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1. If you have not traveled to Japan before, it is important to familiarize yourself with a few facts about the country:
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2. A better understanding of Japan’s past will increase your appreciation of how this economic superpower conducts business today. Throughout Japan’s 6,000-year history, the Japanese have proven their resilience, resourcefulness, and ability to adapt time and time again. They have achieved one of world’s highest standards of living and become the world’s second largest economy. Japan exhibits its stability as a nation by having the longest unbroken imperial line in the world. |
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3. Because Japan is weak in natural resources, it has relied heavily and successfully on global trade to support its economy. Thus, Westerners must be prepared to deal with Japanese executives who possess great sophistication and savvy in the international arena. |
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4. Westerners seeking to do business in Japan will find the stiffest competition in the areas where the economy is strongest, such as consumer electronics, automobiles and pharmaceuticals. Greater opportunities exist in areas where the economy is weaker, such as agricultural products, or where there are strong needs, such as alternative energy sources. |
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5. Products and services designed for the Japanese market should be geared for a largely middle-class, well-educated populace. Approximately 90% of Japanese regard themselves as middle class, and the country has a literacy rate of almost 100%. |
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6. It may be extremely advantageous to your business to build relationships with Japanese politicians and bureaucrats. Keep in mind that in Japan, government officials and bureaucrats often have far more prestige, influence and power than their counterparts in Western countries. |
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7. Time your business dealings in Japan to the Japanese calendar by avoiding trips during major holiday periods. These include New Year’s celebrations (first week in January), Golden Week (April 29 to May 5), and the Obon Festival (between July 13 to 15 or August 13-15, depending on the region). Also be aware that the Japanese fiscal year ends on March 31, and that as the end of the year approaches, no long term projects are started. |
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8. In preparing for your trip to Japan, you will want to acquaint yourself with the regions and cities you will be visiting. Your Japanese business associates will be honored you have taken the time to learn about their locality. Before your departure, you will also want to review some tips about traveling in Japan and familiarize yourself with the Japanese way of doing business. |
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1. The Japanese rarely respond to “cold call” letters or phone calls. Thus, it is extremely valuable -- in fact, virtually essential -- to approach a Japanese company through the assistance of a Shôkai-Sha, or third party intermediary. This person should be someone well-known, respected, and trusted by the company with which you desire to do business. |
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2. Your pre-departure research should cover three major areas: the company you will be visiting (including its history, products and finances); the people with whom you will be meeting; and Japanese culture, economy and business practices. You can be sure your Japanese counterparts are conducting the same research at their end. Your Shôkai-Sha may be able to help you obtain information relating to the first two categories. |
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3. It is highly recommended that you send a team rather than a sole representative to your meetings in Japan, despite the expense. Your Japanese counterparts will undoubtedly conduct their business with you as a team, and if you try to do it alone you will put yourself at a distinct disadvantage. |
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4. Pick your team members to match theirs in terms of size, rank and responsibility. This team should include members of different management levels, and at least one senior (over 40) high ranking person. Do not change your team members from meeting to meeting, because your Japanese counterparts will want to establish long-term relationships and will find such alterations disconcerting. |
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5. Great care should be given to the preparation of your written and audio-visual materials and any documentation you intend to leave with your Japanese counterparts. Be sure that they reflect Japanese business philosophy (long-term planning; dedication to quality; mutual benefits). All proposals should be substantiated by ample facts and technical information. |
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6. Business cards (meishi) are essential in Japan, and you will need to bring a large supply. They should be of good quality paper and printing, and, if possible, the reverse side of the card should be a Japanese translation of your business information. |
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7. Gift giving plays an important role in Japanese business life; it is a way of showing respect and helps to establish a good relationship. By bringing appropriate gifts, you will demonstrate your appreciation of this tradition. First gifts should be symbolic rather than lavish, and may include items with your company’s logo or samples of your state’s products. |
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8. Hire your own interpreter for both business and social gatherings. An interpreter furnished by your Japanese counterparts might shade translations in favor of their point of view. Furthermore, hiring your own interpreter gives you the opportunity to do appropriate pre-meeting preparations and allows you more candor. |
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9. Make sure you schedule enough time for your meetings in Japan. Japanese managers generally take far longer on certain aspects of the meeting process than Westerners do, and if you try to rush things you may well put yourself at a disadvantage. |
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10. During your first meeting with the Japanese, do not try to hurry the getting acquainted phase and move too quickly into a serious business discussion. Your Japanese counterparts will want to invest time in getting to know you in order to build trust (Shinyô) and establish a more personal relationship (Ningensei). Therefore, during your first meeting, concentrate on forging a relationship rather than selling a product or service. |
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11. Status and hierarchy are extremely important to the Japanese. Your team members should learn the hierarchy of your Japanese counterpart team, and treat its members with appropriate deference. Make sure the Japanese team members understand the ranking of everyone on your team. |
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12. To put the Japanese at ease, observe Japanese meeting protocol. Give and receive business cards with both hands; and treat any that are handed to you with great respect. Seating is never random in Japan, either in business or social situations. Allow your counterparts to direct you to your place. |
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13. Western businesswomen are somewhat of a rarity in Japan, and within the Japanese corporate structure itself there are relatively few women managers. For a Western woman to function most effectively, her role and authority must be made clear to the Japanese team at the earliest possible opportunity and underscored throughout the meetings. |
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14. Expect to devote a great deal of time during your meetings to the exchange of information. The Japanese are extremely thorough, and will want you to support your presentations with solid facts, which you should be well-prepared to provide. |
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15. Because the Japanese greatly value group harmony (Wa), make sure during the negotiation and agreement phases of your meetings that your entire team is united behind any proposals or concessions that you make. Also allow the Japanese side ample time to reach an agreement amongst themselves; they will want to build a harmonious consensus (nemawashi) among all their team members, a process which cannot be rushed. |
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16. Westerners and Japanese often fail at doing business with each other due to communication differences. The Japanese are indirect and use polite, non-confrontational forms of expression; they are put off by the blunt Western “bottom line” approach. Learn to use a more indirect, courteous, non-aggressive style yourself. |
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17. Avoid the impulse to break the periods of silence that often occur during meetings in Japan. Though they might seem uncomfortably long by Western standards, they are a normal element of Japanese non-verbal communications. |
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18. It is extremely helpful to become acquainted with the Japanese concepts of “Honne” (a person’s true feelings) and “Tatemae” (what the individual or group presents to the outside world; the public stance). By becoming familiar with these concepts, you can understand why the Japanese sometimes appear to be holding two conflicting viewpoints at once. If you can determine the honne as well as the tatemae, and work toward resolving the gap between them, you will stand a better chance of reaching a positive outcome to your discussions. |
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19. Accept any opportunity to socialize with members of the Japanese team. Informal get-togethers are an important component of business life in Japan. These relaxed occasions away from formal meetings will help strengthen your relationships and may give you a chance to learn, off the record, how your meetings are going, and what potential trouble spots you need to address. |
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20. In Japan, one of the bonds that tie people together in business as well as in personal life is “Giri,” or mutual obligation. “I owe that man giri” means that you have received a favor from him and are expected to reciprocate in the future. By establishing a connection with your Japanese colleagues based on giri, which is often expressed through the giving of gifts, you will strengthen your relationships and increase their respect for you. |
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1. The Japanese sararîman ("salary man") is the person you will most likely encounter during your meetings in Japan, although the Japanese team might also include one or more members who have a blue collar background. Among the values of the highest importance to the "salary man" are the Japanese work ethic of dedication to the job, teamwork, deference to those above him in rank, and a distaste for standing out as an individual. |
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2. You should not assume that every female employee you encounter in Japan is a secretarial worker known as an "Office Lady." There is a small but increasing number of female executives in Japan's corporate world, and one of these women may even be part of the Japanese team with whom you will be meeting. A female executive would be quite offended to be mistaken for an Office Lady. |
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3. Be aware that there are significant differences between the business cultures of large corporations and smaller companies in Japan. Smaller firms are freer than large ones to take advantage of new opportunities, but their finances also tend to be less stable. |
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4. Tight, informal networks of close friends, often forged during the university years, cut laterally across corporate and bureaucratic lines. If you become friendly with a member of such a group, especially a graduate of a prestigious university, you may gain access to other influential individuals. |
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5. Japanese executives are used to working together as a team; even their open office layout reflects this emphasis on group work instead of on the individual. Therefore, they will feel more comfortable with you and your Western colleagues if you also utilize a team approach, and do not allow one individual to dominate your discussions. |
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6. The working day of the Japanese executive often extends into a working night. After leaving the office, many hours are spent in informal socializing with co-workers, clients and prospective business partners. It is to your advantage to take part in this socializing if you are invited, for you will be able to develop a closer relationship with your counterparts. |
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7. Japan is a hierarchical society where a great deal of respect is paid to individuals of higher rank and status. This is true in business life as well as in personal life, and if you, too, pay appropriate deference, it will be greatly appreciated by your Japanese counterpart. |
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8. Company loyalty is a highly esteemed value in Japan, and the Western custom of job hopping is not customary among Japanese executives. You may therefore wish to demonstrate your loyalty to your own employer, and exhibit pride in your company's achievements. |
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1. If you are thinking of marketing a product in Japan, be sure that you know what Japanese consumers want, how they use the product, and even how they want it to look. Japanese consumers expect the products they buy to be of excellent quality and free of scratches, dents, or other blemishes. Even small cosmetic flaws are believed to reflect defects in the product's quality. |
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2. Retailers in Japan are often permitted to send goods back to the manufacturer if they are damaged or do not sell well. Companies exporting to Japan should be aware of this practice and should be prepared to handle a significant volume of returns. |
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3. Advertising in Japan tends to emphasize an entertaining, soft-sell approach over an aggressive, hard-hitting one. The consumer is sought by indirect messages that appeal to his emotions, and the specific benefits of a product are rarely mentioned. Foreign firms have used this style of advertising in Japan to good advantage. |
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4. Space is almost always a major concern in Japanese shops and homes. The Japanese tend to shop often and buy products in small sizes rather than in bulk. Their appliances are scaled to the size of their living spaces. |
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5. Direct marketing through catalogs is booming in Japan. If you plan to do this, make sure you clearly state important information such as shipping rates and return policies. Accept checks in yen, and emphasize quality and service. |
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6. Make sure your products can pass all Japanese tests and regulations. Just because they pass tests in your home country does not mean that they will be accepted by Japanese standards, even if the tests in your country are more stringent. Bureaucratic regulations can be very time consuming, so be sure to check with appropriate agencies in your home country and in Japan to determine which tests your product must undergo and the length of time these tests will take. |
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7. The Japanese place great importance on attractive product packaging. Even an outstanding product will not sell well if its packaging is unattractive by their standards. Familiarize yourself with Japanese packaging styles, and compare your product to competing brands. Also be careful to choose colors and designs that appeal to Japanese tastes. |
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8. When exporting to Japan, it is advisable to go overboard when it comes to servicing orders. The bulk of your orders will be placed by facsimile. The Japanese will expect an immediate response to these faxes, which is a standard policy of Japanese companies. |
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9. Many Western exporters work with distributors or agents to help them market their goods in Japan. These specialists can assist with import and customs procedures, help prepare Japanese labels, do marketing in the Japanese language, and advise on packaging and reformulating for the Japanese market. |
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1. A clearer understanding of the historical roots of the Japanese economy will enable the businessperson to better comprehend and appreciate the business culture of this nation. It is important neither to underestimate the role the government plays in setting economic policy nor to minimize the importance of the keiretsu (powerful business alliances). |
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2. Be sure to consider currency rates and risk when entering into business with Japan. Establishing business in Japan can be very expensive for foreign companies due to the high value of its currency. On the other hand, however, companies selling to Japan have seen the value of their sales go up, dramatically and the price competitiveness of their products has also improved |
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3. Western companies wanting to do business in Japan should understand the Japanese keiretsu system and know specifically how their potential Japanese business partners fit into it. These keiretsu are strong networks of long-term alliances. They share capital, research and development, customers, vendors, and distributors. In the past, they did not typically have business relationships with companies that were not members of their keiretsu, but these barriers are breaking down. |
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4. Japan has the second highest per capita income in the world after Switzerland. However, its real standard of living is comparably lower due to the high cost of consumer products and land. This translates into an opportunity for foreign companies, because Japan’s large and sophisticated consumer market is interested in buying high-quality but lower-cost foreign goods. |
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5. Beginning in the 1980s, the rapid growth of Asian countries caused Japan to re-focus its attention on Asia, and an increasing share of Japan's trade and investment was done with Asian countries. This has had economic ramifications for Japan's traditional trading partners in North America and Europe. As Japan becomes less dependent on these markets for export of its manufactured goods, it may be less willing to offer trade concessions to North American and European countries. |
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6. Due to the large trade surpluses and the high savings rate of Japanese consumers, Japan has invested significant amounts of capital abroad in the form of direct investments in plants overseas, foreign government bonds, securities in foreign countries, and real estate. While some of these investments have been less successful than others, the trends underlying this foreign investment still exist and Japanese companies will continue to invest outside of Japan. |
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1. The Japanese financial system has been undergoing a process of liberalization, or deregulation, which began in the mid-1980s. These changes are making it easier for foreign companies, especially financial services firms, to do business in Japan. By staying informed of these changes, Western businesses will be better able to perceive new opportunities as they arise. |
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2. Be sure to consider currency rates and risk when entering into business with Japan. Establishing business in Japan can be very expensive for foreign companies due to the high value of its currency. On the other hand, however, companies selling to Japan have seen the value of their sales go up dramatically and the price competitiveness of their products has also improved. |
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3. In personal interactions with bankers, it is useful to know whether or not their bank was the result of a merger, even if the merger happened several years ago. Bank mergers are not as final as Westerners might expect. Often the banks are divided into long-running factions consisting of personnel from the former banks. |
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4. The Bank of Japan (BOJ), the nation's central bank, is often cited in the financial news because of its influence on interest rates. Japanese businessmen closely follow the activities of the BOJ, as do astute foreign bankers and businessmen. Like the Federal Reserve of the United States or the Bundesbank of Germany, the BOJ has tremendous influence over the world economy. |
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5. Over 80% of Japan's stock market trading volume is on the Tokyo Stock Exchange (TSE). The two indices that measure TSE performance are the Nikkei Stock Average (Nikkei 225) and the Tokyo Stock Price Index (TOPIX). The Nikkei is the arithmetic mean of 225 selected stocks and is similar to the Dow Jones Industrial Average. The TOPIX index better represents the market, for the influence of each share is weighed proportionately. |
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6. In addition to direct lending, both the Japan Development Bank (JDB) and the Ex-Im Bank work with commercial banks to finance projects through guaranty programs. Foreign businessmen may want to consider making contacts at these banks because they are interested in promoting foreign imports. Both the JDB and the Ex-Im Bank have offices in the United States and will supply information to interested parties. Be forewarned that these are government-sponsored organizations and their decision-making processes can take time. |
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7. Because Japan has a very large GDP (Gross Domestic Product), Japanese securities will continue to be of interest to foreign investors. It can be expected that a portion of any global portfolio will be invested in Japan, just as it will be invested in the US or Europe. This fact alone will ensure at least a minimum level of investment by foreigners in Japanese securities. However, Japanese securities are still not very attractive to international investors because of their low returns. |
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1. The Japanese regard contracts differently than do Westerners. They believe that the language of a contract and the terms it lays out are secondary to the spirit of trust that exists between the contracting parties. They view a contract as an agreement to have an ongoing, harmonious relationship and to create mutually beneficial business. |
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2. When you are negotiating a contract with the Japanese, do not agree to any points until you have first obtained the necessary approvals from your home office. Having to pull back from points already agreed on will seriously undermine, and perhaps even terminate, your business relationship with the Japanese company. |
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3. Contracts in Japan have traditionally been much shorter and far more general than Western contracts. However, in recent years, Japanese companies have begun to write more detailed, Western-style contracts, particularly for international transactions. Your choice of contract should be reviewed with an attorney. Carefully consider any provisions relating to the resolving of disputes, as well as clauses that define the official language the parties will use and the type of currency to be employed in transactions. |
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4. The Japanese have a traditional distrust for attorneys, whom they regard as representing and advocating only one side of an issue. They rarely involve their attorneys in business negotiations. If you feel you must have your attorney present at meetings, stress to the Japanese that he or she is merely representing your company and lending assistance. Your attorney should refrain from openly disagreeing with ideas brought forward at the meeting and should instead discuss any disputed issues away from the negotiating table. |
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5. Note that Japan has far fewer attorneys per capita than Western nations and that many legal services in Japan are performed by "quasi-lawyers." You may be dealing with one of these legal practitioners while doing business in Japan. They are often quite experienced in a particular area, though they lack a graduate-level law degree. |
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6. Be aware that Japan has many laws that govern business with foreign companies. Laws and regulations can be passed by Japan's Diet (legislative body) and also by its ministries (executive branch). Rules and regulations may also be found in unpublished policy statements. In addition, Japan's 47 prefectures, while not autonomous, do write some of their own laws. |
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7. Due to the importance the Japanese place on maintaining social harmony, it is customary in Japan for disputes to be resolved without seeking legal recourse. When differences arise between you and the Japanese that cannot be resolved through discussions, it may be appropriate to ask your shôkai-sha (the person who introduced you to your Japanese partner) to mediate a new understanding. You may also wish to seek the assistance of a chûkai-sha (mediator or intermediary). |
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8. Even though many Japanese contracts have arbitration clauses, the Japanese rarely utilize them. Arbitration in Japan can be a difficult and expensive undertaking and can seriously damage your business relationship. Litigation has even more adverse ramifications. Therefore, thoroughly explore all other options before resorting to either arbitration or litigation. |
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1. Do not make the mistake of stereotyping the Japanese as being a totally homogeneous people. They are proud of their regional differences and personal individuality, and your understanding of this will be appreciated. |
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2. As you are getting to know your Japanese counterparts, especially during informal business socializing, be sensitive to the fact that the Japanese are more conservative in terms of family and gender roles than most Westerners. |
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3. The Japanese are justifiably proud of their rich and highly refined traditional arts. Your Japanese colleagues will be pleased if you show an understanding of some of the fundamental aspects of traditional Japanese aesthetics, such as the keen sensitivity to the natural world and the changing seasons. |
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4. When you are not in meetings or socializing in restaurants with your Japanese counterparts, take time to notice the many aspects of Japanese culture around you. This could be as simple as noticing the beautiful ikebana (flower arrangement) in the lobby of your hotel, attending a kabuki theater, or scheduling a climb up the side of Mt. Fuji. |
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5. Although the Japanese take business matters seriously, it is erroneous to think that they don't relish having a good laugh. Comedy and humor play an important role in everyday life and in the arts, so don't be surprised to find that good-natured humor is also a welcomed part of informal business socializing. |
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6. The Japanese are justifiably proud of their rich and highly refined traditional arts. Your Japanese colleagues will be pleased if you show an understanding of some of the fundamental aspects of traditional Japanese aesthetics, such as the keen sensitivity to the natural world and the changing seasons. |
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7. A basic knowledge of Japanese history and the social roots of the Japanese people will enhance your understanding of contemporary Japan and its ways of doing business. For example, communal rice growing helped shape the Japanese group work ethic, and the Confucian emphasis on social ranking influenced the hierarchical structure of the workplace. |
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8. It is sometimes difficult for Westerners unfamiliar with Japanese art to appreciate its simplicity and beauty. Thus, it is advisable to show proper respect for objects you may find in Japanese offices and homes. A simple ceramic dish may be a priceless work of art, and an informal looking flower arrangement may have taken hours to design. |
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1. When packing for your trip, remember that business meetings in Japan require conservative suits, including ties for men. Bring an umbrella if you will be traveling during the rainy, muggy summer, and a supply of cloth handkerchiefs to wipe your hands, because paper towels may not be available in restrooms. But don't overpack or bring extremely large luggage, because trunk space in Japanese cabs is limited, and heavy luggage is difficult to maneuver on crowded Japanese trains. |
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2. The currency used in Japan is the yen. Change your money at the airport and at Authorized Foreign Exchange Banks, or at large hotels. Carry at least 30,000 yen ($300.00) and traveler’s checks with you, because if you are on your own during the day you will need a great deal of cash. Major credit cards are accepted in most banks, hotels, and large stores in major cities, but you may have trouble using them elsewhere. |
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3. Most major hotels have business equipment and services available for guests. These “business centers” include items such as fax machines, copiers, computers, and conference rooms, plus services such as translators and business card printing. |
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4. If you get lost in Japan, ask for directions at a police box (kôban), which can be found in almost any neighborhood, especially near train stations. If you need help quickly and are not near a kôban, the emergency phone number for the police in Japan is 110. They are equipped to respond to people who do not speak Japanese. |
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5. There are a variety of public phones in Japan. Some take coins and others take phone cards. You can purchase phone cards at any convenience store. They are also sold in vending machines. Sometimes these vending machines are located right in or near the public telephone booths. It is probably best to place international calls from your hotel, so hotel staff can assist you. |
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6. Chances are, you will be eating with chopsticks (hashi), and there are some important dos and don'ts in terms of using them. Do not stick your chopsticks upright in your rice bowl or pass food from your chopsticks to someone else’s; these are funeral customs and taboo at other times. You can use your chopsticks to help yourself to food from a common platter, but do not use the eating ends of your chopsticks until your companions indicate that you can do so; until then, use the non-eating ends. |
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7. Taxis are expensive in Japan. Taking a cab from the airport to your hotel in Tokyo, a distance of about 60 kilometers, can cost the equivalent of $200 US. However, there are excellent alternatives, such as airport buses and high-speed trains. |
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8. Japanese people you encounter in business and at hotels often speak excellent English, but many people outside of these settings are not skilled in English. It is extremely helpful to learn a handful of Japanese words, phrases, and symbols, especially the common courtesies. The Japanese will appreciate any effort you make, however simple, to speak with them in their own language. |