Hierarchy or structure: American (Mis?)perceptions of German Corporate Culture

How steep is your corporate hierarchy?

Does national culture play a role?

When reading web-based literature about the German corporate culture as experienced by Americans, one learns that US-colleagues are often struck by the ordered structure with respect to job duties and communication channels in German companies. This more defined structure, coupled with language barrier difficulties, seems to lead many Americans to believe that the German workplace has a steeper and stricter hierarchy than it actually does.

I should mention first that even the perception of corporate hierarchy varies amongst cultures. The American perception shows evidence of being colored by communication style within a company. For Statesiders, simply the German business custom of using last names—or even titles (i.e. “Frau Doktor”)—as well as the formal “Sie” with a supervisor or colleague feels hierarchical. This is because, regardless of decision-making power, Americans value a sense of egalitarianism in their communication style. Friendly (at times even effusive), open, casual and positive verbal interactions give Americans a sense of equality.

The more clearly structured tasks associated with the well-defined job titles in German corporate culture may also be misperceived by Americans as more “hierarchy”. Especially in larger companies in more traditional industries, German employees study or train for specific positions. This intense preparation—usually lasting a minimum of three years—leaves German employees highly qualified for positions in their chosen field. Of course, there is always an on-the-job learning curve even in Germany, though to a lesser extent than the average American counterpart will likely experience.

What this means by extension is that Germans tend to be more deeply specialized in their areas of expertise. As such, their professional assessments will factor into company decision-making regardless of where they fall on the corporate totem pole. Upper-level managers in Germany will still formulate strategy and take final decisions affecting this strategy, but not before a thorough collaboration and solid fact-gathering phase from his/her respective team of experts. Doing less would be considered unprofessional and possibly even reckless.

In contrast, this is where Americans working with German counterparts can tend to get impatient; we like our decisions to be made quickly and to follow a “chain of command” in their implementation. Being overly collaborative with subordinates is more likely to be viewed as indecisive and as weak leadership. Moreover, managers at the upper levels tend to cycle in and back out of companies comparatively frequently, sometimes even bringing in / taking away loyal employees with them.

Conversely, highly-placed managers in many German companies are more likely to have risen through the ranks at the company and are deeply immersed as experts in their industry (increasingly, Germans work for more than one company throughout their careers). German employees can also become attached to (or disgusted by) their managers, too, but their written contract and main identification (typically) is with the company. The fact that employee loyalty in US companies tends to center around the manager and not necessarily around the company surely leads to less direct questioning of managerial decisions and their potential impact on the overall company.

In Germany, employee interest and sense of ownership in a company’s direction and success is codified in German labor law by way of the co-determination laws, which empower a company’s workers at all levels to be involved in company decisions and to keep employee interests high on the corporate radar. If you care to delve deeper into the specifics of German co-determination laws, have a look here.

In contrast, American labor laws contain no provisions for co-determination; moreover, American worker membership in labor unions is much lower than in Germany. All of which is to say that, where hierarchy is concerned, workers of all levels in German companies enjoy a legal mechanism for having a voice in company decisions—especially as they affect employees—within the German corporate structure.

While it is true that At Will employment (“hire and fire”) allows American employees relatively unencumbered freedom to leave a company swiftly to take a position elsewhere–and that the new position may be higher ranking and thus allow for expanded decision-making power—one could make a credible argument that the right to co-determination regardless of company rank is the less hierarchical set-up.

In any case, social science ranks the USA and Germany on a similar level on the topic of hierarchy. The six-dimensional model of culture developed by Geert Hofstede shows that, in a side-by-side comparison, the two countries score 40 and 35, respectively, on the dimension of power distance (power distance means the acceptance of disparities in equality. The higher the number, the higher the acceptance). See the very interesting comparison on this and other dimensions here.

With all of this information as a foundation, here are some specific takeaways for Americans in a German workplace and vice versa:

For Americans:

-Americans, it is important to mention that younger generations of Germans have grown up in the era of globalization, and thus often communicate in a manner more familiar to you, especially with regard to first names. A bit of conversation amongst colleagues who know each other is also typical in Germany, but the working style is generally more concentrated and intense so casual chit-chat is kept comparatively to a minimum.

-Also, Germans, in general, are more reserved around folks who are new to them, and effusiveness very often comes across as insincerity. My advice: if you are new in a German work environment, tone down the excessive praise, complimenting or personal information sharing until you have gotten to know your colleagues better (and even then, keep it dialed back!)

-Just because the German work environment is often more formal and structured (especially in larger companies) does not mean you are not an instrumental part of the “action”. On the contrary, you will be expected to have deep, substantive knowledge of your area, and this knowledge will drive the company forward and gain you respect from your colleagues and supervisors. Just don’t expect lavish praise; your expertise is a given!

-If you are interested in being an active voice in company matters, find out who your Workers’ Council reps are and pass constructive feedback along to them. If you are staying on with your company in Germany for the longer haul, you could even make yourself available for election to the Council itself.

For Germans:

-It is important to be aware that a casual and friendly communication style amongst colleagues in an American company is NOT a sign of lacking hierarchy. This is because rank within the company generally determines decision-making power, and the expectation (especially in larger companies) is that subordinates “get behind” and carry out an announced managerial decision. Criticism of a decision should be made with positive formulations and privately.

-Go Zen with quick managerial decision-making, and carry out these decisions as positively and swiftly as you are able. The longer you work with a manager and establish a positive and trusting bond, the more liberty you will have to offer constructive feedback before a decision is announced.

-If you are genuinely alarmed by a decision, express this privately and take a tone of sincere concern rather than of negativity or criticism.

-If you ARE the manager, understand that your employees expect expediency more than thoroughness. Find a couple of subordinates whose knowledge and experience you trust and make them your main sounding boards.

Corporate culture is, of course, determined by factors other than national culture. The size of the company, the industry and the individual personalities of the leadership and workforce will also determine how much “hierarchy” one encounters when working in partnership with international colleagues or on assignment abroad.

Hierarchy is but one factor that varies from culture to culture. If a business relationship with the USA is in your company’s future, schedule an intercultural training today to get ahead of deal-breaking misunderstandings.