Course Number and Name
Businesses today operate on aglobal basis without regard to national borders. Trade and
access to new markets are rising, worldwide mergers and acquisitions and joint ventures are
emerging and global business ties are becoming increasingly intertwined (Bunten, 2018).
Therefore, managers are required to follow both national and international regulations. Any
attempt to comprehensively examine global economic trends must take Germany and the United
States of America into account. One is the biggest economy in Europe, the fourth largest in the
world, and home to global business heavyweights like BMW, Bayer, and Siemens. The other is
the world’s preeminent industrial powerhouse, the world’s largest economy by practically every
metric, and the home of globally renowned brands such as Apple, Microsoft, and McDonald’s.
The corporations of both Germany share several features such as use of high technology among
many and also there is alot that sets the firms operating in these two countries apart as discussed
in this essay.
Similarities and Differences
Stock operations in the United States are governed by two separate corporate entities.
One of the most important meetings is the annual general meeting, which brings together all of
the company’s directors and stockholders once ayear. Instead, German corporation law creates a
two-tiered structure with two boards, each with distinct responsibilities and responsibilities that
interact with one another (Chang, 2009). While most countries’ firms only have two
organizational tiers, Germany has three.
There are also substantial disparities between Germany and the United States in terms of
labor and employment legislation, as well as the environment. However, although “employment
at will” is commonplace in the U.S., the usual employment contract in Germany is for an
unlimited period and may only be terminated for particular reasons and with statutory notice
periods in Germany. This is asignificant difference.
Furthermore, the American culture is characterized as the land of liberty and opportunity,
and the American way of life as amodel for the pursuit of happiness in many organizations (El-
Bassiouny & El-Bassiouny, 2018). The Germans, on the other hand, prefer a “we” culture in
which people identify primarily with agroup and place ahigh value on solidarity.
It is widely known that the United States and Germany are two major economic powers
in the world. American and German firms have a lot in common. One of the most important
similarities between American and German firms is that they are both large and multinational. In
fact, the largest firms in the world are usually American or German. Another similarity between
American and German firms is that they are both highly competitive. Finally, American and
German firms are both subject to strict regulation.
Explaining of the similarities and differences
One of the most important similarities between American and German firms is that they
are both large and multinational. In fact, the largest firms in the world are usually American or
German. For example, Walmart, Exxon Mobil, and General Motors are all American firms,
while Volkswagen, Siemens, and Bayer are German (Dore, 2006). These firms are all leaders in
their respective industries, and they have asignificant presence in many different countries.
In both American and German firms is that they are both highly competitive. In both
countries, there is alot of competition among firms, and companies are always looking for ways
to gain an edge over their rivals. This competition is one of the main drivers of innovation and
growth in both countries. Firms in the United States and Germany are vying for abigger portion
of market share in each other’s marketplaces and in other nations. As aresult, comparing the
financial features of American and German companies might give useful information to financial
managers and investors in these nations. People in Germany are interested in different things
based on where they are located (Gelter & Helleringer, 2018). Successful market strategy
incorporates regional differences as part of a strong national presence. Because the primary
competitors for most American products are local companies with established presences,
competent representation is a huge benefit to any market strategy. High-quality products and
services at competitive prices, as well as local after-sales support, can help American businesses
compete. Investment may be discouraged by Germany’s high marginal tax rates and the country’s
complicated tax legislation, but the country’s generous use of tax credits and other incentives
helps to keep effective tax rates competitive globally.
In both countries, there are laws and regulations that govern the activities of firms. These
regulations are designed to protect consumers and to ensure that firms operate in a fair and
transparent manner. Germany’s company law provides several legal avenues for conducting
entrepreneurial business activity. German statutory rules specify the available corporate legal
forms, which can be customized to a greater or lesser extent using contractual clauses. All
regulatory standards surrounding corporations and the legal basis for continued commercial
activities for all legal entities recognized by Germany are found in German company law (M Ã¼ller,
Buliga & Voigt, 2021). Corporations limited by partnerships and companies limited by shares
are distinguished under German law. Various legal regimes in the United States regulate
corporate governance. This group includes state and federal statutes and regulations produced by
avariety of government entities.
A stock corporation has two corporate entities under US law. The annual (general)
meeting is the first. It is aonce-a-year meeting of the board of directors and shareholders. The
board of directors briefs shareholders on the company’s success at the meeting. Additionally,
shareholders elect the Board of Directors and vote on resolutions. By allowing shareholders to
vote on the company’s direction during the annual meeting, shareholders are accorded significant
authority. However, in reality, avariety of reasons restrict shareholders’ actual authority (Koen,
2005). While shareholders democratically elect the Board of Directors, they can vote for or
against only one candidate (or abstain), and there is often no competition. The second corporate
entity is the Board of Directors. It is responsible for managerial oversight. This board is
comprised of individuals from both the internal and external communities. Outside directors are
not company workers and typically serve on the management team (executive directors),
whereas inside directors are (non-executive directors). A chairman represents and preside over
German corporate law, on the other hand, creates atwo-tier organization with two boards.
They each have separate responsibilities and interact with one another. German firms have three
corporate bodies instead than just two. The annual meeting is the first for US firms. It has many
of the same characteristics and responsibilities as acorporate annual meeting in the United States.
Shareholders of German firms, like those in the United States, have alot of power in principle,
but they rarely utilize itto influence corporate management (M Ã¼ller, Buliga & Voigt, 2021). The
second and third corporate bodies are two different boards of directors, each with its own
specific set of powers and responsibilities: On one hand, the Management Board is responsible
for the administration, coordination, and control of the firm. It is expected to report on aregular
basis to the second board of directors, the Supervisory Board. Decisions are made democratically,
with the chairman unable to reject a majority vote of the board. On the other side, the
Supervisory Board is responsible for supervising and managing top management and for
approving key firm decisions.
There are also substantial disparities between Germany and the United States in terms of
labor and employment legislation, as well as the environment. While the dominant paradigm in
the United States is “employment at will,” which allows both parties (employer and employee) to
terminate the relationship at any time and for any reason, the standard employment contract in
Germany is indefinite in duration and can be terminated only for specific reasons and with
statutory notice periods. Both the employer and employee have a one-month notice period,
however the employer’s notice term grows with the employee’s duration, up to seven months for
a 20-year employee. Termination with notice is authorized for a range of reasons, including
personal, behavioral, and business, but termination without notice is permitted only in the event
of serious misbehavior. In very limited circumstances, such as for temporary project work,
employment contracts might be specified for afixed duration (Bassiouny & El-Bassiouny, 2018).
Additionally, the Act requires employers to let full-time employees to work part-time and to give
precedence to part-time employees when filling full-time positions. Collective bargaining
agreements may trump statutory responsibilities.
American culture may be explained using the historical ideals of liberty and opportunity,
as well as the American way of life as an expression of the pursuit of happiness. As aresult,
Americans are firmly identified since individuals, as they cherish their independence and place
their faith in their own power and aptitude (Rahman & Thelen, 2019). Citizens in the United
States believe they have control over their own fate and route in life. Chance or luck, as well as
privileges, have little or no bearing on accomplishment. Each person is responsible for his or her
own accomplishments in terms of ability, experience, and performance. They are self-sufficient,
self-assured, and proactive, and with this sense of self-worth, the success of each individual is
more important than the group’s achievement. The country is hopeful, as exemplified by the
The Germans, on the other hand, prefer a”we” culture in which people identify primarily
with agroup and place ahigh value on solidarity. An extended family may be able to accomplish
better outcomes if they work together. This project is meant to be ateam effort. It is the need to
avoid uncertainty and maintain order that drives colleagues to form aclose bond. The quality of
life and professional relationships are more essential than financial success. The high sense of
community well-being is also compatible with the social market economy in Germany. Efforts
by the government, business, and labor unions to achieve mutually beneficial outcomes (Spitz,
2019). Germans rely on government engagement because the mixed economy system provides
excellent work circumstances, social assistance, and public services. Consensus is necessary for
Discussion on the similarities and differences
Until 2006, the two countries’ national debts as a percentage of GDP were nearly
identical. However, following this date, the US debt has skyrocketed. Inflation rates in both
nations are quite modest, in the single digits. However, there is aregular trend of the US inflation
rate being approximately 1% higher than Germany’s, with Germany averaging about 2% and the
US flirting with 3% (Yanez-Araque, et al., 2021). This demonstrates that the true cost of
financing in the United States has continuously been lower, net of inflation. It’s no surprise that
Germany has afar greater savings rate than the United States, rising from 20% to 25% in the
previous ten years, while the US saves rate has decreased from 15% to 10% in the same time
As aresult of Germany’s labor regulations and rising levels of unionization, lower
profitability for German businesses is expected (Sorge, Noorderhaven and Koen, 2015). For
German companies, asmaller income gap and reduced corporation tax burden might lead to
increased consumer expenditure on produced goods and, as aresult, to higher profitability ratios.
Companies in Germany may be unable to enhance production automation due to the presence of
labor unions on company boards and tougher labor rules that make itdifficult to terminate staff
and necessitate hefty severance payments. This may lead to agreater turnover of total assets.
The United States and Germany, respectively, have the world’s top and third highest
volumes of international trade. There is a heated competition between American and German
companies to gain a foothold in their respective domestic markets as well as throughout the
world. This comparison of the financial characteristics of German manufacturing firms with
those in the United States would be beneficial to both corporate leaders and global investors. The
considerable discrepancies in total assets turnover and profitability between the two nations
might be related to variances in legislative regimes and labor environments. Higher labor
expenses and lesser profitability are associated with German legislation, which is particularly
protective of employee rights. With their greater liquidity, lesser debt, and higher profitability,
U.S. manufacturing companies appear to be particularly enticing to overseas investors.
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