The company in Japanese business culture

The company in Japanese business culture

In the previous section on Japanese business culture, we briefly looked at its most visible signature; excellent service. Now lets take a look at the central pillar of Japan’s business culture; the Japanese company.

Webster’s Dictionary defines ‘business culture’ as “……the shared attributes, goals and practices that characterizes a company or corporation……” and ‘the company’ occupies a uniquely important place both in Japanese business culture and society. It is not an exaggeration to say that after World War II, Japan rebuilt its society on Japanese companies and it was through work and the company that ordinary Japanese regained their pride and place in global affairs. Regardless of the stresses of modern society, Japan’s aging demographics, and the gradual erosion of lifetime employment, the company remains the pillar of business culture and society in Japan today.

Many things about Japanese business culture are the same as when I first wrote this section in 2004. Men still dominate Japanese industry and commerce, and to a great extent Japanese society still ranks a man and his family according to his employer’s reputation and the job and prospects he has there. For this reason, much of this page and the pages following it, focus on men’s role in Japanese business culture and much less on the role of women. In the US and Europe, the success of entrepreneurial economies has to an extent supplanted social casting by employment, but many Japanese do not accept entrepreneurs so readily and often see them as eccentrics or misfits. Japan today is as much as ever a nation of company men, in colloquial Japanese ‘the salarymen’. One of the reasons why Japanese so ritually exchange business cards at meetings, is the salaryman’s intense pride in belonging to his company. Business cards are an essential part of every Japanese business or social meeting, and show each person’s place in their corporate hierarchy. One reason, maybe the real reason, why your company’s Japanese subsidiary President strongly suggests your company must set up a KK kabushiki kaisha company if it wants to succeed doing business in Japan, is because of the prestige his business card would impart. Carrying a business card with the words ‘Representative Director President’ on it is a real status symbol regardless of the company’s size.

Despite the decades old recession and gradual erosion of lifetime employment, the company is still at the core of Japanese business culture and thus at the center of Japanese society. A young man entering a large corporation such as Fujitsu immediately after graduating from university at age 22, often still hopes to retire from that same company when he reaches age 65. Despite corporate efforts to the contrary, for many employees at Japan’s major corporations the promise of lifetime employment still holds true. Even in smaller companies, where labor turnover is higher, good employees may well stay with one employer for life and will rarely switch employers at less than 8 – 10 year intervals. These long-term relationships create very strong ties between a company and its employees, and of course between co-workers and managers.

Co-workers and managers are often so close that in a typical Japanese office, the words used to informally refer to senior and junior employees are often the same words used to describe the hierarchy of a family or of school friends. This ‘corporate family’ often stretches out to include many subsidiaries and even third-party suppliers. It is not unusual for very strong ties to exist between companies and their suppliers because the employees doing the buying and selling may have occupied the same jobs within their respective companies for 10 years, 20 years, or even longer. What many foreign company executives often see as impenetrable barriers to Japanese business, are often strong ties of personal trust established over many years. If your company tries to win business by breaking those ties, it may well fail miserably; it’s far better to swim with the tide and to first work around or within those ties, such as creating a partnership with the trusted supplier. That’s how Japanese companies work together.

In Japan, the company man, the salaryman, is the norm and the company he works for very much shapes his and his family’s social expectations. In 2004, I wrote that sadly in most Japanese industries, and certainly within large Japanese corporations, it was unlikely that you would meet a female decision-maker: more than a decade later, that statement remains true. In the US and Europe, women occupy many senior manager, executive, and C-level jobs. While Japan is changing, many Japanese women still decide to marry between ages 25 – 40 and leave their career to tend to the home or raise children. Japan’s workforce is rapidly shrinking as its population ages and the government talks about encouraging women to return to the workforce, but many Japanese women do not return to work even though they may have excellent skills and experience and might want to continue a career. In fact, a good source of skilled and dedicated employees for a foreign company’s Japanese subsidiary is bilingual women looking to return to work after having left their original Japanese employer to start a family.

Based on discussions with many Japanese businesspeople, and having counseled Japanese employees over the past decade, here are just a few examples of how the company that a Japanese man works for affects his, and his family’s, life:

  • If a Japanese man wants to marry a girl from a ‘nice’ family (still something valued highly in this semi-feudal society), she and her family will look for the assurance that he has a good steady job with a reputable company. If not, he needs to show that he is independently wealthy, successful, and reliable.
  • When a Japanese person applies to rent an apartment in a respectable suburb, the landlord’s agent will want to know in detail which company the applicant works for, how long he or she has worked there, how long the company has existed, and details of the company’s revenues and paid-in capital.
  • If two people are competing to rent the same apartment, the landlord will prefer the person working for the ‘better’, where better means larger and longer established, company.
  • If a Japanese person changes company after renting an apartment, he or she must tell the landlord (who might then try to evict the tenant if the new company seems unreliable).
  • If a Japanese couple want to buy their own apartment or house, the bank will expect that the man is working for a reputable company that has existed for some time and that has employed him for at least 3 years.
  • For Japanese parents competing to get their child (single child families are the norm in Japan) into a good school, even at kindergarten level, the ‘quality’ of the father’s employer and his length of employment with that company are key factors.

Considering the above points, and adding to them the very conservative Japanese attitude toward corporate failure and the pressure on Japanese men to ‘conform’, your company can now ask the following questions:

  1. When your company’s executives are interviewing an apparently successful Japanese candidate, they can consider why he or she is considering working for your company’s small, newly set up, Japanese subsidiary office. If the candidate he does accept, or even shows interest in the job in the first place, your company’s executives must decide if it’s because: 1) he or she thinks it’s an exceptional career opportunity (in which case your recruitment agency has probably identified a rare and valuable candidate), or 2) if it’s because he or she hopes to negotiate a compensation package with your company that is far superior to anything he would ever get from a domestic Japanese company.
  2. When your company’s executives are presenting to a Japanese corporate buyer for the tenth time, they can consider what they can do to convince him or her that there is no risk in placing a first order with your company’s small, newly set up, Japanese subsidiary office.

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