Negotiations In Germany
Negotiations in Germany can take rather a long time since Germans first of all collect and discuss all the information needed to reach a decision. These discussions can sometimes go into great detail, as they form the basis for making the final decision. This phase of a cooperation is considered to be very crucial. Many details are planned and prepared in advance so that the cooperation can run smoothly. Once signed, Germans are not prepared to renegotiate or change parts of the contract.
Negotiations are embedded in the German communication style, which is task-oriented clear, direct and transparent. Discussions and negotiations follow a logic line of arguments. Interests are often expressed clearly with data, facts and figures. The attention to detail is considered to be professional. Often data are prepared in writing, too.
The negotiation process is therefore well prepared, detailed, structured and follows an agenda. The topics of the agenda can be discussed in advance. During the negotiation, they will be discussed in order, topic by topic. You do not step back to a topic or discuss a topic yet to come. Decisions might take long – but once agreed upon they are binding, should not be changed and will be summarised in writing.
In German business culture, there are clear hierarchies and responsibilities. That means that during the negotiation people with different backgrounds and from different departments may be present to bring their expertise into the discussion.
Jokes, humour or slang are considered inappropriate during negotiations.
In general, the German negotiation strategy has the aim to achieve a satisfactory result for both sides. That includes an understanding of compromise that means to meet halfway.
For Germans, effective negotiation is task-oriented, includes a lot of expert knowledge and is based on facts. This means that they are well-structured and detailed both in terms of time (chronological) and content (logical). Negotiations provide the basis for contracts. They already show a certain commitment and are crucial for further steps. This phase is considered to lay the foundations for a fruitful and long-term cooperation.
Germans do not bargain too much. Before entering negotiations in Germany, all details of a deal are collected and the possible price range is sorted out. Most likely, your German business partners will set a maximum and minimum limit of tolerance and include it in advance.
Price negotiations are direct and clear without frills and they are based on data rather than on emotional factors. A good counter suggestion should include specific terms and conditions. It is important for a deal, that the conditions and terms are reasonable for both sides.
Once you have agreed on a price it will be very difficult to renegotiate with your German business partners. They are not used to renegotiating and don’t expect any subsequent adjustments once they have made a deal.
Reaching a decision
Who decides? Decisions are made top-down – sometimes by a group of senior managers. There is a clear hierarchy within the companies and the employees work in clear lines of authority. The decision-maker is normally present and recognizable throughout the whole process.
However, everybody involved, e.g. the team members, experts or executing departments, are involved in the decision process. Objective facts, detailed expertise and logical arguments from everyone involved will be collected, listed and thought through by the decision-makers of the upper hierarchy. That means that the final decision of the senior management is heavily based on the expertise of employees and, if possible, made with a certain factual based consensus of the group or the team.
When is a decision made?
It takes a certain time to collect expertise, facts and figures from the people who are involved in the decision-making process and who will enforce the decision once it has been taken. All the data is exchanged in writing. Offers and counteroffers are also made in writing. Sometimes several meetings are necessary to discuss the factual arguments in case of uncertainties or different opinions concerning some points.
German business people like to resolve every detail of an upcoming business deal before starting the cooperation. The idea behind this is to saddle the horse before the race and not while riding the horse during the race.
How is a decision made?
The decision-making process is completed once all arguments and figures have been collected, every expert has contributed their requested expertise and common ground regarding the agreement has been found.
The verbal assurance of a decision and a handshake of the decision-maker is considered binding in Germany even today.