The Federal Republic of Germany’s political system has been established similarly to the United States in that it is based upon a constitution. The country has had many changes to its constitution which was created in 1871 and then amended twice in 1919 and 1949. One of the key feature that Germany’s 1949 Constitution shares with the country’s past constitutions is the deliberate distribution of power between the central government and the Lander or states (Darlington, 2014). The German Constitution is also known as the Basic Law and similarly like the United States it established a separation of powers between the executive branch, the legislative branch, and the judicial branch. One of the main differences with the United States and Germany is that the most powerful official in the executive branch is the head of the government and is referred to as the Federal Chancellor which would be equal to an United States president. The Federal Chancellor controls the federal government and appoints Federal Ministers (Germany Legal Research Guide: Government and Political Structure, 2015). Along with having the Federal Chancellor, the German government also elects a Federal President, which is known to be the head of state and is elected into office by a collective known as the Federal Convention. The members of the Federal Convention consist of all members of the Bundestag and an equal number of members nominated by the state legislatures, the total number of voters for the Presidential election is 1,244 (Darlington, 2014). The German economy is the fourth largest in the world and they are the leading exporters of machinery, vehicles, chemicals and household equipment. The new German government introduced a minimum wage of $11 per hour in 2015. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Merkel’s second term increased Germany’s total budget deficit to 4.1% in 2010 but slower spending and higher tax revenues reduced the deficit to 0.8% in 2011 and in 2012 Germany reached a budget surplus of 0.1%. A constitutional amendment approved in 2009 limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016 though the target was already reached in 2012. Following the March 2011 Fukushima nuclear disaster, Chancellor Merkel announced in May 2011 that eight of the country’s 17 nuclear reactors would be shut down immediately and the remaining plants would close by 2022. Germany hopes to replace nuclear power with renewable energy. Before the shut-down of the eight reactors, Germany relied on nuclear power for 23% of its electricity generating capacity and 46% of its base-load electricity production. (Country Reports: Germany, 2016). Germany has a social market economy and has highly skillful labor force, well developed infrastructure, capital stock and a very low level of corruption. The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Industry and construction account for 29% of gross domestic product and employ29.7% of the workforce. Germany excels in the production of automobiles, machinery, electrical equipment and chemicals. (Country Reports: Germany, 2016). Germany is also the third largest exporter and importer in the world and are a part of the World Trade Organization (WTO). Most of their exports are industrially produced good and services such as engineering products, vehicles and chemicals. About fifty-two percent of Germany’s GDP relies on the exporting of goods and services.
For a company like Mercedes-Benz it is important for them to have the backing of a strong government who not only looks out for the public interest but for corporations as well. Since the automobile industry plays a major role in the German economy it is imperative that the government ease the way these companies do business. Also, having a skilled labor force and well-developed infrastructure play a major role in contributing to the success of companies that require high areas of expertise and technological innovations. Mercedes-Benz has also highly benefitted, alongside the government, by having its products available throughout the world.
Political and Economic Progress
The German Constitution said to guarantee the stability of the country’s political environment. The basic rights afforded to every citizen of Germany along with the democratic form of government within Germany provides irrevocable character to the nation that may not be abrogated in the future either by subsequent alterations to the Basic Law or by a new constitution (Reicher, S 2015). Due to Europe’s economic struggles dating back to 2008 many European nations were impacted negatively. In many of these countries the government was blamed for the issues and thus these governments also faced negative criticism. But in Germany the government and political parties were strong enough that these economic issues did not have much negative impact on the country. (Darlington, 2014). This has allowed Germany to become an important and probably one of the strongest members of the European Union. It is largely because of Germany’s success that the European Union has not completely fallen. Due to such a strong political environment, it has a positive impact on the economy as well. Being the fourth largest economy in Europe and with an annually growing GDP they are projected to be one of the most successful countries in the near future. Not only do they have a highly skillful labor force but they have also made many advancements in technology, have established a stable currency and produce the highest rates of employee productivity in the world. Also, due to low interest rates the country is considered to be a top location for investors. Also, manufacturing and the auto industry have proven that they can operate at an international level. A major disadvantage that results from doing business in Germany is the taxation. There are nine tax payments a year which get split and in turn result in fourteen small tax payments a year. These are a large number of payments to be made and thus require corporations to invest many work hours when dealing with taxation. Also, contract issues are a concern in the German legal system as even though the courts look over these issues they take 394-438 days to resolve. Also, to obtain construction permits there is an even longer wait which would largely impact the business flow.
Mercedes-Benz benefits greatly from the political and economic progress made by Germany. The fact that the government is ready to help businesses, as demonstrated after the 2008 issues in Europe, greatly benefits any business as they have the backing of the people in power in order to keep conducting business. Also, attracting investors into their country can only be beneficial, especially for a company like Mercedes-Benz. Even though they have tons of investors to begin with the automobile industry is changing every day and new investors could play a major role in making more advancements in the industry. Since Mercedes-Benz has already established themselves in the country they do not have to worry about construction permits for the most part. The political and economic landscape of Germany is strong enough for not only Mercedes-Benz but other companies to conduct their business from as well.
Germans are considered to be masters of planning, this is a culture that prizes forward thinking and knowing what they will be doing at a specific time on a specific day. The German thought process is extremely thorough, with each aspect of a project being examined in great detail. Most aspects of German living and working are defined and regulated by structure, for example, through laws, rules, and procedures, which are evident in all economic, political and even social spheres.
Germans are very good at being well-organized and in which they are very meticulous about doing everything right. This is reflected in the fact that Mercedes-Benz has a reputation for being very well-engineered cars that are also very high quality. Ads for these cars tend to emphasize “German engineering” because high quality is seen as a typically German trait.
With a strong investment in the cultural atmosphere of the company. Mercedes-Benz has a system that allows and promotes personal growth as a person and growing the global brand. Mercedes Benz has created a growth based workplace that pushes for the employee to be the best they can be and has created employment based incentives to achieve these goals. Being a German Company the culture and history of the institution is very important in the future success of that overall business. Mercedes-Benz’s current employee culture and the past work and historical relevance to that work are impossible to separate. Mercedes-Benz being the company that holds the original patent for the automobile holds a very large significance for the leadership of that company even today.
The cultural philosophy throughout the company is that with each passing batch of vehicle produced there should be something special in the very make up of that vehicle that uniquely and distinctly makes it a Mercedes-Benz. Going above and beyond in every part of the company is expected from every employee because buying a Mercedes-Benz is more than just a purchase it’s an experience and this is what the upper level management wants to convey throughout that process. There is an overall expectation that when the consumer finally sees the end product vehicle they can tell every detail on that vehicle has been tirelessly crafted and meticulously designed creating the ultimate fusion of unparalleled design with unrivaled craftsmanship. The goal of the company is to convey the experience that used to be experienced buy luxury coachbuilders of the past that would meticulously design every piece of the individual vehicle to meet the individual specifications of that particular client making them more than just a transportation device but a work of art that individually suits the needs, desires, personality and style of the individual client. Mercedes-Benz goes above and beyond to provide an experienced that harkens back to a bygone era of luxury in both design and service while never sacrificing on craftsmanship and individuality.
Germany has an abundance of organizations participating in ethics evaluation and endorsing responsible and ethical study. One main objective that politicians relate to are ethical and social responsibility. Throughout the years, ethics evaluations have spread to other fields such as environmental matters, safeguarding information, medical as well as governmental corporate social responsibility (CSR) strategies. These types of plans in Germany intensely underline the voluntary integrity of the application of CSR procedures.
Main concentration topics of Mercedes Benz CSR are reevaluated yearly to make sure that projects which Mercedes Benz are immersed in exist on concentrating on the genuine necessities within the general public. The sections on which focus in being implemented are education and HIV/AIDS. CSR undertakings began at some stage in the founding of its first manufacturing plant in South Africa about 60 years ago. The Mercedes Benz standing for Corporate Social Investment (CSI) is renowned and has developed throughout the years to affiliate itself with the governmental main concern and the King Code in making a cultivated, vested and economically self-regulating society. The company has established almost 22 fixed clinics that operates from refurbished containers on various highways truck stops, in addition to a specially equipped mobile clinics travelling to depots and warehouses for a long-haul freight industry. In addition, Mercedes-Benz has also taken an initiative of accommodating other vulnerable communities including sex workers. The support of Mercedes-Benz in South Africa comes as a result of its interest in the freight industry, which they consider as the lifeblood business of commercial vehicles. The company is also planning a further commitment towards Peer Education Program, which have often been used in promoting the company’s healthy lifestyle, and will be expanded to include all Trucking Wellness clinics across South Africa (Tichy ; McGill 2003).
Mercedes-Benz being a promoter of the creative change, supports arts and culture across the globe. Furthermore, the company is placing a higher priority towards sponsoring arts and culture. For example, the company is having a long-term partnership with the art museum of Staatsgalerie Stuttgart, in which they promote the cultural life of this city in addition to offering opportunities of obtaining good education. The company has also improved various access towards education, which is their most important long-term investment within a society. That is the reason why this company is highly involved in several projects for supporting the youths since they will be the tomorrows skilled employees. An observable example of this project is the company’s charitable projects. Because of Mercedes-Benz global presence, they regard it as their mission in supporting various aid projects for improving communities under which they operate (Tichy & McGill 2003).
To Mercedes-Benz, being an ethical company is lying within its manufacturing, production, and even existences of their various products. As with all aspects of this company’s innovation, the worldwide benefits is as a result of their unique combination regarding extensive diversity as well as an intensive devotion. For several years, Mercedes-Benz has often broken new grounds with the aim of preserving this earth for generations to come. The company has provided the first low-emission SUV and a 100-percent CFC-free car, as well as award winning processes and factories. Mercedes has helped developing local infrastructure across the world that will result to a greener tomorrow in the entire world. In addition, Mercedes-Benz has been on the forefront to implement and develop new ways to assist in minimizing the impacts of trucks and cars on the entire world (Ladkin 2015).
Mercedes-Benz is also having an Integrity Code as an ethical practice. This code is based upon the company’s shared values and is developed together with their employees. This code defines the company’s basis upon their workplace actions including responsibility, fairness, mutual respect, openness, transparency, as well as complying with the rights and laws. In addition, this code also covers the company’s interpersonal conduct in addition to conduct towards business partners and customers. This code applies to the whole Mercedes-Benz Group and is written in 23 languages. It also comes with a guidance that assist in applying the code in particular workplace situations. All frequently asked questions are also covered in the code. Furthermore, Mercedes Benz has also trained and employed a team of experts for answering various questions concerning this code. There are also various general rules of conduct that are included in the Integrity Code alongside the regulations and requirements on various topics including: Protection and respect to human rights, compliance with internal regulation and laws, dealing with issues regarding conflict of interests, appropriate required conduct within the group, as well as dealing with business partners, customers and the government. Others also include preventing all issues of corruption, social responsibility principles, as well as protection of the company assets (Tichy & McGill 2003).
The organizational structure Mercedes-Benz overall as a Corporation is one that is rigid and authoritarian. The majority of employees overall the company tends to push to produce job design and job structure based on the smaller teams and sub-sections. They’re formed to complete any designated task. There is an overall mix between Horizontal structure of leadership and vertical structure of leadership. This distinction depends on if we’re talking about everyday employees or the upper level management in charge of the overall business dealings with its parent company Diamler-Benz. Most teams tend to follow strict structure in the way in which they operated but tend to have a lot of flexibility when it comes to the execution of any specific task the management structure of a team is deeply engrained in the tools they are taught when they undergo management training. Mercedes – Benz prides itself for being on the forefront of integration of different team design materials into one finished project on time and on budget with very little cost over-runs and very little need for replacement of parts in the majority of their products allowing them to be able to put together a comprehensive warranty program that offers more coverage point by point then their closest competitor. The overall structure of Mercedes-Benz is built around principles of building the best or nothing This requires them to have a less restrictive intergroup management style when dealing with the design, production, Sales, advertising portions of their business. Overall the track record for success of Mercedes-Benz has shown that the structure of their company continues to put out the best product possible in the most innovative way possible while taking into account new innovations that are on the cutting edge that Mercedes-Benz feels are integral parts of their products. This cements Mercedes-Benz Legacy as a premium automotive manufacturer and a premium company all around that has lasted the test of time and has shown a successful design and leadership structure throughout its company.
The German Standardization Strategy sustains industry, guiding principle producers, municipal controllers and the general public, in such a way whereas these principles aid in reinforcing, outlining and creating local and worldwide markets. In Germany, their standardization is a stable global plan, the public’s view for this strategy is very optimistic. These standards are broadly acknowledged and represent the belief, standardization and trustworthiness.
Gains that Mercedes Benz undergo in exporting come with the circumvention of considerable outlays of instituting industrial set-ups in host nations, can aid businesses attain familiarity curve and location markets as well as comprehended scale markets from central production. In Germany, turnkey projects are utilized with knowledge essential to collect and run high-tech practices is a valued resource. This is advantageous where Foreign Direct Investment (FDI) is restricted via host rules, specifically in a nation with an unbalanced atmosphere can render a company to certain hazards. Licensing agreements lays the majority of the investment needed, whereas the companies do not need to tolerate expansion expenditures. This is eye-catching for companies that are deficient of funds needed to grow in a foreign country,
Greenfield Ventures, is a form of market entry strategy with establishment of a new wholly owned subsidiary in a foreign country by constructing its facilities from start. With the locality of their manufacture in high income level nations, the importation of external prepared merchandises into foreign markets was not going to be competitive. In addition, perfectly whole competitors have at present accomplished advancements with promising costs. In 2007, the company obtained one hundred acres in order to erect a put up a factory in Pune, India. This factory’s yearly amount was approximately five thousand components and utilized home-grown industry and resources available.
Daimler Chrysler was created once Daimler Benz determined that in expanding in the United States market, it would be necessary to purchase Chrysler. This was done without any type of build-up of any plants, thus saving an enormous amount of money and time. It would be difficult in concluding that sticking to a Greenfield investment/acquisition stratagem is certainly going to attain dividend profits to the stockholder. Given all of the components involved with labor, legalities or price just to name a few, there’s the probability of complications that may arise because of certain dynamics both man made or political. These factors can create walkouts or interruptions in the overall work output. Mercedes was able to avoid any of these obstacles for their sales have not decreased throughout the years.
The staff at Mercedes are constantly performing, inventing and generating new found innovations giving each and every customer the satisfaction in knowing that their hard earned money has gone to a vehicle that is luxurious and functional for their everyday use.
Perceptively networking factories using state-of-the-art in information technology, for instance instantaneous signal processing, is going to take part in a foremost part in producing investments and heightening output. Mercedes Benz began an experimental trial at one of their plants in Hungary that employs computerized shipment procedures in order to move arranged packages of parts to the assembly line. (Hetzner 2015).
Usually, it takes approximately 2 to 10 years to gain any type of subsidies in the completion of an effective Total Quality Program (TQM). For Mercedes Benz an adjustment in company ethos regarding the significance of superiority has been the core since its inception. Shaping of in-house team dependences to succeed in excellence, development, and management and the establishment of peripheral reliance with consumers and contractors along with assessments to guarantee quality practices.