Susanne Hilger. "Amerikanisierung" deutscher Unternehmen: Wettbewerbsstrategien und Unternehmenspolitik bei Henkel, Siemens und Daimler-Benz (1945/49-1975). Stuttgart: Franz Steiner Verlag, 2004. 314 S. EUR 60.00 (cloth), ISBN 978-3-515-08283-9.

Reviewed by Alfred C. Mierzejewski (University of North Texas)
Published on H-German (November, 2005)

Americanization of Consumerism

In her interesting new book, Susanne Hilger addresses the problematic concept of the Americanization of German industry since World War II. This issue is part of a larger debate on the Americanization of German society as a whole. The discussion on this matter was spurred by Volker Berghahn with his The Americanization of West German Industry, 1945-1973 published in 1986.[1] Despite the fact that Berghahn's book was built on a thin research foundation and contains many questionable assertions, it has set the terms of the subsequent debate. Hilger seeks to place this discussion on a firm empirical foundation by examining the behavior of three prominent firms in different industries in order to determine what actually happened. Her objective is to explain how the adoption or adaptation of U.S. business practices influenced business behavior in West Germany.

Hilger selected Daimler-Benz, the manufacturer of automobiles and trucks, Henkel, producer of branded, packaged consumer chemicals such as the famous Persil laundry detergent, and Siemens, manufacturer of a full range of electrical goods as her illustrative examples. She made extensive use of the records of all three companies as kept at their archives as well the relevant secondary literature. The boundaries of her topic were set by the caesura of the German defeat at the hands of the Allies in 1945 and the thirty-year rule that limits access to archival materials. She employs concepts from the New Cultural History to illuminate the development of modern society by looking at cultural, or "soft" factors that are usually ignored by social scientists.

On this foundation, Hilger structured her work around five cultural transmission belts that she identified in this context. They include personal contacts between West German and American business people, visits by West German managers to the United States, agreements by West German firms to license U.S. technology, cooperative arrangements between firms based in the two countries and the establishment by American companies of branches in West Germany.

Of the three firms discussed by Hilger, Henkel went the furthest in adopting U.S. business practices. Henkel worked closely and consistently with American consultants McCann-Erickson and especially Stanford Research Institute. This was made possible by a generational change in the leadership of this closely held family firm in 1961. Under intense competitive pressure from Proctor & Gamble, Henkel gradually and hesitantly adopted U.S. marketing techniques. The company resisted mounting splashy advertising campaigns and was reluctant to produce a single, all purpose laundry powder. However, P&G's success on Henkel's home turf forced management to change its policies on these matters. To facilitate this new competitive stance, Henkel examined the multidivisional structure that had been pioneered by DuPont and General Motors and become standard in the United States. Henkel adopted a form of the "M-Structure," though with modifications that made it less than orderly.[2] It also implemented the American internal accounting practice of designating segments of the company as profit centers. At about the same time, it also began strategic planning similar to U.S. firms. The company altered its personnel management methods, prompted by changes in West German labor law and the democratization of the West German political system and society. It adopted U.S. human relations practices with suitable adjustments to the West German environment. In particular, it implemented the management by objective and management by delegation approaches. Hilger attributes the development of these concepts to the "American" business analyst Peter Drucker. In fact, Drucker was an Austrian corporatist who had emigrated to the U.S. in 1939.[3] It would be interesting to determine whether his background rendered his ideas more acceptable to the West Germans. Finally, Henkel began using many American public relations techniques in its internal corporate communications and to improve its external corporate image.

Daimler-Benz, despite its heavy involvement in the U.S. market, made fewer adjustments than Henkel. DBAG did not use consultants. It did alter the equipment of its passenger car models and trucks in light of demand in the American market. In particular, it added safety devices and environmental protection equipment to conform to American regulations that were more stringent than those then in effect in West Germany. It also added convenience features to its passenger cars such as air conditioning, power windows and power steering to satisfy calls for them from American buyers. In addition, it selectively adopted U.S. marketing techniques, particularly as they related to media advertising. However, it refused to conform to the American practice of the annual model change and, most importantly, adhered to the German tradition of avoiding price competition. Daimler-Benz resolutely refused to adopt the American multidivisional structure and rejected the use of profit centers. It did take up some factory floor practices from Detroit. Its public relations efforts were modified in light of American developments, but they transmitted a traditional message of German quality and solidity.

Siemens made very little use of consultants. It relied heavily on cooperative arrangements with U.S. firms to gain access to their technology and management methods. It worked with Westinghouse and Allis-Chalmers in the fields of electrical engineering and nuclear technology. When it became clear that it had picked losers with both, it switched to working with one of its main competitors, General Electric. It cooperated with Westinghouse in semiconductors and RCA on computers, again choosing its partners badly. Siemens household appliances, sold primarily in West Germany and largely unavailable in the U.S., were influenced by American developments hardly at all. Siemens did adopt the multi-divisional structure due to increased competition and a change in West German corporate law. Similarly, it also reorganized its operations to create profit centers. Its public relations work was expanded and changed in light of lessons learned from the Americans, but, like Daimler-Benz, it adhered to the traditional message.

After surveying these developments, Hilger concludes quite reasonably that West German firms observed developments in the United States, but did not adopt American methods wholesale: "von einer grundsätzlichen Amerikanisierung der Unternehmensführung nicht gesprochen werden kann" (p. 279. See also pages 168 and 282). She notes, correctly, that most West German managers did not see the emergence of a consumer society in their country as a form of Americanization. Most interestingly, Hilger attributes the move to change West German business methods as motivated primarily by market competition. As she puts it, "Damit bildete der ökonomische Wettbewerb einen wesentlichen Antrieb für die interkulturellen Transferprozesse nach dem Zweiten Weltkrieg und für die Adaption (sic) von U.S.-amerikanischen Know-how" (p. 284). However, she asserts, Europeans and West Germans in particular refused to follow this process to its logical conclusion. German firms reacted to the competitive challenge posed by U.S. firms in the traditional manner. They tried to order markets. They sought to moderate competition to ensure that all of the players would survive. Although Hilger doesn't mention it, this was an outgrowth of the German view of the firm as an Existenz intended primarily to ensure the livelihood of its owners and employees, rather than as a profit-making mechanism and the view that competition wastes national resources. Hilger summarizes her findings by stating that West German companies selectively adapted American procedures to their purposes in their social setting. This helped them limit and control U.S. influence, enabling them to concentrate on traditional German entrepreneurial goals and strengths such as the preservation of the firm and the incremental improvement of a given technology (p. 287).

Hilger's general conclusion that no thoroughgoing Americanization of West German industry took place is surely correct. In this regard, she performs the useful service of further undermining the Berghahn thesis. She makes clear that such change as did take place was the result of competition. In passing, she also highlights the persistent desire of German firms to evade competition by engaging in collusive activity. Indeed, she makes clear that Daimler-Benz and Siemens continued the practice in the period that she examined (p. 195). Only Henkel, and then reluctantly and belatedly, condescended to compete on price. She also points out that Siemens and Philips ran a cartel to control the market for medical devices in Europe during the 1960s. Just as importantly, she also highlights Siemens's and Daimler-Benz's continued embrace of the traditional German high price policy. This was intended to give their products an aura of exclusivity and fit the high wage policy that was forming in the Federal Republic in the late 1950s and 1960s.

Hilger's work raises questions about the viability of the New Cultural History as an approach to understanding the evolution of West German business. From an economic perspective, her findings would have been easy to predict. Individuals and firms respond to incentives. Consequently, when faced with competition, West German companies adjusted their strategies. Yet they also resisted change, clinging to traditional values. Understanding this resistance can be facilitated by employing ideas from the New Institutional Economics, most notably the concepts developed by Douglass North, Nobel Prize winner in economics in 1993.[4] North contends that social and cultural institutions (not organizations) evolve very slowly. Consequently, the social institutions and values with which the actors on the West German economic scene were equipped in the three decades after World War II were actually more suitable to an earlier age. This state of affairs led them to resist or reject new developments. Hilger's discussion provides evidence of this tendency. For example, she mentions that codetermination prevented West German firms from adopting many American human relations concepts. Codetermination as well as works councils and national labor contracts are forms of collective action. They stem from the traditional desire for group solidarity and the concomitant aversion to market competition, as pointed out by North. The result was that German firms sought to divide markets, moderate competition and concentrated on perfecting existing technologies in order to avoid risk, thus preserving livelihoods.

Overall, Susanne Hilger's useful book should help bury the bogey of Americanization. It is an ill-defined concept with little empirical evidence to support it. Her book also raises questions about the viability of the New Cultural History as a method of understanding the behavior of German firms and the performance of the German economy as a whole. As she rightly hints, what we are dealing with here is the spread of consumer culture in a competitive environment, something that is not an exclusively American phenomenon.

Notes

[1]. Volker Berghahn, The Americanization of West German Industry, 1945-1973 (Cambridge: Cambridge University Press, 1986).

[2]. On the M-structure see Alfred D. Chandler, Jr., Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge: MIT Press, 1962), especially chapters 2 and 3.

[3]. On Drucker see Eugene McCarraher, "'An Industrial Marcus Aurelius': Corporate Humanism, Management Theory, and Social Selfhood, 1908-1956," Journal of the Historical Society 5 (Winter, 2005): pp. 104-109.

[4]. Douglass C. North and Robert Paul Thomas, The Rise of the Western World. A New Economic History (Cambridge: Cambridge University Press, 1973); Douglass C. North, Structure and Change in Economic History (New York: Norton, 1981); Douglass C. North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990); Douglass C. North, Understanding the Process of Economic Change (Princeton, NJ: Princeton University Press, 2005).

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Citation: Alfred C. Mierzejewski. Review of Hilger, Susanne, "Amerikanisierung" deutscher Unternehmen: Wettbewerbsstrategien und Unternehmenspolitik bei Henkel, Siemens und Daimler-Benz (1945/49-1975). H-German, H-Net Reviews. November, 2005.
URL: http://www.h-net.org/reviews/showrev.php?id=11253

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