German Business Structures

Most of the power in German companies is vested in the hands of a few senior managers. Larger companies (AG & GmbH) have a Supervisory Board (Aufsichtsrat) which appoints the Management Board (Vorstand).

The management board is the final decision-maker on policy matters which affect management. The members of the Vorstand have shared 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 Vorstand level, companies tend to have a strictly hierarchical approach within which individuals’ specific roles and responsibilities are tightly defined and compartmentalised. This results in a methodical approach to most business issues where procedures and adherence to well-defined rules are respected.

This methodical approach has both good and bad points. On the plus side, everybody knows what is expected of them and has a process to help them achieve clearly identifiable goals. On the other hand, a criticism that is often levelled at German industry as a whole – and at German business people individually – is that they are inflexible and slow to change to new situations.

Author

This country-specific business culture profile was written by Keith Warburton who is the founder of the cultural awareness training consultancy Global Business Culture. 

Global Business culture is a leading training provider in the fields of cross-cultural communication and global virtual team working.  We provide training to global corporations in live classroom-based formats, through webinars and also through our cultural awareness digital learning hub, Global Business Compass.

This World Business Culture profile is designed as an introduction to business culture in Germany only and a more detailed understanding needs a more in-depth exploration which we can provide through our training and consultancy services.