Schutzhund is a sport that originated in Germany as a means to evaluate a dogs character as well as preserving the abilities of a working dog.
During the late 18th centuries, Western Europe had many types of dogs herding sheep, cattle and other livestock. These dogs guarded the livestock and their masters. Near the end of the 19th century, the value of these dogs actually became more valuable than the livestock they guarded because of the skills they possessed. One man was central to the development and preservation of these dogs, in particular the German Shepherd Dog, his name is Max Von Stephanitz.

Max Von Stephanitz founded the German Shepherd Club of Germany (called the SV) in 1899. Von Stephanitz is credited with almost single-handedly building the German Shepherd breed. An excellent book written by Max Von Stephanitz is "The German Shepherd Dog in Word & Picture". Informal dog training contest always existed, but Max Von Stephanitz was the man who brought formality to these competitions, and included tests of the dog's abilities in tracking, obedience, and protection. These training contests became the sport of Schutzhund.
In addition to the creation of the SV, he put into place strict rules that guided the breeding of the German Shepherd Dog. Von Stephanitz was totally committed to the idea that the German Shepherd, above anything else, must remain a working dog. The beauty of the breed is in the utility of the animal. This is contrary to the goal of many American breeders who have bred out the working and hunting drives of their dogs in exchange for, often extreme, physical appearance. Unlike the American counter-part, a German Shepherd dog in Germany cannot receive official registration unless BOTH parents have passed a Schutzhund trial. Furthermore the dog cannot be shown in confirmation; it cannot be eligible for the top confirmation rating (V rating) for beauty and structure; and it will not be recommended for breeding by the "breed warden", if the dog does not earn a Schutzhund title by passing a challenging test. Because of these restrictions, the German's have guaranteed the breed will continue to develop as an intelligent, stable, trainable, working dog.
The Schutzhund trial is a formal test of the working dogs character and trainability by competition in 3 phases - tracking, obedience and protection. The titles a dog can earn are a Schutzhund 1, which is the most elementary title, followed by a Schutzhund II, and the most challenging a Schutzhund III. Before any dog (and any breed dog is eligible) can compete for a Schutzhund title, the animal must pass a combination temperament and obedience test (called the BH). This evaluation is necessary to ensure that no dog that is unsuitable due to temperament will be competing for the Schutzhund I, II, or III. The temperament of the competing dogs are continually tested each phase of a Schutzhund trial. Any dog that has been disqualified due to temperament problems is closely reviewed if they are entered in any future Schutzhund trials.
Prior to the tracking phase of Schutzhund competition each dog is closely examined by the judge for stability and impartiality. Impartiality is an aspect of a good working dog's character which means it is neither hostile or fearful of strangers. If the judge perceives any sign of shyness or inappropriate aggressiveness, the dog will be disqualified from further participation in the trial. The result is recorded in the trial records of the dog, which is presented to the judge at every competition.
During the obedience phase of competition, the dogs temperament is again evaluated during the heeling exercise which involves the dog and handler moving through a milling crowd of people. The dog should be attentive to the handler and undisturbed by the crowd of people. After leaving the crowd a gun is fired twice in slow succession. The dog should not react to the shots. If the dog seems gun-shy (timidness) or shows signs of aggressiveness he will lose points, and this will be recorded on the dog's trial records.
The final phase of a Schutzhund trial is the protection phase. This phase of training is surrounded by myths and misconceptions. Some people feel that it creates dangerous animals, and some consider it cruel and inhumane. Common sense and an understanding of the training methods necessary to produce a competition dog is needed to dispel this ignorance. Any dog that is stable and friendly prior to protection training will remain so after protection training.
The difference will be that the preexisting characteristics of these dogs will be strengthened and molded into an animal that is more predictable and confident, thus less likely to act with inappropriate aggression. The common sense aspect of this debate pertains to the cruelty myth associated with protection training.
The primary objective of bite work is to build and maintain confidence in the dog, and this would be impossible if cruelty and force was used. For the dog to compete and excel in protection work, it must develop the self-assurance, conviction and force to willingly confront a human. Understand that the emphasis in the previous sentence was on "willingly" confronting a human being. In the Schutzhund trial the dog works off leash and most go out after the decoy. An animal that has been abused or mishandled will not actively search for and engage with the "decoy".
Another erroneous belief held by many dog owners is that a dog will naturally protect its owners in a real-life, threatening situation. This is very unlikely. Because a dog will bark aggressively is no guarantee that it will protect its owner. Most dogs have an inhibition against biting a human unless they are cornered. Anyone who has ever trained a Schutzhund dog can tell you that it takes a great deal of training, using patience and progressively building the dogs confidence and desire, to develop a bite that is strong and full.
The final point that must be made is that Schutzhund does not teach a dog to bite. Schutzhund training strengthens and channels this behavior to create a controlled and confident dog. If the dog does not want to bite, no amount of training will make the dog a voluntary or eager participant, and this will be apparent to the judges during competition. Unwilling dogs should not be pressured to train in Schutzhund. Attempts to do so will result in poor performance and the dog will be a wash-out early in the game.
The person who is considering Schutzhund must be honest about their goals and their competency. The trainer must be honest with the owner about both the dog and owners abilities and temperament! They must accurately determine the dog's temperament and desire to train in Schutzhund. The owner must respect the fact that a trained dog is a powerful weapon and take care to make good decisions regarding the safely of the dog and of other people. Here in lies the crux of the debate; irresponsible owners can forget it!
References: Schutzhund Protection Training by Gary Patterson, Training The Competitive Working Dog by Tom Rose & Gary Patterson, Schutzhund:Theory and Training Methods by Susan Barwig
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Jazz der Rose, owned and trained by Jan Hunt