Doing Business with the Japanese!

Contents

1 Introduction

2 The Japanese Company

3 General Aspects to be Taken into Consideration
3.1 Hierarchy, Status, and Respect
3.2 Communication Style and Conversation

4 Rules for Doing Business in Japan
4.1 Maintaining Surface Harmony
4.2 Concern with Face
4.3 Business Dress
4.4 Forms of Address
4.5 Wining, Dining, and Entertaining

5 Important Rituals
5.1 Exchange of the Business Card
5.2 Gift-Giving and Receiving

6 Meetings and Negotiations
6.1 Language of Business
6.2 Making the Initial Contact
6.3 Punctuality
6.4 Getting Acquainted Before Talking Business
6.5 Making a Presentation
6.6 Determining One's Bargaining Range
6.7 Concession and Decision-Making Behaviour
6.8 The Role of the Contract

Bibliography

1 Introduction

Although the world is still devided into different countries and regions it grows together steadily. Companies buy the components and ingredients for their products from suppliers in many different countries to get best quality at lowest costs and sell their products and services to costumers all over the world.

Because of this globalization it gets more and more important to learn and to know the special rules, rituals, and the way of thinking in a differtent culture, if a company wants to do business there. The old saying "When in Rome do as the Romans do" is still valid. The differences exist between all coutries and cultures not only between Europe and Asia. The knowledge about the differences can and will build the first step to a successful relationship.

This paper deals with the Japanese etiquette and ethics in business. What should a foreigner think about when doing business with Japanese business partners? Chapter 1 is about the structure and the peculiarities of Japanese companies. Afterwards general aspects to be taken into consideration are described. The chapters 4 and 5 deal with rules for doing business with the Japanese and with two important rituals in Japanese business culture. The last chapter provides guidelines for successful meetings and negotiations.

2 The Japanese Company

For the Japanese it is first of all not the profession which is important, in contrast to Germany for example the Japanese will first tell somebody for which company they work for. They speak of their company and workplace in a possessive way. The Japanese word for company, kaisha (kie-shah), has strong connotations of "community". The identification of Japanese with their employers is in general so strong it prevents them from having contact with other people in their profession, spontaneous relationships are practically out of question. This behaviour makes it difficult to establish business relations with employees of other unknown companies, especially when someone is forced to do business with such "enemies".

Another business practice is that in Japan the person is the most likely one to be promoted who gets along with everybody, is good in maintaining harmony and is flexible. The reason for this practice is that otherwise they are afraid the people will be more concerned about themselves than about fellow workers. Since the employees are likely to spend their whole life with the same co-workers it is not difficult to understand why everybody is not about to disturb the harmony.

The Japanese philosophy is that companies with good human relations will succeed, while companies with bad human relations will fail. Because of that Japanese firms train a "company morality" so the employees are bound together by emotional, economic, and social ties that transcend all others. To reach this goal the companies prefer - among other things - to hire new stuff directly from school when they are more susceptible to being imbused with the company philosophy.

Japanese companies look more like social organizations than business enterprises, they are a combination of an exclusive club, a cooperative union, and a business enterprise because it incorporates attributes of all three.

Japanese companies are first classified according to industrial catagory, then by size and market share and finally by whatever group of companies the individual firm may be affiliated with. Major companies are called first-class companies, medium- sized ones are called second-class and smaller ones are third-class companies. Each industrial catagory tends to be made up of a few very large companies and a large number of medium-sized and small firms. A part of the motivation that spurs the Japanese economy continuously is the competition for the title and prestige of a first- class company. Also the competition among young Japanese high school and college gratuates to enter these first-class companies is equally intense, because social status is more important to most Japanese than economic status.

In Japanese offices the employees sit together in a special way. Each section

- called a "box" – consists of several persons. The section chief and his assistants or supervisors sit at the front of the desks arranged to form a rectangle. The staff members sit along the sides. Each department is made up of several of these boxes. The desk of the department chief is usually the farthest from the door commanding a good view of the entire department. The only managers in a large Japanese

company who have private offices are executive directors and up. The boxes are also ranked according to their importance within the departments they make up. The larger the number of people in a box, the more important that section is likely to be. The more sections in a department, the more important that department is. Because this organizational structure does not contribute to speedy results and innovations, Japanese companies also make use of special project teams to cope with and take advantage of new technological and management developements.

Within each of the boxes, responsibility and activity is more or less a team effort, with work assigned to the group as a whole. It is expected that the members of each section cooperate and support one another. More experienced members provide new members with the direction and help they need in a continuous on-the-job training process. The effectiveness of a particular section is strongly influenced by the morale, ambition, and talant of the whole team. But these team members do not want anyone upsetting its balance or harmony in any way. Because of that there is very little and sometimes no communication between departments on staff level. This sectionalism is so intense in some organizations that a kind of internal warfare rages.

This rivalry makes it even more difficult for the partners who must deal with more than one group in the company.¹

3 General Aspects to be Taken into Consideration

3.1 Hierarchy, Status, and Respect

In Japanese business culture younger, subordinate individuals are expected to defer and to show the greatest respect to older, higher-ranking persons because the age equals rank.

Since few women have reached positions of authority in Japanese companies, most Japanese men are not used to dealing with females on an equal basis in a business context. Women will have to work harder and be more dedicated and flexible. Because skills and professional competence are always respected women should demonstrate these qualities to gain acceptance.

Buyers automatically enjoy higher status than sellers and expect to be treated with great respect. Consequently young foreigners - especially women - face significant cultural obstacles when trying to sell to Japanese customers.¹

Four ways to overcome age and gender barriers with the Japanese:

- The eldest, most senior man available introduces his colleagues.
- Sellers should learn the different ways of showing proper respect to the customer.
- The visitors should gradually establish professional or technical credentials and should be careful not to appear cocky or arrogant.
- Many women are more skilled than their male counterparts in reading body language. This ability is very valuable when dealing with Japanese, who employ a great deal of nonverbal communication.²

3.2 Communication Style and Conversation

Japanese are reserved and formal while they are getting to know the new business partners. There is less reliance on written and telephone communication, and more emphasis on meeting the partners face to face.

Japanese negotiators frequently employ indirect language wherein the meaning is deliberately implicit rather than clear and explicit. They tend to employ silence and evasive language to avoid offending the other party. For instance, many Japanese consider it offensive to reply to a request with a simple "no." So a negotiator might answer "We will do our best!", or "That will be difficult!" instead. If the response to a question is "Maybe!", "Probably!", or "I'm thinking about it!", the answer is likely to be "yes". The result of this politeness of course might be confusion on the part of the foreigner. Surface harmony has been maintained at the cost of clarity.

Japanese use fewer words than people from more expressive cultures, relying more on paraverbal and nonverbal language. They tend to speak softly and hesitantly and employ frequent silences. Periods lasting between 10-15 seconds are considered useful rather than uncomfortable. Japanese may pause before answering a question or responding to a request and try to avoid interrupting the other party, since this would be extremely rude. A laugh or a giggle may signal nervousness or embarrassment rather than amusement. Foreign negotiators should avoid loud talking and always wait until their Japanese counterpart has finished speaking before saying their piece.

Japanese greet each other only with soft handshakes. Strong, direct eye contact may be misinterpreted as an attempt to intimidate or an indication of outright hostility. A smile may mask disapproval or anger. Body language is very restrained, formal, with small gestures. Arm-waving and other vigorous gestures should also be avoided. Because Japan is a low-contact culture visitors should expect very little touching. Taboo gestures include arm-grabbing and backslapping.¹

Japanese may ask their business partners extremely personal questions regarding one's salary, education, and family life. If someone does not like to answer, he or she should remain polite and indirect. In Japan the foreign partners should avoide begining to talk about World War II or making jokes. Whereas the Japanese like talking about their history, positive aspects about the their economy or sports.

Visitors should use as many Japanese sentences as they can. In the course of a conversation it is also considered to be polite to frequently say "I'm sorry". For example, the Japanese will apologize for not being punctual enough or providing substandard hospitality, even if it was perfectly good.²

[...]

¹ see De Mente (1994) pp. 53 – 64

¹ see Doing business in Japan, Worldwide Business Briefings (05.11.2001) and De Mente, Boye Lafayette; Let's Make a Deal – What you shuold know before negotiating in Japan (19.01.2002)

² see Doing business in Japan, Worldwide Business Briefings (05.11.2001)

¹ see De Mente, Boye Lafayette; Let's Make a Deal – What you shuold know before negotiating in Japan (19.01.2002) and Doing business in Japan, Worldwide Business Briefings (05.11.2001) and De Mente, Boye Lafayette; Conversation – Welcome topics of conversation in Japan (19.01.2002)

² see De Mente, Boye Lafayette; Conversation – Welcome topics of conversation in Japan (19.01.2002)