How Japanese managers in Germany can overcome challenges
Japanese expat managers in Germany face challenges with culture, language, colleagues, clients, authorities, and requests from the headquarter.
Japanese managers often become department heads or chief financial officers without a technical background. Japanese companies prefer this challenging environment to find the best candidates for advancement: either with our withour success. This article outlines how Japanese expat managers can successfully navigate this environment.
Japanese expat managers often face multiple challenges
While working in Indonesia and Germany, I observed two types of Japanese expat managers. Japan sends the first type directly and it has never lived in another country. They have limited English skills or are hesitant to speak it. The second type has often already lived in other countries and is proficient in English.
In Japan, professional education doesn’t always match the job you end up doing, like in the Anglo-Saxon system. In Germany, there is a cultural problem when starting a new management role. In this situation, you must prove yourself and earn respect from your local subordinates.
Technical expertise is key to earn respect from local subordinates
Technical expertise initiates this process and culminates in displaying a healthy level of self-confidence to the team. Without this respect of the local team, often there is a lack of support and even good team members may leave their job.
German is necessary to connect with the local team
Language is another challenge. English is important for business in German cities, but knowing German is necessary to connect with the local team.
However, due to long work hours and a limited posting (mostly 4 years) in Germany, it is in practice almost impossible for Japanese expat managers to study German.
The German regulatory environment is complex and tax law ever changing
The regulatory environment in Germany is exceedingly complex, especially tax law which is ever changing. Japanese companies usually hire big4 accounting firms for tax advice to ensure safety. Because of limited funds, they often ignore daily questions and conversations, causing Japanese expat managers to feel unsure.
Japanese expat managers often work day and night
Japanese expat managers in Germany face challenges during the day and handle special requests at night. This is because of the time difference with Japan.
These requests often require immediate attention. For example, they may need to create a management report that is not easily accessible from the ERP system. They may also need to conduct job interviews for a new local HR manager. Additionally, they may need to oversee the implementation of a new IT function.
What is the result of these multiple challenges faced by Japanese expat managers?
In my over 25 years of experience with hundreds of Japanese expat managers I have observed that – of course with exceptions – Japanese expat managers with a limited posting do what everybody would do: keep the status and do not enter into risk.
However, this does not help the Japanese firm because it does not unlock opportunities, for example:
Users are not using new accounting systems or modules that automate and digitalize processes. This means that we are not utilizing digital bank transaction data and learning files. The purpose of utilizing these resources is to reduce the accounting team and minimize human errors.
We are delaying important decisions about our employees: we are not making unproductive or disruptive staff redudant.
How can Japanese expat managers be successful
To succeed as a Japanese expat manager in Germany, you must understand and collaborate effectively with German culture. Additionally, it is crucial to establish strong relationships and adapt to the local business environment. Here are some tips to help Japanese expat managers thrive in Germany:
Understand the German business culture
- Germans value efficiency, punctuality, and precision. Be organized and respect deadlines.
- Decision-making in Germany tends to be more consensus-driven. Take time to build relationships and seek input from team members.
Improve language skills
- Learning basic German can enhance communication and rapport with colleagues, particularly in multinational companies that commonly use English.
Adapt leadership style
- German management styles may be more direct and assertive compared to Japanese styles. Be prepared to communicate clearly and assertively, while also being open to feedback.
- Networking is crucial in German business culture, not only in Japanese culture. Attend social events, build connections, and participate in team activities to foster good relationships with colleagues and subordinates.
Embrace work-life balance
- Germans place importance on maintaining a healthy work-life balance. Respect boundaries and encourage your team to have a balanced approach to work.
Learn the legal and regulatory environment
- Familiarize yourself with German laws and regulations to ensure compliance and avoid any legal issues. For an example on tax regulations, see my comments further below.
Be open to feedback
- Germans value constructive criticism and open communication. Encourage your team to provide feedback, and be open to receiving and implementing suggestions for improvement.
Adapt to hierarchical structures:
- German companies often have a more hierarchical structure. Understand the reporting lines and respect the chain of command within the organization.
Localize management practices
- While retaining your own cultural identity, adapt management practices to align with local expectations. Be flexible in your approach to leadership and decision-making.
Seek cultural training
- Consider undergoing cultural training programs to better understand and adapt to the German work culture.
Remember that successful integration involves a combination of respecting the local culture, adapting your own practices, and fostering positive relationships with colleagues. Keep an open mind, be patient, and demonstrate a genuine interest in understanding and embracing the German work environment.
How can Japanese expat managers quickly study tax regulations in Germany?
Studying the tax regulatory environment in Germany is crucial for Japanese expatriates to ensure compliance and make informed financial decisions. Here are steps Japanese expats can take to understand the tax regulations in Germany:
Seek advice from tax professionals, such as tax consultants or accountants, who specialize in German tax law. They can provide personalized guidance based on your specific situation.
- To learn about taxes in Germany, visit German tax administration websites like the Federal Tax Office and Ministry of Finance. These sites typically offer extensive details on tax rules, forms, and instructions.
Tax guides and publications
- Refer to tax guides and publications that explain the German tax system in detail. You can obtain these resources from government agencies, tax consulting firms, or reputable publishers specializing in tax matters.
Attend workshops and seminars
- Participate in workshops or seminars organized by tax authorities, chambers of commerce, or professional associations. These events often provide insights into recent changes in tax laws and regulations.
- Connect with expats, locals, and business chamber members. Share experiences and get practical advice. This will help you navigate the German tax system.
Utilize expat assistance services
- Some organizations and service providers offer assistance to expatriates, including help with tax-related matters. Explore these resources to get specialized support.
Stay informed about changes
- Regularly check for updates on tax laws and regulations. Changes in tax policies can have a significant impact on your financial situation, so staying informed is crucial.
Understand residency rules
- Familiarize yourself with the residency rules in Germany, as they can affect your tax status and obligations. Being aware of these rules helps you plan and manage your tax liabilities appropriately.
- Understand any tax treaties between Japan and Germany. These treaties can affect how taxing authorities tax your income and can offer relief from double taxation.
Document financial transactions
- Keep detailed records of financial transactions, income, and expenses. Accurate documentation is essential for fulfilling tax obligations and can be helpful during tax audits.
Japanese expats in Germany can learn and follow local tax laws and manage their firm’s finances using these strategies.
How s&w can support Japanese expats and companies
s&w has supported numerous Japanese firms and its Japanese expat managers on the following tasks, for example:
· Ad-hoc advice on financial accounting and tax questions
· Digitalization of accounting workflow
· Support on the transformation of an existing ERP system to SAP
· Communication with external auditor
· Management of audit preparation process
Contact us to get to know our Japanese Desk team and how we can support you. Our team has mostly a big4 background, knows how to deal with auditors and authorities and is hands-on.
Naomi Kaneko, our Japanese Desk Head, has lived in Germany for 15+ years and is a certified German Bookkeeper. She can help you overcome challenges in your own language.
Source: s&w (own); Thomas Wirtz
Disclaimer: We assume no liability for the accuracy and completeness of the information. The information provided here does not constitute recommendations for action.