Background to Business in Japan

Despite the recent growth of China and India as both regional and global economic super-powers, Japan remains a major force in world commerce with leading corporate players in such diverse sectors as banking and finance, computing, software, automotive and pharmaceuticals. It would be unwise to switch attention away from this potentially lucrative market.

Many people find Japan both fascinating and difficult as a business destination and often leave the country more confused than when they arrived. The Japanese approach to business is determined by history and as such is a reflection of Japanese society as a whole. In order to work and interact successfully with your contacts in Japan, a basic understanding of some of the underlying concepts governing business life is essential.

Some of these underlying concepts are so fundamentally different from western models that adjustment can be difficult and complete comprehension almost impossible. The most important concept to grasp is that of the overwhelming importance of personal relationships within the business cycle. Of all the business cultures of the world, Japan is the one most strongly rooted in the concept that relationships should come before business, rather than business being more important than personal considerations.

This means that in order to achieve success in Japan, it is important to put the maximum amount of time and resource into the early stages of relationship-building – even when eventual results may seem a long way off.

Business models in Japan have been under enormous strain for more than two decades and there is massive pressure (both internal and external) for reform. Yet change comes slowly to Japan and old traditions and loyalties linger. Expect changes to happen, but do not expect an easy or quick transition – and do not assume that any changes will result in business models that will be immediately or easily understood by outsiders.

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