1 Introduction

1.1 Reasons for Choice of Country

We decided to do our project over Germany because they're a leading World Trade Nation, a G-

20 Nation and one of the United States biggest trade partners.

1.2 Major Sources and Limitations

Our major sources are the World FactBook, Europa World, GlobalEdge, Business Source

Complete, and Market Line. With a project as detailed as this one we did have limitations. Some

of the limitations we encountered were finding reliable sources on Trade Balance of Payments

Positions and Investment Policy towards Economic/Industrial Development, as well as

information on E-commerce. Furthermore, Germany is involved in many different economic

organizations, but for this project we chose to focus mainly on the EU, since they 're one of

EU's most influential members. Additionally, the entrepreneurial section of the paper data of

self-employment may be skewed because the most current data was found in 2009.

1.3 The Country

Germany has faced major hindrances in the last one hundred years. They have been through

two major wars and were once divided into the western Federal Republic of Germany and the

eastern German Democratic Republic. Even after all of this sad history, Germany has become

Europe's largest economy and second most populous nation. Not to mention, the fifth largest

economy in the World. Germany occupies an area of 357, 124 sq. km., has a population of

80,523,746(est.) and a population density of 225.5 per sq. km. The life expectancy is 80.9: 78.6

males and 83.3 females. 1 Natural Resources are composed of coal, copper, lignite, salt, uranium,

1 The World FactBook, Europe: Germany. https://www.cia.gov /library/publications/the-wordfactbook/ geos/gm .html.

Table of Contents1 Introduction.........................................................................41.1 Reasons for Choice of Country...........................................................41.2 Major Sources and Limitations...........................................................41.3 The Country....................................................................................4

2 Social, Cultural, Political and Government Relations. 52.1 Politico-Economic Factors..................................................................5

2.1.1......................................................................................................The Political System............................................................................................5

2.1.2 Regional Economic Integration and Role in World Organizations .. 7 2.1.3 The EU.................................................................................................82.2 Socio-Cultural Characteristics.............................................................8

3 Country Economic/Trade Data and Trends.................93.1 Country's Economic Growth..........................................................93.2 Technological Factors........................................................................10

4 Role of Public Sector in Business Ventures and/or Privatization and Entrepreneurial Development.......11

4.1 Role of Public Sector.........................................................................124.2 Trends towards Privatization.............................................................124.3 Entrepreneurial Development......................................................13

5 Multinationals/Joint Ventures, Management Infrastructure and Major Companies of National Origin..................................................................................13

5.1 Multinationals/Joint Ventures in Country.........................................145.2 Management Infrastructure...............................................................145.3 Major Companies of National Origin...............................................155.4 Major Strengths, Findings and Issues...........................................16

6 Conclusions........................................................................176.1 Major Findings...................................................................................176.2 Limitations.........................................................................................186.3 Concluding remarks...........................................................................19

7 Appendix.......................................................................208 References.....................................................................22

nickel, iron ore, natural gas, timber, and construction materials. Agriculture products produced

by Germany are potatoes, wheat, cabbage, barley and fruits.2

2 Social, Cultural, Political and Government Relations

2.1 Politico-Economic Factors

2.1.1 The Political System

The Federal Republic of Germany consists of 16 federal states (Baden-Wlirttemberg, Bayem,

Berlin, Brandenburg, Bremen, Hamburg, Hessen, Mecklenburg-Vorpommem, Niedersachsen,

Nordrhein-Westfalen, Rheinland-Pfalz, Saarland, Sachsen, Sachsen-Anhalt, Schleswig-

Holstein, ThUringen) and the powers of the country are divided into two sections of the

government, the Federal Government and the federal states. The federal states have their own

constitutions, parliaments and governments and they have far-reaching legislative powers

regarding state finances, cultural, educational and social policies. The states have the right to

legislate as long as the laws do not confer legislative power on the Federation. 3

The German law defines five state institutions: the Bundestag, the Bundesrat, the Federal

President, the Federal Government and the Federal Constitutional Court.4 The Bundestag is

elected by the German people and is the forum where differing opinions about the policies are

discussed. The most important role of the Bundestag is the legislative process and the

parliamentary scrutiny of the Federal Government and its work. Another important role of the

Bundestag is the election of the German Federal Chancellor. Besides these tasks, the members

2 Germany, in Europa World online. London, Routledge. Wichita State University Libraries. Retrieved 02 September 2014 from http://www.europaworld .com/entry .3 Sveriges Ambassad: Berlin. N.p., n.d. Web. 28 Sept. 2014.<http://www .swedenabroad .com/sv-SE/Ambassader/Berlin/Landfakt a/Om-Tyskland/Politik/>.4 GermanMissions in the United States. N.p., n.d. Web. 28 Sept. 2014.<http://www.germany .infoNertretun g/usa/en/06_Foreign_Policy_State/04_Political_System/03_Constitutional_Organs/_In tituti ons.html>.

of the Bundestag also decide on the federal budget and deployments of the Federal Armed

Forces outside Germany.5

The Bundesrat represents the 16 federal states and is obliged to deliberate on each federal law.

The Bundesrat has 69 members which are delegates of the 16 state governments. The vote each

state has depends on the size of its respective population. 6 One can say that the Bundesrat plays

the role of providing a link between the Federation and the federal states, since the Bundesrat

represents both the state as a whole and each of the federal states. One can also say that the

Bundesrat has the functioning of a counterweight to the Bundestag.7

The Federal President is elected for a five-year period and is the only constitutional organ that

consists of only one person. One of the traditional functions of the Federal President is to

represent the Federal Republic of Germany, both at home and abroad, through public

appearances at social and cultural events, speeches, visits to different federal states, state visits

abroad and as host to foreign state guests. Another of the traditional functions of the Federal

President is to represent the Federal Republic of Germany for the purposes ofintemational law.

There is nothing in the legislation that bans the Federal President from making political

statements, but he generally does not comment publicly on issues when there is some

controversy among the political parties. This party-political neutrality allows the Federal

President to remain above party politics.8 The current President is Joachim Gauck.

5 Deutscher Bundestag. N.p., n.d. Web. 28 Sept. 2014.<http://www.bundestag.de/htdocs _e/bundestag/function/function/197608 >.6 GermanMissions in the United States. N.p., n.d. Web. 28 Sept. 2014.<http://www.germany .infoNertretung/usa/en/06_Foreign_ Policy_ State/04_Political_ Systern/03_Constitu tional_Organs/_Institutions.html >.7 Bundesrat. N.p., n.d. Web. 28 Sept. 2014 .<http://www.bundesrat .de/static/Web/EN/funktionen-en/inhalte/3-Bindeglied-en .html>.8 Der Bundersprasident. N .p., n.d. Web. 28 Sept. 2014.<http://www.bundespraesident.de /EN/Role-and-Functions /Constitutiona!Basis/Constitutiona !Basis-node.html> .

The Federal Government and cabinet are made up of the Federal Chancellor and the Federal

Ministers. The Federal Chancellor holds the power to issue directives and the Federal Ministers

have departmental powers, which means that they independently run their respective ministries

in the framework of those directives. The Federal Government decides by majority.9

The task of the Federal Constitutional Court is to ensure that all institutions of the state obey

the constitution of the Federal Republic of Germany, the Basic Law. All government bodies are

obliged to comply with the Basic Law and should any conflict arise, the jurisdiction of the

Federal Constitutional Court may be invoked. Its decision is final and all of the above

mentioned institutions are bound by its case law.10

2.1.2 Regional Economic Integration and Role in World Organizations

The German economy is the fifth largest in the world, and Europe's largest, in purchasing

power parity (PPP) terms. Germany is a leading exporter of machinery , vehicles, chemicals,

and household equipment and benefits from a highly skilled labor force.11

Germany was a founding member of the European Community , which is now the European

Union (EU), and participated in the introduction of the single European currency, the euro.

Germany is also a member of the Council of Europe, the Organization for Security and Co-

operation in Europe (OSCE), the Council of the Baltic Sea States, the Organization for

Economic Co-operation and Development (OECD) and the North Atlantic Treaty Organization

9 German Missions in the United States. N.p., n.d. Web. 22 Oct. 2014 .<http://www.germany.infoNertretung/usa/en/06_Foreign_Policy_State/04_Political_Systern/O l_Govem ment/ Goverment.html>.10 Das Bundesverfarssungsgericht.N .p., n.d. Web. 22 Oct. 2014.<http://www.bundesverfa ssungsgericht.de/en/organi zation/task.html>.1 1 The World Factbook. Central Intelli gence Agency, n.d. Web. 22 Oct. 2014 .<https://www.cia.gov/library/publi cations/the-world-factbook/geos/gm.html>.

(NATO). Germany is also a contracting party to the General Agreement on Tariffs and Trade

and has joined the World Trade Organization (WT0). 12

2.1.3 The EU

One of the organizations in which Germany plays a major role is the EU. The EU is a unique

economic and political partnership between 28 European countries, which ensures free

movement of goods, services, capital and persons. This means that that the European citizens

are free to live, work, study and do business within the internal market. The EU has contributed

to competition, the creation of new jobs, more affordable prices for consumers and enabled

businesses and citizens to benefit from a wide choice of goods and services. 13

German power rests primarily on the country's economic strength, for instance in terms of gross

domestic product (GDP). This economic strength gives the country status, influence, and

certain independence in its decision making. Another factor that has contributed to Germany 's

power is geography. Germany is situated in the middle of Europe, between Central Europe and

Western Europe and between Scandinavia and the Mediterranean, and lies at a crossroads of

flows of goods and people. Germany has strong economic, social, and political ties with all its

neighbors and plays a mediating role between the different political, social, and economic

views and attitudes in Europe. 14

2.2 Socio-Cultural Characteristics

Germans can be considered the masters of planning. Most aspects of German living and

working are defined and regulated by structure, for instance through laws, rules, and

12 Europa World. N.p., n.d. Web. 22 Oct. 2014. <http://www.europaworld.com /entry/de.is.100115 >.13 Europa: Summaries of EU legislation. N.p., n.d. Web. 24 Oct. 2014.<http://europa .eu/legislation_summaries/internal_ market/index_ en.htm>.14 Carnegie Europe. Ed. Ulrich Speck. N.p., 14 Mar. 2014. Web. 24 Oct. 2014.<http://carnegieeurope.eu/2014 /03/ 14/foundations-of-german-power >.

procedures. Rules and regulations allow people to know what is expected so they can plan their

lives accordingly. In German business culture, this is reflected in the low degree of flexibility

and spontaneity in attitudes and values. Germans do not like surprises and sudden changes in

business transactions, even if they may improve the outcome. In Germany, business is viewed

as being very serious and humor is not appreciated in a business context. Counterparts do not

need or expect to be complimented and it's important to consider that work and personal lives

are rigidly divided.15

3 Country Economic/Trade Data and Trends

3.1 Country's Economic Growth

Germany is one of the world's largest and most advanced economies. According to The World

Factbook, Germany is the world's fifth largest economy and is an export and domestic demand

country. Their main exports are vehicles, machines, and even chemicals. 16 Exports are nearly

half of their gross domestic product (GDP), which was $3.227 trillion in 2013. In 2012, their

gross national income (GNI) was equivalent to $3,603,895 million. 17 The GDP real growth rate

is not as competitive as a lot of Germany's other economic factors; the rate is only 0.5%,

ranking them 185 out of 221 countries. 18

Germany primarily trades with the European zone, but does have strong trading relations with

the United States. Their main export partner is France, but the United States comes in at close

second.19 Their exports amounted to $1.493 trillion in 2013, which was ranked #4 in the

15 Passport to Trade. N .p., n.d. Web. 24 Oct. 2014. <http://businessculture.org/western-europe /business-culture in-germany/business-etiquette-in-germany />.16 "The World Factbook." Central Intelligence Agency. N.p., n.d. Web. 30 Sept. 2014.<https://www.cia.gov /library/publications/the-worl d-factbook/geos/gm.html>.17 Economic Affairs (Germany), in Europa World online. London, Routledge. Wichita State University Libraries. Retrieved 29 October 2014 from http://www.europaworld .com.proxy.wichita.edy /entry/de.is.59. 18 Country Statistics (Germany), in Europa World online. London, Routledge. Wichita State University Libraries. Retrieved 30 September 2014 from http://www.europaworld .com.proxy.wichita.edu/entry/de.ss.1 19 "The World Factbook." Central Intelligence Agency. N.p., n.d. Web. 30 Sept. 2014 .<https://www.cia.gov/Iibrary/publications/the-world-factbook/ geos/gm.html>.

world.20 One of the major trading agreements between the two countries is The U.S.-Germany

Treaty of Friendship, which is an agreement over tariff barriers that allows for the free

movement of capital amongst them.21 According to the U.S. Department of State, Germany and

the United States also have peace and security relations. Furthermore, Germany was the United

States' top importer in 2011. The United States and Germany are also members of several of

the same organizations globally such as, the UN, G-20, IMF, WTO and NAT0.22

These relations suggest that the two countries have the same ideals for their countries and

ultimately are allies. Germany maintains a strong growing economy by being one of the world's

largest and primary exporters and limiting their imports to a minimal number. Germany is also

knowledgeable of the benefits of foreign direct investment internationally and has invested

$1.871 trillion of their money.23 They also pay attention to their domestic needs such as a low

unemployment rate and filling their demands. Germany is a successful country by taking part

in a number of international organizations and building strong relationships with important

trading countries. They realize and understand the importance of trading and integration

amongst countries and that ultimately is what makes them successful.

3.2 Technological Factors

Germany is a very technologically advanced country. According to BBC News Europe, They

have a very competitive TV market with televisions in over 90% of the country's households.

They also state that Germany is competitive in Internet usage as well. The Internet for Germany

20 "The World Factbook." Central Intelligence Agency. N.p., n.d. Web. 30 Sept. 2014.<https://www.cia.gov/library/publications/the-world-factbook/geos /gm.html>.21 "U.S. Relations With Germany." US. Department of State Diplomacy Action. N.p., n.d. Web. 29 Oct. 2014.<http://www .state.gov/r/pa/ei/bgn/3 997.htm>.22 "The World Factbook." Central Intelligence Agency. N.p., n.d. Web. 30 Sept. 2014.<https://www.cia.gov/library/publications/the-world-factbook/geos /gm.html>.23 "The World Factbook." Central Intelligence Agency. N.p., n.d. Web. 30 Sept. 2014.<http ://www.cia.gov/library/publications /the-world-factbook/geos /gm.html>.

escalated in 2012 when 67.5 million started to use the Internet and one of the most popular

websites/social media sites visited was Facebook.24

Germany also takes advantages of household telephones and cellphones. The amount of people

who use cellphones more than doubles the amount of people who use landlines, making it easier

and more convenient to communicate throughout the day no matter where they are.25

Germany is Europe's most industrialized country.26 It also has a large labor force of 44.2

million. Although, less than 30% of that partakes in industry and agriculture, which accounts

for over 30% of the GDP in the country.27 According to Europa World, in 2009 Germany

decided to prevent the increase of unemployment by reducing workers number of hours worked

per week and in 2014 they presented the idea of a minimum wage for the country. 28 Germany

makes it a point to be aware of the amount of people unemployed and to think quickly to correct

the problem, which has made them a successful and more productive country. The use of

telecommunications also allows for information to spread quickly domestically and

internationally.

4 Role of Public Sector in Business Ventures and/or Privatization and Entrepreneurial Development

24 "Germany Profile." BBC News Europe. N.p., n.d. Web. 30 Sept. 2014.<http://www .bbc.com/news/world-europe- l7299607>.25 Communications Media (Germany), in Europa World online. London, Routledge. Wichita State University Libraries. Retrieved 29 October 2014 fromhttp://www.europaworld.com.proxy.wichita.edy /entry/ropafms2.ss.32.26 "Germany Profile." BBC News Europe. N.p., n.d. Web. 30 Sept. 2014.<http://www.bbc.com/news /world-europe-17299607>.27 "The World Factbook." Central Intelligence Agency. N.p., n.d. Web. 30 Sept. 2014.<https://www.cia.gov/library/publications/the-world-factbook/geos/gm.htrnl >.28 Economic Affairs (Germany), in Europa World online. London, Routledge. Wichita State University Libraries. Retrieved 29 October 2014 from http://www.europaworld.com .proxy.wichita.edy/entry/de.is.59.

4.1 Role of Public Sector

The German constitution has set up basic freedoms like in America, but the free market

economic system has been modified because of their memory of market distorters and social

tensions prior to 1939 in fascist Germany and is termed a "Social Market Economy". The social

market economy has a safety net of benefits for the employees, from health protection to

unemployment and disability compensation, and is paid for by individuals, employers and

public funds. The government attempts fair play between management and the employer and

regulates capitalist relationships in the market, particularly toward monopolistic competition.

The government also acts as owners of some enterprises, mainly public utilities. Outside of the

government , the market is also regulated by a plurality of agencies, mainly delivering social

benefits. 29

4.2 Trends towards Privatization

Privatization in Germany has been a very long process. In the early twentieth century, large

scale nationalization took place to industrialize the country. Nationalization slowed down after

the war and there were actually attempts at privatization that failed from 1959 through 1965.

When the Social Democratic Party took power in 1969, privatization was against their political

principles. The move toward privatization thus was very minimal during their reign from 1969

through 1982. In the early 1980's conflict arose between the Social Democratic Party and the

Free Democratic Party, resulting in a shift of powers and paving the way for historic

privatization measures. Between 1986 and 1989, Germany started to privatize the auto

manufacture, Volkswagen , the energy and chemical company, Verna, and the airline company,

Deutsche Lufthansa. Since 1989, the Germany telecommunications and postal sector has been

29 Sheehan, James. "Germany." Encyclopaedia Britannica . 27 Mar. 2014. Web. 27 Oct. 2014.<http'.//www .britanni ca.co/EBchecked/topi c/231186/Germany/58011/Economy>.

a major area of privatization for the government. Mainly the ongoing partial sales of the

Deutsche Post and Deutsche Telekom, or T-Mobile. Other Stated Owned Enterprises becoming

privatized , include the manufacturing company Jenoptik AG, the utility company MVV

Energie AG, and the real estate company Bankgesellschaft Berlin AG.30

4.3 Entrepreneurial Development

Entrepreneurship has been going on in West Germany since the end of World War II , as the

country thrived from the economic restructuring provided by the allied forces. Although, it

wasn't until the fall of the Berlin wall in 1989 that East Germany was finally able to start

reaping from the benefits of entrepreneurship that was once frowned upon in their socialistic

economy. East Germany was able to adopt the formal institutions that had provided success in

West Germany, and Entrepreneurship growth has been very fast. Self-employment grew rapidly

in the 1990's in East Germany and in 2004 they reached the rates of West Germany and had a

total of 3,852,000 self- employed people in Germany. Germany major reformations in the labor

markets around 2005 and the extension of public support by startup of companies by

unemployed people has led to a continued increase in self-employed people.31 Based on the

newest self-employment numbers in the article "How Much of a Socialist Legacy? The Re-

emergence of Entrepreneurship in the East German Transformation to a Market Economy",

there were approximately 4,215,000 Germans who are self- employed.

5 Multinationals/Joint Ventures, Management Infrastructure and Major Companies of National Origin

30 "Germany" Privatization Barometer. Web. 26 Oct. 2014.<http://www .privatizationbarometer .net/atlas.php?id=7&mn=PM>.31 Fritsch, Michael, Elisabeth Bublitz, Alina Sorgner, and Michael Wyrwich . "How Much of a Socialist Legacy? The Re-emergence of Entrepreneur ship in the East German Transformation to a Market Economy." SmallBusiness Economics 43 (2014):428-30. Print.

5.1 Multinationals/Joint Ventures in Country

Germany's location at the heart of Europe, highly developed economy, ranking on the global

stage and Europe's number one location for research and development has made it a very

enticing country for foreign companies.32 Thus, many well-known companies have operations

in Germany. The main foreign companies operating in the country are the automobile

manufacturer Ford, the automobile manufacturer General Motors, the oil company Exxon, the

electronic company Toshiba and the energy company Total.33 Furthermore, you can find the

American conglomerate 3M, the American electronic commerce company AMAZON, the

American postal service company FedEx, the Dutch technology Company Philips, the Swiss

watch company Rolex, and the British vacuum manufacturer Dyson. You can also find Asian

companies, like the Taiwanese electronic company Asus, the Korean LG Electronics, the

Japanese imaging and optical makers Canon and Fujifilm and the Chinese telecommunications

company Huawei.34

5.2 Management Infrastructure

Looking at the information on the executives from a few of the major companies that have

originated in Germany on Mergent Online, the management infrastructure of the country is very

similar to that of the United States of America. Thus the infrastructure has a few top executives

and trickles down to managers of certain portions of the business. The leading executive of

most of the companies looked at on Mergent Online had the title of chairman or chief executive

officer. Chief financial officers were found to be part of the company's management

32 "10 Reasons to Choose Germany." GTAI -. Germany Trade and Investment. Web. 27 Oct. 2014.<http://www.gtai.de/GTAI!Navigation/EN /Invest/Business-location-germany / 10-reasons-to-choose germany .html>.33 "Germany: Foreign Investment." Santander. Export Entreprises SA, 1Oct. 2014. Web. 26 Oct. 2014.<https://en.santandertrade.com/establish-overseas/germany /foreign-investment>.34 "Well- Known Foreign Companies in NRW ." NRW.lnvest Germany. Web. 26 Oct. 2014 .<http://www.nrw invest.com/NR W_at_a_glance/Good _reasons_for_NRWIF oreign_Companies/ index.php>.

infrastructure. There were also officers in charge of certain portions of the business, like sales,

marketing, production and certain international countries' operations or global operations as a

whole. 35

5.3 Major Companies of National Origin

According to Forbes, the largest company in Germany is Allianz. It is a multinational company

that focuses on insurance with sales of 124.4 billion dollars, profits of 3 billion dollars, assets

of 1,300.6 billion dollars and a market value of 60.6 billion dollars in the last fiscal year. The

second largest company in Germany is Daimler. It is a multinational automotive manufacturer

and had sales of192.8 billion dollars, profits of 3.3 billion dollars, assets of 245 .9 billion

dollars and a market value of 51.7 billion dollars in the last fiscal year. The third largest

company in Germany is Deutsche Bank Group. It is a global financing and banking service

with sales of

60.2 billion dollars, profits of 3.4 billion dollars, assets of 1134.8 billion dollars and a market

value of 70.5 billion dollars in the last fiscal year. The fourth largest company in Germany is

Deutsche Telekom. It is a telecommunications company with sales of 78.5 billion dollars,

profits of 6.3 billion dollars, assets of 146.3 billion dollars and a market value of 70.5 billion

dollars in the last fiscal year.36

Allianz has insurance supplier relationships with travel companies such as Southwest Airlines,

Air France, Carnival Cruises, Royal Caribbean and Singapore Airlines.37 Daimler- Chrysler

provides cars, vans and freightliner vehicles to customers all over the world. Some of the

suppliers of Daimler- Chrysler are B.A.E Industries, Petoskey Plastics, Detroit Chassis LLC,

35Mergent Online. Web. 27 Oct. 2014. <http://www.mergentonline.com.proxy.wichita.edu/compsearch.asp>.36 "The Largest Germany Companies." Forbes. Forbes Magazine. Web. 27 Oct. 2014.<http://www.forbes.com/lists/2005/183/Rank_ l.html>.37 "Covered Suppliers List as of June 30, 2014." Allianz Global Assistance. Web. 27 Oct. 2014.<http://www.allianztravelinsurance.com/aa/coveredsuppliers.aspx> .

Johnson Controls, Motorola Inc. and Ashland Inc.38 Deutsche Bank provides payment and

current account services, investment management, investment planning and loans to 24 million

clients in Germany, Belgium, India, Italy, Poland, Portugal, Spain and other International

Countries.39 Deutsche Telekom supplies telecommunication services over 31 million fixed

networks and over 17 million broadband networks to 143 million mobile customers in 50

countries.40 Some of their major supplier relationships are with Cisco, Salesforce.com, Alliance,

Avaya and Pisa.41

Additionally, other smaller, but notable, countries in Germany are Volkswagen, Adidas and

Porsche. Volkswagen is an automotive company that had sales of 120.7 billion dollars, profits

of 0.9 billion dollars, assets of 169.5 billion dollars and a market value of 17.3 billion dollars

in the last fiscal year. Adidas is a sports shoe manufacturer with sales of 8.8 billion dollars,

profits of 0.4 billion dollars, assets of 5.8 billion dollars and a market value of 9.7 billion

dollars in the last fiscal year. Porsche is another automotive manufacturer with sales of 8 billion

dollars, profits of 0.9 billion dollars, assets of 11.5 billion dollars and a market value of 6.4

billion dollars in the last fiscal year.42

5.4 Major Strengths, Findings and Issues

In recent years Germany's economy has improved due to positive economic development; rise

in employment and by conducting some of the World's largest trade events. Germany is not

only the fifth largest market for US exports but also the United States largest European trading

38 "Connecting Buyers IPS Opens Horizons." Global Supplier: 21. Print.39 "Private and Business Clients." Deutsche Bank. Web. 27 Oct. 2014.<https ://www .db.com/en/content/company/Private-and-Business-Clients. htm>.40 "Deutsche Telekom: At a Glance." Deutsche Telekom: At a Glance. Web. 28 Oct. 2014.<http://www.telekom.com/company/at-a-glance/64478>.41 "Media Information Enterprise Solutions." Deutsche Telekom: Archive . Web. 28 Oct. 2014.<http://www .telekom.com/media/enterprise-solutions/70160 >.42 "The Largest Germany Companies." Forbes. Forbes Magazine. Web. 27 Oct. 2014.<http://www.forbes.com/lists/2005/l 83/Rank_ 1.html>.

partner. Germany's major strength is the fact that their market is the largest in the EU and

remains an important element to any export strategy to Europe. 43 On the other hand, German

restrictions on biotech agriculture products represent one of their major challenges.

Germany offers highly skilled labor force, high values of productivity and quality engineering.

Unfortunately, this might require a higher cost of business to the US investors. Innovation,

research and development, high product range quality level and diversity of production make

up some of Germany's major strengths. While its weaknesses are the demographic decline, lack

of engineers, and low female employment rate.44

Germany's future is also compromised by the illegal party funding and nepotism that continues

to grow. Group of States against corruption (GRECO) criticized Germany for failing to

strengthen their laws that confront illegal party funding. According to GRECO corruption is an

impediment to development and its presence could hinder future investment.45

6 Conclusions

6.1 Major Findings

• Germany is one of Europe's most powerful countries. The German economy is the fifth

largest in the world, and Europe's largest, in purchasing power parity (PPP) terms. This

economic strength gives the country status, influence, and certain independence in its

decision making. Another factor that has contributed to Germany's power is geography.

Germany is situated in the middle of Europe and lies at a crossroads of flows of goods and

people.

43 "Chapter 1: Doing Business in Ge1many ." Export.Gov. N.p., 11 July 2014. Web. 10 Oct. 2014 .<http://export.gov/germany/MarketResearchonGermany /CountryCommercia!Guide/DoingBusinesslnGermany/e g_de_034823.asp>.44 "Germnay: Risk Assessment." Global Edge. N.p., Dec. 2013. Web. 1 Sept. 2014.<http://globaledge.msu.edu/countries /germany/risk>.4 "Gemrnny: PESTLE Country Analysis Report." MarketLine (2013) : 2-5, 53+. Print.

• In Germany, business is viewed as being very serious and work and personal lives are

rigidly divided. German business culture has a low degree of flexibility and spontaneity in

attitudes and values. They do not like surprises and sudden changes in business transactions,

even if they may improve the outcome.

• Germany is a successful trade country because it takes advantage of exporting more goods

than importing and building strong relations with those trading countries.

• Germany has one of the lowest unemployment rates in the world. They have been able to

acknowledge issues in the labor system and take action. Mainly, the reduction of working

hours per week, allowing more people to work.

• Germany has a "Social Market Economy" that has a safety net, including health protection

and unemployment and disability compensation, which benefits employees. The

government also regulates fair play between management and employer and capitalistic

relationships in the market.

• Germany's location at the heart of Europe, highly developed economy, ranking on the

global stage and Europe's number one location, has made it a very enticing country for

foreign companies.

6.2 Limitations

We have found some very important limitations affecting the economic and environmental

well- being of Germany, USA and the world looking toward the future that may need to require

future research. Significant exposure to Eurozone Economies, mainly Italy and Spain, has made

the German Labour Market vulnerable to future external economic shocks that may occur.

Germany is also facing an aging population, similar to the USA, and resulting in negative

worker- replacement ratio looking forward. This aging population brings reduction in the work

force and increased government spending to take care of the elderly. Germany is also facing a

deficit in skilled engineers and a decline in the technical workforce. These trends, if continued,

could hinder Germany's stance as one of the world's top high tech industries. In addition,

Germany's energy sector has also become very reliant on coal power plants, increasing the

greenhouse gases emitted and possibly affecting the environmental well- being of the country.

Germany has also been involved in a few cases of government corruption and continuing this

could defer future foreign direct investments there.46

6.3 Concluding remarks

Inconclusion, Germany's location at the heart of Europe, highly developed economy and high

tech industry has made it one of the most successful countries in the world. They are currently

the fifth largest economy and, more importantly, are able to export more than they import

resulting in a positive trade balance. Likewise, they have taken advantage of making good

trading relations with European Countries and the United States. They are also perfect for

foreign multinationals looking to invest abroad; with many companies like, Exxon, Toyota and

Ford already in the country. Unfortunately, their "Social Market Economy" is not quite a free

market, but in recent years privatization of government enterprises and a growth in self

employment has become common place. This has allowed countries of national origin, like

Deutsche Telekom, Volkswagen and Allianz to prosper. Looking toward the future, Germany

faces problems from external shocks of other Eurozone Countries, an aging labor market, and

decline in engineers and technology workers. Although, based on their current economic

performances and if they can successfully eliminate or minimize the problems facing them,

Germany definitely has a chance to continue to be a major world economic power for years to

come.

46 "Germany: PESTLE Country Analysis Report." MarketLine (2013): 2-5, 53+. Print.

Abstract

This paper is about Germany - a leading World Trade Nation, G-20 Nation and one

of the United States biggest trade partners. Germany is a leading exporter of

machinery ,

vehicles, chemicals, and household equipment and benefits from a higlify skilleo laoor -

force. Exports are nearly half of their gross domestic product (GDP), which was $3.227

trillion in 2013. Germany's location at the heart of Europe, highly developed economy,

ranking on the global stage and Europe's number one location for research and

development has made it a very enticing country for foreign companies.

Some very important limitations have been found, which are affecting the economic and

environmental well- being of Germany, USA and the world looking toward the future that

may need to require future research . Significant exposure to Eurozone Economies, mainly

Italy and Spain, has made the German Labour Market vulnerable to future external

economic shocks that may occur. Germany is also facing an aging population, similar to

the USA, resulting in negative worker- replacement ratio looking forward. However,

based on Germany 's current economic performances and if they can successfully

eliminate or minimize the problems facing them, Germany definitely has a chance to

continue to be a major world economic power for years to come.

Self- Employment Rates (1991 - 2009)

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

WestGerm.iny -Setf·employment rate, overall

-Setf·employment rate in West Germany Self-employment rote in Eas.t Germany

Fritsch, Michael , Elisabeth Bublitz, Alina Sorgner, and Michael Wyrwich . "How Much of a Socialist Legacy? The Re emergence of Entrepreneurship in the East German Transformation to a Market Economy. " Small Business Economics 43 (2014): 430. Print

:!......0

l3.037 3•091

3,175,

Thousands

8 ReferencesInternet

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7 AppendixGerman GDP (1990 - 2014)

GERI.\ANY GOP,,

;.. : .. :::. ' ..

1990 1995 2000 2005 2010

"Germany GDP 1970-2014 I Data I Chart I Calendar I Forecast INews." Germany GDP. Web. 3 Nov. 2014.<http://www.tradingeconomics.com/germany /gdp>.

Germany vs Other Nations - Unemployment Rates '

Percent Chart 1. Unemployment r»tes adjusted to U.S. concepts, 10countries, seasonallyadjusted, February 20U·June 2013

27

24

21

18

15

12

9

6

3

0United Canada Austraria Japan France Germany Italy Netherlands Sweden United States

Kingdom

"International Unemployment Rates and Employment Indexes, Seasonally Adjusted, 2009-2013." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics. Web. 3 Nov. 2014.<http://www.bls.gov/fls/intl_unemployment_rates_monthly.htm#Rchartl >.

4000 4000

3500 3500

3000 3000

2500 2500

2000

1500

2000

1500