Managers and Management in West Germany

Peter Lawrence

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9780415788731
• eBook ISBN:
  9781351839730
• Topic: Economics
• Subtopic: Business General
• Index: Economics

Originally published in 1980 but re-issued now with a new preface, this book looks at the German manager from a sociological viewpoint and explains why German management has been so successful and highlights the key factors in the training of the German manager and the attitudes and skills he develops in his work. The views and aspirations of German managers themselves are discussed in the light of the author's first-hand acquaintance with German industry. Throughout there is comparison with the UK, USA and other European countries. The manufacturing function is the subject of a special examination. It is argued that although German management has adopted some American practices the ethic is strictly German and an essential part of the German character.

1 ECONOMIC LIFE: PAST AND PRESENT

Now

The German economy is the context within which management functions. This economic context has been revolutionised since the end of the Second World War, though the revolutionary change itself is already a thing of the past.

West Germany is now a major economic power, and has been for some years. Since the late 1950s West Germany has been the world’s second largest trading nation.¹ West Germany also has the fourth largest gross national product in the world:

Country^2	GNP 1975 (in millions of US $)
USA	1,508,680
USSR	665,910
Japan	495,180
West Germany	408,756

A few comparisons may be of interest:

Country^3	GNP 1975 (in millions of US $)
France	304,600
UK	214,940
Canada	151,730
Brazil	107,870
Australia	76,190

The richest countries of the world, using the measure of gross national product per capita, are no longer to be found in either northwest Europe or North America:

Country^4	GNP per capita 1975 (in US $)
Kuwait	11,510
United Arab Emirates	10,480
Qatar	8,320

Setting aside these anomalies and concentrating on the industrialised countries West Germany is in sixth place:

Country^5	GNP per capita 1975 (in US $)
Switzerland	8,050
Sweden	7,880
USA	7,060
Denmark	6,920
Canada	6,650
West Germany	6,610

Again some comparisons may be of interest:

Country^6	GNP per capita 1975 (in US $)
Norway	6,540
Belgium	6,070
Luxembourg	6,050
France	5,760
Australia	5,640
Iceland	5,620
Netherlands	5,590
Finland	5,100
Austria	4,720
New Zealand	4,680
Japan	4,460
East Germany	4,230
UK	3,840
Czechoslovakia	3,710
Israel	3,580

West Germany has for years enjoyed a substantial trade surplus:

Year^7	Imports	Exports (both in millions of DM)
1969	97,320	113,353
1970	109,130	125,144
1971	119,630	135,912
1972	128,146	148,915
1973	144,509	178,228
1974	177,967	230,068
1975	182,521	221,206
1976	220,556	256,303

It will be noted that West Germany continued to enjoy a favourable trade balance throughout the period of the oil crisis and the world recession, indeed 1974 was a record year with a trade surplus of over DM 50,000 million.

The trade surpluses for 1975 and 1976 were not so impressive, but the first nine months of 1977 showed a 10 per cent improvement over the previous year.

All the wealthy industrialised countries fell victim to inflation after the 1973 oil crisis. There were, however, remarkable differences in degree. If we take the change in consumer price indices over 12 months up to May 1978, well after the worst effects of the oil crisis and ensuing world recession, marked differences are still apparent. West Germany is in second place in a list of 25 countries including the major industrialised countries of the free world:

Country^8	Change in consumer price index over 12 months to May 1978 as a %
Switzerland	1.6
West Germany	2.7
Luxembourg	2.9
Japan	3.5
Netherlands	3.5
Austria	3.8
Belgium	4.4
Ireland	6.2
USA	6.6
Portugal	7.5
Norway	7.7
UK	7.7
Australia	8.2
Canada	9.0
France	9.0
Denmark	10.8
Sweden	11.5
Italy	12.2
Greece	13.5
Yugoslavia	14.0
New Zealand	14.7
Spain	22.0
Iceland	42.8
Turkey	52.3
Average OECD Total	8.1
Average OECD Europe	10.3
Average EEC	7.5

If one takes the longer term indicator of consumer price indices for 1977 where 1970 = base 100 then West Germany is in first place among the same group of countries. West German, that is, had the smallest rise in consumer prices over this seven year period:

Country^9	Consumer Price Index 1977 (1970 = 100)
West Germany	146.3
Switzerland	149.2
USA	156.1
Austria	161.0
Canada	165.4
Luxembourg	166.0
Belgium	174.8
Norway	178.0
Sweden	180.2
France	183.2
Denmark	189.0
Japan	203.6
Australia	207.6
New Zealand	217.5
Finland	224.0
Greece	227.0
Italy	236.6
UK	249.0
Ireland	249.9
Spain	258.9
Portugal	302.4
Turkey	307.3
Iceland	519.0

West Germany had, and continues to have, its unemployment difficulties. In comparison with other industrial countries, however, the German record has been quite good. In 1973 Germany was in fourth place on a list of 19 West European countries plus the USA, Canada, and Japan; that is, only three of these countries had lower unemployment figures than West Germany:

Country^10	Unemployed as proportion of civilian working population 1973
Luxembourg	0.0
Switzerland	0.0
Denmark	0.7
West Germany	1.0

By 1977 rather more countries could claim lower unemployment figures than West Germany, but Germany’s position was still not unfavourable seen in an international context:

Country^11	Unemployed as % of civilian working population 1977
Switzerland	0.4
Luxembourg	0.6
Norway	1.5
Sweden	1.8
Japan	2.0
West Germany	4.0
Belgium	4.3
France	4.9
UK	5.8
Denmark	5.9
Finland	6.0
Spain	6.3
USA	6.9
Netherlands	7.0
Canada	8.1
Ireland	9.7

West Germany has a better strike record than most countries. For the period 1966–70 Germany had the best record, that is the fewest working days lost through strikes, of 16 West European countries plus the USA, Canada, Australia, New Zealand and Japan.¹² For the longer period 1966–75, West Germany was in second place:

Country^13	Annual average working days lost per 1000 persons employed 1966–75
Sweden	49
West Germany	52
Norway	61
Netherlands	62
Japan	247
France	303
New Zealand	355
Belgium	368
Denmark	535
UK	775
Finland	833
Ireland	927
Australia	1,036
USA	1,318
Italy	1,766
Canada	1,849

Enough has been said to indicate that West Germany is a rich country, a substantial member of the international economic community, and a country which compares well with most of its neighbours on the evidence of statistics on economic performance and industrial well-being. These facts, other things being equal, give an added interest and salience to the study of German management.

There is an extension to this argument. Not only does German management function in a society that is economically successful now; this same society, only 30 years ago, was just emerging from a period of extreme, if artificial, poverty.

Then

That a country experiences deprivations during wartime is obvious. That Germany, on the losing side in the world’s worst war, suffered particularly is well recognised. What is perhaps less readily appreciated is that in several respects Germany suffered more in the period 1945–8 than in the period of her successive military failures, that is, between 1942 and 1945.¹⁴ With the end of the War, death and destruction in combat and through aerial bombardment ended: they were replaced by homelessness, hunger and death by ‘natural causes’ – malnutrition.

It was, in fact, the purely physical destruction of German cities which most impressed those who wrote eye-witness accounts. Here is a young British lieutenant’s account of his entry into Hamburg in an armoured car in May 1945:

If the damage in Harburg had been startling to our eyes the streets and waterfront of Hamburg were a revelation. None of us had ever seen anything to equal this wholesale destruction. It was Caen all over again, only ten times worse because ten times as big an area was affected. In the half light we could not see the damage in detail, but it was apparent that whole rows of houses, whole blocks, were a mere mass of rubble,...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Acknowledgments
• 1. Economic Life: Past and Present
• 2. The Structure of German Firms
• 3. The Background of German Management
• 4. The Character of German Management
• 5. The Views of German Managers
• 6. Production Management
• 7. The Foreman
• 8. The Standing of Industry
• 9. Export Potential?
• Bibliography
• Index