Secrets of Japanese business culture

Secrets of Japanese business culture

Japanese business culture is one of the most misunderstood aspects of doing business in Japan, so maybe it’s not surprising that hundreds of thousands of people have browsed this Japanese business culture section since it first went online over a decade ago in 2004. Japanese business culture affects many things about doing successful business, especially B2B business, in Japan, so it’s sad that so many foreign company executives have such wrong perceptions about it.

First a disclaimer: I am just a foreign executive who has lived in Japan for more than two decades, whose interest in Japanese business culture results from needing to understand how it affects successfully doing business in Japan. There are many others, far more qualified than me, to lecture about the reasons why Japanese business culture evolved the way it has. My only interest, and what we will focus on in this section, is how it affects us in business meetings, negotiations, and successful selling in Japan. Based on more than two decades of direct sales and executive experience in the Japanese market, dealing face to face with Japanese at all corporate levels, we will look from an insider’s perspective at how Japanese business people think and how Japanese companies make decisions. Hopefully you and your company might then better understand what is going on over ‘the other side of that table’.

Many very successful companies never start business in Japan, or only enter the Japanese market through a distributor, because they fear Japanese business culture. Often it’s the result of the wrong perception, maybe fueled by those infamous myths of doing business in Japan, that dealing with Japanese business culture is too risky. Fortunately, Japanese business culture is not an impenetrable barrier to successful business in Japan, as proven by the very large Japanese market share that Apple, BMW, Mercedes-Benz, Microsoft, Chanel, Louis Vuitton, Tiffany & Co., and many others enjoy. Yes, Japanese business culture is different to that of the US or Europe, but the differences do not make it any more risky to do business in Japan than elsewhere in the world if your company has quality products or services. In fact, certain aspects of Japan’s business culture, such as the very stable long-term relationships resulting from the conservative Japanese sense of loyalty to trusted partners and suppliers, are very beneficial for those foreign companies that understand how to swim with Japan’s cultural tide as opposed to vainly struggling against it.

So how is Japanese business culture different?

The obvious differences are there from the moment a foreign executive arrives at Tokyo’s Narita International Airport (or Tokyo’s Haneda International Airport, Osaka’s Kansai International Airport, or any other international airport in Japan). The white-gloved baggage handlers carefully lining up your luggage on the conveyor (including the bags for Economy class), the very polite customs inspectors, the cleaner standing at the top of the escalator going down to the JR Narita Express and Keikyu SkyLiner train station (at Tokyo’s Narita International Airport), making sure the escalator handrail is clean, the cleaning staff quickly and silently cleaning and leaving the express train before it departs for Tokyo, the ticket inspector on the train who removes his or her hat and bows before proceeding through the carriage, and so on. It’s the same when arriving at your hotel; the bell-boy who bows and opens the door, the porter who carries heavy bags to the room but politely refuses a tip. The politeness and consideration are part of the customer-oriented service that is the most outwardly obvious aspect Japanese business culture.

Everywhere there are signs of the service-oriented aspect of Japanese business culture. When entering a Japanese shop or bar, the shouted chorus of ‘irrashaimase’ (meaning ‘welcome’) and when leaving there’s another shouted chorus of ‘domo arigato gozaimashita’ (meaning ‘thank you’) with every staff member, including the chefs, joining in. When entering a bank, there is a member of staff to guide customers to find the correct line. In the US and Europe, personalized service has become something that people must pay for with tips; in Japan there is no tipping and personal service is literally ‘part of the service’.

Many foreign executives mistake the service aspect of Japanese business culture as simply Japanese people being polite. While it’s true that Japanese society is generally very polite, the people noted above were doing their job and a big part of it is keeping customers happy. Whether cabin attendants for ANA or JAL, store assistants at Mitsukoshi department store, MAC, Chanel, or Christian Dior, or front-desk staff at The Conrad Tokyo or the Shangri-La Tokyo, Japanese companies invest a lot in training staff to care for customers and assure quality service. The training pays off: in the airline business, the difference in in-flight service between ANA and many of its competitors has helped make sure that ANA stays one of the world’s top-rated airlines year after year. Many Japanese pay much more to fly ANA than to fly cheaper foreign competitors.

Some foreign executives also mistake the unusual politeness and humility of Japanese in business as meaning the person performing the service somehow lacks strength of character. Several times I have heard visiting executives say “You won’t find our receptionist smiling and helping a visitor like that!” in a tone of voice that seems to imply that his or her receptionist’s less helpful attitude is somehow superior. Just because a Japanese employee puts customer first and is unusually deferential, doesn’t mean he or she lacks character; what it does mean is he or she wants to give excellent service experience because it’s important for his or her employer’s reputation.

Excellent service is Japanese business culture’s visible signature; less visible is Japanese employees’ unusual pride in the company they work for, which is the reason Japanese companies can so easily train their staff to such high levels of customer service. This is not as true of some younger workers, many of whom are these days more likely to change companies mid-career, as of their elders, but pride of employment is still a major pillar of Japanese business culture. Even now, many Japanese consider their co-workers almost closer than their family and share a very strong sense of team spirit. For many Japanese, their employer, the company where they work, is central to their life in far more than just pay.

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