Abstract

Germans place great importance on this stage of the project planning cycle. Plans and budgets
are developed with a high degree of accuracy and in great detail. There is a widespread opinion
that the work will be easier for everyone if there is a clear plan, and the work itself will be more
effective. In Germany, it is believed that goal-oriented activity is only possible with such an
approach, and not constantly patching holes and reacting to problems that continually arise.
Only then is it possible to work without interference, realizing ones creative potential. In
Germany organization structure is relatively flat but companies tend to have a strictly
hierarchical approach within which individuals specific roles and responsibilities are tightly
defined and compartmentalized. There are less hierarchical differences among workers,
supervisor and management executives. This is highly task oriented country where division of
labor and job specialization are highly practiced in manufacturing firm. Teamwork in Germany
is required less supervision because of highly specialized job. German companies prefer
recruiting from among the more practically educated graduates from the senior technical
colleges and the MBAs specializing in management because they are considered to be better
prepared for jobs as specialists. Training and development is company specific in Germany.
Because of strong labor law and high bargaining power of unions, it is hard to make layoff in
Germany. Leadership behavior in Germany is now characterized by high scores on charisma,
inspiration, intelligence, consideration and contingency. Styles consisting of attributes such as
management by exception and laissez-faire were ranked lowest of all attributes and odd all
researched countries. To some extent German leadership had positive sides like: being reliable,
being punctual, and being knowledgeable about own work, highly committed, and taking
decisions. Germany considers transformational leadership, team orientation, and participation
as desirable and important attributes of good leaders. In case of Controlling, German firms still
need a more pragmatic approach in this most important function of management. German
management education has less focus on people and controlling function of management.

1. Planning Practices in Germany

Management planning is the process of assessing an organization's goals and creating a
realistic, detailed plan of action for meeting those goals. Much like writing a business plan, a
management plan takes into consideration short- and long-term corporate strategies. The basic
steps in the management planning process involve creating a road map that outlines each task
the company must accomplish to meet its overall objectives. This planning procedure, although
a common function in management process, might differ significantly across countries
(McQuerrey, 2016).
Germans place great importance on this stage of the project cycle. Plans and budgets are
developed with a high degree of accuracy and in great detail. There is a widespread opinion
that the work will be easier for everyone if there is a clear plan, and the work itself will be more
effective. In Germany, it is believed that goal-oriented activity is only possible with such an
approach, and not constantly patching holes and reacting to problems that continually arise.
Only then is it possible to work without interference, realizing one's creative potential. German
planning have following steps.
1.1 Defining Goals and identifying Recourses
The first step of the management planning process is to identify specific company goals. This
portion of the planning process should include a detailed overview of each goal, including the
reason for its selection and the anticipated outcomes of goal-related projects (Chimoriya,
2013). Germans like to set straightforward and detailed goals. They think it helps everyone
understand exactly what are expected from them. Where possible, objectives are described in
quantitative or qualitative terms. Each goal should have financial and human resources
projections associated with its completion. In Germany, at this phase, all participants of the
project group receive their jobs/tasks and prepare their own proposals for the project as part of
that job.
At this stage, project discussions are often long and multi- phased. The purpose of such
discussions is to arrive at a complete and comprehensive understanding of the essence of the
problem which has brought the new project to life, of the corresponding goals and tasks,
establishing connections between tasks and sub-tasks and the parts of the project corresponding
to them. The planning phase is considered successful and the plan a quality one if it doesn't
need to be changed during the course of the project (Kavalchuk, 2012).
1.2 Assignment of tasks and the work process
The assignment of tasks and the identification of individual steps to perform assignments
happen openly at a meeting of project team members dedicated to this issue. Project
participants take on individual assignments which match their qualifications and interests. The
role of project manager at this stage primarily consists in formulating assignments and
evaluating the match between team member qualifications and the duties they have taken on.
Disputes and discussions are possible both between specialists of the same hierarchical level
and between managers and subordinates. The certainty that success can be determined and
guaranteed reigns in a German team. Each project participant usually works alone, based on
2

their own experience and knowledge, being guided by directives that have been discussed in
advance and agreed upon together. Qualities that are particularly valued in project work are
independence and individual responsibility, as well as the strict fulfilment of agreements.
German project colleagues are not pleased by constantly changing approaches to work, plans,
or deadlines. Such individual responsibility and independence has nothing to do with working
for one's self, without paying attention to the project as a whole or the interests of the common
cause. At German enterprises and organizations, if one of the team members is absent, his tasks
and authorities are transferred to other members of the project group. The team spirit
presupposes that the project goes forward even if some of the members go on holiday, quit, fall
ill, etc. Such an organization of the work process would be impossible if individual project
participants were to only focus on their specific tasks, without knowing what their colleagues
were doing, or wouldn't participate in joint discussions and consultations.
1.3 Contingency Planning
The quality of products and services, effective processes and optimal conditions all of this can
be only achieved, from the German perspective, if each mistake, any oversight, not to mention
a major problem, is subjected to serious analysis. Such analysis is understood to mean, first of
all, a careful study of the causes of the problem, determining who was responsible and only
then seeking options to resolve the problem. Problems give rise to a clearly expressed need to
figure out their causes, not so much with the purpose of identifying the guilty parties and
punishing them, as to prevent such complications within the project for the future, in other
projects and in related areas.
German colleagues do not understand the situational and empirical approach to problemsolving that prevails in many countries and it is equally impossible to understand a lack of
desire to carefully work through the details of a project and plan its implementation. This is
why such an approach is often perceived by Germans as evidence of irresponsibility,
thoughtlessness, inability to anticipate and insufficient attention towards preventing such
problems from occurring in the future. That is why German colleagues spend so much time on
careful planning, so they can identify potential problems during the initial stage and thereby
attempt to prevent them, minimize sources of error, defects, etc. The principle of '100% error
reduction' in production rules in most German companies.
Thus, if we summaries the most important features of the German approach to problem solving,
we get the following picture.
German partners prefer to act comprehensively because they believe that only
comprehensive and systematic decisions make it possible to prevent problems or, at least,
to minimize them.
The problem-solving algorithm is worked out in great detail, in other words, it is clearly
prescribed when, by whom, how and by which means, steps should be taken, and which
specific steps are expected from team participants when they solve the problem.
An integral part of project preparation lies in the formulation of criteria for evaluating the
outcome and determining milestones. There is always a carefully worked out plan and a
backup plan in case the first plan doesn't work.
3

 Such a plan does have its weaknesses, as the process of identifying and taking a decision
takes time, which in some situations may be counterproductive. There is little ability to
improvise during project implementation. Carefully following the plan decreases
sensitivity to signals of a changing business environment and does not always make it
possible to take advantage of new opportunities (Kavalchuk, 2012).
1.4 Information and Communication in Planning Stage
German project channels for sharing information among project participants are usually
provided for fine-tuned. For example, frequent information meetings are integrated in the
process, which considerably reduces the need for spontaneous contact. Time- and moneysaving communication channels that make it possible to quickly and efficiently discuss current
issues are widely used, such as group e-mails or telephone and video conferences.
There are two principles peculiar to information sharing in German project teams: the 'duty to
collect' and 'duty to deliver'. This means that each project employee is obligated to provide his
colleagues proactively with any information relating to their duties and tasks. On the other
hand, he has the right to ask for the information he needs from any colleague. And he is sure
to get a response.
Activity at meetings and conferences is high and all project participants are expected to make
a constructive contribution to the discussion process. Silence and passive attendance of a team
meeting are seen as lack of motivation or knowledge of the subject. Project members with
expert status speak longer than other meeting participants. Regardless of their status and
position in the hierarchy outside of the project team, each member is entitled to openly express
his or her opinion and criticism.
Germans preserve, or attempt to preserve, most of the approaches described above when
working on international projects. If foreign partners come from a relationship-oriented and
primarily polychromic culture, then it is very difficult to avoid misunderstandings and
conflicts. The sources of these misunderstandings can be found in cross-cultural differences in
organizing the project process, internal communication, information sharing, the understanding
of professionalism and trustworthiness, in the manager's role, in the features of communication
style, and also in different strategies for resolving problem or conflict situations.
The Project, German style even more unpleasant conclusions, for example, that their foreign
partners do not follow rules or observe agreements, do not express their opinion directly and
honestly, are capable of questioning decisions that have already been made, do not show
enough zeal in their work and are not interested in the common cause.

2. Organizing Practices in Germany

2.1. Business Structure
The members of the supervisory board share responsibility for the overall management of the
company and this means that the chairman of a company has considerably less personal power
than in certain other countries management at the top could be said to be collegiate. However
below management level, companies tend to have a strictly hierarchical approach within which
individual's specific roles and responsibilities are tightly defined and compartmentalized. This
results in a methodical approach to most business issues where procedures and adherence to
well-defined rules are respected.
2.2. Organizations Orientation
In any culture, there are always two aspects between two individuals in any relationship: the
form and the substance of that relationship, or in the terminology of cross-cultural management,
people orientation and task orientation. In Germany, most of the power in German companies
is vested in the hands of a few senior managers. Larger companies have a Supervisory Board
which appoints the Management Board. The management board is the final decision-maker on
policy matters which affect management.
In Germany, on the contrary, the content aspects and task orientation are the focus of attention,
i.e., in the professional world the emphasis is clearly on business relations. Having said this,
the task is understood to be the aim of activity and what is most important of all in this context,
for example, finances or equipment, logistics or prices, compliance with leg- isolation or
quality issues.
When working with German partners someone may encounter at every step verbal displays of
the German goal- orientation concerning work, with such expressions as let's get down to
work, let's get back to work, and don't get distracted, etc. This also means that small talk,
poetic digressions and ways of strengthening contacts, by extended informal events such as
long feasts are often perceived by German counterparts as a waste of time.
A few important principles of German business culture follow from an understanding of the
employees' role in achieving the objectives and tasks. First of all, it is important to assign the
right people to key positions. Second, subordinates need to be involved in the decision-making
process. They need to be made stakeholders, not just made to feel like people who carry out
decisions. Third, business calls for discussions, including those between supervisors and
subordinates, where the subordinates are able to criticize and reject managements proposals.
2.3. Organization Hierarchy
The relation of works to staffs differs signicantly between Germany. The ratio of supervisory
staff to works, German enterprises have the lowest ratio. Managerial/supervisory staff are
considered in relation to the works component. In German enterprises there is no strong
distinction between those in supervisory/managerial positions and those with technical staff
status. Consequently, many of those in authority positions are, at the same time, technical
experts.
5

Among German manual workers, both skilled and semi-skilled, a high proportion have a
relatively high level of skill, have received all-round training and demonstrate a capacity for
self-motivation. They do not exercise union control over the allocation of tasks. German
workers carry out many supervisory tasks themselves. Hence, technical staff have a less
prominent role on the German shop oor.
German organizational structures is generally said to be at, with wide spans of control,
particularly at the supervisory level. German business organizations manage with a relatively
low overall stafng level because of the way jobs are designed and supervised. Organizational
boundaries, and formal and hierarchical coordination mechanisms are softened and
complemented by informal and professional modes of coordination.
2.4. Work Order
Germans manage to work comparatively little but still produce so many quality goods and
services. The secret is German working style is being methodical, having structure and being
systematic. Ordnung (order) is a German word that is familiar to most business people around
the world if they work with German colleagues. Many are also familiar with the German saying
Order forms one half of Life.
2.5. Team Activities
Teamwork in Germany could probably be best described as a group of individuals working to
a specific leader towards a recognizable goal. Within the team, each member has a set, welldefined role which is adhered to. Lines tend not to be crossed as this could promote confusion.
Team members are respected for their technical ability and functional knowledge and are
allowed to perform their tasks without too much supervision which can be seen as unnecessary
intrusion.
2.6. Job Classification
In Germany workers flexibility and permeable boundaries are evident due to all round training
and strongly developed internal market. Highly developed vocational education and training
ensures career ladders and homogeneity of competence and orientation at various hierarchical
levels.
In Germany, there is no union control over the allocation of tasks, and job classications are
broad and can be exibly changed through a variety of informal and formal negotiation
processes. Work has also been less specialized horizontally due to the existence of polyvalent
workers capable of carrying out a wide range of tasks. The control of work is achieved via the
standardization of skills through extensive training rather than by the standardization of
processes. Moreover, German workers have a great degree of control within their jobs, in
carrying out job tasks and through informal negotiations with supervisors.
2.7. Function Specialization
Germany, the generalist approach to education and skill formation has received no
institutionalized recognition, and additional qualications that are highly rewarded are either a
doctorate in science or engineering or alternatively, an apprenticeship. Germany has
6

traditionally exemplied a specialist approach in management education, with an emphasis on

specic knowledge and skills, especially technical ones. Most German managers are trained as
engineers, and more than a few have passed through apprenticeship training too. It is worth
mentioning that, in Germany, rst degrees in subjects such as engineering encompass
management education as an integral part of the course, which is part of the more general
tendency for technical courses to be broader-based than they are in many competitor countries.
German managers, as individuals, will often identify themselves in specialist terms as, for
instance, an export salesman, a production controller, a design engineer, a research chemist,
and so on, rather than using the general label manager. This specialism also enhances the
integrity of particular functions, and careers are formed within functions. Specialism is also
apparent in the German organizational format, with companies being agglomerations of
functions, coordinated by a thin layer of general management at the top.
2.8. Specialization and division of work
In Germany jobs are highly specialized in manufacturing firms. German firms provide firm
specific training in specialize jobs. This job specialization is highly applicable for white color
workers. Firms provide job rotation opportunities for blue color workers. Division of labor is
practiced in Germany to specialize the jobs like everywhere.
2.9. Communication Styles
German communication is weak context orientated. What are the signs of a weak connection
with a specific communicative situation? In Germany, all the aspects which are not voiced and
would require additional interpretation play a minor role.
Germany's historical development which coexistence of many states on German territory and
the absolutist form of government have led to limited life experience and views of most of the
German population. In a small state where relationships in small local communities with an
agrarian way of life were stable and fairly clear, the individual could not help but notice how
to communicate and focus attention on content alone. This is probably the source of such
peculiarities of German culture as weak context orientation in communication can be found.
Germans put truth and directness before diplomacy, believing that the fact is the important
issue and that personal emotions should not deflect the truth from being spoken. This directness
can be interpreted by certain cultures as rudeness. It should be noted, however, that direct
speaking is seen in Germany as a sign of respect and a fundamental in the search for the correct
answer to a particular problem.
The German communication style is marked by direct, unmediated communication, the
absence of subtext, undercurrent, diplomacy, double meaning, hints, etc. The German side
prefers the direct style of communication in business because it makes it possible to get right
down to business, to talk about substance and save time. It leads without fail to the objective
and protects against misapprehensions and misunderstanding, in other words it is from the
German perspective professional and businesslike. It is possible because the emphasis in

business relations is placed primarily on the task, and not on the relationship between business
partners.
To sum up and generalize communication characteristics in German business culture - it is
truly important is formulated in words and is expressed explicitly and clearly. German
discussion style implies a clear goal orientation, strict structure, and a reliance on objective,
carefully prepared and verified facts in strings of arguments with practically no emotional
component. Openness and straightforwardness are positive values in this culture. Written
communication plays a central role in German culture.
2.10. Meeting Norms
We note in particular that German partners react quite negatively to a so-called hierarchical
use of the informal address where a superior uses the informal address with those of lower
rank, while they address the superior formally. Such behavior is considered a sign of poor
breeding or as arrogance. A handshake accompanied by a light and friendly smile is the
generally accepted greeting in Germany among both men and women. The people engaging in
the greeting process exchange a direct eye contact. You shouldn't hold or shake the other
person's hand too long.
Germans attend meetings having done a considerable amount of preparation in order to help
them debate their point of view with conviction. This sense of conviction, coupled with the
often very direct nature of debate, can be mistaken by people from other cultures as
intransigence, pedanticism and even arrogance. Some people charge that German's have always
made up their minds on an issue before arriving at a meeting but this is not necessarily the case.
They just want to argue their view point thoroughly and support it with well-researched data.
People are expected to contribute to the debate when discussions touch their area of expertise
but are not necessarily expected to have an opinion on everything.
2.11. Trustworthiness
In German business culture, trustworthiness is closely related to loyalty, devotion not to certain
individuals such as manager but to the company. This means caring about the companys
reputation, identifying ones self with the product or services, being proud of belonging to the
whole such as, being part of the Volkswagen family, and a willingness to work over many
years for the company. This is why long-standing cooperation with German companies that has
stood the test of time and various trials and crises acts as a guarantee of the practically
unshakable status of a trustworthy and, therefore, irreplaceable partner.
2.12. Negotiation Style
The negotiation process is quite formal, particularly with major companies. German would like
come to the negotiations with well preparation. They also expect serious preparation from
opponents. When preparing for negotiations Germans often try to anticipate oppositions
arguments and prepare a carefully thought-out, calculated strategy of objection, or they may
offer you a backup option which is also thought-out in advance.

German business partners believe that if they prepare carefully for the negotiations, and think
through most of the aspects, their position will become sounder, logical and justified, especially
if it is supported by facts and calculations. For this reason, it is difficult for them to easily reject
their arguments or radically change their original position.
A German can be convinced only by strict logic, by figures, facts and expert opinions, in other
words, by means of information. As we have already mentioned, information should be set out
in written and/or electronic form. It should be detailed and well structured. Information should
be set out logically and the later sections should rely on, and evolve from the earlier ones. In
German business culture it is an accepted practice to segment arguments. In other words, each
participant of the delegation speaks about their specialty.

3. Staffing Practices in Germany

3.1 Recruitment and Selection
German companies emphasize the application form, interview panel and references as
recruitment methods. Recruitment is on the basis of specialist knowledge and experience,
especially in technical areas. German companies regard university graduates as good abstract
thinkers, but prefer recruiting from among the more practically educated graduates from the
senior technical colleges and the MBAs specializing in management because they are
considered to be better prepared for jobs as specialists. As mentioned above, since the German
system of initial vocational training is standardized, it is less important to test the technical
knowledge of those employees who hold such a qualication.
3.2 Training and Development
In Germany, most companies place special emphasis on the training and selection of
apprentices and management trainees as their preference for internal labor markets. Moreover,
codetermination has an impact on selection and induction, as works councils have the power
to inuence the design of selection instruments. By foreclosing ready access to the external
labor market, institutional rigidities force as well as enable rms to invest in long-term human
resource development. The German training regime is capable of obliging employers to train
more workers and afford them broader skills than required by immediate product or labor
market pressures. German rms train large numbers of apprentices and retain most of them on
completion of their training. Although such training is not rm-specic, its broad and exible
nature nevertheless makes it a valuable resource that large rms are anxious to retain. Further
exibility is acquired by more informal and rm-specic upgrading of training, which greatly
increased in volume during the 1980s, and by works councils support for the exible
utilization of core labor. Rather like the Japanese human resource system, however, the German
system of in-company training and internal promotion does not t with radical innovation
industries. Hence, Germany experiences the same problems with high-tech innovation.
3.3 Wage System
Union pressure on wage bargaining is high as for solidaristic wage policy. For that reason the
wage negotiation is highly centralized between unions and employers associations. The result
is that wage negotiations are simply structured and well-coordinated nationally since they
rarely involve more than one union. Union members are organized regardless of their skill and
occupation, and thus are industry unions. The employer associations are also structured by
industry, and negotiations are usually conducted on a state level by industry. A decentralization
of the bargaining structure has been a recent trend in Germany, with works councils assuming
more inuence over negotiations so as to better match bargaining outcomes to the economic
performance of rms, although centralized negotiations are still prevalent.
An egalitarian pay system has not been given the priority of German unions, in international
comparison the wage differentials across occupations and industries are not high, and the
differences between white- and blue-collar workers have been declining. There is a current

10

trend to pay blue-collar workers monthly salaries and to otherwise equalize the employment
conditions of blue- collar workers with those of white-collar workers.
3.4 Performance and Payment
Pay for performance is not common in Germany since the centralized collective bargaining
agreements introduce egalitarian pay scales that do not incorporate individual performance. In
Germany, managers are least likely among the different staff categories to be subject to
performance-related pay. It appears that against the background of a long standing tradition of
prot sharing as part of managerial remuneration, the use of formal performance-related pay
schemes has not found much acceptance. Moreover, because unilateral decision-making is
limited, German rms cannot easily create strong performance incentives for management. As
a result, performance rewards tend to be targeted at groups rather than at individuals. The
comparatively high uptake for some employee groups is a reection of particular collective
agreements. The collective agreement for the metal industry, for example, includes provisions
for appraisal-linked pay increases. In the past, although extrinsic rewards were less popular in
Germany, organizations had already used differential rewards and effort bonuses to reward
good performance on the shop oor. These were paid, on the recommendation of foremen, to
around 10 per cent of the workforce. The rating system was transparent. Works councils
participate in working out the system, and unions have their own REFA (Association for Work
Study) expert to help them work with such a system. From the 1990s onwards, it appears that
the ideology of individual performance related pay has had more impact on German managers.
Some rms attempted to link pay more to performance by introducing analytical job evaluation
for those exempt, by changing xed bonuses into variable ones, and by linking merit increases
and bonuses to an appraisal scheme. Works councils, however, remain critical of performancerelated pay and sometimes prevent its introduction.
3.4 Job Termination
German manufacturing rms do not have a great degree of exibility in adjusting the size of
their workforces through layoffs, subcontracting or transfers or loans to other rms. Germany
is generally believed to have the most extensive restrictions on layoffs and dismissals. Layoffs
are costly, complex, restricted by law as to required notice, and essentially must meet a just
cause test. Moreover, high employment stability is imposed on rms through collective
agreements, codetermination and legislation. While there are no formal laws stipulating longterm employment, German labor has used its power on supervisory boards, as well as its formal
consultative rights under codetermination law over training. For a major employee dislocation
like a plant closure, the German regulations contained in the Dismissal Protection Act 1951 are
among the most comprehensive among advanced nations. The works council and the regional
government must be notied 12 months prior to the nal decision to close a plant. The notice
to the works council of a staff reduction must include the reason for the layoffs, the number of
workers affected and the planned duration of the layoff. The rm and the works council then
discuss options for minimizing layoffs. The law requires employers to make every reasonable
effort to prevent layoffs through such mechanisms as retraining, work sharing and
reassignment.
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3.4 Performance Appraisal

In Germany formal performance appraisal systems remain in their infancy, although there is a
widespread use of performance related bonus arrangements. Only 25% of workers in small
firms are subject to PA. Men are more frequently appraised than women. Use of performance
appraisal in Germany varies substantially by industry sector and job type. It is most commonly
practiced in financial service companies and least common in construction and agriculture.
Generally self-evaluation methods are less common in Germany and few companies use peers
or customers as inputs to the appraisal process. Performance appraisal is generally linked in
some way to pay reviews or promotional decisions. Appraisals are primarily the responsibility
of an individuals immediate supervisor or manager. Most appraisals are conducted just once
a year, especially for those well established in their posts. But they are sometimes conducted
on a more frequent basis such as during an employees first year in post, or if they have been
performing poorly.
Studies indicate that PA has a beneficial impact on company performance. In Germany firms
with HRM practices have a higher level of productivity. Performance appraisal itself has a long
and colorful history being used extensively from earliest times to ensure that individuals and
work groups were motivated to complete tasks to a required standard and in a timely manner.
But performance appraisal is not used extensively in Germany.

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4. Leadership Practices in Germany

4.1 Overview of Leadership Practices in Germany
Germany found lower levels of transformational leadership styles among German employees.
Charismatic and inspirational leadership are less likely to be used in Germany than in other
countries. (Silverthorne, 2005).
The typical leadership behavior of German leaders is described by Scandinavian as results
oriented getting things done, hard-working, organized, reliable, very task focused and
hierarchically oriented, less open and challenging as compared with the Scandinavians who are
seen as more direct and open, more people and team oriented disregarding hierarchies.
(Brodbeck, Frese and Javidan, 2002).
According to the CEO of Allianz Group, Michael Diekmann, His leadership style was
described as direct, decisive and sensible which is shown in the restructuring process of the
Allianz transforming the German insurance company in to an international player. According
to VP HR of Anglo-Saxon Business Unit, German based International Firm, Leadership skills
in Germany are underdeveloped according to some professionals. They underestimate the value
of people leadership. They get things done, they move, solve problems. They are much more
formal and hierarchically oriented than the Scandinavians but not as direct in their
communication. (Brodbeck, Frese and Javidan, 2002)
There was a difference in the leadership styles among the retired or retiring leaders and young
leaders. The then leaders followed the hierarchy and formality in leading their subordinates.
Both of these leaders were task oriented. But during the last decade retiring leaders were being
replaced by young leaders having stronger focus on dialogue, open discussions, less attention
to the hierarchy and formality, a team-based approach, and self-leadership.
Leadership behavior in Germany is now characterized by high scores on charisma, inspiration,
intelligence, consideration and contingency. Styles consisting of attributes such as management
by exception and laissez-faire were ranked lowest of all attributes and odd all researched
countries.
Laissez-faire leaders allow subordinates to decide how to complete their tasks and projects, but
not to make organization-wide decisions. Participative leadership not only accepts
subordinates comments, ideas and suggestions, it also encourages their input on decisions and
strategies.
To some extent German leadership had positive sides like: being reliable, being punctual, and
being knowledgeable about own work, highly committed, and taking decisions. Germany
considers charismatic, transformational leadership, team orientation, and participation as
desirable and important attributes of good leaders. (Kessler and Wong-MingJi, 2009)
Germany follows transformational leadership style where the leader works with subordinates
to identify needed change, creating a vision to guide the change through inspiration, and
executing the change in tandem with committed members of a group. Charismatic leadership

13

is followed to inspire the followers to do things or to do things better, this is done by conjuring
up enthusiasm in others for a stated vision or goal.
4.2 Criterion of a Good Leader in Germany

High energetic impetus and strength in goal attainment through team work
Capability of effective communication and bargaining
Structuring and controlling complex systems
Implementing plans and attaining goals
Planning ahead and proactive towards anything that may happen
Thinking analytically and problem solving skill
Critical and realistic thinking capability during making important decisions
Broad knowledge about the specialized field where s/he has to work
Transformational and Charismatic leadership style
And persistence and stress resistance during any crisis moment

In Germany there is a clear chain of command in each department, and information and
instructions are passed down from the top. This does not mean, however, that German
management is exclusively autocratic: while the vertical structure in each department is clear,
considerable value is placed on consensus. Equally, the German striving for perfection in
systems and procedures carries with it the implication that the manager who vigorously applies
and monitors these is showing faith in a framework that has proved successful for all.
4.3 Characteristics of German Leadership Practices
German leaders are highly oriented towards performance, autonomy, and participation.
German leadership is characterized by:
4.3.1 Respecting Professional Expertise
Managers in Germany are expected to be technically capable in their respective areas and to
show strong, clear leadership. Although disagreement with a superior will rarely be seen in
public this does not mean that Germans are 'Yes' men. Subordinates tend to respect the
technical abilities of their superiors and this will impact on their willingness to implement
instructions. The interesting corollary of this is that when less technically proficient nonGermans are asked to manage a team of Germans, the non-German can sometimes be seen as
lacking the key prerequisites for developing the teams respect.
4.3.2 Task Orientation
The German leadership style, like the business culture in general, is task oriented. It does not
have room for heart-to-heart talks with subordinates and other forms of communication beyond
the work tasks. Each person does his own job: employees independently perform their tasks
within strictly defined scopes of authority, and the manager leads. In other words, he solves
strategic tasks, determines areas of competence, develops structures, and oversees the meeting
of deadlines and targets.

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4.3.3 Employee Empowerment

Subordinates need to be involved in the decision-making process, they need to be made
stakeholders, not just made to feel like people who carry out decisions (participative leadership
style), they need to be persuaded, convinced and motivated and given the freedom to act, within
the framework of strictly defined authorities, instead of being at the receiving end of top-down
orders. The ability to convince employees, to get them 'fired up' with the idea of a common
cause, and to work skilfully with staff resistant to change these leadership qualities are highly
valued in Germany. Such an attitude towards employees is also demonstrated by the motto that
can be found in many German companies: 'Empowering the people involved'
4.3.4 Hierarchical Relation
In a German enterprise the manager is a person who occupies a fairly high place in the
hierarchy, has subordinates and solves management tasks. German managers strive to create a
perfect system. There is a clear chain of command in each department and information and
instructions are passed down from the top. Nonetheless, considerable value is placed on
consensus.
4.3.5 Being Autocratic While Leading People
German people are very task oriented and they like to be autocratic during leading people. They
always try to show the hierarchical authority towards its employees. During decision making
they used to discuss with the employees but they remain autocratic in making any decision.
4.3.6 Delegation of Authority
Responsibility is expected to be delegated by the manager to the member of the team who is
technically competent to carry out a particular task. The team member then expects to be left
to perform the task without undue interference or supervision. Thus instructions need to be
clear, precise and above all unambiguous.
4.3.7 Emphasizing Rules, Routines and Control
German managers motivate staff by showing solidarity with them in following procedures.
They work long hours, obey the rules and, though expecting immediate obedience, insist on
fair play. For their part, German employees welcome close instruction: they know where they
stand and what they are expected to do.
4.3.8 Dignity of Position
People from cultures where managers are expected to develop a closer, more intimate ambience
can see the German manager-subordinate relationship as distant and cold. The higher up the
organization people rise the more a sense of the 'dignity of the position' becomes apparent.
Socializing tends to be at peer group level rather than up and down a hierarchy.

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4.4 Factors that motivate and stimulate a German employee

Incentives may be an objective evaluation of the work output with appropriate

compensation,
Extending the range of tasks solved and the professional sphere,
The possibility of career growth and accompanying increase in income,
More varied work, the opportunity to influence the decision-making process,
Additional powers and responsibility, professional development through trainings and
courses,
Supervising one's own development being responsible for one's own output,
An egalitarian, equal but not buddy-like relationship with managers.
The possibility to work by setting one's own goals,
Opportunities available for personal development,
Realization of one's own potential,

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5. Controlling Practices in Germany

In Germany, in particular, the sole major development related to controlling was the emergence
of uniformity in controlling systems. Johann Friedrich Schr published the first comprehensive
chart of accounts (Schr, 1911). Beginning in 1927, anyone learning Schmalenbachs system
readily could analyze more and more industrial companies financial records. Previously, one
had had to be familiar with the peculiar organization in every individual firm, whose books one
might want to examine. The result of course, was a marked increase in the transparency of
enterprise systems for external stakeholders. The National Socialists were especially
appreciative of this development, which facilitated their exercise of control over the German
economy. They made the adoption of such charts compulsory, particularly because the price
mechanism was not operating due to controls on prices and money.
Several of Germanys European neighbors, Japan, and the United States have taken a more
pragmatic approach. For example, in the U.S., participation of the entire management in
controlling tasks (e.g., through the employment of balanced scorecards or BSCs) appears to be
more widespread. Supporting these assertions is the fact that most new insights and impulses
for the development of controlling have come from Japanese and American scholars and
professionals. Besides the balanced scorecard, one can cite benchmarking, Kaizen-budgeting
(i.e., continuous-improvement-budgeting), perfection standards, activity-based costing (ABC),
total quality management, Sigma Six, target costing, and so forth among the more innovative
contributions.
Controlling is a way of thinking. It involves all the managers and employees of an organization
in the attainment of a set of specified goals. Therefore, leadership constitutes an important
element in controlling. Hypothetically, a company could exercise this leadership element in the
controlling function without creating a special position or department for it. The presence of a
controller or a controlling staff accordingly just represents a firm-specific division of labor. In
practice, though, most medium-sized and large businesses find it advantageous to have such a
position or department. In small businesses, on the other hand, the general manager (chief
executive or chief operating officer) typically exercises the controlling function in addition to
his or her other responsibilities.
In medium-sized and large businesses, controlling also traditionally has been a service that
supports top management across departmental and functional boundaries. As part of the
executive staff, controllers typically have provided services for line unit managers too.. It has
introduced and coordinated various systems, applying them to the organizations goal-setting,
planning for attainment of those goals, steering a course toward the goals, and checking its
position along the way.
Even today, in many cases, the controlling services primary duties still have to do with goalsetting, planning, navigating, and course-checking tasks in support of the firms leadership.
Investment Management and Financial Innovations, managers themselves partly or completely
assume the controlling function and exercise it within their area of responsibility. In keeping
with the self-controlling concept, a controller then acts more like an internal consultant, who
aids managers by providing them with technical assistance and guidance (Gruber, Nausner,
17

2004). A key problem is that German management education pays little attention to actually
managing people. The "master of business administration" degree reflects that the educational
emphasis is on managing finances and administrating processes. But good management also
requires a focus on people, something that German companies currently lack. In far too many
businesses, employees with the longest tenure or who have the greatest subject matter expertise
are moved into management, regardless of whether they have an aptitude for managing people
(Gallup, 2016).
As a result, the talent for managing people is more of an accidental dividend among German
managers than a desired characteristic. Managers who can engage their workers will build
better, more profitable teams -- but companies that don't understand that talent and don't look
for it won't successfully recruit engaging managers. By ignoring the benefits of engagement
and the talents of engaging managers, German companies will continue to leave their financial
wellbeing to chance (Gallup, 2016).
In German companies, there are countless rules, regulations, procedures and processes. German
business people prefer contracts and written agreements of all types. The existence of these
things and their tight and consistent application, the adherence to them and the rigid
consequences, or even penalties, for not complying with them are in stark contrast to other
cultures. On the one hand, this underscores a consistency and high degree of mutual obligation.
On the other hand, this principle leaves little room for flexibility and individual determination
(Expatica.com, 2016).
Because management has not been regarded in Germany as a separate science, it was rare until
the 1980s to find courses in management techniques such as those taught at schools of
management in the United States. Germans believed that management as a separate discipline
bred selfishness, disloyalty, bureaucratic maneuvering, short-term thinking, and a dangerous
tendency to neglect quality production. Instead, courses at German universities concentrated
more on business administration, producing a business administration degree. Despite this, two
West German schools for business administration, the Hochschule fr Unternehmensfhrung
and the European Business School, were established during the 1980s, but they teach in ways
that reinforce rather than overturn traditional German ways of management.
Out of this compendium of business practices arises what might be termed a German
management style, with the following characteristics: collegial, consensual, product- and
quality-oriented, export-conscious, and loyal to one company and committed to its long-term
prospects. One could legitimately conclude from this that the German system could stifle
change because it is not as innovative, aggressive, or results-oriented as the United States
management style. That, however, would not be correct, for change can and does take place. It
occurs gradually, not always obviously, under the mottoes of stability and permanence, with
the least dislocation possible, and often under competitive pressures from abroad. German
managers themselves occasionally speculate that change might come too slowly, but they are
not certain whether or how to alter the system and its incentive structures (German Culture,
2015).

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