Wikipedia
Mittelstand commonly refers to small and medium-sized enterprises in German-speaking countries, especially in Germany, Austria and Switzerland. However, The Mittelstand proves difficult to translate and causes a lot of confusion. The majority of definitions define the Mittelstand as a statistical category and most commonly suggest that Mittelstand firms are small and medium-sized enterprises (SMEs; German, kleine und mittlere Unternehmen or KMU) with annual revenues up to 50 million Euro and a maximum of 499 employees.
However, the term is not officially defined or self-explanatory hence, in English linguistic terms SMEs are not necessarily equivalent to the Mittelstand. In fact, even larger, and often family-owned, firms claim to be part of the Mittelstand, such as Robert Bosch based on the Mittelstand's positive connotations. The term Mittelstand mainly applies to mid-sized firms as opposed to larger listed companies and most importantly Mittelstand companies are characterized by a common set of values and management practices.
Already Ludwig Erhard, the former Economics Minister who crafted the post-war (West) Germany's economic miracle (German: Wirtschaftswunder) warned not reduce the Mittelstand to a mere quantitative definition, but instead emphasized more qualitative characteristics which embody the German Mittelstand, as it is "...much more of an ethos and a fundamental disposition of how one acts and behaves in society."
What does define the Mittelstand, is a much broader set of values and more elastic definitions. Business historians define various traits associated with Mittelstand firms, such as:
- Family ownership or family-like corporate culture
- Generational continuity
- Long-term focus
- Independence
- Nimbleness
- Emotional attachment
- Investment into the workforce
- Flexibility
- Lean hierarchies
- Innovativeness
- Customer focus
- Social responsibility
- Strong regional ties
The latest English publication on Mittelstand firms by Prof. Bernd Venohr, Prof. Jeffrey Fear and Dr. Alessa Witt highlights that: "These companies are predominantly run by classic “owner-entrepreneurial families” (Unternehmerfamilien) seeking to sustain the business by instituting a core ideology of longevity, conservative long-term financing, and operating practices." The Mittelstand acts as a counterpoint to a singular focus on shareholder value and dispersed investor-orientated shareholding.