american vs german management style
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american vs german management style

Three insights emerge from these various texts: 1. In America, however, no one would contradict a superior in public. 2. They have faulted the large banks for being too slow to raise capital for the introduction of new technologies and for favoring large companies while neglecting the venture capital needs of small, entrepreneurial companies. It has a fraction of the resources and less than one-third the population of the United States. And yet it is precisely in the system that the real lessons of the German model lie. The nationwide worker-training system functions only because there is close cooperation between the social partners who design and administer the system. Required fields are marked *. It is also worth mentioning that your American colleague has been through a school system (or homeschooling curriculum) that puts a heavy emphasis on creativity in contrast to your traditional German educational stress on procedures and structures. This conversation should happen at regular intervals from the very beginning, however. Despite this, two West German schools for business administration, the Hochschule für Unternehmensführung 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. [CDATA[ That, however, would not be correct, for change can and does take place. For instance, in the 1970s, West Germany’s then-Social Democratic government announced a new policy to improve the quality of work life at manufacturing plants. Neither the government, the trade unions, nor the business community encourages litigation if there is no clear sign of genuine and deliberate injury. Finally, argues Walter, despite the complaints of many German managers about high labor costs, the Federal Republic continues to be quite attractive to foreign investors. Soskice argues that these networks allow the German financial system to retain its traditional stability even as it adapts more flexibly to changing economic circumstances. “Industrial Organization and the Politics of Industry: Centralized and Decentralized Production in Germany,” by Gary B. Herrigel, Massachusetts Institute of Technology: Dissertation, 1990. Instead, they engage in what German managers describe as Leistungswettbewerb, competition on the basis of excellence in their products and services. And that consensus hinges on the strong position of unions and their participation in joint decision-making forums like the works councils. If the German economy is a model, they say, then it is an outmoded one. More recently, however, it has come in for considerable and extensive criticism. All rights reserved. Like German unification, European integration poses a systemic challenge to the German model. Most companies have to participate in collective bargaining nationally, regionally, or both, depending on the industry. They talk not of a “free market” economy, but of a “social market” economy, or Soziale Marktwirtschaft. In order to start untangling these key differences in management style between the USA and Germany, I will turn to an illuminating piece of recent research. These big companies have become closely tied to Baden-Württemberg’s dense network of small machine shops, using them as high-quality suppliers. Yet German companies manage to produce internationally competitive products in key manufacturing sectors, making Germany the greatest competitive threat to the United States after Japan. Seitz worries that Germany in particular and Europe in general are in danger of being “technologically colonized” by the United States and Japan. In Germany, business has a responsibility for providing a stable order, both for the economy and, more indirectly, for society. This arrangement is largely a byproduct of German history. The key to the region’s economic development, argues Herrigel, has been the efforts of employer groups in the state to enhance the competitive position of local companies. Since every situation is a bit different, a specific plan for how to approach this is best worked out in a full intercultural training. In fact, they account for some of the most difficult-to-navigate territory when it comes to business cooperation between the two countries. Once again, the solution is not to dismantle the German model but to adapt it to a changing environment—change in the service of continuity, and continuity in the service of change. Also be prepared for a more blunt communication style than you are used to. In the network model, by contrast, several banks join together informally to finance entire networks of companies. On the one hand, sharp economic disparities between eastern and western Germany hold out the prospect that the five new eastern states could become a low-wage platform for economic growth—but possibly at the price of undermining high wage rates in the west. They must be consulted by management about organizational changes such as job classifications and flexibility in shift assignments. Finally, these centralized industrial associations act cohesively in part because of the detailed involvement of Germany’s banks in long-term corporate investment strategies.

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