among key stakeholders. Negotiations are based on extensive assessments of data and plans and, since Germany is a low-context culture (where message clarity counts), communication is explicit and easily understood by foreigners.tend to be broadly educated, multilingual, and widely traveled. They are highly regarded for being trusted partners, as well as for their forward-looking human resource management policies. In recent years, perhaps because of this informed worldview, Germany has witnessed an increased flexibility in cultural expressions. Still, differences remain.and management trends in Germanywith companies in any country, it is difficult to generalize about the nature or structure of the typical German firm (or Konzern in German). Like the US, German firms generally take one of two legal forms: a limited partnership designated by a GmbH (Gesellschaft mit beschraenkter Haftung) following the company name, or a public stock company designated by an AG (Aktiengesellschaft) following the name. As such, the company Volkswagen AG is a public company with publicly traded stock. In German conglomerates, the parent company is often referred to as the Muttergesellschaft (literally mother company). An organizational standpoint, German firms are typically led from the top by two boards. At the very top is the supervisory board (or Aufsichtsrat), as shown in Exhibit 6.9. This board, much like a board of directors in US firms, is responsible for ensuring that the principal corporate objectives are met over the long term. Its members are typically elected for five years and can only be changed by a vote of 75 percent of the voting shares. A key function of the supervisory board is to oversee the activities of the management board (or Vorstand), which consists of the top management team of the firm and is responsible for its actual strategic and operational management. These two boards are jointly responsible for the success or failure of German enterprise.a company level, a legally binding codetermination system (Mitbestimmung in German) supports worker rights. This system is based on the belief that both shareholders and employees have a right to influence company policies, and that profit maximization must be tempered with concern for social welfare. Under codetermination, workers may exercise their influence on corporate affairs through representatives on the supervisory board. Typically, one-half to one-third of the members of this board are elected by the workers - normally through their works council - while stockholders elect the remainder. As such, German workers can have a significant influence on strategic decision-making. Moreover, many serious labor problems are discussed and resolved at this executive level before they grow into major conflicts.a plant level, workers exercise their influence through works councils. Works councils typically have no rights in the economic management of the firm, but have considerable influence in human resource management policies and practices. Their principal task is to ensure that companies follow regulations that exist for the benefit of their employees. As such, works councils have the right to access considerable company information concerning the running of the firm, including economic performance. Rights granted to works councils are divided into codetermination rights (the right to approve or reject management decisions) and participation rights (the right to be consu...
