Want to do Business in Japan?

Japan has the world's second largest GNP and is the world's second largest market accounting for 60-70% of the economy of Asia. It is the source of a great deal of advanced technology, much of it built into Japanese consumer products owned by consumers throughout the world. Japan has 50 million mobile phone users (40% of the total population) most with Internet access, while broadband technology is rapidly advancing on both the home and business fronts. Total sales through mobile e-commerce reached $500 million in 2000 with projections of $10 billion in sales by 2005.

The Japanese have the justified reputation of being the world's most demanding consumers who are satisfied with nothing less than the very highest standards of quality and service. The Japanese market is therefore the benchmark for any company aiming to succeed in international business.

Despite its ultra-modern, Western appearance and technological sophistication, foreign business people often find that on closer acquaintance, Japan is in many ways the most culturally distinct advanced society they will have encountered. This is part of its fascination. Too much is sometimes made of this but is does mean that time spent acquiring the necessary cultural awareness and knowledge needed to adapt one's style and approach to fit Japan is a necessary investment. Key aspects to be aware of are the strong group orientation of Japanese and the distinction they make between tatemae, the face which Japanese present in public to maintain harmony and avoid embarrassment, and honne, one's real feelings or the actual situation.
Japanese business is relationship-based on the assumption that it is the relationship which makes the business possible. Since Japanese are instinctively wary of those with whom they have no relationship, whether Japanese or foreign, it follows that building a relationship takes time and requires patience, persistence, and perseverance. These are among the qualities most admired and respected in Japanese business and they are needed in abundance by both companies and individuals in Japan if they are to succeed.

The hallmarks of the Japanese approach to business are tireless collection and collation of information, thorough preparation and meticulous attention to detail. Foreign companies in Japan should do their best to match this and should also have clear objectives and a well thought out strategy for the market. Time-consuming and often very costly mistakes have been made there by foreign businesses which have failed to gather sufficient information and skimped on preparation and planning. "Winging it" or "playing it by ear" are sure recipes for disaster. Those who do their homework thoroughly will find a vast amount of information readily available from official and commercial sources as well as many experienced consulting companies to call on with long experience and specialised knowledge of Japan's particular markets. Being prepared also means knowing one's company, products and markets inside out. Those who do not cut a poor figure in Japanese eyes even if they can do business in Japanese.

Formality and formal politeness are much more important features of Japanese social and business life than in most other societies. Their observance ensures respect for hierarchy, the smooth functioning of social relations and the elimination of uncertainty and any possibility of public embarrassment. Knowing and being able to observe the basics of etiquette are therefore important for the incoming business person wishing to make the best possible impression. First encounters in business, for example, must always begin with the formal exchange of meishi or name/business card. Any business visitor to Japan therefore needs to take an ample supply (anything between one and two hundred) of professionally produced cards. They are a key element of the public face not only of the individual but of their company. On the sophisticated and often involved protocol for meetings, entertainment and other areas of business, it is best to take expert advice.

Japanese companies are collective organisms whose individual members are with the company for most if not all of their working lives. Decisions are made after an exhaustive period of information gathering, consultation and discussion (nemawashi) among all relevant parties in the company. This takes time and will involve repeated requests for information as well as great patience from a prospective business partner. It also underlines the necessity for any business partner of developing and maintaining good relationships with as wide a range of people as possible in their Japanese counterpart.

Being able to speak and do business in Japanese is always an advantage, not least because it shows an unquestionable commitment to the market. The language is also an important window into Japanese culture and without the ability to read it, foreigners have the unnerving experience of being functionally illiterate when they arrive in Japan. However only a minority of foreign business people will have these language skills while all Japanese have some knowledge of English and some a very good command of it. It is therefore certainly possible to do successful business through the medium of English in Japan. Native speakers of English however need to now how to adapt their language in order to communicate effectively with second-language speakers of English like the Japanese. This involves much more than just speaking more slowly. And even when doing business mainly in English, every foreign business person should make the effort to learn some courtesy and survival Japanese and in particular the polite expressions and formulas which always lubricate social interaction in Japan. This will always be appreciated.
Whether business is being done in Japanese or English, all relevant printed information such as company brochures, product information and the like should be produced in Japanese and an interpreter, properly briefed, should be used at all important business meetings.

The economic and financial news coming out of Japan over recent years has seldom been positive but this should not be allowed to obscure Japan's massive strengths and the increasing opportunities it offers for successful and profitable business. Worth highlighting here is the genuine welcome now on offer to foreign inward investment in an economy where in the past it has deliberately kept it to a minimum. As a result foreign investment has been rising rapidly.

Graham Thomas was previously Head of the Briefing Office, School of Oriental and African Studies, University of London. He now provides a consultancy service to companies wishing to do business in Asia, specifically in Japan and China and for expatriate Japanese executives to manage non-Japanese effectively in Europe and the UK. May 2002

To find out more about our Working with Japanese, Japanese Language or Living and Working in Japan programmes, please email: info@farnhamcastle.com, or visit our website at http://www.intercultural-training.co.uk