Japan is an island nation which borders China, South Korea, the Philippines, North Korea, Taiwan and Russia by sea. Japan’s bolstering economy makes this country of great interest for conducting business. With proper preparation foreign managers can formulate better strategy and develop better awareness throughout their intercultural interactions. Helpful knowledge includes an overview of the country’s current cultural systems and cultural values that inform decision making, communication, relationship building, and more business elements (Livermore, 2015).
Demographics in Japan
Japan’s population is highly variable. According to Demographics Trends (2017), the country has so many mountains that the majority of the population is concentrated on the few lowlands and plains that exist. The population with years has increased leading to a considerable reduction in the population of the rural districts, and an over-concentration of the population in a limited area (Demographic Trends, 2017). Industrialization is a major factor that fueled the population growth. The population rose to more than 42 million after industrialization first began in 1897 (Index Mundi, 2017). From 1898 to around 1918, industrial cities and the mining towns were the beneficiaries, as they absorbed a large portion of the population. As described by World Population (2019), by 1920 the population had risen to 57 million and was still rising in the 1950s. The aftermath of World War II in Japan, however, led to a drop in the population, and a decline in birth and death rates. The result was that there were fewer families and improved health care. By the end of the 20th century, the population had remained stagnant (World Population, 2019). The fear is that as the current working population phases out the needed workforce will not be available to fill their shoes.
Educational Characteristics
Japanese all over the world today are known for some features that highly distinguish their education system. The Japanese people are known for politeness, wellness, strong health and their intelligence (Educational system, 2018). One of the unique educational characteristics is the fact that Japanese schools do not subject children or students to exams until they are in fourth grade. According to Japan Times (2018), education is highly regarded in Japan and the country prides itself on being highly egalitarian. It promotes the idea of an ‘all middle-class society’, where access to opportunity is a function of merit and merit is determined by achievement in school as regarded by performance in exams. Japan operates the 6-3-3-4 system of education where children spend 6 years in elementary school, 3 years in junior high, 3 years in senior high and then 4 years in higher education.
Although in Japan, primary school has been universal since the early 20th century, the Japanese education system became more democratized after World War II. This brought about the extension of compulsory schooling to nine years. This has provided students from low-income background with equal opportunities as those of high-income background. It is also interesting to note that outside the public school, there is a very expensive, active after school private schooling business known as juku. This program involves one-on-one tutoring, remedial classes and preparation for exams that will determine a student’s progression from lower secondary to upper secondary and then higher education (Japan Times, 2018).
Religious Sects
The two main religion in Japan are Shinto and Buddhism (Japan Guide, 2018). Shinto is as old as the Japanese culture while Buddhism was imported. These two religions have complemented each other, over the years to a certain degree, so much so that some Japanese regard themselves as faithful of both religions. Nevertheless, according to Japan Today (2013), religion does not play a big role in the daily lives of the people. The average Japanese follows the religious rituals for special occasions such as births, weddings and funerals, and may visit a shrine or temple on New Year (Japan Guide, 2018).
Judicial System
The judicial system in Japan is quite comprehensive with five types of courts including: summary courts, district courts, family courts, high courts, and the Supreme Court. Summary courts handle civil cases which do not go beyond 90,000 yen as well as criminal offenses that are punishable by fines and penalties that are lighter (Japanese Judiciary System, 2019). District courts, on the other hand, handle civil and criminal offenses. Family courts specifically deal in family matters and juvenile delinquency cases as well as conciliations. High courts deal in appeals that are brought to it by courts of lower rank. The Supreme Court is the final and highest court, and handles appeals from the high court (Judiciary System, 2019).
Holidays
In Japan, there are countless local, annual festivals. Shops, restaurants and tourist attraction centers are generally open except on New Year (Japan Guide, 2018). If a national holiday falls on a Sunday, the following Monday is also turned into a holiday. Likewise, a day sandwiched between two national holidays is automatically turned into a holiday. The three busiest holidays in Japan are:
The Golden Week: this is a collection of 4 national holidays within 7 days. These are Showa Day - the birthday of the former emperor, Constitution Day (May 3) - a day to remember the new constitution which was put into effect after the war, the greenery day (May 4) and Children’s Day (May 5).
New Year (shogatsu). The first day of the year, January 1, is the most important holiday in Japan. Although only the first day in January is regarded as a national holiday, several businesses remain closed through the third day in January.
The Obon Week (July/August 13-15): this is an annual event for commemorating one’s ancestor. It is believed that each year during Obon, the ancestor’s spirit returns to this world to visit their relatives. Traditionally, lanterns are hung in front of houses to guide the ancestor’s spirit. Obon dances are performed, graves are visited and other offerings are made at house altars and temples. At the end of Obon, floating lanterns are put in rivers, lakes and seas in order to guide the spirits back to their world.
Others holidays are: Seijin no Hi - the coming of age of 20-year-old men and women; Kenkoku Kinenbi - National Foundation Day; Shunbun no Hi (Spring Equinox Day) - this is a time where grave sites are visited during the week; Ocean Day (Umi no Hi) - it is a day used to celebrate the ocean; Mountain Day (Yama no Hi) - this holiday was newly introduced in 2016 to celebrate mountains; Respect for the Aged Day (Keiro no Hi); Autumn Equinox Day (Shubun no Hi) - celebrated around September 23, graves are visited during the week; Health and Sports Day (Taiiku no Hi) - this holiday is celebrated on the second Monday in October; Culture Day (Bunka no Hi) - this is a national holiday to promote culture, and celebrate the love for freedom and peace; Labor Thanksgiving Day (Kinro Kansha no Hi) - a day used to honor and celebrate labor; Emperor’s Birthday (Tenno no Tanjobi) - the birthday of the current emperor is always a national holiday (if the emperor changes, the national holiday changes to the birthday date of the new emperor).
Economic Characteristics and International Business
Economy and Industry
According to Economy Watch (2013), capitalistic Japan is well known for its extraordinary economic growth rate, especially following World War II. The growth was accelerated by aspects such as the expansion of industrial production, enormous domestic markets, as well as an aggressive expert trade policy. In terms of the gross national product or gross national income, Japan is quite wealthy. CNN Business (2017) reports that it is the third largest economy in the world after the United States and China. Japan has been able to diversify in the manufacturing and the service economy which has enabled the economy to propel far over the years. Japan has slowly but steadily become the largest producer of steel, motor vehicles and high technology manufactured goods (Economy Watch, 2013). Using the 1992 revision of the Harmonized System (HS) classification, the top exports of Japan are cars, integrated circuit, vehicle parts, industrial printers and passenger and cargo ships (Atlas media, n.d.).
Business Acquisitions
Japan has made many acquisitions across the globe over the past decades. According to Kopp and Rudlin (2012), some early examples, include the acquisition of American Hollywood movies studios by Sony and British Burberry by Renown. Unfortunately, some of these earlier acquisitions were unsuccessful as Japan was buying out failing companies. More recent acquisitions have instead been a strategic move to expand the industry of the parent company abroad. For example, Kao purchased Molton Brown to grow its market of personal care products (Kopp and Rudlin, 2012).
Multinationals and Multicultural Training
As for management of these acquisitions and multinationals, Japanese tend to take a less multicultural approach (Nishiyama, 2000). They believe that their style of management and organizational structure is the reason for their economic success, and therefore do not modify their company culture in foreign countries. Instead, they hire employees from the host country without a working background and train them intensely in Japanese corporate culture. Furthermore, multinationals tend to be run by only Japanese managers who usually come from the parent company (Nishiyama, 2000). While one might assume that western-educated Japanese would be chosen for these positions overseas, these multinationals prefer graduates from prestigious Japanese universities who they can mold and instill company loyalty in, because they feel these western-educated Japanese are not truly Japanese anymore (O’Connor, 1990). Japanese corporations tend to be faithful to the same subcontractors as well, even in different countries (Nishiyama, 2000).
Cultural Values in Business
The cultural values of Japan can provide significant insight into business practices there. Though Japan is considered moderate for power distance, some very hierarchical traditions include: the importance of using last names, the giving of more expensive gifts based on status, the importance of communicating with those of a similar level in the company, and the lower levels of bowing for higher ranks (Axtell, 1993). Age is somewhat synonymous with rank, furthermore, the higher the rank, the less likely the manager will be to speak English as they expect lower-level managers to be responsible for translating (Axtell, 1993; Conaway & Wayne, 2007). When looking for valuable information, take lower ranking executives and junior members for a coffee or drinks (Conaway & Wayne, 2007).
On the other hand, decisions are consensually made at lower levels of management (Conaway & Wayne, 2007). Decision making is intuitive, and may involve many meetings and lengthy discussions (Nishiyama, 2000). The process is less about making the decision, and more about deciding if a decision needs to be made (Deming, 2005). Once they have decided to work with another company though, they will likely stick with that company for life (O’Connor, 1990). Japan has long-term orientation, they take a long time to build relationships, make careful observations before moving forward, and are highly concerned with reputation and credibility (Livermore, 2015; Storti, 1994). In fact, results from endeavors in Japan may take five to ten years to surface (Storti, 1994). Gift giving is integral part of Japanese business culture as it communicates respect and friendship. Gifts should be personal, not just valuable (Axtell, 1993).
Japan is considered slightly individualistic, and falls somewhere in the middle of focus on quality of life and focus on work and goals (Matsui, 2013). The society itself is very competitive and strives for perfection in their products and services (Matsui, 2013). Japanese are very competitive between groups, but not between individuals in the same group (Storti, 1994). Harmony in the group is of utmost importance in Japan. Opinions are not given publicly and confrontation should be avoided as it disrupts harmony and causes loss of face (Brown, 2012; Meyer, 2014). Therefore, choosing intermediaries from outside both companies to help with negotiating and delivering bad news can be helpful (Conaway & Wayne, 2007). Praise is better given to the entire group as it would embarrass a person to be singled out for their contributions (Conaway & Wayne, 2007).
The Japanese have an indirect communication style and negative feedback is given indirectly (Meyer, 2014). Some ways to identify an indirect ‘no’ are: the person asks a question, says they didn’t understand, changes the topic, or says that they cannot answer now or that it is challenging to answer (Storti, 1994). Moreover, Japanese do not reveal emotions with outward expression (Axtell, 1993). As for nonverbal communication, direct and consistent eye contact is seen as disrespectful. Physical contact is uncomfortable for most, though they may shake hands (Axtell, 1993.a). Additionally, silence after someone has made a proposal is polite and shows that the listener is considering carefully what the other person said (Storti, 1994). Japan has high uncertainty avoidance, they reach for perfection, and prefer organization and predictability (Matsui, 2013). Furthermore, time is viewed as more linear, therefore Japanese usually focus on one task at a time, stick tightly to schedules and deadlines, and are very on time, as this communicates respect (Meyer, 2014; O’Connor, 1990).
Conclusion
Japan has many unique features to its cultural systems and values. Livermore (2015) emphasized that through knowledge of the cultural systems of another nation, the international business person can see how this country organizes itself. Furthermore, through awareness of the nation’s cultural values, one can access deeper levels of the metaphorical ‘cultural iceberg’. Certainly, for proper preparation, knowledge alone is not sufficient. On the other hand, through thoughtful and careful implementation of this knowledge, the business person can formulate comprehensive well-thought-out strategies to interact smoothly and effectively across the globe.
References
Atlas Media. (n.d.). Retrieved on February 2, 2019. Retrieved from: www.atlas.media.mit.edu/en/profile/country/jpn/
CNN Business. (2017). Retrieved from: https://money.cnn.com/2017/11/22/news/economy/uk-france-biggest-economies-in-the-world/index.html
Demographic Trends. (2017). Japan. Retrieved from https://www.britannica.com/place/Japan/Demographic-trends
Deming, W. E. (2005). Critical Evaluations in Business and Management. [Google Books version] Retrieved from https://books.google.com/books?hl=en&lr=&id=H6NYwPCKRWQC&oi=fnd&pg=PA6&dq=what+are+the+major+industries+in+Japan&ots=CqMAZsEjf9&sig=U2AVE-ar60e-7_XDuWBWogz8b6Q#v=onepage&q=what%20are%20the%20major%20industries%20in%20Japan&f=false
Economy Watch. (2013). Japan. Retrieved from http://www.economywatch.com/world_economy/japan
Educational System. (2018). 10 Distinctive Features of the Japanese Education System that Made This Nation the Envy of the World. Retrieved from https://brightside.me/wonder-places/10-distinctive-features-of-the-japanese-education-system-that-made-this-nation-the-envy-of-the-world-214655/
Index Mundi. (2017). Japan Age Structure. Retrieved from https://www.indexmundi.com/japan/age_structure.html
Japan Guide. (2018). Government Leaders. Retrieved from: https://www.japan-guide.com/topic/0002.html
Japan Guide. (2018). Public Holidays and Annual Events. Retrieved from: https://www.japan-guide.com/e/e2062.html
Japan Times (2018). Retrieved from: www.japantimes.co.jp/opinion/2018/09/30/commentary/direction-education-japan/#.XFKfVjBKjIV
Japan Today. (2013). How Religious Are Japanese People. Retrieved from https://japantoday.com/category/features/opinions/how-religious-are-japanese-people
Japanese Judiciary System. (2019). Judiciary System. Retrieved from http://www.courts.go.jp/english/judicial_sys/index.html
Judiciary System. (2019). Japan Judiciary System. Retrieved from https://japan.kantei.go.jp/judiciary/0620system.html
Kopp, R. & Rudlin, P. (2012). Japanese Acquisitions Overseas: What’s Different This Time? Retrieved on February, 4, 2019. Retrieved from https://www.japanintercultural.com/en/news/default.aspx?newsID=126
Livermore, D. (2015). Leading with Cultural Intelligence the Real Secret to Success. Retrieved from https://ebookcentral-proquest-com.cmich.idm.oclc.org/lib/cmich-ebooks/detail.action?docID=1964260
Matsui, Y. (2013). Key to Effective Leadership Development for Multinational Companies in Japan in the Eye of the Beholder (Order No. 3557719). Available from Business Premium Collection; ProQuest Dissertations & Theses Global; Psychology Database. (1346184938). Retrieved from http://cmich.idm.oclc.org/login?url=https://search.proquest.com/docview/1346184938?accountid=10181
Meyer, E. (2014). Culture Map. Retrieved from https://ebookcentral.proquest.com/lib/cmich-ebooks/reader.action?docID=1634787&query=
O'Connor, T. A. (1990). The Prescription: Selection and Training of Expatriates for Work in Japan (Order No. 9019544). Available from ProQuest Dissertations & Theses Global. (303871125). Retrieved from http://cmich.idm.oclc.org/login?url=https://search.proquest.com/docview/303871125?accountid=10181
Nishiyama, K. (2000). Doing Business with Japan: Successful Strategies for Intercultural Communication. University of Hawai’i Press.
World Population. (2019). Japan Population. Retrieved from http://worldpopulationreview.com/countries/japan-population/