ng conditions poor by German standards. Multinational corporations looking to foreign locations for low-cost labor, therefore, should avoid Germany. Unemployment, however, is high in relation to traditional post-war German standards. Therefore, labor wage rate increases have been moderate. Labor stability is higher in Germany than in the United States. The turnover rate in German manufacturing firms is quite low.
Industrial activity employs 43 percent of Germany's workforce, while 54 percent are employed in the service sector of the nation's economy, and the remaining three-percent are employed in agriculture (World Bank, 1994, p. 240). German workers are among the best educated, best trained, and most productive to be found anywhere in the world.
Strong industrial unionization and legislation in Germany create job protection and security for German industrial workers. As a consequence, both strikes and unauthorized absenteeism among most German workers is low in relation to most other industrial countries. Employers in Germany encounter difficulties in effecting changes among the members of the German workforce. The tradition of strong worker social services and strong labor unions in Germany strengthens the will of employees to resist such changes suggested by management.
Key Management Issues Faced By the Companies
The advent of the Single European market within the European Community, of which Germany is a member, has caused German firms to begin planning for Community-wide expansion and joint ventures as a means of remaining competitive. Community-wide expansion will introduce a more decentralized control function into German business organizations. Similarly, organizatio
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