German Management Facing Globalization: The ‘German Model’ on Trial

This paper investigates the particular challenges facing German management as they seek to adjust to the global economy by increasingly internationalizing their business operations. Although globalization is a challenge to all national economies, the German economy, as an example of what Taplin describes in this volume as ‘consensual capitalism’ based on an activist state, is finding the adjustments especially difficult as they question the fundamental structure and characteristics of the national business system. In this paper, we focus on the ongoing debate about whether the ‘German model’, previously seen by many, not only in Germany, as a highly successful social welfare state, is now a liability in terms of Germany’s attractiveness as a location for business investment. We investigate German managers’ views on the issue, which are ambiguous since they want to retain what they see as the advantages of the model whilst introducing some Anglo-Saxon-style reforms. It is an open question whether they will be able to ‘have their cake and eat it’. No one knows as yet what the next phase of the German model will look like, although this paper makes some tentative suggestions about this. In conclusion, we question the longstanding attachment to national models as champions in management thinking.