The Canadian Chamber of Commerce in Japan - Doing Business in Japan
- an Insider's Guide
Japanese Culture and Society
Japanese society has a reputation for exclusivity, both in the
Western press and among Japanese intellectuals who wish to emphasize the
"uniqueness" of Japanese society. Examples abound of the seemingly vast
differences between Japanese and Western culture, and the contradictory
nature of Japanese culture, leading Westerners to despair of ever
understanding Japanese society, let alone doing business there.
Explanations as to why our cultures have developed differently also
abound, in many cases with limited practical utility for the foreign
businessperson. Gregory Clark, chancellor of the Institute of Developing
Economies Advanced School and professor of Japanese Studies in the
Faculty of Comparative Culture at Sophia University in Tokyo, agrees that
differences in approach do exist, and offers a theory as to why modern
Japan has developed the way it has and how Western businesspeople can
use this knowledge to manage their Japanese operations successfully.
The main problem in explaining the Japanese is the fact that almost anything said
about them can be easily contradicted. For example, it is often said that the Japanese
are a rigidly hierarchical people; yet the essence of good Japanese management is
supposed to be its egalitarianism. Many see the Japanese as a highly disciplined
people; yet the Japanese see themselves as a highly emotional people given to excessive
mutual dependence (amae) in their relationships. Indeed, the ease with which emotional
moods and "shocks" sweep across the nation is a key characteristic of the
Japanese. Some see the Japanese as a highly progressive people; yet it is easy to
find examples of extreme conservatism - the Japanese have yet to adopt daylight saving
time, for example.
The Japanese can be extraordinarily polite at times. Still, they are reluctant to
admit, let alone apologize for, war guilt. The Japanese have a reputation for exclusivit
attitudes to foreigners, but in some ways Japan is one of the most open societies
in the world. Today, for example, it is not uncommon for foreigners to be asked to
join government policy advisory committees, something that would not happen in the
West. And when it comes to openness to outside ideas and culture, no other large
nation can even begin to match Japan.
And so on. Some say the Japanese lack a proper sense of morality. Yet most foreigners
living in Japan for any length of time have stories of lost valuables being returned
at great effort by honest citizens. Usually the Japanese are quite hardworking, but
at times they can be lazy - university students are renowned for treating their four
years of study as a holiday camp. The Japanese like to tell us they are a society
which emphasizes wa or harmony; yet some very unharmonious farmers have blocked vital
construction at Narita airport for more than ten years. Even the one seeming absolute
of Japanese society, the strong group instinct, is contradicted by occasional examples
of extreme individualism. In 1984, a U.S. academic who was impressed by Japanese
enterprise management wrote a paper entitled "Joy on the Factory Floor."
A few years later, a foreign researcher here published an article with the headline,
"Fear in the Factory." Is it possible that both could be right?
Why are the Japanese the way they are? Assuming that there is something unusual
about Japan, then there must be a reason for that something. The standard theories
do not help us much - that the Japanese are as they are because they grow rice, because
they eat rice, because of the climate, because they live on crowded islands, because
they enjoy some allegedly unique homogeneity. Nor can we simply ascribe perceived
differences to a broad concept of Oriental culture. Many Westerners who have lived
and worked in the East find it easier to relate to Chinese and Koreans than to Japanese.
The former are much closer to us in their liking for logic, principles, debate, ideology
- the rationalistic approach - than are the Japanese, and they are more individualistic.
Most attempts to define the Japanese concentrate too much on secondary features.
It is like trying to say that a fish is fundamentally different from a land animal
because it has a particular breathing or blood system, when the primary difference
is the fact that it lives in a watery environment and has adjusted to that environment
in various ways. Some of those adjustments involve breathing and blood circulation,
but there are many others. And ultimately, the fish is not all that different from
It is not a question of the Japanese having some quality that sets them absolutely
apart from all other peoples; as human beings we are all basically the same. Rather,
it is a matter of the Japanese operating as human beings in an environment or social
dimension different from that in which most Westerners prefer to operate. We non-Japanese
prefer a more rationalistic environment, one where principles, universalistic ideologies,
and reasons are emphasized. The Japanese prefer something less rationalistic, something
similar to the more "instinctive," practical, and emotional values that
all of us use in small primary groups: the family, village, team, or tribe, for example.
To put it another way, when we are with our families, we all behave like the Japanese,
even if in a much simpler and less refined manner. We are all group-oriented. We
have one attitude for those outside our group and another for those inside - the
allegedly unique soto-uchi phenomenon found in Japan. We employ such "Japanese"
techniques as instinctive communication, implicit obligations, situational flexibility,
and mutual dependence (amae). We do not emphasize such rationalistic tools as law,
contract, or scientific planning. We prefer rules to principles, mood to logic, custom
and convention to universalistic ideology. We combine arbitrary hierarchy with genuine
egalitarianism. We exclude outsiders, but not their ideas. We differentiate sex roles.
We cooperate naturally with each other for common goals. We instinctively concern
ourselves with the long-term welfare of the group, rather than shortterm gains. In
short, we behave just as the Japanese do.
However, when we leave our family group and go into the factory, the university,
or any other large secondary group, we non-Japanese do not continue to behave in
this familial, instinctive manner. We tend to prefer a more principled, logical approach,
what some would call a more rationalistic approach. The Japanese, on the other hand,
continue to act as if they were still in a small, primary group situation. To put
it more precisely, they refine the more instinctive values and attitudes that we
all use in small primary groups and adapt them for use in their secondary groups.
To date we have tended to see this as backward and illogical. But some of us are
now discovering, via Japan, that this approach has its own practical and emotional
logic at times.
Why are the Japanese like this? I prefer to turn the question around and ask why
the rest of us prefer the rationalistic approach. Or to go back to the fish analogy,
instead of asking why the fish got into the water, we should ask why the other animals
wanted to get out of the water. We all begin by operating in the instinctive dimension.
Maybe something happened to the rest of us to push us away from that dimension, something
that did not happen to Japan.
Perhaps one clue can be found in the relative lack of war and conflict with foreigners
that the Japanese have enjoyed throughout much of their history. As an island nation
close to the Chinese mainland but distant from Europe, Japan was in the almost unique
situation of being able to absorb the advanced, rationalistic civilizations of China
and then the West without being attacked or dominated by either. So Japan was able
to evolve without having to change its original "primary group" approach.
Or to put it another way, it did not need to move to a more rationalistic approach.
Today, we non-Japanese assume that our more rationalistic approach was the natural
result of our desire for progress. In fact, the need to prepare for and survive conflict
with foreigners could well have been the main factor forcing the peoples of the Eurasian
continent to move quickly to more rationalistic values, including the development
of powerful universalistic ideologies. Japan was not put in this position, so it
simply retained the values and attitudes of its original tribal-village society.
Over its long history, it refined these values to create a feudal society. Up until
the middle of the nineteenth century, the Japanese saw no need to take the next step
and embrace the more rationalistic values that most other countries used for the
creation of the unitary nation state.
Even today, much of what we see in Japan is simply a continuation of the mores of
that original village or feudal society. The Japanese refer to their mura-ishiki
(village consciousness) to explain the closed nature of their groups. Most firms
or groups of firms like to think of themselves as familial groups - thus, we see
references to the "Matsushita family" and the like. Concepts such as lifetime
employment and keiretsu (affiliated companies) are basically feudal in nature; the
individual or the enterprise "belongs" to the larger group just as in the
past the individual and village belonged to the feudal fief or han. Some would argue
that current Japanese attitudes to women are also feudal.
In the West, many assume that village/feudal attitudes cannot possibly go hand in
hand with modern industrial progress, that the Japanese are in effect dissembling
when they talk about muraishiki, and that they will use any pretext to justify their
exclusivity and their claims to cultural uniqueness. They are not pretending. What
is more, the Protestant ethic of northern European societies -the British Isles,
Germany, the Netherlands, Scandinavia, and extending to the United States, Canada,
Australia, etc. - owes its origins to a rather similar history of village/feudal
development. These societies, like Japan, were for most of their history fairly isolated
from the cultural mainstream of the Eurasian continent; they too retained feudal
features until quite recently, and were slow to embrace rationalistic values. The
early industrial progress in those countries resembled in many ways what we see in
Japan today. Like the Japanese, the northern European people have, or rather had,
a natural attachment to the workplace, a willingness to cooperate with others in
the workplace, and a tradition of craftsmanship. In more rationalistic societies,
these qualities do not emerge easily or automatically.
Great Britain, which enjoyed island isolation and was able to adopt aspects of continental
European rationalistic civilization at its own pace, comes closest to the Japanese
model. Many traditional British attitudes have Japanese equivalents - pragmatism,
attention to detail, rules and conventions, and a lack of strong ideological dogmas
and convictions, to name a few. This may be why the First Industrial Revolution occurred
in Britain and the Second Industrial Revolution is now occurring in Japan, rather
than in other countries with much stronger traditions of scientific and other intellectual
achievement. This could explain why modern Japanese enterprise management exports
so well to the rural areas of Anglo-Saxon societies, and why the management of American
firms only a generation ago was so similar to what we see in Japan today.
By contrast, the peoples of the Eurasian continental societies exposed to conflict
- China, India, the Middle East, and southern Europe - place more emphasis on principles
and ideological absolutes. They would find it hard to accept the ideological looseness
of the Japanese. The average Japanese is born into a secular, Westernized world,
is educated in a vaguely Confucian morality, has a Shinto wedding (or, perhaps, a
Christian ceremony), works in a capitalist enterprise, and is buried with Buddhist
rites. Few seem even to be aware of the contradictions involved, a major difference
between Japan and the Sinitic cultures of Asia, which are sensitive to ideological
This is not to rule out entirely the role of Chinese Confucian, and to some extent
Buddhist, factors in molding the Japanese personality. They may also have contributed
to Japan's progress. As an ideology born in feudal China more than two thousand years
ago and refined to allow the organization of a large continental civilization, Confucianism
may well be superior to many of the more religious or political ideologies that the
rest of the world prefers. But it is far from being the deciding factor in Japan.
For example, Japanese society plays down the emphasis on blood relations as the principle
of group formation found in other Confucian societies. In its place is the assumption
that you will cooperate closely with whomsoever happens to be around you in a group
situation. This represents a major divergence from the Chinese approach, with obviously
favorable implications for enterprise productivity.
The concept of the Japanese operating in a different psychological dimension can
also help to explain some of their seeming contradictions. Thus, it is not a matter
of them being kinder or crueler, more moral or less moral than the rest of us. Rather,
it is a matter of them having much the same qualities as the rest of us, but expressing
them differently. For example, when the more "instinctive" morality of
the Japanese makes them assume automatically that lost property should be returned
to its owner, we are impressed. But when the same morality allows them to ignore
principles emphasized by our more rationalistic moralities, we are dismayed - as
in their tolerance of political corruption, for example, or their attitude to war
crimes. The Japanese are often just as bemused by our contradictions - for example,
they cannot understand the scrupulously principled, contractual Western businessman
with a take-it-or-leave-it attitude to quality or service.
Or take the hard work versus laziness contradiction. Those of us who prefer the
rationalistic dimension rely on what we see as logical incentives to get people to
work hard - money and promotion, intellectual challenge, penalties, and so on. When
those incentives work properly, productivity can be higher than in Japan. But as
we see only too well today, there are also times when they do not work very well.
It is not always easy to apply rationalistic incentives effectively in the modern
The Japanese rely on more "instinctive" incentives. They start with the
natural cooperativeness of the group. They then create emotional challenges, real
or artificial, to motivate that group, in the process relying on both joy and fear.
This approach may not work well at times - in the universities, for example. But
in enterprises, it works very well indeed.
Some see higher education, technology, organization, and skilled management as the
keys to Japanese enterprise productivity. But in many cases these are the results,
rather than the causes, of that productivity. People who want their group to survive
will go out and obtain whatever skills are needed to survive. That, after all, is
the way guerrilla armies defeat large conventional armies. Guerrillas, incidentally,
are close to the ideal as an example of "instinctive" values in action:
Their skills are not developed in universities or management courses; rather, they
are the results of practical wisdom growing out of that most powerful of all instincts
The other strong advantage Japan has in the area of the work ethic is the village/feudal
concept of one's work being the main purpose of one's existence. The butcher exists
in the society because he is a butcher, the baker because he is a baker. Both take
for granted that they should do their allotted tasks to the best of their ability
simply to maintain their place and role in society. This concept survives from an
advanced feudal society, one incidentally that northern European societies also had
Other positive aspects of the more "instinctive," or village! feudal,
approach of Japan include political stability, a low rate of crime against the individual,
a lack of litigiousness, and pragmatic openness to outside ideas and applied technology.
Areas where the Japanese approach works less effectively include intellectual creativity,
diplomacy, the rights of women and minorities, service sector productivity (where
there is too much emphasis on service and not enough on efficiency), and the scientific
as opposed to the practical approach in research and planning. To some, these negatives
may outweigh the positives. But when it comes to the creation of a modern industrial
society, the Japanese approach would seem to work as well as most. And when it comes
to creating powerful manufacturing export industries, it can be argued that the Japanese
approach is clearly superior.
How can all this be related to the practical problem of doing business in Japan?
Perhaps the most important conclusion is the concept of the Japanese as emotional
and nonrationalistic. For example, it is often said that business in Japan revolves
around human contacts, to which experienced Western businesspeople reply that when
it comes to the bottom line, all business is the same and human contacts become secondary.
But Japan really is an exception. Japanese firms may pass up the chance to buy at
lower prices or to sell at higher prices in order to maintain long-standing ties
with old customers. The emphasis in Japan on keiretsu connections, school and university
ties, close business-bureaucracy links, factional politics and so on, is not the
result of some government policy to create an artificial "system" to run
Japan. For the Japanese it is the natural way to do business.
This more emotional, nonrationalistic approach explains many of the other peculiarities
of doing business in Japan. For example, in any non-Japanese society, few consumers
would succumb to the entreaties of a door-to-door car salesman when they know they
can buy the same car more easily, with more choice and almost certainly at a discount,
from a nearby showroom. But in Japan, many consumers will be impressed by the "sincerity"
of that salesman and buy the product offered at the price quoted. This lack of price
consciousness and weakness to emotional mood was behind the extraordinary popularity
until very recently of grossly over-priced European fashion goods in Japan. High
price was associated with high quality and scarcity value. As the sales chief for
a popular jeans company said when asked why his company's jeans sold in Japan for
well above their price overseas: "Japanese do not like cheap prices."
This emotionalism also explains the seeming exclusivity of Japan. The Japanese have
a simple "onion-ring" approach to relationships. Individuals see themselves
as surrounded by rings of human contact extending outward from the ego center - family
and close friends are in the first ring, then work colleagues, school colleagues,
industry or regional groups, and so on, with the final and outer ring being the Japanese
nation. Almost automatically then, the individual will give priority to someone within
a closer ring over someone further out. Thus, the foreigner outside the onion altogether
gets lowest priority - a fact well illustrated by the Japanese habit of using the
term gaijin (literally, "outside person") to describe foreigners.
But the foreigner does not have to remain forever outside the outer ring. A foreigner
can move into one of the rings by joining a group within Japan. When that happens,
the Japanese within that group will give that foreigner priority over any Japanese
outside the group. Those foreigners with long residence in Japan who have been drawn
deeply inside the rings may be treated almost as if they were Japanese.
Even without major efforts to break inside one or other of the rings, the foreigner
can be favored. Many Western businessmen, confronted by the seemingly tight wall
of keiretsu groups and ties to long-standing suppliers or buyers, assume that Japan
is an impossibly nationalistic country in which to do business. But as with the other
contradictions in Japan, the Japanese attitude to foreigners has two sides. It's
true that the instinctive approach can at times produce an almost unreasoning rejection
of anything that is different (a rejection that applies as much to Japanese who are
different as to foreigners, incidentally). But that same instinctive
approach can just as easily work in the opposite direction. The Japanese can decide,
for example, that foreigners are interesting and important just because they are
so different. Emotional, mood-based curiosity has in the past been a major factor
in the success of foreign products in Japan. Curiosity about foreigners in general
can often help the foreigner businessperson get through doors blocked to Japanese
equivalents. At times the desire to avoid angry foreign reactions has also been a
factor - the gaiatsu, or "foreign pressure," factor - in forcing Japanese
concessions on trade.
That said, success in Japan ultimately depends on getting "inside the ring,"
so to speak. Somehow you have to find a way to make the Japanese regard you as an
insider rather than an outsider. Japanese learn very quickly to distinguish between
fly-by-night Westerners and those committed to the long haul. Efforts to learn Japanese
and a willingness to invest heavily in staff and buildings are seen as firm evidence
of "sincerity" and commitment (the Japanese obsession with quality and
after-sales service is important for the Japanese not so much in itself but as visible
proof of "sincerity" in business relations). In personal relationships,
the foreigner who can always maintain a smiling, "sincere" disposition
will do better than the so-called rikutsuppoi foreigner - someone who is always worrying
about principles or trying to argue small points of logic.
The same factors are also important in the handling of staff. Many foreigners assume
they cannot hope to get the same loyalty from Japanese employees as Japanese firms
can. They are wrong. Obviously anyone setting up business in Japan - Japanese or
foreign - has trouble at first in attracting good people. But often foreigners have
the advantage of curiosity value; many bright young Japanese are attracted by the
foreign image and the chance for foreign experience. Foreigners are also better placed
to take advantage of the large pool of intelligent female labor largely overlooked
by Japanese firms. Provided foreign employers show the right "sincerity"
toward employees, they will earn the same highly productive loyalty that most Japanese
It is crucial that employers avoid the hire-and-fire approach now so popular in
the West. Even if used only in an emergency, it breaks down the familial togetherness
of the enterprise group. Foreign managers should also avoid the mistake made by many
foreign firms in the past, namely hiring people simply for their ability to speak
English and get along with foreigners; these people may not be otherwise suited to
the work, and may lack the qualities necessary to get on in Japanese society. Like
their Japanese equivalents, foreign employers must try to feel that they are establishing
a collective - an unmei kyodotai, or a "community bound by the same destiny"
- that will work together over the long term, sharing both the failures and the successes
of the enterprise.
Many assume that the younger generation of Japanese no longer share the emotional,
rather feudalistic, attitudes of the older generation toward employment. And it is
true that in some financial sector industries there are young Japanese with a "dry,"
take-it-or-leave-it rationalism. But most young Japanese still see the workplace
in emotional terms. True, they no longer have the feudal attitude that once made
loyalty to the workplace automatic, but they still want to see the workplace as a
sort of "club" where they can find good friendships, where they can enjoy
prestige and bask in the good "image" of the company, and where to some
extent they can enjoy paternalistic welfare. Japanese companies now devote enormous
resources to "image" creation. Recruitment videos show company jazz bands,
trips to Hawaii, evenings out drinking with work colleagues, and soon, with almost
no mention of salary or career paths.
The main thing to remember in Japan is this: Beneath the veneer of complexity and
sophistication, Japan is really a very simple, emotional, almost naive, society in
which straightforward, uncomplicated attributes can be highly effective. Some of
the most popular foreigners in Japan are Mormon ex-missionaries who have stayed on
in the country.
A brief but true story says it better than I can. It concerns a tough-minded, aggressive
American baseball team owner of the 1980s who had ruthlessly hired and fired in a
bid to get his New York team to the top. An American television interview with him
had been dubbed for broadcast in Japan, and at the end of the interview the owner
was asked for his philosophy of life, which was, predictably: "Nice guys finish
last." The Japanese translator
dearly could not understand this, but assumed it had a positive meaning. In Japanese
it came out as: "The nice person struggles through to the very last." Consider
that as a philosophy for doing business in Japan.