Global Businesses Cultural Analysis In Japan

This paper is a global business cultural analysis of Japan. The Japanese culture (communication and customs) is very complex. In order to show how the United States should conduct international business with Japan, this paper answers four research questions. First, what are the major elements and dimensions of culture in Japan? The seven major elements and dimensions discussed are communication, languages, religion, ethics, values and attitudes, manners and customs, and social structures. Secondly, how are these elements and dimensions integrated by indigenous people conducting business in Japan? Thirdly, how do these elements compare with United States’ culture and business? Lastly, what are the implications for United States businesses that wish to conduct business with Japan?

If Businesses wish to do business with Japan, they must first understand the major elements and dimensions of Japanese culture along with its impact on how the Japanese conduct their business. If businesses fail to understand and make appropriate adjustments, they may unwittingly offend Japanese sensibilities and fail in their pursuits. Therefore, this paper will discuss these elements and dimensions, along with their impact on Japanese businesses. Furthermore, these critical factors will be compared to the United States business culture and identify appropriate adjustments, which must be made. However, prior to discussing these matters, it is prudent to consider the historical macro-cross-cultural relationships between Japan and the United States.

Although Japan has an extensive and interesting history, for the purposes of this paper, the first significant milestone is that the Tokugawa Shogunate brought political stability to Japan in 1603. Subsequently, Japan was not influenced by foreign countries and its culture flourished in isolation. However, when her ports were opened to trade with the United States in 1854, Japan began to modernize and industrialize . Eventually, the country became a regional power. Seeking further domination in the Pacific, Japan attacked Pearl Harbor in 1941, making United States Japan’s enemy. Rather than subjugating Japan, after her defeat, the United States helped her rebuild. Therefore, Japan recovered, became an ally of the United States, and remains an economic power today (Japan, 2010).

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What are the major elements and dimensions of culture in this region?

Communication in Japan is very complex. Spoken words can have several meanings; therefore, both verbal and non-verbal communication is important to understand. Context is important part of understanding what the meaning of what is said. Non-verbal communication is important since verbal communication can be interpreted in so many ways. The smallest expression can change the meaning of what is being said. For instance frowning while someone is speaking can be interpreted as disagreement (Japan-Language, Culture, Customs and Etiquette, 2004). Japan is considered to be a high-context country. This affects the way that the Japanese communicate. Information is conveyed indirectly and silence is considered a mark of maturity (Cooper-Chen & Tanaka, 2008).

Japanese is the predominate language spoken in Japan. However there are many other languages and dialects spoken in Japan. As the foreign and indigenous minority populations increase, so does the number of other languages spoken. Some of the other major languages spoken are Ainu, Ryukyuan, Chinese, English, and Korean. Ainu and Ryukyuan are indigenous languages that are spoken in different regions of Japan, while the other languages listed are mainly spoken by immigrants (Maher, 1997).

English is a secondary language, spoken by many educated Japanese. English is studied in many Japanese secondary schools and in higher education. There are between 40 to 50 international schools in Japan that instruct in English. “The historical notion of a language ‘model’ (usually British or American) has declined considerably in recent years. Multi-accented English, including Asian Englishes, is increasingly acceptable” (Maher, 1997).

Shinto is the ancient native religion of Japan. The origins of Shinto cannot be traced because it was transmitted orally until writing was introduced by the Chinese in the fifth century. The Japanese worshiped forces and forms of nature. Shinto has many deities with no supreme deity. The Shinto shrine is a simple wooden building that houses an object that is believed to be the dwelling place of the Kami. As Buddhism entered Japan, Shinto was influenced and the shrines became more elaborate. Shinto is still widely practiced in a form that is influenced by Buddhism and Confucianism. The present form of Shinto is less like a traditional religion and more observed in festivals, traditional ceremonies, and customs. The disestablishment of state Shinto came after the country’s defeat in World War II. The present-day Shinto religion has no dogmatic system or any code of morals. The philosophies of newer sects stress world peace and brotherhood (Columbia Electronic Encyclopedia, 2009)

Another major religion in Japan is Buddhism. Buddhism entered Japan in the 6th century A.D. (Columbia Electronic Encyclopedia, 2009). Buddhism originated in India about 2500 years ago. It was started when Siddhartha Gotama, now known as Buddha, was said to be awakened. Buddhism’s basic concepts of faith are the Four Noble Truths and the Noble Eightfold Path. Buddhist do not believe in any deity. The goal of Buddhism is nirvana, which means cessation. Buddhist believe that to become enlightened the human spirit must be free of the struggle to prove our existence to the world and therefore be free of reincarnation (Buddhism, 2010). 84 % of the Japanese citizens claim to be following both Shinto and Buddhism, but many only practice during the New Year, weddings, or funerals (Taylor, 2008, p. 33). Traditionally the Japanese ring out the old year at Buddhist temples. Buddhism in Japan is often called funeral Buddhism, because the Japanese have traditionally held Buddhist funerals. Buddhist priest fear that Buddhism in Japan will soon die out (Onishi, 2008).

Japanese ethics is mainly influenced by Shintoism, Buddhism, and Confucianism. The Japanese believe in an ideal human equality. They respect those who work hard to better the Japanese society as a whole and put a lot of emphasis on the importance of the group. Long-term and give-and-take relationships are important to the Japanese for a harmonious society. It is important to the Japanese to work together and help the fellow man. Each person must learn how to rely on each other and support others (Japan, 2003).

Before conducting business in Japan it is important to understand some basic values and attitudes. Since the Japanese culture is considered high-context, even little gestures go a long way. Respect is something that the Japanese highly valuable. Direct eye contact is also not the norm, to lower one’s eyes is considered a sign of respect. (Etiquette, 2010). Being on time is very important to the Japanese, as it shows respect for the attendees. However, the Japanese like to take their time making decisions (Japanese Meetings, 2010). As stated earlier the Japanese attitude toward work is that it is the individual’s duty to work hard. They view work as a way to better their society and to help their fellow man. There is a big push from the Japanese government for change. However, this is not the attitude of the Japanese people. The Japanese fear that change will have a big impact on their way of life and cause more harm than good (Gaijin at the Gates, 2007).

It is easy to see where Japanese manners and customs derive from once basic Japanese values and attitudes are understood. Some manners that derive from Japan being a high-context country are: it is considered inappropriate and even rude to express dramatic gestures especially pointing. When pointing something out the Japanese wave their hand, palm up, towards the object that they are pointing out. Blowing one’s nose in public is considered very inappropriate. Bowing with one’s hands at their side, is the traditional greeting. Male and female touching in public is considered inappropriate, even among married couples. The Japanese like to observe personal space when having a conversation. The person should go somewhere private and blow their nose with a disposable tissue. To the Japanese, smiling and laughter can be confusing. These forms of expression to the Japanese may convey embarrassment, confusion, shock, or even being upset. Respect also drives some of the manners and customs. To be invited to a person’s home is considered a big honor. When entering a Japanese home, it is important to remove one’s shoes to show respect (Etiquette, 2010).

The modern Japanese society can be divided into six social groups; i.e.,the Imperial Family, Nobility, Upper Middle Class, Lower Middle Class, Industrial Proletariat, and Peasants. The Imperial Family is not a ruling position, but more of a symbolic position. The second highest group is the Nobility group, which is divided into three sub-groups. The highest in the order are descendants of the old court nobility called the Kuge. They also have little political power. Next is the Daimyo group, who are descendants of the dukes and counts that ruled after the seventeenth century. The final nobility group is the New Nobility. These are people who were ennobled since 1868. A large part of this group is the descendants of the Samurai. Many of the people in this group have moved up from lower social groups to this position. Out of all the nobility groups the New Nobility group has the most power in modern Japan. The Upper Middle Class can be divided into two sub-groups, the gentleman group and the top-ranking civil servants. The gentleman group mainly consists of those who have graduated from a university. The top-ranking civil servants gain their prestige through being in governmental service. The lower middle class includes people like shopkeepers and white collar workers. The industrial proletariats are from the rural population that came to the city to become industrial workers. The peasants have very little and do not have much social standing. The armed forces are not included in the general social structure. The armed forces provide a way to move up socially in a different social group by ranking up (Levy Jr., 2000, pp. 18-21). Women in modern Japan have the same legal rights as men. When it comes to family life though, women are expected to be house wives and take care of the children (Women in Business in Japan, 2010).

How are these elements and dimensions integrated by locals conducting business in the nation?

Everyday Japanese communication is also found in communication during business transactions. There is usually an underlying meaning to what the speaker is saying. According to a study done by Emmett, the speaker will present a generalized theme-oriented opinion to persuade, explain, or get approval from the addressee. He states that the addressee will have little room to disagree with the speaker, because the generalized theme-oriented opinion gives the impression that the belief is shared and supported by other people (Emmett, 2003, p. 77). The Japanese are careful in how they communicate, especially in business settings.

Japanese is the most common language spoken in Japan and when dealing with local business. “The need for the clear and precise use of language is never greater than in such situations” (Japanese Communication Styles, 2010, para. 3).

Shintoism and Buddhism influence how the Japanese conduct business. Business people who work hard to contribute to the greater cause of their companies are respected by the Japanese. It is widely believed that “through sacrifice and diligent work, the individual can connect himself with a greater, pooled life-force and comply with the ethical expectations of Japanese society” (Japan, 2003, para. 4).

Japanese business ethics reflect their culture and religion. Japanese workers are expected to be subordinate to their companies and the companies in turn are expected to be subordinate to their nation. A sub-group may be ridiculed or punished as an unethical entity if it violates the expectations of the next larger group in the chain. These group ethics only apply to their individual groups or spheres. They are not expected to have the same ethical consideration to other rival corporations or foreigners. Japanese businesses are expected to work diligently to create mutually beneficial transactions. If they fail to do so they will face consequences and even sanctions (Japan, 2003).

Integration of values, attitudes, manners, and customs into local business go hand in hand. Politeness, sincerity, and good manners are important to Japanese business etiquette. The way that the Japanese conduct business is very formal. The formality starts in the first meeting, with the presentation of business cards. Business cards should always be presented by holding it with two hands to the most senior member of the Japanese party first. The person presenting it should bow slightly and then present a card down the ranks. The business card should be treated with respect and never written on. It is important to be on time, but if a person is running late they should call at least one hour ahead. It is good to take a lot of notes during a meeting. This shows the company that they are interested in the meeting (Japanese Business Etiquette, 2009).

Social classes can also be found in Japanese business. Upper middle class and even new nobility are often members of large corporations and directors. The lower middle class are often the white collar workers and shopkeepers (Levy Jr., 2000, p. 20). Japanese business decision making process is based on consensus and co-operation. This gives the people a feeling of being actively involved and they become committed to their company. “Japanese companies, like Japanese society, are hierarchically organized with individuals knowing their position within a group and with regard to each other” (Japanese Business Structures, 2010, para. 2). Women take the roles of lower grade tasks and are expected to leave once they marry or have children. Japanese women’s annual income is about 50% less than a male co-worker (Women in Business in Japan, 2010, para. 1).

How do both of the above items compare with US culture and business?

Communication can be one of the biggest dilemmas between US businesses and Japanese businesses. It is important for the Japanese to develop relationships with business partners early on, which is often dependent on the person’s ability to read the underlying truth to what is actually spoken. This may be difficult for US business men and women. It is important to ask enough questions in order to ensure a clear understanding (Japanese Communication Styles, 2010). Communication differences can be found between the two countries, because Japan is a high-context country while the US is considered a low-context country. As discussed earlier, the smallest gesture to the Japanese can change the context of what is being said. In low-context cultures, like the US, people rely on what words are being said (Satterlee, 2009, p. 41). This can cause some major miscommunication. Another communication barrier is how American and Japanese business people arrive at an agreement differently. This causes difficulties during the negotiation process. The Japanese are concerned with pursuing social relationship goals during this process. Meanwhile, Americans tend to be individualistic. Americans focus is on the immediate and not the long term relationships that the Japanese look for. This can cause some issues between Japanese and American businesses (Kumar, 1999, p. 63-78). Communication between Japanese and American businesses may be difficult; but, with patience and an understanding of the Japanese, a great business relationship can be formed.

Language can be a problem for American and Japanese business meetings. There are few foreigners who can speak Japanese well; therefore, the meetings must be spoken in English. Most levels of English in Japan are patchy. This can cause confusion. Often what is said is either not understood or it is misunderstood (Japanese Communication Styles, 2010).

The major professed religion in the United States is Christianity. As of 2007 only 0.7% of Americans claimed to be Buddhist (United States, 2010). This is a drastic comparison to the 84% of Japanese who claim to be following both Buddhism and Shintoism. However, moderation and toleration is becoming a norm in America. Americans are celebrating differences and look down upon those who judge another’s beliefs (Orwin, 2004, pp. 26-27). Buddhism teaches its followers to be tolerant of all beliefs and religions. They agree with moral teachings of other religions (Buddhism, 2010). There should be no conflict dealing with religion in business, because Americans are becoming more tolerant to other beliefs and Buddhism embraces other religious teachings.

The Business Ethics Index (BEI) for Japan is very similar to that of the US. There have been a few more incidents of unethical behaviors from Japanese companies than that of the US. Like Enron did in the US, Liverdoor did the same thing in Japan. Some of the other Japanese scandals include Snow Brand Foods and Tokyo Electric Co. Based on the BEI, Japanese and American managers had the same views on corporates responsibility and unethical business practices. Differences in ethics can be found in some areas. For instance, Japanese focus on the group (collectivism). The Japanese have the “good-of-the-group” mentality while the American mindset is that of the good-of-the-individual (Tsalikis, 2008, pp. 379-385). Since Japanese and American business ethics are very similar, Americans should have little ethical complications when dealing with Japanese businesses.

There are differences when it comes to American values and attitudes from those of the Japanese. The major driving force for the differences is the individualism of Americans versus the collectivism of the Japanese. The American dream is to make a name for one self. The Japanese, as stated many times earlier, are concerned with how their actions affect everyone around them. “Japanese hierarchy is based on consensus and co-operation rather than the top-down decision making process which often typifies western models of hierarchy” (Japanese Business Structures, 2010, para. 3). Respect is important to both Americans and Japanese, but the Japanese have a more formal stance on respect. An example of this would be how Americans find that not looking a person in the eye as disrespectful or even the person is trying to hide something, while the Japanese lower their eyes to show respect. There may be differences when it comes to values and attitudes, but American businesses should have no problem understanding the Japanese values and attitudes with a little research and study.

Whenever someone is dealing with a new culture, there is going to be differences in manners and customs. The typical American greeting is a firm handshake and looking the person in the eyes. The traditional Japanese greeting is a bow with the person’s hands at their side and with their eyes lowered. The Japanese are aware of the handshake being the typical Western greeting and they will greet Westerners with a handshake, but it will be often weak. The American dream allows a person to be in a high position in the company based on their education and hard work. This is in contrast to the Japanese, where age equals rank. Both cultures will use professional titles in formal situations. The Japanese word for Mr. or Mrs. is san. The exchange of business cards is common in both cultures. The Japanese, as discussed earlier, take it to another level. American business men and women should have business cards that are printed in English on one side and Japanese on the other side. The person receiving the cards should take time to read it. It should never be put in one’s back pocket or a wallet. American hosts usually allow everyone to order food and drinks; this is not true for Japanese hosts. The host will order drinks and meals for everyone in the group, because they are responsible for paying the bill. Silence can be uncomfortable for Americans, but this is seen as useful and generative to the Japanese. Dress is important to the Japanese. Americans also take pride in how they dress, but acceptable dress clothes in America may not be appropriate in Japan. Vibrant colors, bold designs, and flashy jewelry should be avoided, as this is not the norm. Women in Japan do not wear revealing clothing in a business setting, full or longer length skirts is acceptable. Learning the differences between American and Japanese manners and customs can lead to a successful business relationship between American and Japanese companies (Etiquette, 2010).

The American social structure is different than that of the Japanese. American social classes can be broken down into upper class, upper middle, lower middle, and lower class. The upper class refers to the rich, while the lower class refers to the poor. Unlike the Japanese, there is no royalty or nobility in the United States. CEOs are usually found in the upper class, while the majority of business workers can be found somewhere in the middle class. The American dream allows for a person to move upward through the social classes based on how hard they work and getting a better education. This is where the Japanese and Americans will find contrast. As stated earlier, the Japanese know their place in society and remain there unless they join the armed forces. American women have come a long way in the US. Many American women are found in high ranking positions. There will be difficulties for American women working in Japan. Women in Japan do not hold high positions. American women may encounter difficulties when dealing with Japanese male colleagues. They sometimes are accepted as an honorary man (Women in Business in Japan, 2010).

One way to understand the difference in culture between Japan and the United States is using the Geert Hofstede Cultural Dimensions. This study is considered the most comprehensive study of how values in the workplace are influenced by culture. Geert Hofsted analyzed a data base of employee values from IBM between 1967 and 1973 which covered more than 70 countries. The dimensions that he included were Power Distance Index, Individualism, Masculinity, Uncertainty Avoidance Index, and Long-Term Orientation. Japan scored higher in the Power Distance Index. This means that more members of organizations in Japan accept and expect that power is distributed unequally. Americans scored higher in the Individualism dimension. As discussed earlier, the Japanese are more concerned with collectivism, while Americans are concerned about individuals. Japan scored higher in the Masculinity dimension. This shows that there is more of a gap in Japan between men’s values and women’s values. According to Geert research the masculine values are very assertive and competitive, while the feminine values are modest and caring. The Japanese also score higher in the Uncertainty Avoidance Index. The Uncertainty Avoidance Index pertains to a society’s tolerance for uncertainty and ambiguity. The Japanese are uncomfortable in unstructured situations where the outcome is uncertain. Countries with a high Uncertainty Avoidance Index will minimize uncertainty with strict laws and rules. The last dimension is where there is the biggest difference between the two countries. The Japanese scored a lot higher on the Long-Term Orientation dimension. Virtues associated with Long-Term Orientation are thrift and perseverance, while values associated with Short-Term Orientation are respect for tradition, fulfilling social obligations, and protecting one’s face (Geert Hoftede Cultural Dimensions, 2009). The Geert Hoftede Cultural Dimensions helps international businesses understand how the host country’s culture compares with their home culture. To be successful at international business in Japan, a U.S. company should look at the five dimensions and use it to further their understanding of the Japanese culture.

What are the implications for US businesses that wish to conduct business in that region?

Understanding current U.S. and Japanese relations is important before conducting business in Japan. U.S.-Japan alliance is responsible for the U.S. security role in East Asia. This alliance has helped the with U.S. national security strategy in the region. In return the alliance provides protection from Japan’s neighbors, particularly China and North Korea (U.S.-Japan Relations, 2009). Japan recently elected a new prime minister, Naoto Kan of the Democratic Party of Japan. Relations between the U.S. and Japan were harmed by the former Prime Minister Mr. Hatoyama. During elections Mr. Hatoyama pledged to reconsider the agreement on the relocation of the US air base on Okinawa. The U.S. pressured Mr. Hatoyama to later reverse his position, which infuriated the inhabitants of Okinawa and many leaders within the Democratic Party of Japan. This was the major factor that lead to his resignation. The new Prime Minister, Mr. Kan, has pledged to implement the original agreement. There are about 47,000 U.S. Troops stationed in Japan. More than half of these troops are stationed on the island of Okinawa. This dispute has caused the goodwill between the two countries for the past fifty years to be undermined (Japan: Country Outlook, 2010).

Japan is considered one of the United States’ most important economic partners. Japan is responsible for the second largest source of imports for the U.S. outside of North America. They are also the second largest source of foreign direct investment for the U.S. Japan has helped to finance the U.S. deficit and reduce U.S. interest rates by being the second-largest foreign holders of U.S. treasuries. Even though the two countries are facing tensions over base relocation, they are economically dependent on each other (U.S.-Japan Relations, 2009).

The Japanese banned all U.S. beef imports in December 2003, after the discovery of the first U.S. case of “mad cow disease.” This ban was finally lifted in December 2005, but quickly re-imposed it in January 2006, after finding bone material among the first beef shipments from the U.S. The Japanese lifted the ban in July 2006 on cattle 20 months old or younger. After much pressure from the U.S. in May 27, 2009, the Japanese Ministry of Health, Labor, and Welfare and the Ministry of Agriculture, Forestry, and Fisheries reportedly were ready to ask the restrictions to be more relaxed allowing U.S. beef imports from cattle younger than 30 months (Federation of American Scientists, 2009).

Japan asked the World Trade Organization (WTO) for permission to impose sanctions on U.S. imports on January 2008 for the failure to comply with WTO decision against the U.S. practice of zeroing in antidumping duty determinations. These sanctions on U.S. imports were valued around $250 million. On April 24, 2009 the WTO ruled in favor of Japan stating that the United States was not in compliance with the WTO ruling. “The practice of zeroing is where the U.S. Department of Commerce treats prices of imports that are above fair market value as zero dumping margin rather than a negative margin” (Federation of American Scientists, 2009).

There are many reasons that an American company should consider doing business in Japan. Japan is considered the center of new trends and creativity. Businesses around the world are partnering with Japanese companies. Japan External Trade Organization (JETRO) gives ten advantages to investing in Japan (Investing in Japan, 2010). They are listed as follows:

Japan has an enormous market that has huge potential.

Japanese consumers are early adapters. These consumers like to stay on the cutting edge when it comes to new technologies. Many companies find that Japan is a good test market for new products and services.

Japan provides promising markets and industries. Many of Japan’s industries are globally competitive. Four sectors that are showing potential for future growth are: Information and communication technology, medical and health care, automotive parts, and environment-related markets.

Japan is home to many of the world’s top companies.

Many small and medium-sized enterprises (SMEs) can be found in Japan like SMEs that possess unique technologies. Partnerships with these types of companies can help foreign companies seeking to enter the Japanese market, boost their technological capacity, and open up markets and sales channels.

Japan possesses the ideal conditions to be a center of innovation due to its cooperation between foreign companies, universities and other organizations.

Japan is also becoming a gateway to the Asian market. Companies from around the world are using Japan as a location for regional headquarters.

There are a number of foreign companies seeking to expand their businesses in Japan. Japan is becoming a destination that offers potential for foreign companies to increase their profits.

Japan has a mature investment infrastructure. Japan’s industrial structure and business environment is similar to U.S. and European environments.

Japan has a secure, comfortable living environment. Japan has welcomed many foreign cultures and provides clean and safe urban environments.

There are some risks that foreign companies will face when looking into investing into Japan. There is the risk of being scammed by people who will pretend to be experts in various aspects of doing business in Japan and pocket the company’s money. Doing business in Japan can be extremely expensive if cost are not properly controlled (Making Japan Work for You, 2009). The Japanese government is trying hard to attract foreign direct investment (FDI). The government has changed its commercial code, making it easier for foreign firms to buy Japanese ones. The government does not desire foreign cash; but it hopes that foreigners can help reform companies and introduce competition. For instance, Starbucks forced other Japanese coffee shops to improve. While this may sound good to foreign companies looking to conduct business in Japan, it has not been very successful. Consumer spending is becoming sluggish and the Japanese population is shrinking. Tax codes make life difficult for foreign firms. Many Japanese companies are resisting foreign takeovers. They fear that foreign take over their companies would result in a loss of jobs. Some foreign investors are finding that investing in Japan involves too much effort for a little profit (Gaijin at the Gates, 2007). Despite the risks involved, international business in Japan can be a good investment.

Conclusion

Japan is home to a rich and vibrant culture that offers much for innovation and investment for businesses. The Japanese are a very complex society from the way they communicate to their many customs. American business men and women can learn a lot from the Japanese. For instance, the Japanese have been very successful in globalization and have avoided an economic crisis. Most importantly, Japanese businesses do a better job of building a relationship with business partners than American businesses do. Oftentimes, Americans are more interested in making money than building relationships American business can be more successful by learning about the people they are doing business with and taking the time to build a relationship with them. Although the Japanese may seem drastically different from Americans, American companies can be successful in doing business in Japan. It will require a lot research and preparation, but the payoff can be great.