Up until World War Two, Japan was dominated by a small number of very large companies, the zaibatsu, that had massive influence on the economy.

However, in recent years the Japanese economy has become much more varied in terms of the size and structure of its companies, producing a complex web of inter-locking relationships between large and small firms. Competition amongst these smaller firms is very strong which results in a great number of bankruptcies in every sector – therefore the concept of life-time employment enjoyed by the total workforce is, and has been for some time, a myth.

Japanese companies, like Japanese society, are hierarchically organised with individuals knowing their position within a group and with regard to each other. It is this sense of belonging to the group that gives Japanese companies their strength and purpose. Group orientation and team working are not merely concepts and phrases in Japan but a way of life which permeates all aspects of corporate life at all levels.

Japanese hierarchy is based on consensus and co-operation rather than the top-down decision making process which often typifies western models of hierarchy. This means that people feel actively involved and committed. It can also mean that decisions are slow and have to be based on deep analysis or large amounts of information. ‘How can we get the Japanese to make their decisions more quickly’ is a question often asked by western businessmen. The answer is probably that you can’t!

A brief overview of some key concepts to consider when doing business in Japan

Written and Produced by Keith Warburton

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Overview

Japan – a decades old paradox. Ultimately modern; completely traditional.

It has perplexed observers for decades as to how Japan can be so advanced in terms of technology and infrastructure whilst at the same time being wedded to traditional cultural approaches to all things corporate. Japanese companies are at the same time innovative and disruptive whilst retaining strong alignment to traditional hierarchical structures, risk aversion and detail obsession. How does Japan retain its position in the global economic league tables when it seems to stubbornly refuses to move with the latest corporate thinking?

The question continues to be asked as to whether it is really possible to do business in Japan as a foreign entity or are things so weighted against foreign entrants that it really isn’t worth the effort. The answer has to be a resounding ‘yes’ as many companies have entered the Japanese market and had great success. However, many companies have also failed to crack the Japanese market.

So what is the key to doing business in Japan in a successful and sustainable manner? At Global Business Culture we strongly believe that understanding Japanese business culture is the key to success. How can Japan be innovative and traditional? The answer is ‘culture’. How can Japanese companies retain strong alignment to hierarchy and remain efficient? The answer is ‘culture’.

Looking at Japanese business culture is not a ‘nice to do’ it’s a definite ‘need to do’. Take the time to really understand the key drivers of your Japanese colleagues, clients and other stakeholder and you will find the benefits obvious and immediate.

This country profile provides an overview of some of the key aspects of Japanese business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips