8 Things you should know About Doing Business in Japan

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Today, we post a paper written by one of our partners,

David Clive Price of “The Master Key to Asia” Blog,

an expert in Asian business culture & communication.

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8 Things You Should Know About Doing Business in Japan by David Clive Price

Sometimes even people who have lived and worked in Japan complain that doing business in the country is like trying to read Emoticons without knowing what they mean.

You’re never quite sure what’s going in in a business meeting, presentation or negotiation, and you aren’t allowed to ask because you won’t get a straight answer. You might not get an answer at all!

1) Personal dignity or face is very important to the Japanese, so they work hard to save ‘face’, to give other’s ‘face’ and to avoid anyone losing ‘face’. The result is that the Japanese tend to be rather rule bound, highly methodical and fastidious in their daily activities.  This meticulousness has several positive sides, but foreigners in Japan often find that the Japanese view bending rules and procedures as tantamount to losing face. Independent thinking is not always encouraged.

2) This has particular relevance to decision-making. Face-saving and delaying tactics are often used in business to avoid giving a clear, logical response to proposals. This gives the Japanese side time to consider proposals and – crucially – to wait until a personal relationship is established. Non-verbal techniques to avoid responses include a hissing sound made by indrawn breath, vaguely worded and evasive questions, and a love of paradox (for en excellent guide, see Five Things about Haragei: the Japanese Business Language).

So don’t worry if your Japanese counterparts remain silent for long periods of time, or close their eyes when they are listening to you. They are not going to sleep. They are concentrating.

But if so much activity is non-verbal and indirect, how are decisions ever made?

3) The answer is that decisions are based on a time-consuming process called nemawashi (‘binding the roots together’). 

There is a strong hierarchical and collectivist system in Japan, which means that your proposal has to work its way through several layers of management and internal consultation.

The Japanese client will seek to obtain consensus from specialists in planning, manufacturing, marketing and at many other levels about your ideas. This process of nemawashi means a lot of time-consuming consultation.

4) So what should you do in the meantime? You should build up your avenues of communication.

Few Japanese speak or understand English well, although the situation has much improved in the last twenty years. So it is important to provide written information and to continue to provide information on any questions in both English and Japanese on your company, your proposal and what your clients have said about you. The quality of your presentation and subsequent material will reveal to the Japanese the standards of your company, its reliability and products.

5) You should also do further research on the Japanese company itself.

At your first meetings several associates will probably accompany your Japanese counterpart.

An experienced Western executive will find out who the key senior decision-makers are after liaising with outside intermediaries that have a good relationship with people within the company.  Local knowledge and well-respected local contacts are crucial.

6) You must also make sure that your personal relationship with your client is carefully developed. 

Eating, drinking, singing karaoke (sometimes an acquired taste) and general socializing with Japanese clients after work is essential. This initial social interaction is part of the long-term process of building a successful relationship.

Business lunches and dinners are good times to get to know your Japanese counterparts, so never turn down an after-hours invitation. Just be careful not to disclose too much or become over-personal despite the beer and saké flowing!

The key is participation. You don’t have to be champion drinker, or a lover of sushi and sashimi, or an Elton John or Liza Minelli. You just have to take part.

7) Similarly, don’t refuse any requests for a small amount of business to begin with.

It will be a trial of your ability and trustworthiness. And at the end of every meeting, offer a small gift as a token of esteem to the most senior person.

8) Always remain polite and soft-spoken and expect only incremental progress.

As a general rule, the Japanese do not see contracts as final and they will prefer a broad mutual understanding so that the essential element of flexibility can be maintained. At the end of the day, when the Japanese are ready things can move very fast, and implementation will be thorough and precise. Patience will be rewarded!

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If you want to know more about doing business successfully in Japan and in other countries of Asia, I offer a free special report ’3 Key Elements of Asian Business Culture’ on my website www.davidcliveprice.com, which will help you focus your efforts on the areas that really count.

© David Clive Price. Want to use this article for your website or ezine? That’s fine as long as you share it complete with the following:

David Clive Price is an international speaker on Asian business cultures and author of the The Master Key to Asia and several other books on Asia. As a business adviser, he helps entrepreneurs and businesses to improve their knowledge of Asian cultures to grow their profits and promote their brand.

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