Finding the Key to German-Style Management

Abstract

American business practices and views on Japanese management tend to dominate the management literature worldwide. This domination is at odds with the relatively meager attention given to the management practices of other successful countries in the world. This paper focuses on Germany, Europe's economic giant. In 1990, West Germany produced 40 percent of the European Community's manufactured output (Warner and Campbell, 1993). Its export power is unparalleled; Germany's volume of world trade nearly equals that of the much larger United States. Its exports are, and have been since the 1960s, twice as high, per capita, as Japan's (e.g., Heiduk and Yamamura, 1990; The Economist, 1993). This paper aims to identify the key to German-style management, by which we mean the unique, culturally embedded management practices within Germany. In order to provide a realistic picture of a national management style, one has to consider behavioral as well as institutional aspects of the business system (see Whitley, 1992, 1994). In this paper, both types of aspects are combined in an integrative fashion. Compared with management in other European countries, German-style management has received a lot of academic attention. Surprisingly, however, the number of empirical studies on this topic is rather limited. In order to identify the key to German-style management, we analyzed a representative set of empirical research studies that focused on management styles and systems in different countries, including Germany. To enrich our analysis, we also considered essays and noncomparative literature on German management. These essays provide information on the background conditions of the German business system which cannot be neglected in order to achieve an understanding of German-style management.1 After characterizing the empirical literature, this paper offers an overview of the unique features of German-style management. Attention is then focused on