German American

German-American Collaboration

German-American Collaboration-talking-together Greg Nees talking together

Strategies for German-American Collaboration

Based on my experience working with a number of German organizations, there are three general strategies that German parent companies use when collaborating with their American subsidiaries. These three strategies are described below from the viewpoint of the American associates working in the U.S. subsidiary.

Local Autonomy: Some German companies take a very “hands-off” approach to running their American subsidiaries. By granting the American subsidiaries almost complete autonomy in the day-to-day running of the subsidiary they have been able to minimize frictions and misunderstandings. Most American associates in these organizations have little direct contact with Germans and they often perceive themselves to be working for a typical American company. As such they report a very low incidence of negative experiences in dealing with Germans.

The Local Autonomy strategy seems to work best when German executives have a deep familiarity with US business practices and there are long-standing friendships between the senior German and American executives. It is particularly successful in smaller companies or simpler businesses with a lower need for transatlantic communications. When combined with low staff turn-over in the American organization these elements foster the trust and understanding which enable a low-level of control from the German parent. This lack of control then translates into the sort of freedom that US Americans rate as one of their highest values.

Forced Adaptation: This strategy shows the most variation in its application; it also has the widest range of satisfaction levels on the part of US associates. It is marked by either an ad hoc approach to differences in the organizational cultures or by a top-down attempt at standardization. In this model, German influence on the American subsidiary is perceived clearly though not always positively. US associates are very aware that the organization is ultimately in German hands and sometimes feel they are being forced to adapt to a system they are not comfortable with.

In this strategy, control is clearly asserted by the German parent. This control then impacts many of the day-to-day activities at the US subsidiary such as goal-setting and decision-making, accounting and reporting procedures, control of the production processes and general attempts at centralized control and organizational standardization.

Based on reports by US associates, organizations using this Forced Adaptation strategy seem to experience less stable morale than the other two strategies. In these organizations morale is experienced as cyclical, with phases of relative satisfaction followed by phases of frustration. During periods of frustration, a typical response of the US associates is to attempt to minimize contact in order to increase local autonomy.

In these organizations there are few systematic procedures in place to help associates learn to deal with cultural differences in working relationships or business practices. Instead Americans report that they struggle as individuals to learn how to balance a mixture of German and American business partners and practices. This process can be successful but it comes at a price – it is often exhausting for the associates and the corporate atmosphere is marked more by caution than trust.

Transnational Corporate Culture: Organizations using this strategy consciously strive to develop a transnational culture that builds on the best practices of both sides. Assessments of the organizational culture by American associates vary between claims that the organization is “80% American” to “we are a 50/50 blend”.

These organizations take a long-term approach to career development and transatlantic personnel exchange is a keystone of the organization’s strategy. While personnel from a wide range of functions are exchanged, the focus is clearly on the development of leaders who feel at home in a transatlantic organizational culture. International assignments are preceded by a systematic selection process, and often also via contacts previously established through business travel and virtual collaboration. Support on relocation issues as well as information and training, including cultural preparation, are all made available.

While I have not done rigorous research on how widespread these different strategies are, my best guess would be that the Forced Adaptation approach is most common, followed by the Local Autonomy approach. Organizations that work to deliberately develop transnational cultures seem the rarest, though I suspect their overall performance may be the best of all three approaches.