Doing Business in Japan | Navigating Business Culture

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Japan has the world's third-largest economy and is the world's tenth largest country by population, with 125.8 million people.

Although the country covers only 0.25% of the land area on the planet, 18.5% of earthquakes in the world occur in Japan, therefore schools and office workers regularly take part in earthquake drills. Waiting for ‘the big one’ is deeply engrained in the national psyche.

Business culture in Japan

Japan remains a male-dominated society. A World Economic Forum report, which tracks progress toward gender equality in the fields of economy, politics, education and health, noted only 9.9% of Japan's parliamentarians were women and 10% of ministerial positions were held by females. It also noted the country has never had a female prime minister. Women are employed in just 14.7% of senior roles, despite 72% of Japanese women being in the workforce. The number of women working part-time was almost twice that of men, and the average Japanese woman's income was 43.7% lower than that of a Japanese man.

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 every level.

Japanese hierarchy is based on consensus and co-operation rather than the top-down decision making process. 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.

Japanese management emphasises the need for information flow from the bottom of the company to the top. The key task for a Japanese manager is to provide an environment in which the group can flourish. He must be accessible at all times and willing to share his knowledge. In return, he expects his team members to keep him fully informed of developments. This reciprocity of relationships forms the basis of good management and teamwork.

The concept of Wa (harmony) lies at the heart of the Japanese approach to meetings. No individual will offer a strong opinion which might cause a conflict and therefore affect Wa. 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 Wa.

In Japan, the concept of ‘face’ is possibly even more important than in other Asian societies. Reputation and social standing strongly depend on a person’s ability to control emotions and preserve group harmony. The importance of restraint and tact cannot be overestimated.

‘Giving face’ is crucial to develop relationships. Showing great respect for and praising the group or organisation will be favourably noted. Never single out a Japanese person, whether for praise or criticism, in front of the group. Doing so embarrasses them and may cause the person as well as the group to lose face. The group identity comes first. Humility is valued very highly in this country, and foreigners are encouraged to show a similar attitude.

Many expats and international colleagues experience communication difficulties when working in Japan. The combination of Japanese vagueness and (potentially) language comprehension leads to issues which can make problem-solving and decision-making difficult. The success of your relationship will be dependent on your ability to read between the lines. It is best to check back several times for clarification of anything that remains unclear.

In stressful or difficult situations, the Japanese will often become silent to decrease tension and allow people time to reflect. This silence signals neither agreement nor rejection. Unfortunately, many westerners are uncomfortable with silence and feel the need to fill this with more discussion. At meetings, and when dining out, keep conversations at a quiet level. Loud and boisterous behaviour may be perceived as a lack of self-control.

As saving face is so important, people will not openly admit it in front of others if they do not understand what you are saying. If in doubt, try writing down key points. When communicating in English, speak in short, simple sentences free of jargon and slang. Pausing as often as you can gives people a better chance to translate and understand what you have said. Also, allow for frequent side discussions in Japanese.

The group or groups to which a person belongs are a life-defining set of relationships and the importance of these group relationships should never be underestimated. Japanese business people will often socialise in teams after work. Dinner and drinks are an important work and social function and should be encouraged. In order to achieve success in Japan, it is important to put a considerable amount of time and resources into the early stages of relationship-building, even when a deal may seem a long way away.