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.
Written and Produced by Keith Warburton
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in Japan. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in Japan and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: