Japanese Business Culture

Misunderstood or misrepresented?

Japanese business culture is wrongly perceived as the biggest obstacle to starting business in Japan for many foreign companies thinking of entering the Japanese market.

Many foreign companies never do start business in Japan (or only enter the Japanese market through a distributor) simply because of the misconception, fueled by those infamous myths of doing business in Japan, that dealing with Japanese business culture is somehow too risky. Fortunately, Japanese business culture is not an impenetrable barrier to successful business in Japan, as proven by the very substantial Japanese market share enjoyed by Yahoo!, BMW, Mercedes-Benz, Chanel, Louis Vuitton, Tiffany & Co. and many others.

Inevitably Japanese business culture is different to that of the US or Europe, but the differences do not make it any more risky to do business in Japan than elsewhere in the world. In fact, certain aspects of Japan's business culture, especially the very stable long-term relationships resulting from the conservative Japanese sense of loyalty to trusted partners, can be very beneficial for those foreign companies that understand how to swim with the cultural tide as opposed to vainly struggling against it.

So just what is Japanese business culture and how is it different?

The differences are there from the moment you arrive at Tokyo's Narita International Airport - the white-gloved baggage carriers carefully lining up your luggage on the conveyor, the incredibly polite customs inspectors, the cleaner standing at the top of the escalator (if you are going down to the Narita Express train station) making sure that the escalator hand rail is clean, the cleaning staff quickly and silently cleaning and leaving the train, the girl on the platform who politely bows to you as you board the train, the ticket inspector on the train who stands at the front of the carriage, removes his hat and bows before proceeding to inspect tickets etc. It is the same when you arrive at your hotel - when the bell-boy bows and opens the door, when the porter shows you more information about the buttons beside your bed than you can possibly remember, they are doing it for you the customer.

When you enter a Japanese store or even a bar, you will be greeted by shouts of 'irrashaimase' (welcome) and when you leave there will be shouts of 'domo arigato gozaimashita' (thank you) and you will notice that everyone, even the chef will join in the 'chorus'! The difference you should notice is that they are all very service oriented and of course service is a pillar of Japanese business culture. In the US and Europe, personal service has become something that people must pay for with tips - in Japan there is no tipping, personal service is literally 'part of the service'.

Many foreigners confuse the service aspect of Japanese business culture noted above as being simply a part of Japanese social culture, i.e. people are just being polite. Agreed Japanese society is very polite but all of the people noted above were doing their job when you encountered them - a big part of their job is keeping you happy and in Japan that entails good customer service. Unfortunately many foreign company executives doing business in Japan for the first time, do not recognize the differences noted above - primarily because when traveling they are 'off duty' - they consider their first encounter with Japanese business culture to be when they arrive at a Japanese customer or distributor's office for their first business meeting.

2. Business meetings in Japan

As it was mentioned above, many executives of foreign companies starting business in Japan, consider their first encounter with Japan's business culture to be at their first Japanese business meeting.

If your first meeting is with a Japanese distributor used to dealing with foreign companies, or with the trading division of one of Japan's large multinationals, then the chances are that the employees fielded by the 'other side' will speak English, possible extremely fluent English and, they having dealt with many hundreds or thousands of foreigners, you will soon feel pretty much at home. If however you are dealing with a smaller domestic distributor, a smaller company or an internal division of a major corporation (even one of Japan's multinationals), then the entire meeting may be in Japanese with English being restricted to "Good morning/afternoon.", "Nice to meet you.", "My name is Tanaka." etc. at the outset.

"The Japanese in English."

In the first of the above scenarios you will pretty soon forget you are in Japan and neither Japanese business culture nor etiquette will seem to be an obstacle to your success. Very often you will proceed quickly to a profitable business relationship but equally as often you will not. The problem is that the conversation may be in English but the other side is thinking in Japanese and, being polite, the Japanese side will not wish to hurt your feelings. Japanese salesmen instinctively know when they are being politely rebuked - most foreign executives do not, particularly if they are hugely relieved to find a prospective customer or partner that speaks fluent English.

Never calculate your probability of success with a Japanese using the same metrics that you might use in the US or Europe - the metrics are different.

Politeness and meeting manners are a key aspect of Japanese business culture and, as noted above, one which can mislead foreign executives. I have often noticed that many Japanese businessmen show a heightened sense of politeness when speaking in English with foreign company executives. The same man speaking in Japanese will be more direct, saying what he really means, or rather, he will say "No" in a way that while polite will leave a Japanese salesperson in no doubt of his meaning. The question is: why are they so polite in the first instance but more direct in the second?

"The Japanese in Japanese."

In the second of the above first meeting scenarios, the differences in business culture will be emphasized by language differences and that (depending upon the character and quality of your interpreter) can be either very enlightening or very frustrating. In a Japanese language meeting, the Japanese side are likely to be very polite, show a substantial amount of formality and reserve and you will be concerned that they are not 'opening up' and that the meeting is not going well. Very often the pattern is as follows:

• you are greeting by your initial contact upon arrival and taken to a meeting room,

• the Japanese team troop into the meeting room and politely exchange business cards with you,

• they politely sit through your presentation and take copious notes,

• ask some questions, bow politely then all troop out leaving you with your initial contact.