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Business

No presents this year in corporate Germany

A major German industry association is urging managers to rethink corporate Christmas gifts this year. It doesn't want to spoil the cheer, but reminds everybody of the dangers of corruption.

Money with a bow around it

Cash gifts are absolutely off limits in Germany

Christmas is just around the corner, and people are scrambling to find the perfect presents to stack under the tree. But one organization isn't feeling the festive spirit and wants to do away with presents entirely – at least in the world of business.

The German Association of Materials Management, Purchasing and Logistics (AMMPL) says gifts have no place in business and that a good supplier won't need them to keep its customers. The association represents some 8,000 members, and in 2008 established a 'code of conduct' which covers corporate gift giving.

But it's not always easy to draw a line between a small token of appreciation and a gift that could open the door to a host of ethical dilemmas.

That's why Sebastian Schroeder, an AMMPL compliance expert, says the code of conduct drafted by his organization lets companies decide what limits are acceptable. Comparable business dinners in London, Hamburg or Shanghai come at very different prices, he pointed out.

"Ultimately it is up to the individual employee of a company to determine if a present has been made in good faith," he told Deutsche Welle. "We didn't set a limit to the value of presents."

Fraport

Airport operator Fraport says its staff know what's acceptable

Despite their clean-cut reputation, German managers have gone astray on numerous occasions. In recent years, corruption scandals have rocked companies including Siemens, MAN, Daimler, and Volkswagen.

Intercultural challenge

In a globalized business environment, there's always the issue of differing cultural expectations. Representatives from Asian, Middle Eastern and South American companies are likely to expect a tighter bond with business partners than many Germans are used to, Schroeder said.

"They close deals based more on personal trust," he said. "And sometimes a German buyer shows up and wants to get right to the deal and sign a contract, only to find there are certain limitations."

In China, for instance, monetary gifts are not at all uncommon, although they are "clearly not acceptable in Europe and the United States," Schroeder said.

Companies may be reluctant to insult their business partners by returning a gift, giving rise to the challenge of different cultural expectations.

Wariness of owing favors

Clemens von Stockert, a manager in the compliance department of Fraport airport in Frankfurt, says his company deals with potential problems by banning gifts like airline tickets, car shares, and inexpensive credit.

A meal

It's the thought that counts: dinner comes at a different price depending on the city

A dinner out is fine – it's gone after having been eaten. But anything over 35 euros should be internally documented, according to von Stockert.

"The important thing is that people don't put themselves in a position of dependency," he told Deutsche Welle. "We have clear rules that money and anything with monetary value are not to be accepted."

Gift giving has decreased in volume during recent years, according to von Stockert, but occasionally someone in the company will receive a present. If it can't be given back without jeopardizing a business relationship, then it's likely to end up going to charity... and the company has to pay taxes on it.

"Nowadays more companies are keeping these regulations in mind when it comes to accepting gifts and giving them," von Stockert said.

Sebastian Schroeder of AMMPL added the idea isn't to spoil Christmas fun, but to foster an environment where companies work together "fairly and in a spirit of partnership."

"It is true that Christmas and similar holidays are used as an opportunity to intensify existing relationships between companies," he said.

Author: Gerhard Schneibel
Editor: Sam Edmonds

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