefits desirable. Corruption and bribery are very rare in Germany. It is strongly advisable to stay away from giving gifts of significant value or making offers that could be read as bribery. With Germans one must be careful when using pressure tactics such as applying time pressure, making expiring offers, or nibbling. Germans may consider these inappropriate unless they are strongly interested in your offer and clearly understand the logic behind the approach. Otherwise, while the negotiation is not necessarily over, it may become less constructive. Decision Making Germans tend to respect hierarchy because it helps maintain an element of control, not because they believe that bosses are better managers. So more than often when a German states that a decision during a negotiation is not within his authority, it would help to provide him with more data and information to get the approval from his immediate superiors. Decision making is a well planned and executed process in Germany and hence takes substantial amount of time. Patience is required to see the decision through and once made is very unlikely to change. Agreements and Contracts Both agreements and contracts in Germany tend to be legally binding unless stated otherwise. It is always advisable to consult a legal advisor before signing any contract to understand its process. These contracts (once signed) are usually dependable and considered binding. Once signed any amendment to the agreement or contract can be meet with serious opposition. Surprisingly German love for punctuality is often not extended towards contract drafting – as they would prefer to have everything in writing. References: * http://books.google.co.in/books?id=0b6DChPi0UUC&pg=PA60&lpg=PA60&dq=why+are+germans+logical+?&source=bl&ots=UAyhMKCScy&sig=3Nxe8sfCspiubwZel99itdZ3QxI&hl=en&sa=X&ei=OZfUUK6bHY_rrQevl4CQDg&ved=0CGcQ6AEwCTgK#v=onepage&q=why%20are%20germans%20logical%20%3F&f=false * http://www.german-business-etiquette.com/22-successful-negotiations.html