Introduction

German negotiations are characterized by a high level of formality. Germans are interested primarily in efficiency and quality and will be guided by those principles throughout. It is important to show respect for your counterparts’ method of conducting business; being lax with formalities may indicate to them that you are not serious about doing business together.

Your overall concern should be a thorough presentation of your proposal. Your German counterparts will expect you to be well informed, and your degree of expertise and knowledge will influence the success of your proposal. If your counterparts are satisfied with your proposal, they will initiate negotiations. These may be slow and painstaking, as they examine every aspect of the business deal in detail.

Goal of Negotiations

German business culture values efficiency almost above all else. In this context, the relationship is seen as secondary to the business deal itself. A business relationship may remain formal for years before the two sides develop a more comfortable rapport. While it is important to cultivate a sense of trust with your German business counterparts, this may take a long time; and if trust is lost it can be extremely difficult to regain.

The contract will be the basis for all action on the part of the German company. In the case of a dispute, your German counterparts will refer to the signed agreement. Do not expect them to make concessions on the basis of your relationship.

That being said, it is still important to build a sense of trust between the two parties. Business relationships in Germany are highly selective, but are well worth the effort. If you do succeed in establishing a relationship with your German counterparts, it will be a solid one. Building this relationship may take many visits, social meetings, and overall, a good performance record.

Attitude

German negotiators usually take a win/win attitude. They hold both sides responsible for coming to a mutually satisfying resolution, though the buyer is seen as having a slightly superior position.

Cooperation and the maintenance of a positive, trusting atmosphere is essential to the success of negotiations. Though you should avoid confrontation, it is perfectly acceptable to ask questions about sensitive issues. Your German counterparts may not wish to answer, but will often share some information. You should not appear to be hiding information, as this can compromise the sense of trust. You may, however, state that you are not willing to share certain information and your counterparts will often respect your wishes.

Though the general atmosphere is cooperative, do not be surprised if your German counterparts are reluctant to make concessions. It is rare for German negotiators to concede unless the negotiations as a whole are at risk. However, they can be very aggressive about your making concessions. They often insist on concessions at the last minute, so it is a good idea to hold something back until then.

Personal Style

German businesses tend to be extremely formal. Coworkers often address each other by their title and first name, and they start the day off with a handshake even after working together for years. It is important that you conduct yourself formally in this environment as a sign of respect for your business counterparts. Your counterpart may not relax formalities until the relationship is well established, which can sometimes take a number of years.

Realize that formality extends to behavior, dress, and even posture. Slouching, leaning, or keeping your hands in your pockets may be seen as a sign of disrespect.

Communication Style

Germans communicate directly and efficiently. They use few hand gestures or facial expressions to supplement their speech. They make constant eye contact, and their voices tend to be low-pitched. It may be a good idea to lower your voice if you tend to speak in a high pitch.

Germans do not mince words. Discussion will be to the point. Be prepared to answer direct questions and to ask them in return. Your German counterparts may not react at all to your proposal, but if they do, you can take what they say seriously. German professionals can be blunt. When they impart criticism, they will not soften the blow with positive feedback, and neither should you. Germans look at each issue in and of itself; including positive feedback together with the negative will confuse them.

It is important for you to make a thorough presentation. Not only should you present a complete picture, you should give the appearance of doing so. That means including graphs, charts, and figures wherever applicable. Make sure that your team presents a unified front. Your German counterparts will view internal conflict as a sign that you are unprepared.

Although Germans prefer a straightforward approach, they often employ deceptive techniques such as misrepresenting an item’s value, lying, sending false non-verbal messages, or pretending to be uninterested. If the German side brings an interpreter to the meeting, it is a good idea to bring one of your own as well. The German side’s interpreter is a member of your counterparts’ team and may not give a completely accurate picture of what they are saying. Stay calm in the face of deceptive tactics—they are not meant personally.

Time Sensitivity

Expect negotiations to be lengthy. German negotiators are meticulous about details and will do their homework between negotiating sessions. They take time to consider before making a decision, and may not get back to you right away.

At the same time, efficiency is practically the definition of the German attitude. They are meticulous about schedules and deadlines. Your business counterparts may insist on including strict deadlines as well as penalty clauses in the contract. Be exact about meeting deadlines and delivery dates. If you can beat the deadlines, so much the better; it will give a favorable impression and may stand you in good stead if you are late in the future. If you foresee a missed deadline, notify your German counterparts in advance and offer an explanation.

Be punctual for all meetings. It is a good idea to arrive a few minutes early and wait for the meeting to begin. Arriving even a few minutes late will reflect poorly on you; your German counterparts may assume that you are not really interested in the negotiations.

Germans’ sense of time also means that meetings will be uninterrupted. Negotiating sessions will focus on the issues at hand, with no exceptions. Your counterparts will not accept interruptions from anyone outside the negotiations, and you should stay focused as well. Do not introduce a topic unrelated to the business discussion; socializing is restricted to a brief exchange at the beginning of the meeting.

Emotionalism

Expect your German counterparts to be practical. German businesspeople do not conduct business on an emotional level. Decisions are always made rationally and without considering personal feelings and relationships.

In the case of a dispute, do not attempt to leverage the relationship to resolve the issue. Similarly, avoid aggression and confrontation. Instead, explain your side clearly, unemotionally, and in detail. If your side is responsible for a problem, explain what specific steps will be taken to fix it.

Your German counterparts may express approval by rapping their knuckles on the table instead of applauding. Or they may not indicate approval in so many words, and instead ask for further information or specifications as a sign that they were pleased with your proposal and are interested in continuing negotiations.

Germans may use emotional techniques such as attitudinal bargaining, grimacing, or attempting to make you feel guilty. If they do, it is important to remain calm.

Risk Taking

German business culture values logic and stability. Your business counterparts are unlikely to enter into a business venture that poses a risk for their company. Be advised that what might be considered a normal market uncertainty in other countries may be considered a risk in Germany.

It may be helpful to clarify contingency plans and outline other sources of support in order to downplay the risk element of your proposal. 

Team Organization

German businesses usually have a pyramid structure with a few executives, or sometimes just one, making decisions at the top. More junior members of the company are not expected to offer an opinion, nor are their thoughts taken into consideration.

Junior members of a company generally defer to their superiors in all matters. Their role is to carry out the decisions made higher up on the pyramid. Focus your efforts on senior members of the German team; attempting to get a decision out of a junior team member may be a waste of your time, as that person probably has limited authority within the company.

Agreement-Building Process

Germans prefer to work efficiently and get down to business right away. Although they are interested in long-term business relationships, they will look at the details of a specific proposal from the outset.

It is important to provide a lot of detail during the initial stages of negotiations. Providing a list of written terms and conditions is a good way of beginning and may shorten the bargaining process. Germans like to be well informed and want to see that you have a thorough command of your ideas.

They often begin talks with an intense questioning period in which they fire detailed questions at your team, attempting to assess your degree of certainty. Though this practice may be unnerving, it is important to remain cooperative. Answering their questions calmly will communicate that you are competent and capable. Rather than grow frustrated, take these questions as a sign that your counterparts are seriously interested in your proposal.

Agreement Form

Contracts will be long and detailed. German negotiators like to include the specifics of the basic agreement as well as any eventualities. Be aware that verbal agreements and initial offers can be legally binding as well. Always express that an offer is subject to change until the final contract is signed.

Your German counterparts may review the legal aspects of the contract many times before it is completed. It is important that your own lawyer reviews the contract as well before you sign. Contracts are easily enforced in Germany and you may face legal action if you do not follow through on your commitments. Realize that requests to change the terms of the contract after it is signed will meet with strong resistance.

The assessments detailed in this article are intended for informational purposes only. They reflect typical attitudes within a given country or culture, and are not intended to describe any specific individual or business. World Trade Press is not responsible for any action taken on the basis of the information contained herein.

World Trade Press would like to acknowledge the research of Jeswald W. Salacuse (“Ten Ways That Culture Affects Negotiating Style: Some Survey Results,” Negotiation Journal, July 1998, Plenum Publishing Corporation) as the basis, with modifications, for the assessment categories described in this article.