Reunification Paves Way for Business Expansion

By Hering, Ralf | Public Relations Journal, December 1991 | Go to article overview

Reunification Paves Way for Business Expansion


Hering, Ralf, Public Relations Journal


Coping With Economic Transition And Environmentalism Is Key To Success

German organizations are expecting more business opportunities with the arrival of European unification. Those hoping to succeed in the new Germany must deal with continuing repercussions of the nation's reunification, and a growing environmental movement.

Two predominant influences are affecting business and culture in Germany today. One is German reunification, and the conditions businesses trying to expand into the former East Germany encounter. The second is the high level of environmental consciousness that now pervades German political and social life. A thorough understanding of these two factors and the demands they place on an organization's public relations plan are necessary for success in the country's fast-changing economy.

The German public relations market promises strong long-term growth as what was once East Germany becomes fully integrated into the "new Germany." The 1990 German public relations market was worth between $2.38 and $2.98 billion, according to Deutsche Public Relations Gesellschaft, the German association.

There are more than 200 public relations firms in what used to be West Germany. The biggest of these firms have made initial inroads into Germany's eastern half, beginning with campaigns run out of Berlin. To date, most of these campaigns have been educational in nature, explaining how Western companies and governments operate, in order to influence people's attitudes regarding the influx of new ideas.

The first year of privatization of East German industry presented many problems and was more difficult than initially estimated, causing many governmental and social problems. Of these problems, changing public attitudes and actions was the most daunting task.

Educating people is the first public relations tactic needed to achieve public understanding and support of the new Germany. For example, the German Ministry of Economics ran an informational campaign to educate East Germans on how to deal with the new challenges presented by the changing economy.

Stumbling blocks to start-ups

German reunification has made locating in the former East Germany more attractive to Western companies seeking to capitalize on the inexpensive operating costs and abundant workforce. However, privatization has not been simple, especially in the service industry, which was almost non-existent in former East Germany. While operating costs are low, initial start-up costs can be high as companies encounter various unexpected costs and government regulations. Not only does Western equipment often have to be brought in, but local workers must be taught how to run it.

It is also highly important for Western companies to use public relations to both explain and ease the transition from the old, centrally planned economy to the new free-market economy. Goals of any widescale public relations program in the old East Germany should include the following:

* emphasizing the creation of new jobs;

* popularizing new professions, such as service and commerce jobs in hotels, restaurants, banks, and transportation and construction organizations;

* demonstrating the company's social responsibility, including a discussion of its environmental programs; and

* explaining the contribution the company will be making to the local community, such as contributions to schools, housing and parks. …

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