Background To Business in Japan The most important concept to grasp is that of the overwhelming importance of personal relationships within

the business cycle 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 one of those 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 are currently under enormous strain 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.

Japanese Business Structures Japanese companies, like Japanese society, are hierarchically organised with individuals knowingtheir position within a group Up until World War Two, Japan was dominated by a small number of very large companies, the zaibatsu, and these companies 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 this 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.

Japanese Management Style Individual personality and forcefulness are not seen as the prerequisites for effective leadership Japanese management emphasises the need for information flow from the bottom of the company to the top. This results in senior management having a largely supervisory rather than hands-on approach. As a result, it has been noted that policy is often originated at the middle-levels of a company before being passed upwards for ratification. The strength of this approach is obviously that those tasked with the implementation of decisions have been actively involved in the shaping of policy. The higher a Japanese manager rises within an organisation, the more important it is that he appears unassuming and unambitious. Individual personality and forcefulness are not seen as the prerequisites for effective leadership. The key task for a Japanese manager is to provide the environment in which the group can flourish. In order to achieve this he must be accessible at all times and willing to share knowledge within the group. In return for this open approach, he expects team members to keep him fully informed of developments. This reciprocity of relationship forms the basis of good management and teamwork. Instructions from managers can seem extremely vague to western ears and this often causes confusion and frustration. This difficulty is caused, in no short measure, by problems around styles of communication. As users of coded-speech (where what one says does not necessarily correspond to what one actually means), direct, clear instructions are not needed. The Japanese subordinate will second-guess the boss wishes and react accordingly. It is, therefore, often necessary to ask for clarification if tasks seem vague or unclear. It is better to seek clear understanding at the outset that to allow misunderstandings to produce poor results or tensions in the relationship.

Japanese Meetings Always allow slightly more time than you think might be necessary to achieve your goals Punctuality is important it shows respect for the attendees. However, due to the consensus nature of decision making in Japan, it can very often be difficult to determine a finish time. Always allow slightly more time than you think might be necessary to achieve your goals. Meetings are often preceded by long, non-business polite conversation which could cover such topics as mutual contacts, the merits of your company, Japanese food etc. Do not become exasperated by this use of your time, as it is an essential element of the relationship-building process. Show your impatience at your peril. The concept of Wa, which is probably best described by the English word harmony, lies at the heart of the Japanese approach to meetings. Although it is important to search for a solution, this must not be achieved at the expense of disturbing the peace. No individual will wish to proffer a strong opinion, which might cause some form of confrontation and therefore affect Wa. Japanese decisions are reached through a process of consensus-building meetings, each of which is concerned with the preservation of Wa. This means that the decision-making process can seem very long and drawn out. Patience is essential in these situations, as to show impatience could have an adverse effect on the all-important Wa. Business Cards It is important, when doing business in Japan, that you have a plentiful supply of business cards with information printed on the back in Japanese. Cards are presented at an early stage in a formal manner. Present and receive the card with two hands. (Present your card Japanese side up.) Treat your Japanese contacts card with respect the card is the man. Dont write on it or leave it behind, as this would show disrespect. During the meeting, place the cards carefully on the table in front of you with the senior persons card on the top. Gift Giving Gift giving is an endemic part of Japanese business life and should not be confused with notions of bribery and corruption. Gifts should not be too lavish but should always be of good quality. It is important to take a number of small gifts to Japan to distribute to new and existing contacts. Gifts should always be wrapped. Avoid giving gifts in quantities of four or nine as these are unlucky numbers. Anything sharp could signify the desire to end a relationship. Alcohol, especially good single malt whiskey, is always an appreciated gift.

Japanese Teams It is important that group members maintain 'face' in front of other group members The Japanese do not really undertake training sessions on teambuilding they are naturally group-oriented which underlies the need for a truly consensus approach to issues. The consensus-building process or Nemawashi (literally root binding) determines that agreement is sought before a formal meeting in order to avoid any direct confrontation. Thus arriving at a meeting expecting issues to be thrashed out in a direct and forthright manner will almost always lead to disappointment. It is also important that group members maintain 'face' in front of other group members, which amongst other things means that people must be seen to be modest and humble. Self-promotion in the western sense is seen as childish and embarrassing behaviour. Japanese Communication Styles Everything should be questioned in order to ensure that clear understanding has been achieved Of all the aspects of dealing with the Japanese, the ones which probably cause the biggest dilemmas concern communication difficulties. Japanese communications are epitomised by subtlety and nuance, where how one appears and what one publicly states (tatemae) and what one really thinks (honne) are often poles apart. There is often a huge distance between the expressed tatemae and the felt honne they can often even be contradictory. The development of relationships in Japan is often dependent on peoples ability to read the underlying truth which may underpin the spoken rhetoric. It can, of course, be very difficult for the non-Japanese to navigate these very confusing paradoxes. It is probably best to say that everything should be questioned in order to ensure that clear understanding has been achieved. Check back several times for clarification of anything that remains unclear. Communication difficulties are further compounded by the fact that few foreigners speak good Japanese and that levels of English in Japan are at best very patchy. Much of what is said by English speaking businessmen in cross-national meetings is simply not understood or more worryingly misunderstood. The need for the clear and precise use of language is never greater than in such situations. The combination of Japanese vagueness and lack of comprehension leads to enormous problems which make problemsolving and decision-making very tortuous. In addition, Japanese body language is very minimal, making it difficult for the untrained observer to read. The Japanese seem to be very still in meetings, sitting in a formal upright posture. It is rare for any reaction or emotion to be visible.

Women in Business in Japan There remains a strong unspoken discrimination towards women in the workplace The average annual income for women in Japan stands at around 50% of the male level which is a powerful statistic. Although women have reached a largely equal footing with men in terms of legal rights, there remains a strong unspoken discrimination towards women in the workplace. Women are largely expected to perform lower grade tasks and to leave employment upon marriage or the birth of children. Although there has been a slight shift in this trend over recent years, the changes are negligible. Western women working in Japan will probably only encounter difficulties when trying to manage Japanese male colleagues. Otherwise they will be accepted as an honorary man. Japanese Dress Code The business convention of dark suit, shirt and tie is very much the norm in Japanese mainstream business Appearance is vitally important in Japan and people are often judged on the way they are dressed. The business convention of dark suit, shirt and tie is very much the norm in Japanese mainstream business and although other colours are seen more often nowadays than in the past, it is probably safest to maintain a conservative approach. For women, business dress should be restrained and formal women do not commonly wear trousers in business in Japan. Accessories should be upmarket but not ostentatious. Bear in mind that the climate in Japan is very varied through the seasons, so take appropriate wear for the season overcoats/raincoats may be needed in the winter.

Top Tips on Japanese Business Culture Tip 1 Relationships drive business in Japan. Without the right depth of relationships with the right people, it can be very difficult to achieve anything. Tip 2 It is important to show respect appropriately. Age brings its own dignity and should be respected. It is probable, therefore, that more will be achieved with a delegation that contains some older members. Tip 3 Try to be polite and diplomatic at all times. Avoid showing irritation, annoyance or impatience. These negative emotions could put a strain on the development of the relationship. Tip 4 Avoid putting the Japanese in situations where they might be forced to lose 'face'. Do not try to push for decisions or deadlines. Tip 5 Decisions are arrived at through a lengthy consensus-building process. As it is almost impossible to speed up this process, patience is needed. Tip 6 Perform as many favours for people as possible. Favours must always be repaid. Tip 7 Be humble and apologetic rather than arrogant and brash. Modesty is a characteristic much admired whereas forwardness and being overly self-confident can be seen as childish behaviour. Tip 8 As the Japanese are loath to say 'no' or disagree, it can be very difficult to be completely confident that a decision or agreement has been reached. Tip 9 Do not overestimate the levels of comprehension when speaking English in Japan. There are many fluent speakers of English but many people do not understand even when they indicate that they have. Tip 10 Go over the same point several times from different angles to check the situation. Ask lots of open questions to test for understanding.

Tip 11 Oral agreements carry as much weight as written contracts. In a relationshipdriven society, it is the quality of relationships which will determine events rather than legal niceties. Tip 12 Do not speak well of yourself but be very positive about your organisation and the department or team to which you belong. Never make disparaging comments about your own company - even in jest. Tip 13 Humour should be avoided during serious business meetings where it will be viewed as out of place. Humour will, in any case, probably not be comprehensible. Tip 14 Avoid strong eye contact which can be seen as threatening or hostile behaviour. Tip 15 Body language is minimal and it can be very difficult to gauge progress made or the general sentiment of a meeting. Tip 16 Show an interest in your contact as a person. An interest in family, hobbies, health etc. can help to cement a relationship. Tip 17 Always take gifts to give to key contacts. Gifts need not be too expensive but should always be wrapped. Tip 18 Dress well, but conservatively. Appearance is very important and you are likely to be judged on how you look. Tip 19 If entertaining, entertain as well as possible. Remember that a good deal of the relationship-building process takes place over meals. Tip 20 If confused or in doubt when working in Japan, try not to react immediately. Try to buy some time and reflect on the situation overnight or seek advice from colleagues or other Japanese contacts.

Successful Entertaining in Japan Business meals form an integral part of commercial life in Japan Business meals form an integral part of commercial life in Japan and should be seen as an important facet of the all-important relationship building process. Therefore, if you are invited out for lunch or dinner (rarely breakfast), it is important to accept. The person who invites will invariably pick up the bill. Do not offend by offering to pay if you have been invited by them. When using chop-sticks, never point them at anybody and do not leave them sticking into your rice. When not in use, rest your chop-sticks on the holder which will be provided on the table. It is considered polite to leave some food on your plate (or in the bowl) at the end of the meal to show that you have eaten a sufficiency. When taken to a traditional Japanese restaurant, it is customary to remove your shoes when entering. (This is not, however, the case in other types of restaurants.) A Japanese host will take great delight in choosing the food and explaining to you the different types of dishes on offer. Japan has a rich and varied cuisine it is not all raw fish and pickles. If you invite a Japanese guest for dinner, take them to a restaurant which reflects your own culinary heritage and you can then explain your own culture and customs to them. Tipping is not customary in Japan, as this cost is usually included in the bill.

Japanese Facts and Figures Japan in Figures Land Area Population: Population density: Life expectancy: Adult literacy: Average per household Divorces per1,000 : The Economy Currency: GDP: GDP per heads: Employment (% of total): 377,727 sq km 128m 338 sq km Men 79 yrs Women 86 yrs 99% 2.6 2.2

Yen US$ 4,623bn US$ 36,170 Agriculture 5% Industry 29% Services 66% Unemployed 5% Main Exports:Type: Transport equipment Electrical machinery Non-electrical machinery Chemicals Metals Destinations: (% total) USA 22% China 13% South Korea 8% Taiwan 7% Hong Kong 6% Main Imports:Type: Machinery & equipment Mineral fuels Food Chemicals Raw materials Main countries of origin: China 20% USA 13% South Korea 5% Australia 4% Taiwan 4%