Japanese Business Culture


In business, especially at the international level, negotiations have become an essential instrument starting or terminating business relations with the companies in other countries. Negotiations in international business may be connected with the resolution of various issues in the areas of investments, strategic alliances, etc.

Negotiations are also the means of creating joint ventures. With the growth of globalization processes negotiations as a process of creating international business relations should not be underestimated. Whole sciences and studies are devoted to the skill of performing negotiations, because if negotiations fail, this results in the loss of valuable resources, potentials and alliances. ‘All business communications, whether domestic or international, should be seen in the context of human communication. The process by which verbal and non-verbal language is shared is communication, communication has no determinate beginning or end; it is an ongoing exchange of messages between two or more people’ (Kumagai, 2001).

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A the international level, though in business area, cultural differences should be taken into account, because perceiving the behavior of the foreign partners as a stereotype, based on the accepted norms in the host country, may lead to serious contradictions and negatively impact the result. As, for example, Japanese usually rely on intrapersonal relations as the solid basis for successful communication, the representatives of the US don’t try to pay too much attention to this aspect.

Japanese Business System

Japan, a late comer to the developed world, was able to develop and maintain a sophisticated system of business relationships and forms. Japan remains the world’s second leading economy, with motor vehicles, Transportation equipment, Industrial equipment, and electronics as its key industries. The Japanese business system relies on enterprise groups (Keiretsu Business Groups – KBGs) and is well-known for its ‘dual’ structure, where large organizations operate independently from small and medium sized corporations.

Keiretsu Business Groups have no holding company and promote cooperation and independent decision-making across business units. Horizontal KGBs are either ex-Zaibatsu (Mitsubishi, Mitsui), or bank-led (Sanwa, Fuyo). Vertical KGBs are divided into supplier and distribution: the former supply parts and components, whereas the latter operate as a distribution channel. There are also general trading companies (sogo shosha), which specialize in exports and imports and serve relevant intermediaries for foreign trade.

Japanese Management Style

Japanese enterprises exhibit and rely on unique management styles.

Lifetime employment, seniority wages, and no lay-offs during recession are fairly regarded as the main and most advantageous features of the Japanese management style. Keiretsu companies can easily relocate their workforce from one unit to another, whereas bonuses play a cultural and historical role in profit sharing. As a result, Japan enjoys flexibility of labor compensation and has everything needed to reduce unemployment. Most Japanese enterprises start at the very bottom of the business ladder, gradually expand to become medium and large corporations and, eventually, win the world. Low prices and domestic markets are the two management priorities for start-ups. Management efficiency, technological improvements, huge R&D investments and managerial efficiency are the main drivers of business development in Japan.

Lean production systems, division of labor, JIT philosophies, and economies of scale are all important sources of competitiveness. Kaizen is the basic system of quality control in Japan, which works through series of small improvements. Total Quality Control implies that employee participate in quality management. The success of Japanese firms is in (a) cost advantage; (b) long-term planning; (c) financial strategies; and (d) continuous striving to achieve high quality at a low cost.

Internationalization Strategies and Japanese Management

Until the beginning of the 1950s, the system and drivers of Foreign Direct Investments in Japan had been inward-looking and isolated. During and after Second World War, Japan imposed additional restrictions on FDI, to let its trading companies explore and develop new markets.

The period between the 1960s and 1970s witnessed a rapid increase in domestic wages, accompanied by the growing appreciation of the yen and significant trade surplus. Yet, it was not before the 1980s that the scale of FDI inflows to Japan increased. The current FDI strategy in Japan is built on Incremental Sequential Investment, which means that businesses initially enter the Japanese market with lines of business of core competence and then, through motivation shifts, gradually move to path dependency. The main challenges affecting FDI in Japan include: (a) traditional reliance on Japanese expatriates; (b) a decline in supply of qualified experts; and (c) heavy use of locals for senior positions, which limits Japan’s global growth prospects. Differences between the Japanese and Western models of business should also be considered: Western businesses rely on shareholders, whereas the Japanese believe that employees are business owners, too.

The dilemma of profitability versus employment continues to affect Japanese FDI. In the meantime, Japanese enterprises face serious difficulties, trying to transfer their management style overseas.

Japanese language and communication

Japanese language contains a complex system of constructing polite speech that can not be simply considered as fine phrases of politeness. Foreigners, speaking the Japanese language, use only the ost primitive forms of politeness. The Japanese pardon such violation of a code of politeness by gaijin, but it is unacceptable to the Japanese interlocutor.

Formation of Japanese etiquette was significantly influences not only by the hierarchy of society, but also by religion and Confucianism (Gottlieb 134). It is assumed that Japanese treat the eldest people and seniors with special respect. In Japan the manner and style of speech is considered to be very important. It is necessary to choose a style of communication in accordance with the age and status of the addressee. There is no need to state that insufficiently polite tone will cause the interlocutor’s negative reaction, moreover, excessive politeness can be perceived as a desire to withdraw from the addressee. Therefore, it is important to find so-called golden mean.

If the conversation is carried on in a foreign language, it is subject to the rules that are applied in this language, and that are common to that culture.Listening to the interlocutor without uttering a word also testifies to person’s discourtesy or bad form, in Japan one should occasionally “dilute” the interlocutor’s monologue with short remarks, otherwise it will be perceived as a lack of interest in the words of the speaker. When listening to the words of the equal or junior, it is appropriate to use interjections, expressing agreement, interest, surprise, etc. In Japan one can express the attention to the other party with the words “yes”, “yes, this is so”, “quite right”. The most common expression of gratitude, when addressed to the person holding a lower position in society, in family or when parents address their children, is familiar to us “arigato!” In public speeches, when communicating with strangers, and in the case, when children express their gratitude to parents, it is possible to hear, – “godzaymas arigato!”Previously, only the emperor had the right to use the pronoun “I”. Half a century ago, there were 16 words, which meant “you”.

Now there are about 12 personal pronouns (second person, singular), which are being used, when addressing children, students, servants, etc. One can not use personal pronouns with regard to the relatives, who are senior in age or status. But it is quite possible to use personal pronouns with regard to junior relatives. Senior relatives are usually addressed by the degree of kinship. The mother should be addressed as “okaa-san”, grandfather – “odzii-san” (Mackie 244).

Junior relatives are not called by the degree of kinship. When the youngest introduce themselves to the eldest, they can give their name. But, when the senior introduce themselves to the junior, they name their degree of kinship or other social status.During the conversation, the Japanese address their interlocutor in the third person by surname, to which one must add the polite particles, translated as “master” (generally, a particle “san”, or more respectable – “dono” or “sama”). When communicating with friends, men use a polite particle “kun”(it is also placed after the surname).

As it was stated above, Japanese society is based on a rigid hierarchical system of “senior-junior” (“Senpai-Kowhai”) – and this is due to a very complex etiquette that goes back to time immemorial. When communicating, even the age difference in one year matters. The fact is that the vast majority of independent Japanese men are salaried employees, and the size of the salary, as well as their offices, depend on seniority (in Japan, “lifetime employment” that is until retirement, is the most widespread system). The Japanese pay too much attention to the fact that any negotiations should be conducted between people of approximately equal position in the business world or society. Official negotiation with subordinate, according to traditional Japanese concepts of morality, is fraught with “loss of individuality”. Therefore, from the very first meeting the Japanese try to find out whether the levels of the negotiators correspond to their levels.

If a party is represented by a higher ranked person, then it means that it violates the etiquette or acts as a supplicant. In Japanese establishments or private companies people use to address their seniors in accordance with the job title. A person with an academic title of a professor or doctor, teacher is usually addressed with respectful “sensei” (teacher). It is regarded as a bad form and rude treatment, when you address a person simply by name, without any polite particles.Another foundation of Japanese society is its corporate spirit, the subordination of personal interests to the interests of the group. It is not customary to distinguish yourself in conversation or in correspondence.

On the contrary, the Japanese try their best to verbally demean their personal contributions, skills and achievements; they praise success and knowledge of the addressee or interlocutor. According to Japanese etiquette, is not polite to show the emotions to others. Almost in all situations Japanese retain their steadfast politeness, even if they do not like something. The Japanese use so-called system of subtle hints, based on the principle that other person should understand all himself. However, when communicating with foreigners, some deviations from etiquette are possible.

The Japanese do not usually utter the word “No” – it is considered rude. Instead of it, they can say evasively, – “I’ll think about it”. The interviewee should take it as a rejection and stop pushing. It is very important to choose a shade of polite and simple style of speech, which would correspond to the position and age of the addressee, status and sex, the degree of conversation significance and the character of your relationships with the addressee. It is better to apologize for any oversight once again, or for what the other party may deem a mistake, than to show what may be considered as the lack of politeness.

It is very important to use the appropriate form of apology. The word “sumima-sen” (“Excuse me”) is used in the case when there are some serious grounds for apologizing. Under other circumstances, it is better to use different constructions. One can respond to the apology by answering, – “It’s okay!”

Communication and Gender

According to Japanese etiquette, woman should be modest, thus, she must use more polite forms of speech. There is a specific male and female vocabulary, recorded in the dictionary (Sasaki 200), although the differences are more likely to have a statistical character.

“Women’s language (joseego) is held up as the ideal form of female communication, as men’s language (danseego) is for males” (Nakamura 50). The differences are usually associated with etiquette. But, as a matter of fact, not purely masculine words contrast with the feminine ones, but gender-marked with unmarked: kuu( ‘is’) or hara (‘belly’) are considered masculine and too rough for women, and more polite taberu, o-naka countering them, have neutral character. “Women supposedly use tag questions, hedges, empty adjectives, hypercorrect grammatical forms, intensifiers, and other speech forms, creating an image of uncertainty, irrationality, and insecurity, which makes possible the continued subordination of women. In the past women were not allowed to use danseego, it was even prohibited, in particular, during the rule of Tokugawa” (Nakamura 50).

Now, of course, there is no such restriction, but on the whole, complicated danseego is often used by men (Moeran 12).The first-person pronouns “boku” and “ore” are a purely male, “washi” (now rare) is also typical masculine, the rare first-person pronoun “ataku-shi” is purely female, more frequent “atashi” is also common for women. Differences in the use of pronouns are quite stable, even for students, who are prone to violate general rules; these are “prototypical gender-specific indicators” that are being preserved even in more formal styles, such as television interviews, where other differences may fade (Tanaka 133).The difference in the use of forms of etiquette politeness is also noticeable in the written language. Sometimes a specific essay genre of “Writing Housewives” can be singled out (letters to newspapers and magazines, often on free topics). Feature of these works are the use of address polite forms and expressive modal-particles (Kumagai 183).

The authors of such essays as if talk to an unknown person, using colloquial words and grammatical forms. Men usually do not write so, although the use of standard polite forms of address with the suffix – mas is often found in the texts composed by men.Statistically the distribution of roles in the dialogue also dominates. As a rule, one of the participants plays the key role in dialogue: he selects a topic, moves from one topic to another, asks various questions, interrupting the conversation. Sometimes it happens that the parts exchange their roles, but if one of the participants of the dialogue is senior, then he usually remains a leader from the very beginning and till the end. The aforementioned aidzuti (so-called “echoing”), not in a hundred percent of the cases, but is often used by a subordinate member of a dialogue that helps the narrator.

In the Japanese dialogue the role of the subordinate party is often reduced to aidzuti and answering questions, sometimes to the complementing the narration interlocutor, who is free to interrupt the subordinate party any time (Tanaka 99, 104). It is also possible to select less explicitly marked means of domination in the dialogue: the choice of vocabulary, evasion of a direct answer, and others.As shown by many observations and experiments, most women find themselves in a subordinate position in relation to men. During one experiment, the subjects of both sexes were randomly broken into pairs and suggested conducting an open-ended conversation. The entire experiment was secretly recorded, and it turned out that in all pairs the leading role belonged to men. And during public dialogues on television (interviews, talk shows, etc.

), men use to speak and express their opinion, and women’s role is reduced to aidzuti.


You have to live in Japan for several years to understand that Japanese politeness is not reduced to low bows, which seem quite ridiculous in contemporary street crowd or on the platform of the subway, and not a custom to start a conversation with a set of meaningless phrases. Japanese politeness is primarily the desire of people to cherish the dignity of each other. It is a special art to avoid situations that could humiliate somebody. Japanese politeness is not only faithfulness to certain moral principles of respect.

This is the norm of proper conduct, embedded in everyday life with the edge of samurai sword. The politeness is a good feature, however Japanese politeness and their unique style of communication make their international negotiations complicated that is not beneficial for business. In contrast to for example Chinese, Japanese lack efficiency, flexibility, and deal-making skills. Chinese overseas manage to retain their cultural and business distinctiveness, through slow integration with host countries. However Japanese also display a number of strengths such as professional talents, transparency, successful growth, and succession planning.