Japan Briefing: How to play the game of business

The Japanese are keen on etiquette. Miki Munakata on why it's worth learning
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The Independent Online
DOING business with the Japanese is all about good communication. Americans put forward a business proposal as soon as the first cocktail arrives, while the British may start after coffee. But it will only be possible to start talking business with your Japanese counterpart after the third lunch.

"Do not expect a quick agreement. It takes time to form solid relationships which will lead to profitable relationships," says Bonnie Williams, managing director of Waterbridge International, a London-based consulting firm specialising in international management. Born of American missionary parents in Japan, Ms Williams lived there for 20 years. After working with JP Morgan in New York, Tokyo and London, she set up her own business in London. "I am told that my business approach is more British than American. I think it's because of my Japanese upbringing.

"Japan is a big market and a big trading partner with which you want to work effectively," says Tony Bates, executive vice president of EMI International. "When you do business with the Japanese, the most important thing is clear communication. It's harder than some other places, but you have got to invest time and energy."

Japan has been Britain's second largest export market outside the European Union since 1989. In 1995, British exports to Japan grew by 26 per cent; in 1996, exports were worth over pounds 4.3bn. According to ONS business monitor, the UK's main direct investments in Japan in 1996 were in the electrical engineering and chemicals industries, accounting for pounds 800m and pounds 600m respectively of the pounds 2.4bn total. Over 300 British companies have a base in Japan. "The changing structure of the Japanese economy means there are increasing opportunities," said Sir Michael Perry, chairman of Action Japan, a campaign run by the DTI.

Japanese investment in Britain is far larger: pounds 6bn in 1996, of which financial services accounted for pounds 4bn. Next largest were distribution services at pounds 900m and electrical engineering at pounds 700m. Nearly 1,000 Japanese companies now operate in Britain.

According to Ms Williams, there are many similarities between the Japanese and the British. Both nations, she says, see the need to be properly introduced, socially and in business. Both are reserved, modest, and indirect, but many British companies experience frustrations, especially when it comes to communicating with possible Japanese partners.

The Japanese decision-making process is probably the biggest mystery. "Understand who is more senior, who gets served meals first, how to relate to them," says Ms Williams. "It is important to establish this at the beginning." But consensus matters as much as hierarchy: the British tend to discuss details first and then come to an agreement, but the Japanese reach a consensus first and discuss details later.

"The Japanese rarely have any discussion and debate in the meeting itself," says Ms Williams. "In the West we are told to find the decision-maker and convince him or her, and then you will get the deal. In Japan, there is rarely one decision-maker, and it is usually not the top man. He will rely on his lieutenants to feed him worthwhile proposals. But once consensus is reached, things can move very fast." As the number of Britons working for Japanese companies grows, it is equally important for expatriate Japanese managers to understand how to manage their workforce. Western habits of debate and voicing opinions are unfamiliar, and can be a cause of frustration for both sides.

Tatsuo Minamino, London accounting manager of Casio, the electronics company, said: "The British style of debate can create a conflict between the Japanese working in Britain and their British colleagues, which can also lead to misunderstanding in the Japanese headquarters. We have to compromise at some point."

Nobuo Shimizu, manager of Sony Europe Finance, who has been working for nine months in England, said: "When you give a task to a British employee, they do just what they are told. The Japanese usually try to understand what their boss is expecting before they are told. If they fail to do their job in time, they stay back to complete it, because making excuses is unacceptable and offensive in Japanese society. Managers have to take the initiative in telling their British employees what they have to do, whereas in Japan, the managing director doesn't need to give employees a lot of directions in the Western sense of managing."

All the British businessmen and women with experience of Japan stressed the importance of preparation. While you don't need to speak Japanese, they say, you should understand something of Japanese society, such as the education system: discussion is not encouraged in the classroom, for example.

"I don't think the Japanese want Westerners to copy the Japanese way of business," says Ms Williams. "The most important thing is to appreciate Japanese values, and respect the way they communicate." Due to their homogeneity, the Japanese communicate more by body language than verbally. The signals can be subtle, but one should be able to read them.

The use of language can also cause misunderstanding. To the Japanese, saying "yes" just means that they are listening, not that they are agreeing. "The Japanese don't commit to something until it is absolutely certain and serious," says Mr Bates of EMI. "So you have to understand the differences in language." Christopher Jackson, managing director of Euro Japan Marketing in Tokyo, agreed. "The problem for the British side," he said, "is knowing what Japanese companies are thinking in terms of strategy. It is difficult for Japanese to say they are definitely not interested in a proposal. It's hard to read the signals."

Like several others, Simon Cunningham, representative director of Cable and Wireless in Japan, emphasised that building relationships was paramount. "I think the British and the Japanese can work together, due to their natural affinity in terms of history, and believing that personal relationships are as important as business ones. The most important thing is to establish credibility."

Miki Munakata is a Japanese freelance journalist living in Britain.

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