German Management Model: Should we study it?

Germany was the ill man of Europe several years ago (although Europe is not healthy at all today). The unemployment was high; the economic growth was slow, and the nation was depressed. Germany was paying a high price of the re-unification. On the other hand, the USA (and Great Britain) was the celebrated role model in the introduction of the competitiveness. They were stars in the growth of the wealth of nations. The financial crisis showed different perspective and put Germany in a different view.

The German Politicians had the courage to introduce the reforms. The Germans were never in favor of creating bubbles on the market. The German politicians changed the law to make the labor market effective, supporting innovation and keeping the German solidness.

The Germans enjoyed several years of becoming poorer, but today… Germany is the winner of the post-recession world. The German companies have innovated their products. They exported solid German machinery, and they enjoyed strong GDP growth (and declining unemployment).

The German Management Model is different from the US one. The German companies cooperate in the close relationship with the banks and trade unions. The German managers do not make the decision on the basis of the quarterly results. The German shareholders are patient.

The German Management Model is based on following basic principles:

• Long-term Strategy
• Common agreement with Trade Unions and Employees
• Mutual Respect to Authorities
• Formalism
• Focus on Personal Contribution
• Focus on Performance

Maybe, within several years we will have to learn the secret of the German Management Style. The success of German companies during last few years is truly worth studying.