On one hand, business in Japan seems very modern; on the other, the Japanese economy still has a sense of the spirit of the samurai and the influence of Zen Buddhism. The business culture in Nippon in some ways differs so strongly from our practices that misunderstandings often arise. In today’s blog post, you’ll learn what to keep in mind when it comes to business relationships.
Social relationships play a major role in all spheres of life in the Land of the Rising Sun, and thus also in business. Business is only seldom possible without having created a trusting foundation. The success of an undertaking is thus significantly dependent on how successful relationships are established and maintained both within a company and with external partners. Work in and between Japanese companies is contingent on long-term planning. Business deals are consequently not viewed as individual transactions in most cases, but rather as lasting commitments.
A good business relationship should thus last a lifetime. With that said, relationship aspects have priority over material aspects. Mutual trust holds a much higher status than contractual assurances, as the mere existence of a business relationship mandates adherence to agreements.
From soto to uchi
Establishing the right connections is not easy. You first have to get from soto to uchi, i.e., from the outside of the group to the inside. To that end, you have to find access to the right groups. The competitive spirit is very pronounced in Japan, as domestic companies take great pains to outpace their rivals. It’s therefore relatively difficult for foreigners to gain traction on the Japanese market. Nevertheless, intensive trade relations have existed between Japan and foreign countries for many years, so the effort obviously appears to be worth it.
Not only does work have a significant importance, but so does the time after work. Free time is often spent with others – with colleagues or business partners – and there’s a compelling reason for this. Parallel to the relevance of social connections, mutual enjoyment has an immense significance in Japanese business. A harmonic and positive atmosphere between all parties is extraordinarily important. Evening drinks or visits to karaoke bars offer a perfect opportunity to establish this atmosphere.
This allows business partners to get to know each other better in a relaxed setting. It’s how Japanese people check whether their counterparts are reliable, honest and trustworthy. The personal relationships that emerge in this way provide a good foundation for potentially difficult negotiations.
Be well prepared
Diligent preparation is crucially important to the success of your undertaking in Japan. It’s consequently recommended to invest time and patience in research and to gather extensive information on the Japanese company, the industry, the market conditions and trends and developments. Mutual acquaintances make good sources, and they could possibly also function as mediators.
Incidentally, there are some interesting festivals that are celebrated in Japan in July [e.g., Tanabata – the Star Festival – which takes place on July 7]. Comment on this celebration to your business partners; they’re sure to be pleasantly surprised by your knowledge of Japanese culture. Other useful information for business success in Japan can be obtained in our cross-cultural training on Japan.