Cross-Cultural Management Challenges for a US Bank in Germany

This report analyzes the challenges of cross-cultural management faced by a US subsidiary bank operating in Berlin, Germany. The report highlights potential communication gaps due to language differences and varying cultural behaviors. It delves into the cultural, ethnic, social, and educational characteristics of the German community, emphasizing their conservative nature and formal business environment. The report also describes the political and legal systems, including the Payment Services Regulation Act and consumer protection rules, and examines government intervention in the private sector, including the role of BaFin and the implementation of BRRD. The impact of government interventions on the financial institution is discussed, along with Germany's universal banking system, its historical context, and its involvement in international trade. Finally, the report considers how government involvement in trade issues affects the bank's operations, emphasizing the support provided for the welfare of the German community. Relevant references are included to support the analysis.

Running head: CROSS-CULTURAL MANAGEMENT
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Name of the Student
Name of the University
Author Note

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Discuss some of the challenges you may face in this new environment.
With the growing recognition across the world, the regional banks are taken forward
by expanding our offices internationally. Thereby, a subsidiary bank of United States is
settled at Berlin, Germany. However, there are certain challenges that might be faced in this
new environment. Challenges will be majorly faced in the communication as the community
or the customer base in Germany preferably speaks in German language (Moore, 2016). In
addition, I might be a communication gap with the organizational employees as the gestures
and the behavioral attitudes differs from region to region. Such issues are recognized in the
context of cross culturalism (Moore, 2016).
What are the cultural, ethnic, social, and educational characteristics?
Germans quite enjoy socializing and engaging themselves. On the contrary, they are
conservative and do not tend to get involved in political issues. The culture of German
community is conservative in terms of dresses and gestures (Moore, 2016). Punctuality, dress
code, etiquettes are taken seriously and the organizational environment is preferred to keep
very formal and official. In most cases, personal relationship or flexibility among the workers
are not encouraged.
Describe the political and legal systems.
The political and legal systems in the subsidiary bank in Germany covers the Payment
Services Regulation Act and implementation of investment services, financial and security
regulatory policies (Naqvi, Henow & Chang, 2018). It further involves consumer protection
rules and banking laws and regulations regarding regulatory authorities as well.
How much does the government intervene in the private sector?
The government integrates BaFin into the operating unit and along with it, the
implementation of BRRD is taken forward to conduct the essential regulation measures that

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is supervised by the ECB under specific circumstances. The German government Act on the
Adjustment of the National Law serves the resolution of protecting the financial assets of the
depositors and aims to prevent threats or avoid the use of public funds (Naqvi, Henow &
Chang, 2018).
How will that affect your financial institution?
The government interventions positively affects the bank’s performance due to the
restructuring of distressed debts, reduction of the refinancing costs and improved capital due
to capital insertions (Kisling, 2017).
What type of economic system does it have?
The bank in Germany functions as universal banks that offers the range of foreign
exchange, investment services, savings, and banking to the clients and depositors provided
with the fact that Germany accounts for the highest saving rate (Naqvi, Henow & Chang,
2018).
What is the history of that economic system?
The reforms imposed during post World War II changed the economic system of Germany
and further led to the system of large universal banks. Following it, the role of bank is greater
in financial system than in the United States (Kisling, 2017).
How is the country involved in international trade?
The universal banking system of Germany is increasingly involved in foreign trade
due to their high competence and favourable economy. Therefore, the business model in the
context of economy is unique which makes them the key player in the development of
German industry (Naqvi, Henow & Chang, 2018).
How does the government get involved in trade issues?

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government in terms of the protection of consumers and their financial assets get
involved provided with security regulations and policies.
Will that help or hurt your financial institution?
The involvement of the government would help in holding the strong hold support
regarding security and alliances in order to provide the service of the welfare of the German
community.

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References:
Kisling, W. A. (2017). Trade finance in historical perspective: The role of German banks in
the rise of Germany as international trade power, 1875-1913.
Klein, P. G., Wuebker, R., & Zoeller, K. (2016). Relationship banking and conflicts of
interest: Evidence from German initial public offerings. Journal of Corporate
Finance, 39, 210-221.
Moore, F. (2016). Transnational business cultures: Life and work in a multinational
corporation. Routledge.
Naqvi, N., Henow, A., & Chang, H. J. (2018). Kicking away the financial ladder? German
development banking under economic globalisation. Review of international political
economy, 25(5), 672-698.

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References