Comparing the United States 1

and Germany in terms of ethics

Neal Pathak
Comparing the United States 2
and Germany in terms of ethics

Abstract

Purpose

This paper studies the similarities and differences between the ethics

and morals of the United States and Germany. By studying these similarities

and differences, companies on both sides can use this information to

efficiently interact with each other. Knowing another countrys business

culture will only improve the interactions between the two countries. Global

business will keep advancing as long as countries stay culturally aware.

Design/Methodology/Approach

This research paper shows how history, culture, and other factors

affect the ethics that the United States and Germany have today. By

analyzing articles related to these topics, educated conclusions can be

presented to companies who will benefit greatly. Reviewing this information

and utilizing it is the key to smoother interactions between countries.

Findings

The findings showed that understanding another countrys culture is

necessary for advancing global business. Without a proper knowledge of

another countrys ethical standards and morals, making crucial decisions

becomes too difficult even for the most skilled diplomats.

Originality/value/contributions
Comparing the United States 3
and Germany in terms of ethics

This study is original as it uses multiple sources to collect data from.

This data was then used to compare the United States and Germany in terms

of ethics dealing with business.

Introduction

Doing business in another country requires knowledge of their ethics.

Without this information, a common act in your home country might offend

someone from another country. Even if offending this other person was

unintentional, all this can be avoided by doing research on the countrys

ethics. Ethics are defined as moral principles that govern a persons

behavior. These ethics can vary greatly from country to country, but this

study focuses on the United States and Germany. The United States and

Germany are both developed countries, but there are definitely more

differences than similarities.

Your countrys reputation might give other countries preconceived

notions about your ethics. Preconceived notions can be used to an

advantage if you exceed the other countries expectations. These notions

might exist because of events that have occurred in the past such as Enron,

Tyco, and WorldCom. This is a small part in the interaction process because

acting appropriately is the most important part. Acting with respect and

knowledge of the other countrys culture shows the other country how much

you care and how serious this is to you. This can go a long way in
Comparing the United States 4
and Germany in terms of ethics

international business as making deals with other countries is common and

mutual respect helps the process more efficient.

The United States and Germany do business together efficiently

because their knowledge of the others ethics and culture. This mutual

respect basically locks in a partnership between the two countries. Locking in

a partnership with another country is a huge deal in international business.

Background of the United States

The United States culture is often referred to as a melting pot

because of all the different types of people that move here. This mixing of

cultures and lifestyles makes the United States the most diverse place on

Earth. With this unique combination, the United States is an ideal place for

international business.

With over 40 languages spoken daily, there are countless ways to

communicate with others in America. Each region also has its own accent,

something that the United States has in similar with other countries. Along

with languages, the United States is also home to all religions. About twenty

percent of Americans dont associate themselves with a religion. Most

Americans are Christian, but the rest vary from Hinduism to Mormonism.

With a rich history, America has built up countless traditions. From

watching baseball to eating apple pie, the activities that are considered

American are countless. This unique blend of cultures makes the general
Comparing the United States 5
and Germany in terms of ethics

population more culturally aware. Safe to say, American can be said to be

one of the most unique regions on this planet having such cultural diversity.

When kids grow up in America, they are exposed to differently cultures,

and this gives them an advantage in the future. This advantage comes from

being able to interact with all types of people, not just your own. Being a

country that treats everyone equally, everyone is careful not to say things

that may offend another person. This careful attitudes carries on to the

business world, so interacting with representatives from another country

becomes easier.

Mostly Calvinist Protestants led industrialization and the building of big

American companies. This Protestant background influenced American ethics

with the notion that business and ethics have a positive relationship. This

belief was the foundation of ethics in the United States, and it still applies to

this day. Doing the right thing is the general idea, and this works well

because other countries can respect that.

Today most companies make their employees follow a Code of Ethics.

(Groves 2012) This code helps ensure that all employees act appropriately

while representing the company. Implementing this system of business ethics

has improved Americas power in global business. (Abend 2013)With the

ability to work well with any type of country, conducting business becomes

much more efficient. As a world superpower, conducting business efficiently

is necessary in maintaining power.

Comparing the United States 6
and Germany in terms of ethics

The future of the United States in terms of global business appears to

be bright. With companies getting stricter on ethical practices, and laws

being written to prevent fraud, America is securing its position as a

superpower. Taking pride in being ethically sound and morally right is also a

smart strategy America is implementing. This pride says that the United

States is ethical because it wants to be, not because it has to be. America

also sets an example for other countries with this method, leaving its

influence throughout the world.

Background of Germany

Germany is a developed country with countless resources to offer the

international business world. Although it is not as diverse as the United

States, Germany has many aspects that make it unique. The rich history of

the German people stretches as far back as Julius Caesar. The countrys

language is German, with different regions having different dialect. The two

major religions of Germany are Protestant and Roman Catholic. Education is

important as virtually all the residents attend an institute of higher learning.

Although the United States has a more diverse history, Germany has

had its share of interesting experiences. One of the most prominent times

Germany has played a role was during World War 2. During this time,

Germany and the United states were on opposite sides. After losing the war,

Germany had to go through a rebuilding stage. (Penzig)This rebuilding was

necessary for the recovery of Europe.

Comparing the United States 7
and Germany in terms of ethics

Germany now has one of the worlds most prosperous economies.

Manufacturing is where Germany gets most of its strength, supplying high-

tech industrial equipment. Names like BMW and Volkswagen are familiar

throughout the world, and this familiarity helps Germany grow stronger. With

a strong economy and multiple resources, Germanys potential for

international business is endless.

More than half of Germanys trades are composed of other European

countries, but others include China, Switzerland, and the United States.

Doing business consistently with these countries ensures success for

Germany internationally.

Germany practices fair and good business, but they dont emphasize

the word ethics like the United States does. Their business etiquette

includes things like punctuality, firm handshakes, and seriousness. (ZATOR-

PELJAN 2013)Humor is not taken well in a business setting for Germans.

These things may seem like ethical things to do, but Germans do not put that

label on them. Compared to the United States, Germany has barely

implemented any ways to officially teach ethics across the nation. This is

changing however, and this helps Germany have a better reputation in the

eyes of other countries. Even if Germany is already ethically sound, telling

the entire world they are trying to improve will only benefit them.

The future of international business for Germany is extremely similar to

the United States. Known for their quality products, Germany is locked in
Comparing the United States 8
and Germany in terms of ethics

doing business with multiple countries. Adding programs to educate

employers on ethics will only increase the chances of success for Germany.

Ethics of the United States

Since the country was founded, America has taken pride in being

ethically and morally right. Maximizing profit while upholding values and

laws is the general idea behind American business ethics.(Groves 2012) The

most common business ethics include anti-discrimination, general

professional conduct, honest marketing, and financial responsibility. A simple

slip-up in any of these categories can lead to disasters within the company.

Frauds such as Enron could have been avoided if the employees responsible

were more inclined to be ethical. These types of frauds arent frequent

however, as the majority of companies run smoothly.

A good reputation increases chances with doing business with another

person. The United States is using this to their advantage by starting

business ethics programs. The reasoning behind starting these programs

varies from wanting to be ethical, to not wanting to have a bad reputation.

Whatever the reason however, having a Code of Ethics has become

standard.

Many companies run an Ethics Audit to monitor the effectiveness of

their program.(Groves 2012) This audit tests employees in their knowledge

of ethics and also their ability to apply their knowledge. These audits keep
Comparing the United States 9
and Germany in terms of ethics

employees ethical while also increasing public image. A company that proves

their employees are ethical will have a better reputation than a similar

company that doesnt run audits. (Abend 2013) The general populations

opinion on a company is everything, so most companies run audits for that

reason. Being well liked only leads to good things in the business world.

Even with programs to teach ethics, corruption exists.( Rutherford

2012) Greed and selfishness often lead an employee or CEO down a road of

bad choices that ultimately leads to their own destruction. (Stevens

2013)Economic advantage is only granted to those who practice ethics

genuinely. This corruption will never fully go away, but another point of

business ethics is to minimize this corruption.

The United States government has been regulating more and more

laws to prevent fraud. (Abend 2013) This government involvement helps the

nations companies enforce their ethical guidelines. Increasing fines and

punishments are examples of government involvement. Reforming criminal

law was a critical part in the United States advancing its business world.

Power Distance deals with equality among citizens. With a Power

Distance score of 40, the United States is towards the lower end of the scale.

This number defines the extent to which less powerful members in society

accept that power is distributed unequally. (Beamer, L., & Valentine, D 2000)

A lower score is better, as equality among citizens is more efficient.

Comparing the United States 10
and Germany in terms of ethics

With an Individualism score of 91, the United States is easily one of the

most individualistic countries in the world. An individualistic society has

citizens that only look after themselves and their families. (Beamer, L., &

Valentine, D 2000) This attitude may seem selfish to some, but is necessary

for the majority of American citizens. This particular dimension gives America

a bad name in the eyes of other countries. To most foreigners, Americans are

known for only caring about themselves. Even if this is a false generalization,

it can affect interactions between country representatives.

A high masculinity score indicates a society driven by competition and

winning. The belief that being the best leads to good business is strong in

countries with a high masculinity score. The United States has a masculinity

score of 62. This score is high, and makes sense when thinking about the

competitive nature of the United States. This competitive drive helps

companies improve because they want to be better than their competitors. A

competitive attitude is engraved since childhood in the United States.

Games, sports, and most activities influence their participants to be more

competitive. Teaching competitiveness has its negative effects as well.

Individuals that will do whatever it takes to win often break rules and

regulations to gain an advantage. These individuals only make up a small

portion of the total population, so the positives outweigh the negatives in a

masculine society.
Comparing the United States 11
and Germany in terms of ethics

The extent to which a country feels threatened by the future and

unknown forces is shown on the Uncertainty Avoidance dimension. (Beamer,

L., & Valentine, D 2000) The United States scored a 46 on this dimension,

which is below average. New ideas and innovative technology are welcomed

in America. Americans are more tolerant to new ideas than high scoring

countries, and freedom of expression is encouraged. Events such as 9/11

cause an increase in this score because fear influences citizens to act

differently. The fear of future attacks led to the government implementing

ways to monitor the public through agencies like the NSA. This monitoring of

citizens is only acceptable because the citizens believe it will protect them

from future threats.

Pragmatism describes how societies have to maintain their own history

while trying to deal with problems of the present and future. With a low of

26, the United States can be described as normative. A normative society

likes sticking to traditions and questioning any change. Tradition is a big part

in American culture, so this score makes perfect sense. The American way is

the right way mentality leads Americans to question the validity of anything

foreign. This mentality can lead to tragic mistakes in the business world.

Implying that another countrys way is wrong is highly offensive and will

often end a business deal immediately. Companies have to stress to their

employees that while keeping tradition is important, respecting another

countrys traditions is important as well.

Comparing the United States 12
and Germany in terms of ethics

Indulgence measures how much people try to control their impulses.

The United States scored a 68 in this category, being defined as an indulgent

society. Fast food, reality television, and drugs are just some of many

addictions that Americans share. The majority of American people have a

weak control over their urges, but they are addicted to more than just the

urge. The combination of urges make up the American Lifestyle, and that is

what people are addicted to. Convenience, cheap food, and multiple options

are more key factors that make up this lifestyle. The American lifestyle

makes everything a little easier, and most people dont mind the negative

effects this lifestyle brings. Fast food for example, is convenient and cheap,

but also unhealthy. Even with a tradeoff as serious as personal health, the

fast food industry is booming. This shows how accurate Americas score for

Indulgence is.

All of the scores make up a 6-D model. The combination of scores is

accurate at describing cultural tendencies within a society. (Beamer, L., &

Valentine, D 2000) America is known as individualistic, masculine, normative

and indulgent. Based on description only, American companies may seem

hard to do business with. This is untrue of course, as American companies

flourish in international business. While the 6-D model is good for gathering

basic information, a person should not make an assumption about another

country just based on this basic information.

Ethics of Germany
Comparing the United States 13
and Germany in terms of ethics

While American companies have implemented ways to teach their

employees about ethics, German companies have looked down on them

entire time. ( Fifka 2013)The Germans believed that something as personal

and philosophical as ethics couldnt be taught. They believed that American

companies were making a big deal about ethics just to improve public image.

While this may be true, Americas strategy has also improved their power. A

negative attitude towards the United States affected Germanys progress

towards teaching ethics. (Hinner 2009) The number of supporters is growing

slowly, but wont increase any faster until there is legal incentive.

Germany has a score of 35 for Power Distance on the 6-D model. This

score is low and shows the belief of equality is strong among Germans. The

country is supported by a strong middle class, and dislikes control. Any

leadership is questioned until proven worthy. This low Power Distance score

shows that the citizens are truly in charge, and the belief in equality is

strong. (Beamer, L., & Valentine, D 2000)

Scoring a 67 for Individualism, Germany is described as an

individualistic country. Germans tend to take care of themselves and their

immediate family. Loyalty is also a trait that Germans take pride in having.

This loyalty ranges from employers to family members. Although Germany is

defined as an individualistic country, the citizens are not selfish or

fraudulent. This loyalty is known internationally and increases Germanys

public image.
Comparing the United States 14
and Germany in terms of ethics

Germany is considered a masculine country with a score of 66. The

economy is driven by competition and high performance. The citizens take

pride in their work, which they live for. The school system even separates

children at the age of 10 to specialize in their future fields of work. Showing

off or bragging about financial status is popular, often done with a luxury car

or a nice watch. Germany has used this competitiveness to its advantage,

with companies like BMW being popular worldwide.

Germanys Uncertainty Avoidance score of 65 is on the high end.

Deductive approaches are preferred over inductive approaches. This belief

falls in line with the philosophers Kant, Hegel and Fichte. Details are

important to make sure any decisions are planned out thoughtfully. Germans

deal with high levels of uncertainty by relying on expertise. The combination

of expertise and competitiveness gives German companies an advantage.

This ideology is also reflected in Germanys law system.

Being a Pragmatic country with a score of 83, Germany shows it is

quick to adapt if it leads to achieving results. Pragmatic societies believe that

the truth depends on situation, time, and context. (Beamer, L., & Valentine,

D 2000) This adaptability makes Germany open to change and new ideas. As

long as efficiency is increased, traditions can be adapted to the change.

Flexibility is an extremely useful skill in business. Sometimes pride gets in

the way of international deals, but being pragmatic solves that problem.
Comparing the United States 15
and Germany in terms of ethics

The German culture is described as restrained. A score of 40 on the

Indulgence dimension suggests Germans have a strong control over their

desires. Restrained cultures do not emphasize free time and even believe

that giving into urges is wrong. (Beamer, L., & Valentine, D 2000) This

sometimes leads to a cynical attitude among the society. This doesnt seem

to have a major effect on the ethics of German companies.

Germany can be summed up as individualistic, masculine, pragmatic,

and restrained on the 6-D model. These traits provide basic information

about Germany, but nothing more. Assuming all Germans act like these traits

describe would be foolish. Even though ethics are not taught to employees,

German companies are still aware of ethics. Implementing a system to teach

employees is slowly getting support throughout the country. (Floyd, L. A., Xu,

F., Atkins, R., Caldwell, C. 2013). Germans are taught to have a good work

ethic from childhood; citizens say they live to work. Loyalty is also practiced

among the German society. This combination of scores and traits shows

German companies are ethical even though they havent started any ethics

programs yet. (Preuss 1999)

Similarities

The United States and Germany definitely have more differences than

similarities when it comes to ethics, but this did not matter when comparing

the overall ethical value of each country. (Fifka 2013) The first similarity is

scoring on the Power Distance dimension. 40 and 35 are only 5 points apart,
Comparing the United States 16
and Germany in terms of ethics

and both on the lower end. Both countries citizens believe that everyone is

equal and they are being treated equally. Germany and the United States are

also both Individualistic countries. The United States scored a 91 and

Germany scored a 67. The difference between these values is higher than

the power distance difference. Both countries are still highly individualistic

though, and share lots of similar traits. Loyalty is practiced in Germany and

in the United States with the use of contracts. (Palazzo 2002)Families take

care of themselves in both countries and this is not considered selfish. The

third similarity is masculinity. Germany has a masculinity score of 66 and the

United States has a score of 62. These numbers are very close and it shows

when comparing the two countries. Both countries are taught

competitiveness from a young age. (Birtch, T., & Chiang, F 2014) The citizens

of both countries strive to be the best, and be the better country.

Differences

The United States and Germany have completely different views when

it comes to teaching ethics. (Fifka 2013) Although Germany is starting to

change, it was being stubborn for a long period of time. The United States

started a program where companies teach their employees ethics. German

business owners proposed that ethics couldnt be taught so simply. While

American companies taught these ethics in a more applicable way, Germans

would feel insulted as they practiced a more theoretical method. (Brink

2009) German companies also thought American companies were doing all
Comparing the United States 17
and Germany in terms of ethics

this just for public image. This may be true for some companies, but the

majority of American companies have a genuine attitude. (Brink 2009)

Another pretty major difference between the two countries is their

uncertainty avoidance scores. Germany scored a 65 while the United States

scored a 46. Generally, the people of the United States care less when it

comes to preparing for future threats. German people follow the teachings of

three philosophers. They believe in being deductive over being inductive.

( Fifka 2013) German people also specialize in an area of expertise at a

young age. Pragmatism is the biggest difference between the United States

and Germany. The United States scored a 26 while Germany scored an 83.

The United States is much more normative than Germany. The United States

takes pride in its traditions and does not stray away from them. Germany is

willing to adapt its traditions however if it helps solve a problem. Indulgence

is the last difference these countries share. The United States scored a 40 in

this category, which classifies them as indulgent. Germany scored a 68,

which classifies them as restrained. This just means that Americans cannot

control their urges and desires while Germans can. Dealing with business

ethics, urges and desires can lead to bad decisions. This scale includes urges

that do not deal with business ethics, so it cannot compare the ethical value

of the two countries.

Conclusion
Comparing the United States 18
and Germany in terms of ethics

Although the United States and Germany shared more differences than

similarities, both are ethical in terms of international business. These two

countries actually trade with each other quite often. This is due to the mutual

respect and willingness for success that these two countries share. The

comparison of these two countries and their ethics just proves that different

methods can produce similar results. (Trevio 2010) The United States and

Germany are both leaders in international business, and they will remain in

power for a very long time.

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Comparing the United States 19
and Germany in terms of ethics

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and Germany in terms of ethics