MANAGERIAL EXPERIENCES OF AMERICAN FIRMS IN GERMANY
This research examines the management issues faced by the Whirlpool Corporation and the Gillette Company in their operations in Germany. Each of the American companies operates in Germany through a subsidiary firm that was acquired through acquisition. Whirlpool acquired the German household appliance manufacturing operations of N. V. Philips, while Gillette acquired Braun, A.G., a German manufacturer of consumer electronic personal care products (Maruca, 1994, pp. 135-145; McConnville, 1992, pp. 52-55).
Following this introduction, a brief description of German business environment entered by the two companies is presented. This description is followed by the international management issues faced by the two companies.
Germany is a nation of 80.3 million people (Hunter, 1994, p. 597). Per capita gross national product is US$24,650, gross domestic product is US$1.8 trillion. Germany's international trade balance is traditionally in the black (p. 604). Exports typically exceed imports by approximately five-percent. German monetary and fiscal policy emphasizes the control of inflationary pressures (Epstein, 1993, p. 47). Consumer prices in Germany have risen by an average of approximately three-percent over the past five years (Economic indicators, 1995, pp. 116-117). The inflation rate in Germany is expected to fall below two-percent per year for the full year in 1995.
Germany has pursued a monetary policy that emphasizes the control of inflation, relatively high interest rates, and a strong mark, often to the complete dismay of the country's European Community partners (Epstein, p. 47). Monetary policy emphasizes interest rates and money supply management.
A major labor-related problem for companies entering into the German economy is the fact that Germans by and large are unwilling to accept jobs in industries where the wages are relatively low and the worki...