Doing business in Japan

Japan, is there anything other than geishas and sushi? This week we discuss doing business in Japan and try to go beyond the obvious. The article discusses doing busin

One of the most industrialized nations, home to Hiroshima and Nagasaki, land of the rising sun, Japan has gained many superlatives over the years. The nation which suffered massive destruction during the Second World War, including two nuclear bombs dropped into its densely populated cities, successfully re-invented itself as one of the world's richest and most industrialized nations.

According to the CIA fact book, Japan's GDP is $3.867 trillion (2005 est.), which keeps it ahead of United Kingdom, France and Germany. This along with great infrastructure, an educated population (99% literacy), and a developed banking and services sector makes Japan an attractive investment and business location. But due to cultural misunderstandings and many myths about the Japanese market and society, American and European companies have been rather hesitant about investing in Japan unless absolutely necessary.

Some of the myths about Japan and its business environment are:

You need billions to enter the Japanese market, so it should be last in the list of possible foreign ventures. The fact is that for any technology company, Japan is the best market to enter because consumers are very quick to adapt to new gizmos, they have larger disposable income and there is opportunity to integrate new technology from Japan's highly sophisticated local companies.

In Japan it takes a foreign company a long time to break into the scene because of the strong local companies. It is true that Japan has some very strong local companies, but if you are prepared to make changes according to the customer's taste and requirements, it is one of the most rewarding markets.

Along with the myths, cultural differences are also hindering many foreign companies from investing in Japan. Japanese culture is very distinct from the European and American cultures, and the information available to learn about it is often far removed from reality. Japanese life and culture is more often portrayed wrapped in the oriental mystique, far from the actual modern day life. Some common social practices are:

While entering a temple, shrine and homes you are expected to take off your shoes. So it's always a good idea to wear slip-on shoes with clean socks

Gift giving is a very important part of Japanese culture. Do not forget to bring something for the host, your business partner and also for your colleagues

Unless you are expressly asked, never use a first name to address someone

Japan is a family-oriented society, where people believe that they are a part of a group. The group is the nation, family, school, office, etc. So sometimes the decision-making process is long and tedious because people seek the approval of the group before making the decision

Ways of doing business in Japan are also very different from the US or European ways. Decision making is lot slower because people tend to seek approval of everyone in the group, especially the elders. Japan is a high context culture, where more is understood and less is expressed explicitly. For a person from a low context culture, sometimes it is difficult to understand what is actually meant.

There are also questions about the participation of women in business. For most Japanese women it is common to leave their jobs after getting married or having children. So in many companies they try to hire fewer women, thus lowering the number of women in business and decision-making positions.

Japanese are very hardworking and punctual people and expect the same from their partners. To arrive late is seen as disrespect.

Doing business in Japan is an exciting experience once you find out that there is more to this land of rising sun than the geishas and sushi. It is a melting pot of modern technical advancement and centuries old traditions with lot to be discovered and lot to be learned.

We invite our readers to discuss about their experiences in Japan and its culture.

Sources:

http://www.eurotechnology.com/doing-business-in-japan/index.html

The CIA Factbook, 2005

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