German Companies in China. Jian-Ping Qin

for approval. The headquarter should decentralize its power, mainly take on a supervisory role and only intervene in the management of the branch if this is really necessary: Decentralized as much as possible and centralized as little as necessary should be the motto.

      The Germans are neither enthusiastic nor skillful in cultivating relationships, they prefer to get straight to the point and do it officially. They keep their distance and do only the bare minimum.

      The Chinese attach great importance to relationships and are good at building relationships. They like to build private friendships with customers before doing business with them. When the private relationship is established, the business comes and as long as the relationship with the key person of customers is good, the business remains stable.

      The German nation is particularly disciplined. As long as there are rules and regulations, they are implemented uncompromisingly, even if one may have a different opinion. There is strong executive power in German companies.

      Chinese have strong self-confidence. Instructions that do not meet their own requirements are ignored or adapted as they see fit.

      The Germans take care to keep their faces, they like to show strength and to emphasize their own role. Modesty is not valued highly.

      The Chinese recognize modesty as a virtue; the Chinese saying goes: the tallest tree is destroyed by the wind and the conspicuous bird is shot first. One should not be arrogant, but remain modest.

      The Germans are not good at price negotiations and are ashamed to talk to their superiors about raising salary. The salary increase in Germany seems to be more a matter for the unions. The Germans do not like comparing the salaries of others with their own, nor do they privately ask about other people's income, which is even considered a no-go in Germany.

      Chinese like to compare horizontally, especially salary differences. Even if their salary is very high, they will be unhappy if you find that others earn more at the same level.

       4. Company management

      German companies emphasize process orientation and demand that everything runs according to the German model. Germans attach great importance to process orientation and believe that only good processes bring good results - and only the German process can be a good process, because Germans tend to be stubborn. However, German processes are often too complex, inefficient and costly.

      Chinese companies attach more importance to results orientation and say: Many roads lead to Rome. All means and methods can be used to achieve the best result, there are no fundamental restrictions. A process is only a means to a goal, as long as the result is right, it doesn't matter how it comes about or which process is used. The Chinese are always willing to try new methods and strive for high efficiency and low costs.

      In Germany, high fixed wages and high social benefits are used in conjunction with low or no bonuses; incentive systems are not too common. So, more performance does not mean more income; poor work does not pay less. The work pressure of the employees is not that great, so they often lack the fighting spirit. Compared to China, Germany is still a welfare state in which salary levels are clearly defined by law and unions. The high-wage system has increased the costs of the companies accordingly and the personnel costs make up a large part of the total costs. Therefore, normal companies in Germany do not have a lot of financial scope to introduce a lucrative incentive system. company management in Germany traditionally depends more on the qualifications of German employees than on the incentive system; there are deviations only in middle to upper management due to foreign, mostly American influences, which the population tends to see negatively. This is also the reason why German companies generally have a rather low vitality.

      Chinese companies attach particular importance to the implementation of performance-based motivation systems. Due to the cost structure, Chinese companies can generally get a relatively low salary plus high bonuses. Chinese companies are also putting pressure on employees to force them to work hard. Under pressure and with strong incentive mechanisms, at least from the Chinese perspective, the maximum potential of the employees is used.

      The Germans pay attention to careful work, time is not so important. They assume that good products take more time. It is better not to start at all unless all details have been considered. German companies have very high demands on their products, they will not be launched on the market unless they are perfect. Chinese companies are mindful of speed: time is money, efficiency is life, they say. The importance of speed is strongly emphasized. Whoever has the product first can quickly occupy the market. Chinese products focus on solving problems quickly and satisfying market demand quickly, not striving for perfection from the start. If the main function of a product is given, it can be brought onto the market and then continuously improved.

       Conclusion

      In summary, the main differences between the Chinese and German business models can be compared as follows:

      • High quality requirements of the German model compared to good price-performance ratio of the Chinese model.

      • German legal provisions compared to the human factor in China.

      • Strong employee rights in Germany compared to the performance-oriented employee concept in China.

      • High degree of planning in Germany compared to high flexibility in China.

      • Technology-intensive companies in Germany compared to labor-intensive companies in China.

      • The high accuracy and striving for perfection of the German model compared to the high efficiency and striving for quick solutions and low costs of the Chinese model.

      • The central management German model, in which the German headquarter and the Germans decide everything compared to the decentralized model, in which the Chinese subsidiary decides independently according to the local circumstances.

      • Process assurance of the German model compared to results assurance of the Chinese model.

      • The German culture with discipline, competence and respect as well as distance in dealing with each other compared to the Chinese culture with flexibility, modesty, restraint as well as a more intensive cultivation of relationships.

      Many of the differences between the Chinese and the German model are actually relative, in many cases not contradictory, and this can also be related: high quality and a high price-performance ratio, process and result orientation, high degree of planning and high flexibility, high accuracy and high efficiency can be combined. A reasonable combination of the two models can achieve the best results. If a model were to overemphasize unilaterally, however, this could lead to very poor results. For example, overemphasizing high quality could result in unnecessarily high costs and overemphasizing low cost could result in poor quality.

      Although the two models are different, they are appropriate in their respective environments. A successful model can become pointless and fail in another existential environment.

      Most of the problems in various processes analyzed in this book are due to the simple copy of the German model in China, regardless of the different environment. The focus of this book is therefore on adapting the management of German companies in China to the Chinese environment. First of all, it must be emphasized that the German modern management model has an important reference meaning for the management of Chinese companies and is the basis and starting point for Chinese companies. The adaptation of the German model to the national situation in China is decisive for whether a German company can be successful in China.