Last updated 27 November 2013 Posted in Asia Pacific, Countries

  • Official country name: Japan
  • Size: 377,944 square kilometre (145,925 square mile)
  • Population: 127,368,088 (2012 est.)
  • Internet TLD: .jp
  • Calling code: +81
  • GDP: 4.616 trillion dollars (36,179 dollars per capita)
  • Major import partners: China, The United States, Australia
  • Major export partners: China, The United States, South Korea
  • Currency: Yen (¥) / En (円 or 圓) (JPY)

Key value rankings

  Score Ranking
KOF index of Globalization 64.13 55
Quality of Living 7.392 17
World Competitiveness index 5.40 10
Gender Empowerment Measure 0.557 54
Ease of Doing Business index   24
Power Distance index 54  
Individualism vs. Collectivism 46  
Masculinity versus Femininity 95  
Uncertainty Avoidance 92  
Long-Term Orientation 80  

Business skills

Japan, known as ‘the land of the rising sun’, is famous for its innovative technologies, sumo wrestlers and fish dishes. But what about business etiquettes such as Meishi (handling business cards) which is very important when doing business in Japan. Business cards are exchanged and received holding the card with both hands. When receiving a card, it needs to be examined closely as a sign of mutual respect. This is just one example of many elaborate Japanese business etiquettes. Doing business in Japan requires adaptation and study in advance.

Country specific communication

‘Wa, Kao and Omoiyari’ literally translated as ‘Harmony, Face and to imagine another's feelings’ not only contribute to the Japanese culture but also play a part in the negotiation process. Before negotiations will even start it is very important to build a relationship; not simply a business relationship between companies but also a personal relationship between representatives. Keep in mind that this also means the relationship between an interpreter and your Japanese business partners. Business will not start before a trustworthy relationship has been built with all the business representatives. ‘Wa’ and ‘Omoiyari’ stand for this relationship in which trust, teamwork, mutual feelings and the preservation of good relationships will withstand even when opinions differ. A business presentation in English will need more preparation because English is not a commonly spoken language. Bringing written text to support your presentation, using key words and repeating short clear sentences will help to get the message through. Do not be mistaken when it seems that the message has been understood. Saving face (‘Kao’) is so important in Japanese culture that people will not openly admit if they do not understand what you are saying.

The following aspects should be kept in mind when visiting Japan. During conversations negative emotions are often covered with a smile. Furthermore, it is advisable to keep your tone down during business and lunch meetings. Also, restrict body language and non-verbal communication. Both can send the signal that you are not in control of yourself. Keep eye contact to a minimum until personal relationships have been established. Lowering one’s eyes is a sign of respect.

Listening styles

‘Hear one. Understand two’; a common phrase in Japan, a reminder to always look for the hidden meanings. Words are not always the best way to express feelings. But feelings are a good way to sense whether you can rely on people. The Japanese are listeners rather than talkers. This does not mean that nothing happens during silence; it can mean different things. The Japanese may sit in silence for some time, thinking about what has been said. They just do not signal this during this silence. These types of pauses are called ma.

Argumentation styles

The Japanese tend to be indirect when it comes to argumentation in meetings. They do not want to be offensive in the spoken word, but with the help of non-verbal communication it will become clearer what the exact message is.

Decision styles

Though it would seem that it is the most senior manager who makes decisions, the decision making process actually involves many stakeholders. Contracts are thoroughly researched and discussed between all stakeholders. The Japanese are somewhat reluctant to take risks and these should therefore always be explicable and kept to a minimum.

Management of hierarchy characteristics

Japanese companies have often started as family businesses; many companies are still controlled or greatly influenced by the founding family. It could be said that joining a company is almost like joining a family. As one starts a career the choice of company is more important than the position because for most people it is the choice of their lifelong employer. Top positions are almost always filled internally. Before ideas/concepts can reach the top they need to have been pushed through middle management, getting approvals from all levels; this is a long-term process.

Because of the family/collective nature and the decision making process of Japanese companies, the focus is mostly on the long term interest of the company and the aim is to continually expand wealth and growth potential. There is a high regard for experience and skills, therefore hierarchy is based mainly on seniority.

Decision styles

As Japanese values differ greatly from those of the West it is crucial to be aware of your own behaviour. In a high context culture such as Japan a Westerner must be especially aware of his or her non-verbal communication which will mostly be interpreted differently than intended. Direct and assertive behaviour, not to mention confrontation, are not appreciated; modesty and shyness are revered. The need to save face leads to constant pressures. Seniority plays an important part and the key decision makers are all senior and in important positions and the vast majority are men.

Negotiation teams

Japanese managers want to talk to business partners on the same hierarchical level and it may be considered an insult to send someone from a lower level. To get your idea/offer to reach the decision makers in senior management it is crucial to get in at the highest possible middle management level. As age equals rank in Japan it would be advisable to bring an older colleague. Business meetings will almost always be attended by several people so it would be preferable to have at least three people present, if only to indicate that you take the meeting as seriously as they do.

Contracts, legal concepts

Japanese contract law is mainly based on the Civil Code, which defines in general the obligations and rights of the parties involved. According to this theory the contractor is required to complete the work of a construction at an agreed price and the contractor bears the risk of all expenses up to the completion of the work.

Authors: Daniel Andrade, Rafael Goceryan & Berit Mulder