The Business and Cultural Practices of Japan

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Table of Contents

Introduction
Geographic Description of Japan
Other significant facts
Japan’s Business Practices
Hofstede’s dimensions in evaluating Japan’s cultural values
Comparison of Japan’s Practices to those of United States
Conclusion
Works Cited

Introduction

The rising rate of globalization has led to business activities to be a global affair. It is because of this globalization that any entrepreneur who wants to beat the global competition should familiarize themselves with the customs, norms and practices of the different countries they do business with. It is also important that the business protocol, communication and etiquette are put into consideration.

This becomes of essence due to the increased travelling in terms of doing business (Lipartito 32). Japan is no exception since it is one of the industrial countries in the world. Most countries of the world import most products from Japan because of her good reputation and the high quality products she produces. Japan’s economy is also at the top competing with countries like the United States of America which are known to be doing well economically worldwide.

Geographic Description of Japan

Population

Japan has a population of 126,804,433 and is ranked 10^th among all other countries in the world. Japans life expectancy is 82 years, but its population’s growth rate is declining at 0.242%. 66% of the total population lives in an urban area, and 99% both male and female are literate.

GDP

Japan is the third largest economy in the world after the United States and China. Its GDP (purchasing power parity) is $4.137 trillion and ranked 4^th in the world. Japan entered into recession in 2008, its GDP – real growth rate is currently declining at rate of 5.3% and its GDP per capita is at $32,600. Its labor force is composed of 65.93 million and its unemployment rate is 5.1%.

Political Orientation

Japan government is parliamentary with a constitutional monarchy. It legal system is modeled after the European civil law systems with English-American influence. Japans chief of state is Emperor Akihito, he has been in this position since January 1989. In June 4^th of this year the National Diet of Japan also known as the bicameral legislature appointed Naoto Kan as prime minister, he is considered to be the head of government. Following legislative elections the leader of the majority party usually becomes prime minister; the monarchy is hereditary.

Major Products Produced

Japan is famous in the world for producing vehicles, electronics textiles and machinery. Others include fully processed food commodities, big vessels like ships just to mention but a few. It is known to be the largest exporter of the same products.

Other significant facts

Japan is located in eastern Asia, in a chain of islands between the North Pacific Ocean and the Sea of Japan. Its area can be compared as slightly smaller than the state of California. In 1941 Japan attacked the United States, this initiated Americas entry into World War II. When Japan lost in the Second World War it regained its strength and has become one of the most important economic powers in the world.

For more than a decade Japan has been one of the most important markets overseas for the United States. Japan supplies many important products to firms such as Apple, IBM and Hewlett-Packard. Japan also plays a major role in UN peacekeeping operations, humanitarian relief and also in international election monitoring (Griffin 56).

Japan’s Business Practices

Japan is currently going through major human resources management changes. Traditional culturally influenced Japanese business practices are slowly shifting to more westernized business practices. To globally compete, many Japanese companies feel that they must not let cultural barriers continue to hinder Japan’s economical performance. However, regardless of where Japanese business practices are headed in the future, cultural values and norms still highly influence Japan’s common business practices.

Building business relationships in Japan is a business practice highly influenced by societal values and norms. Writing a letter of introduction, calling, or showing up uninvited to a firm is considered impolite and disrespectful. “One of the best ways of initiating a viable business relationship in Japan is to obtain a letter of introduction (shokaijo) from an introducer.

A good introducer is a person respected and trusted by both parties involved. While these types of culturally influenced business practices are slowly fading from Japanese business philosophies, they are still recognized as polite ways of doing business.

Japan’s highly relationship-oriented business practices go beyond initiating business, it is also noticeable in the way Japanese negotiate contractual terms and handle conflicts. Typical Japanese negotiators are more concerned with reaching a general agreement and building a trusting relationship than specific contractual terms.

Furthermore, Japanese business practices for conflict resolution are similar to the way they do other business practices. The Japanese prefer to settle business issues out of court through mutual consultation and mediation because most of the time, they have built a trusting relationship with the businessperson and would not want to be rude.

Another business practice in Japan is the use of a lifetime employment system. The vast majority of companies in Japan still have this type of employment system where employees implicitly agree to work with the company for the duration of their career (MOFA 10). The Japanese lifetime employment system pays and promotes individuals based on a seniority system. Employees not performing to standard are moved to “easier” positions rather than being fired.

Outright firing of an employee would not traditionally be considered an option within Japanese organizations. However, with increasing globalization demands and the downturn of the economy, the lifetime employment and seniority systems are beginning to fade as more Japanese companies switch to performance-based payment and promotion options.

While there are some advantages to the lifetime employment and seniority system, many Japanese companies are finding that they cannot compete without performance incentives. A lifetime employment system is advantageous because it promotes employee loyalty by providing job security.

Furthermore, this system allows employees to build lasting relationships with supervisors and colleagues. However, Japanese companies have begun to switch from this philosophy to a more performance based, westernized employment system. Promotions and salaries are increasingly becoming performance-based rather than based on seniority.

Japanese business practices are highly related to their cultural beliefs and societal norms. However, globalization and the demand from other countries wanting to enter Japan’s markets, cultural influences are slowly fading away. Westernized business philosophies are creeping their way into Japan’s common business practices and will more than likely continue to shape the future of Japanese business practices.

Hofstede’s dimensions in evaluating Japan’s cultural values

Japan has somewhat a unique culture. Their culture is dramatically different from other Asian cultures, such as ones of China, Hong Kong, and Korea (Gross 1). For an organization to succeed in Japan one should be loyal and have a good relationship with the people around. Based on Hofstede’s cultural dimensions, Japan’s lowest ranking factor is Individualism.

They are more of a collectivist culture, which means that they value working in groups, as opposed to individually. The group, rather than the individual, is the fundamental unit of concern in businesses in Japan. People of Japan are very sociable, and place a great deal of importance upon the opinions of others. They work for intrinsic rewards, and harmony is considered more important than honesty

Japan is pretty much right in the middle of the power distance index which is used to indicate the extent to which differences between people is perceived (Nishiyama 4). Therefore, some inequality and some equality exist between people in Japan. There are moderate gaps in authority, respect, and compensation.

The highest characteristic of Japan is that they strongly value. Masculinity versus femininity indicates how the roles of male and females are perceived. Since Japan has a very high Masculinity score, women’s values differ less among societies than men’s values. Also, people in Japan value assertiveness and competitiveness, as opposed to more modest and caring values that are more common among countries that are feminine (Smith 1).

Japan also has a very high Uncertainty Avoidance Index. The UAI deals with how much a culture tolerates risk. Since Japan’s UAI is very high, this means that they try to avoid risky situations as much as possible. The members of Japan’s society feel uncomfortable when placed in novel, unknown, surprising, or just different from usual situations (Gorill 1).

The corporate culture of Japan is very formal. They try to reduce the chances of amorphous situations by implementation of very laws and rules that are strict. The Japanese people tend to be very emotional and can be easily motivated unlike in other countries. Therefore any entrepreneur who would prefer to start a business in Japan needs to be very prepared and able to predict the outcome of the enterprise.

Lastly, Japan’s culture has a high long-term orientation in terms of delivering its services to the population of Japan and the entire world. Their education systems favor this orientation together with the ethics they have in doing work.

Comparison of Japan’s Practices to those of United States

Business practices

US managers often express leadership abilities and competence by dominating group discussions, whereas Japanese managers demonstrate leadership by silence. Japanese managers often encourage subordinates to participate and come up with acceptable solutions.

In a business meeting, being silent has different meaning between United States and Japan. In United States, if a person does not talk during a meeting or conversation, that person expresses inability to communicate. Whereas in Japan, being silence indicates the person is thinking or increased conversation would oppose to harmonious (William 2).

When American businesspeople arrive for a meeting, they first exchange some pleasantries, then get down to business, and follow by a well planned agenda that has been sent out to each party prior to the meeting (Dietterich 1).

For Japan, the first meeting focuses on whether each party can trust each other rather than working on planned agenda. When Japanese say yes during a contract negotiation, it means “yes, I understand what is being said”. American often interprets them as “Yes, I agree with you”, so there are two different interpretations of the word yes.

Hospitality is quite important in Japanese business culture. In order to build personal bonds and group harmony among participants, fancy meals and after hours entertainment are required.

In United States, when executives are having a meal with the clients in fancy restaurants, this means they are showing their status and clout. In Japan, when organizations encounter bad news, it will informally communicate through one team member to another team member, whereas in the states, bad new will be delivered as soon as possible to the person in charge (Angelucci 2).

In a union negotiation, US labor agreement is actually negotiated between a firm and a union through enforcement by the court of law. In addition, negotiations are relatively formal. On the other hand, collective bargaining is very rare in Japan, Unions and management always work together to come up with a mutual benefit. The Japanese hostile confrontation, disputes are settled through mutual agreement.

Culture Practices

Education in the States is quite different than Japan. In the States, primary and secondary schools guide the individuals to build up self reliance, creativity, and self esteem. In Japan, primary and secondary schools focus on preparing students to take a college entrance exam. Low context cultures include United States, “the speaker explicitly conveys the speaker’s message to the listener.” A high context cultures such as Japan, the words spoken require “cultural clues in order to understand what is being said.

Western country manages stress differently. In United States, Executives would encounter moderate stress and are able to manage stress effectively, whereas the Japanese would encounter very high levels of stress and encounter difficulties in managing stress. Five basic needs of physiological, security, social, self esteem, and self actualization from Abraham Maslow are all important for Japan and United States’ culture (The World Factbook 32).

Conclusion

From the above discussion it can therefore be concluded that the Japan’s business and cultural practices are worth being familiarized because of the economical benefit it has to the entire world. However, Japan as a country is trying to eliminate any barriers that may arise to cause hindrance to the global market.

Even though the United States is the world’s super power, it can be deduced that the two countries work hand in hand because of the similar business practices and the fact that Japan is one of the most industrious country in the world.

Works Cited

Angelucci, Marc. “Hofstede’s Dimensions on Cultural Practices”. 2010. Web.

Dietterich, Tea. “China-Cultural Awareness and Etiquette Training.” 2002. Web.

East & Southeast Asia. “Japan CIA – The World Fact book.” 2009. Web.

Gorill, Jodie. “Japanese Social and Business Culture.” 2007. Web.

Griffin, Ricky. International business. Pearson Prentice Hall 6^th edition, 2010. Print.

Gross, Anchw. “Trends in Human Resource Practices in Japan”. 1998. Web.

Japan’s Contribution to UN Peacekeeping Operations. “Ministry of Foreign Affairs of Japan (MOFA)”. 2005. Web.

Lipartito, Kaiya. “Culture and the Practice of Business History.” 1995. Web.

Nishiyama, Kaiya. “Doing Business With Japan: Successful Strategies for Intercultural Communication”. 2000. Web.

Smith, Ethel. “The importance of understanding cultural Differences in business.” 2002. Web.

Tulshyan, Ruchika. “The world’s qurky cultural practices.” 2010. Web.

Wells, Christopher. “Exercise In Cross-Cultural Negotiations in Japan.” 1996. Web.

William, Melinda. “Cultural Awareness and Business Etiquette in the Global Marketplace.” 2007. Web.

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