Business relationships in Japan are characterized by a
well-structured
hierarchy and a strong emphasis on nurturing personal contacts.
Generally, they
are built up over long periods of time or are based on common roots,
such as
birthplace, school or college. Also, an unusually strong emphasis is
placed on
social activities to strengthen ties. It is not surprising, therefore,
that
those looking in from the outside may see the Japanese business world
as
comparatively hard to break into. In fact, there are many different
kinds of
business relationships, but most share two features they have been
built up
slowly and carefully, and much time is spent in keeping them up to
date.
Business relationships in Japan are part of an ever-broadening
circle that
starts within the company (uchi - inside, or "us") , and moves
towards the outside (soto) to include related companies, industry or
business
organizations, and the like.
Most Japanese companies have a series of very close
relationships with a
number of other companies that provide them with support and a
multitude of
services. It has been traditional practice for a company to hold shares
in
these "related" companies, a practice which has given rise to a high
proportion of corporate cross-share holdings in Japan. This has been a
show of
faith on the part of one company towards another, and also has been
useful in
providing companies with a core of stable and friendly shareholders.
When dealing with a Japanese company, it is important to be
aware of the
existence and nature of some of these close relationships, in
particular those
with banks and trading companies. Understanding these can help to
define the
nature of the company and the way it does business, as well as its
positioning in
the Japanese business world. It should also be understood that there is
a
constant flow of information between Japanese enterprises and their
banks and
trading companies. Unless the need for confidentiality is made very
clear,
these may soon be aware of any negotiations in which the company is
involved.
Larger corporate groupings are becoming more familiar to
non-Japanese
business circles. These groupings are known as keiretsu, and some have
their
roots in the large pre-World War II conglomerates. Accusations of
keiretsu
favouritism overriding more attractive outside offers sometimes are
leveled at
Japanese companies. When asked about this practice by a foreign
businessman,
the president of a large Japanese electronics company replied: "It's
like
going to the tailor your father went to. He may be more expensive than
the
competition and perhaps even not the best, but he has served your
family well
for many years and you feel duty bound to remain a faithful customer. "
There is a tendency in Japanese business to be guided by the familiar
and human
considerations, and thus it is important for anyone wishing to do
business in
Japan to go a major part of the way in establishing a communications
network
and a real presence.
Business Negotiations & Meeting
Etiquette
Face to face contact is essential in conducting business. It
is more
effective to initiate contact through a personal visit (set up by an
introduction through an intermediary) than through correspondence.
Initial
contacts are usually formal meetings between top executives; more
detailed
negotiations may be carried out later by those who will be directly
involved.
During the first meeting, you get acquainted and communicate your broad
interests; you size each other up and make decisions on whether ongoing
discussions are worthwhile. At this point you should not spell out
details or
expect to do any negotiating.
Exchange business cards (meishi) at the beginning of the
meeting. The
traditional greeting is the bow. Many Japanese businessmen who deal
with foreign
companies also use the handshake. If you bow, then you should bow as
low and as
long as the other person, to signify your humility. First names are not
usually
used in a business context. In Japan, the family name is given last, as
in
English. You should address Yoshi Takeda as "Mr. Takeda" or
"Takeda-san. " Expect to go through an interpreter unless you learn
otherwise. If meeting high-ranking government officials, an interpreter
is
always used even if they can speak English fluently because
customarily, they
refrain from speaking foreign languages in public. Other businessmen
may speak
some English but may not be adequate for undertaking business
negotiations.
Exchanging meishi Conservative dress is common for both men
and women in
public. Most Japanese professionals wear Western-style dress (European
more
than American) , although during the hot summer months, men often do
not wear
suit jackets.
Concern about how others perceive you pervades business and
social
communication in Japan. Since saving and losing face are so important,
you
should avoid confrontation or embarrassing situations. A distributor
that
cannot follow up on a promise made to a customer loses face and may
suffer
damages to its reputation. Remember, if you are supplying distributors
in
Japan, to deliver on time (especially if they are samples) or else face
a long
chain of lost faces and apologies. An error or delayed shipment, even
if it is
not your fault, may damage your company's reputation with the Japanese
company
you are dealing with as well as all the companies and customers that
Japanese
company does business with. Following through on promises and
agreements, both
oral and written, is of utmost importance and when you cannot do this
you will
have to swallow your pride and apologize profusely until you are
forgiven. This
is all part of common business practice and you may see business people
(including top executives) on their knees apologizing. When in Japan be
ready
to include this as a part (hopefully not regular part) of your own
business
practice.
Nonverbal communications gestures, nuances, and inferences -
are very
important in signaling intentions. "No" is seldom said directly, and
rejection is always stated indirectly. Remember that the Japanese hai
means
"Yes, I understand you" rather than "Yes, I agree with you.
" The Japanese will sit in silence for some time - it is a way to
reflect
on what has been said. Early business and social contacts are
characterized by
politeness and formality.
The Japanese like to launch new products or take other
important initiatives
on "lucky days. " The luckiest day, called the “taian”
,
occurs about every six days. Your Japanese counterpart will probably
want to
delay a major announcement until the next “taian”
. Japanese calendars
usually indicate these days.
The presentation of a new product is traditionally followed by
a reception
with the product on display; an omiyage, or gift, is given to each
attendee.
This adds to the overall cost of the event.
Japan epitomizes the rule "Make a friend, then make a sale. "
When
selling to or negotiating with the Japanese, do not rush things. the
Japanese
prefer a ritual of getting to know you, deciding whether they want to
do
business with you at all, instead of putting proposals on the table,
and seeing
whether agreement is possible within a broad framework.
The Japanese prefer to close with a broad agreement and mutual
understanding, preceded by thorough discussion of each side's
expectations and
goals. If they decide they want to do business, they will negotiate the
details
with you later.
A Japanese negotiator cannot give a prompt answer during an
initial
discussion. No commitment can be made until the group or groups he or
she
represents reach a consensus. Do not expect an immediate answer.
Negotiations
may take an extended period.
Japanese executives emphasize good faith over legal,
contractual safeguards.
They are not in the habit of negotiating detailed contracts that cover
all
contingencies. However, Japanese managers who are accustomed to Western
business dealings are familiar with more structured contracts. In case
of
disputes, the Japanese prefer resolving issues out of court on basis of
the
quality of the business relationship.
A Japanese partner or customer will usually prefer to develop
a business
relationship in stages, with a limited initial agreement that, if
successful,
is gradually extended into a broader, more binding agreement. So once
you make
a commitment, expect it to be for a long time. If you break it, your
reputation
will be affected and everyone will know. It may be difficult to find
another
Japanese partner after this happens.
Sources
1. Internet
(Alta Vista, Lycos)
2. Boye D
Mente “Business guide to Japan.
Opening doors... and closing deals!” , 1998
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