Week 9: Germanic and Eastern Europe

In this week’s class the teacher shared with us the cases from two multinational companies which faced problems, misunderstandings and obstacles arising from cultural differences. Their experiences were the two most relevant topics of the class for me, because real-life cases proofs the critical role culture plays in business. Then, I am going to sum up the most interesting points I found in each company’s experience.

1. Daimler-Chrysler merger took place in 1998. Between the American Chrysler  Corporation and the German Daimler-Benz. After the merger, DC was one of the biggest automotive company in the world. However, during the merger both companies gave priority to business issues and did not pay much attention to the cultural issues; in fact, projects of corporate culture and management styles were not incorporated within the negotiation and management of the merger. Both of them were ignoring the fact that they came from different countries and they were trying to merge two different corporate cultures; two different ways of doing business; in the end, this translated into a poorer performance of the firm. From this experience, we can learn that synergies in a merger not only emerge from the economic resources and expertise of its members, but also from the cultural values and practices employees have. That is why every dimension of the business should be incorporated in the implementation process and establishing appropriate channels of communication that allow intercultural exchange between both companies. 
2. By 1997 Walmart had set up a store in Germany to take advantage of the highly-profitable retail market of the European country. However, by 2006 this strong multinational was leaving German territory. The reason was clear: German did not embrace Walmart’s philosophy as other countries had done. Practices such as chanting “Walmart, Walmart, Walmart!” every morning, feigned smiling at every customer (Germans are not comfortable with smiling at a stranger), spying on co-workers to report misconducts and not listening to employee’s feedback were not well-seen by Germans.

These two cases provide us with valuable learning about the management of culture in an international context and how to integrate it with the financial and strategic management of every business. I would dare to say that if you do not manage culture appropriately, you are not only discarding a source of synergies and new opportunities, but also creating a big obstacle. Therefore, there should be a stronger commitment from multinationals to properly deal with cultural differences.

Research Question: What stereotypes on German culture are actually true and describe real values adopted in their behavior?

Nick Schäferhoff in his post “9 German Stereotypes That Are Straight Up True” share with us some very popular beliefs about German culture which may be true.

First: Germans are direct. Sometimes rude and characterized but being not much diplomatic as they want to get to the point; they are characterized by being very goal-oriented. Second: Germans love structure and organization. There are several laws regulating different aspects of life and Germans obey them; however, this can lead to certain degree of inflexibility. Third: Germans are punctual. In fact, it is considered a virtue. (I imagine we Colombians are not their preferred counterparts jaja). Fourth: Germans love soccer. It is not only popular, but they are really good at it. Fifth: Germans are well-insurance. You can secure almost anything, they like feel protected. Sixth: Germans are distant. Their personal space is definitely wider than in other cultures. Seventh: Germans love beer. Eighth: Germans know how to bake bread. Baking has a long-standing tradition in the country and bread is part of traditional German cuisine. Ninth: Germans love sausage. Meat in general is a mainstay of German cuisine.

References

Schäferhoff, N. (n.d.). 9 German Stereotypes That Are Straight Up True. Retrieved from: http://www.fluentu.com/german/blog/german-stereotypes/