MARTINEZ CONSTRUCTION COMPANY IN GERMANY

Martinez Construction Company is a well-established construction company in Eastern Spain. It was founded in the mid 1940s, its reputation and quality of service ensured growing profits for decades. Because of a recent decline in contracts in the Spain society, Martinez Construction Company needed to expand into the international market in order to survive ( expand and grow). After a thorough survey of the international market, the newly formed Democratic Germany seemed the perfect place. Furthermore, the best solution was to acquire an existing firm with the help of Treuhandanstalt (THA). This was a result of the lack of liquidity of the Martinez Company. Therefore, an alliance with another German company would not allow it to establish itself as a serious competitor on the international market. The intermediary for Martinez Construction was THA (Treuhandanstalt), a company created in the former German Democratic Republic. The companys main purpose was to find private buyers for some 13 500 business and 15 000 parcels of real estate that had been owned by the former German Democratic Republic. Their primary job was to sell the companies and match existing companies with buyers. Martinez Construction used THAs services to find a new German company to acquire. Thus, THA found Konstruktion Dreizehn, based in Leipzig. Juan Martinez was sent to handle the negotiations part of the acquisition in Germany. During the negotiations, there were noticed strong discrepancies between the business styles of the two representatives of the companies, the cultural barrier between the two being noticeable. However, they managed to arrive at a common point by modifying the initial contract, after Juan insisted. After ending this first chapter and signing the contract, Martinez Constructions had to develop the company in Germany, thus they first of all fired about 300 employees and considered the main department that needed to be developed was Human Resources. Concerning the concepts of work, the East Germans proved to be behind when talking about the degree of initiative and responsibility. Moreover, they proved fear and distrust of management. Only after 6 months after the contract was signed, problems seemed to arise concerning the financial position of the company and Miguel started to think if immediate action was required for them.