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59 Seiten, Note: 1,0
List of Abbreviations
List of Figures
2 Japan and its Economy
2.1 Geography and Demographics
2.2 The Japanese Economy
2.2.1 The Economic Development after WWII
2.2.2 The Economy in Crisis (1990-2011)
2.2.3 “Abenomics” (since 2012)
2.3 Importance of the Japanese Market for Western Economies
2.4 Trade Barriers between Japan and Western Countries
3 Understanding the Role of Culture in Business
3.1 Definition of Culture
3.2 Elements and Manifestations of Culture
3.3 Influences of Culture on Management Functions
4 Analysis of the Japanese Culture
4.1 Hofstede’s Dimensions
4.1.1 Power Distance (PDI)
4.1.2 Individualism (IDV)
4.1.3 Masculinity (MAS)
4.1.4 Uncertainty Avoidance (UAI)
4.1.5 Long-Term Orientation (LTO)
4.1.6 Indulgence vs. Constraint (IND)
4.2 Hall’s Dimensions
4.2.1 High-Context versus Low-Context Communication
4.2.2 Time Orientation
4.3 Lewis Model of Cultural Types
5 Japanese Culture in Business
5.2 Business Relations and Loyalty
5.2.1 Establishing contact
5.2.4 Decision Making
5.2.5 After Hours
5.3 Women in Japanese business
5.4 Western business women in Japan
5.5 Lifetime Employment
5.6 Business Ethics
5.7 Japanese Business Etiquette
5.7.1 Business Cards
5.7.2 Addressing the Business Partner
5.7.3 Dress Code
5.7.4 Gift Giving
5.7.5 Personal Habits
6.1 Preparation of Western Contacts for Japanese Business
6.1.1 Necessity of Preparation
6.1.2 Failures in Preparation
6.1.3 The Language Barrier
6.1.4 Assistance by the Japanese partners
6.2 Behaviour at the Workplace
6.2.2 Meetings and Decision Making
7.1 Benefits of Preparation
7.2 Steps of Training
Appendix A: Table Hofstede Analysis
Appendix B: Table Women in Business
This thesis deals with the adequate preparation when planning business endeavours with Japanese Companies. As Japan is the second largest market in Asia and one of the strongest markets worldwide, it is an important trading partner for Western countries. Many companies, when attempting to move into the Japanese market, run into difficulties that derive from wrong expectations and misunderstandings. These difficulties can be managed with decent preparation. Therefore, the objective of this thesis is the elaboration of a training program based on an analysis of the Japanese business culture.
To achieve this goal, we combined a profound categorization of the Japanese culture with interviews we conducted with people who have gained experience with the Japanese business culture in order to identify possible obstacles on the one hand and determine best practice preparations and to derive an exemplary training program on the other.
The categorization of the Japanese Culture using dimensions introduced by Hofstede, Hall and Lewis, and a profound analysis of the business culture show the key differences between the Japanese and Western business cultures with respect to main sources of conflict in intercultural communication that can be challenging for Western business partners. This establishes the need for preparation. In our interviews we focused on the training the Western contacts had received prior to their first business endeavours with Japanese companies. The results prove that the interviewees consider training to be necessary, and that a profound training eases the entry into Japanese markets.
The results of the different parts of the thesis provide the foundation of an exemplary training program designed to simplify the transition for businesses intending to expand in the Japanese market. This training program combines extensive general culture and language orientation that help easing the transition with a focus on Japanese idiosyncrasies in business. The key elements include the unique characteristics of communication in Japanese business. This training program will improve cross-cultural communication and thus mutual business relations.
Abbildung in dieser Leseprobe nicht enthalten
Figure one: Map of Japan
Figure two: The Levels of uniqueness in human mental programming,
Figure three: The “Onion Diagram”: Manifestations of Culture at Different Levels
Figure four: Influences on Management Functions
Figure five: Japan in Hofstede’s Framework,
Figure six: Lewis’ Cultural Categories
Figure seven: Steps of Training
With international markets and nations constantly growing closer economically and socially, cross-cultural understanding becomes even more important. Japan has one of the strongest economies on earth and is an important business partner of Western nations. A better understanding between the countries can further improve the business relations and facilitate the expansion of bilateral trade relation. Therefore, the purpose of this thesis is an analysis of Japanese business culture with the intent to prepare Western business people for business with Japanese partners.
In order to achieve this goal, we established the need for an understanding of cultural differences by examining the importance of the Japanese market, as one of the strongest markets in Asia by showing its transformation in the last 60 years into a strong market for international import and export as well as and the current struggle to change the economy in order to grow even stronger in the future.
In a second step we establish a comprehensive analysis of the cultural differences between Japan and the West. To achieve this, one needs to understand the concept of culture in business and see the influences it has on basic business operations. This basic insight on how one’s cultural background influences communication, decision making and other management functions will be needed when analyzing the Japanese business culture in detail.
The analysis of the Japanese business style is split in two parts. The first part relies on the dimensions set by Hofstede, Hall and Lewis in order to categorize the culture as a whole. The dimensions give a profound understanding of the countries values, standards and behaviour norms. These analyses will give the Western business person an understanding of how partners from Japan will behave in different situations and what kind of behaviours are to be expected when it comes to hierarchy, business goals and loyalty. We further deepen this insight into the Japanese business culture in the second part of the analysis, in which we explain certain behaviours norms and standards in detail that are more likely to be a hindrance in international business operations when they are misunderstood.
Furthermore, the thesis includes the analysis of interviews that were conducted with Western business people that have gained experience through living in Japan and by working with Japanese partners. Additionally, it contains interviews with Japanese business people that offer guidelines for Westerners when starting business operations and that explain problems that can occur due to misunderstood behaviour.
Finally, this collected data is used as the basis of a training program that we introduce in the final chapter of this thesis. This program is meant to help a Western business person navigate through the idiosyncrasies of the Japanese business world.
As this thesis essentially deals with the Japanese business culture, a general understanding of the country as a whole is needed. In this chapter, we briefly illustrate the countries’ demographics and its geography. Furthermore, we include a summary of the strength of its economy and the development it has gone through since the Second World War. Finally, we describe the current course of the Japanese economy as well as its importance for western markets.
Japan is an island nation located in the Pacific Ocean. It is an archipelago of more than 6000 islands. The four biggest islands, Hokkaido, Honshu, Shikoku, and Kyushu hold 97% of the country’s population(Szczepanski 2014) . Japan has an estimated 126,8 million citizens in 2014 and thus the tenth largest population of the world. The number has been declining from a population of 128,1 million in 2010(World Population Review 2014). The Japanese population is overall declining due to slow birth rates over the last decades. The country has the highest live expectancy worldwide, 80 years for men and 87 years for women(BBC 2014b).
Figure 1: Map of Japan
illustration not visible in this excerpt
Source:The Operation World, 2012
Tokyo, located on the south-eastern side of the main island Honshu, is Japan’s capital and seat of the Japanese Government and the Imperial Palace, the residence of the royal family. The city centre alone contains a population of more than nine million people(Szczepanski 2014).
Due to the islands’ location in the Pacific Ring of Fire, Japan features a number of hydrothermal characteristics such as hot springs and geysers. The location is also the reason for the frequent occurrence of earthquakes and tsunamis. Twenty percent of the world’s earthquakes take place in Japan(BBC 2014b). The last major earthquake and tsunami hit Japan in 2011, killing 19,000 people. These two disasters triggered a third one by leading to the meltdown of the Fukushima Daiichi nuclear power plant rendering the city and surrounding areas uninhabitable(Chuck 2013, ZEIT ONLINE 2013). Furthermor, the country has more than 100 active volcanoes, more than any other country(ZEIT ONLINE 2013).
The primary language is Japanese with the vast majority of 99% of the inhabitants speaking Japanese as their mother tongue. The major religions are Buddhism and Shintoism, while religions like Christianity and Islam are minorities of less than one percent(Szczepanski 2014) . The Shinto religion is a polytheistic faith revolving around nature’s divinity and is almost exclusively found in Japan. It is the native religion of Japan, strongly routed in the traditions of the Japanese population and holds strong influence on people’s behaviours(BBC 2011).
Japan has one of the strongest economies worldwide(Kevenhörster et al. 2007). In terms of gross domestic product, Japan is in the third place with a GDP of 5.96 trillion USD in 2012, coming in behind the United States as first place with a GDP of 15.68 trillion USD and China with a GDP of 8.36 trillion USA(NationMaster), making it the second largest economy in Asia. In terms of Purchasing power parity (PPP), Japan was placed in fourth place in 2012 by the World Bank, following the USA, China and India. Germany was placed in fifth place(The Economic Times 2014). Japan had a GDP per capita of 38.4 thousand USD in 2013, a lower score than many of the Western countries. The USA for example had a GDP per capita of 53.1 thousand USD, France of 41.4 thousand USD. The Western nations with currently struggling economies like Greece and Spain have lower scores than Japan (The World Bank 2014b). Furthermore, Japan has a very modest unemployment rate for an industrialized country of only 4.1 % in 2013(Workman 2014).
The Second World War ended for Japan after two atomic bombs had been dropped on major Japanese cities, Fukushima and Hiroshima. Having been totally defeated, Japan signed the unconditional surrender documents on September 2nd 1945(Cook 2011)and was subsequently occupied by American troops whose main purpose was to demilitarize the country and establish a democratic government system(Dülfer and Jöstingmeier 2008). Japan adopted a pacifist constitution, turning the country into a constitutional monarchy and limiting the Emperor’s power to primarily ceremonial duties when previously he had been seen as an almost godlike deity. The current Emperor Akihito acts as head of state for diplomatic occasions only(Szczepanski 2014).
The Japanese economy, not unlike the economy of West Germany at that time, grew tremendously after the end of the war. The country that had been economically almost isolated opened up to worldwide trade and soon became a major player on international markets. Under the guidance of the American occupants, Japan’s economy grew at an average rate of ten percent every year between 1950 and 1973, doubling the economy every seven years. In 1974 the rapid growth came to a halt due to the Oil Embargo imposed on the United States during the Arab-Israeli War by Arabian OPEC Members(Bureau of Public Affairs 2013)and never picked up to its previous speed(Itō 1992, Tagsold 2013).
In the late 1980s the Japanese real estate market and stock market collapsed, which lead to the “Lost Decade”, a stagnation of the Japanese economy with exceptionally weak growth rates for more than a decade, and to a still ongoing deflation(Morck and Yeung 2001). The Japanese growth rates during the 1992-2002 period dropped to the bottom of all industrialized countries with an average GDP growth rate of 1.2% compared to the United States with 3.2%. It took 12 years for Japan to recover to the same GDP it had in 1995(Horioka 2006).
The financial crisis that started in 2007 did not lead to the collapse of a major Japanese bank as it has in other countries and even gave way for Japanese institutions to use the opportunity and purchase foreign assets at reduced prices. By 2009 however, the reduced worldwide demand left its mark in Japan’s economy. The country’s exports dropped almost by half(Council on Foreign Relations 2009)and the GDP declined by 4.0% in 2009(Taborda 2014).
Japan’s Economy took another major hit due to the tsunami and resulting nuclear-disaster in 2011, which lead to the breaking of supply chains throughout the country and brought industrial production to a halt. All in all, the triple disaster lead to an all-time economic loss of 360 billion USD(Ferris and Solís 2013). The reconstruction of destructed towns and industries and the cleansing of polluted areas are still going on. The pollution rendered the regions around the reactor uninhabitable for the next centuries(Amos 2012).
Only a few weeks after being re-elected in 2012, previously having served as Prime Minister for only a year from 2006 to 2007, the Japanese Prime Minister, Shinzo Abe, declared that his goal was to turn around the Japanese economy, which had suffered greatly in the last two decades and was still suffering from deflation and low consumer spending(Xu 2014).
Abe’s plan to restart the economy, later dubbed “Abenomics”, consists of three different “arrows”, one for fiscal, monetary, and structural policies respectively(Grenville 2014). This plan includes heavy government spending of approximately 20,2 trillion yen (210 billion USD), the rising of inflation rates and the creation of hundred thousands of jobs. Additionally, the plan introduced new child-care policies to increase female participation in the general workforce. The governor of the bank of Japan set an inflation target of two percent so as to gradually reverse the chronic that increases the debt burden of the Japanese state and the population(Stiglitz 2013).
The first parts of his plan seem to have been successful as the sales tax rate rose from 5% to 8% on April 1st 2014, leading to a rise in consumer prices by 3.4% in May, the fastest pace since 1982. This is a first positive step towards the planned raise in inflation rates in order to revive the Japanese economy(BBC 2014a). Critics still fear the risks of the new policies that might lead to hyperinflation and a possible total collapse of the Yen(Xu 2014). Furthermore, export-led economies like Germany and China fear a currency-war in which countries aim for low exchange rates for their currencies in order to raise the demand for domestically produced products(Xu 2014).
Japan’s main export products are vehicles, excluding trains and streetcars, with 21% of the exports in 2013, machinery with 19% and electronic equipment with 15%(Workman 2014).
Japan as one of the biggest markets in Asia is one of the most important trade partners of the EU, America and other Western countries. Statistics published by the Bundeszentrale für politische Bildung in Germany show that Japan received about 3.2% of the European exports in 2010, a total volume of 43.7 billion Euros. Additionally, Japan held 4.3% of the European imports, a total of 64.9 billion Euros (Bundeszentrale für politische Bildung). The statistics can be found at www.bpb.de/system/files/ pdf/39ANYW.pdf. Japan has an even higher share of America’s imports and exports. In 2013, the goods imported from Japan to America had a value of 138.573 billion USD and goods exported into Japan a value of 65.205 billion USD (US Census Bureau Foreign Trade Division). Both the EU and the USA consider a free trade agreement with Japan that would further push trade between the nations (Lill 2014).
When deciding to go into business in Japan, outsiders still face trade barriers. As Japan is a member of the World Trade Organization (WTO), it has agreed to not impose tariffs on information technology and on import of auto-parts. Import taxes on cars in general and machinery are also 0%. Additionally, Japan has overall low import tariffs of approximately 2%. The only exceptions to these generally low tariffs are taxes on agricultural imports with about 19%(Global Trade 2009).
More noticeable for Western organizations in Japan are the non-tariff barriers that are either imposed by the government or arise from cultural and historical differences between Japan and Western countries. Government imposed trade barriers include product and testing standards, which require imported products to obtain a certificate of compliance to Japanese testing standards before being granted permission to be sold in Japan, and a strict policy against the import of firearms, narcotics or related utensils(Global Trade 2009).
Other significant barriers derive from the culture and psychology of the Japanese population(Fukushima 2012). One of the major obstacles remains language and differences in business procedures(EurActive 2012), as Japanese companies for example put high value on good relationships with business partners, which makes agreements without prior establishment of a good business contact very difficult for foreign business partners(Strunz and Dorsch 2001). Understanding these differences in a business context helps reduce the risk of enterprises failing due to misunderstandings, improves business relations and facilitates trade.
In this chapter we define culture and its elements and explain the influences different cultural backgrounds have on individual’s behaviour. Furthermore, we depict the different influences of culture on a person and the extent of cultural influences on management functions.
The first step to understanding the influences of the Japanese culture on business operations is analyzing culture and its influences in business on a more general level.
One of the best known definition of culture was given by Geert Hofstede. He called culture “a collective programming of mind which distinguishes the members of one group from another”(Hofstede 2001 p.9). The Oxford dictionary further defines culture as “the beliefs, art and way of life and social organization of a particular group”(Oxford Advanced Learner's Dictionary). Culture gives people a sense of who they are, the feeling of belonging to a group, how they should behave and what should be avoided, and is generally considered a driving force of people’s behaviour(Moran et al. 2014). Culture has such an immense influence on people’s behaviours without them even realizing that it that is necessary to understand the way culture guides actions in order to be able to anticipate differences so that misunderstandings cannot get in the way of business operations.
In his book Culture’s Consequences (2001), Hofstede further explained that every person’s personality and thinking patterns are unique and influenced by both the culture the individual grew up in and by human nature, as can be seen in figure 2. He considered human nature, which is represented in the foundation of the pyramid, to be inherited and passed down from every generation to the next. It includes basic instincts that all people share like the need to breathe, eat and sleep. The next level of Hofstede’s pyramid is culture; it is differentiated from human nature as it is learned while growing up through one’s environment and education, and is shared only by a selected group. As a result one’s personality, which is at the top of the pyramid, is both inherited and learned, and the result of a person’s genetics and the culture they grew up in(Hofstede 2001).
Figure 2: The levels of uniqueness in human mental programming
illustration not visible in this excerpt
Source: adapted fromHofstede(2001)p.3
Culture consists of various different elements, which can be both visible and invisible to the observer. Different elements can have conscious and unconscious influences on people’s behaviours and attitudes.
To illustrate the different elements and their connection, Hofstede designed a so-called “Onion Diagram” (figure 3)(Hofstede 2001 p.10). In this diagram, he places values at the centre, calling them the “core element of culture”(Hofstede 2001 p.10). The following layers are rituals, heroes and symbols. According to Hofstede these elements, unlike values, are visible manifestations of culture. He subsumes them under the term practices:
- Values influence the opinions regarding god and bad conduct, they influence the countries’ norms. Those norms can include traffic laws and the criminal code as well as table manners or proper behaviour when interacting with servers(Barkan 2013). Values and norms, while invisible to the observer, show themselves in the individual’s behaviour(Hofstede 2003).
- Rituals are the layer closest to the core of the diagram. They are defined as actions that are considered essential in a culture while not actually being necessary to achieve a goal. The rituals of a culture bind the individual to the group. Rituals can for example be a way of greeting or paying respects to another(Hofstede 2001).
- The next layer consists of a culture’s heroes. Heroes generally hold characteristics that are considered good or desirable in a culture. They can be anybody that fits the criteria, living or dead, or even made up like movie or book characters(Hofstede 2001).
- The group of symbols consists of the language, both spoken through words and the jargon and unspoken through gestures and body language, of a group. Language differentiates countries and groups from another in a very obvious way(Morschett et al. 2009). Furthermore, symbols include pictures or objects that hold a specific meaning only known to the members of a culture. Certain elements of symbols can change quickly, with old ones disappearing and new ones replacing them, and can be moved or copied from one culture and to another. For this reason, Hofstede placed this layer furthest away from the centre as the most superficial layer of culture(Hofstede 2001).
Figure 3: The “Onion Diagram”: manifestations of culture at different levels
illustration not visible in this excerpt
Source: adapted fromHofstede(2001)p.11
Each individual’s personality is unconsciously influenced by their cultural background, and those influences can show themselves in the way a person behaves in business. In order to avoid difficulties that may arise if business partners are not aware that reactions and behaviours can differ when coming from different cultural origins, one of the first steps is to understand how management functions are influenced by an individual’s background.
Figure 4shows the relation between one’s cultural orientation and its influences on management functions. As suggested byMorschett et al. 2009, the specific influences of one’s country of origin as well as the traditions norms and customs of this country affect the value patterns, which in return have a significant influence on general attitudes towards work, authority and other aspects of work conduct. Those attitudes have a great impact on the way people behave in business situations and thus in international management functions(Morschett et al. 2009), as for example a manager who puts high value on authority will behave differently when communicating with superiors compared to a manager who was raised to question authority.
Figure 4: Influences on Management Functions
illustration not visible in this excerpt
Source: Adapted fromMorschett et al. (2009)p.135
After having established a basic understanding of culture as an influence factor in business, a profound understanding of the Japanese business culture needs to be built up. When analyzing a foreign culture, there are various different perspectives as each researcher has his own cultural background that influences the way he perceives foreign cultures. Furthermore, as culture is a broad field, there are different propositions on how to analyze the specific cultures of various countries. Several authorities in the field of cultural analysis are Hofstede, Hall and Lewis, who conducted studies on cultural differences and their effects on different aspects of business conduct. These theories will be depicted throughout the following chapter.
The perhaps most comprehensive analysis is the framework explaining the influences of culture on values in business that was introduced by Hofstede, a Dutch social psychologist, in his book Culture’s Consequences: International Differences in Work-Related in 1980(Neghina et al. 2009). From 1978 on Hofstede interviewed thousands of employees from different countries while working at IBM and from his collected data he derived a framework consisting of four dimensions. These dimensions are a means to differentiate culture. Two further dimensions were later added(The Hofstede Centre, Neghina et al. 2009). All six dimensions will be explained in detail in the next paragraphs. His framework uses a score system from zero to 100, and in some cases higher values, to scale how much the particular dimension is exhibited in a society.
Figure 5 shows the scores of each dimension in Japan as they were set by Hofstede and his associates after profound analysis. The scores for the discussed Western societies derived from Hofstede’s work can be found in appendix A. For each dimension, a number of differing Western societies are given to offer a comparison with the Japanese score so as to be able to better interpret the Japanese result. In most cases, the respective highest and lowest scores were used in the comparison to illustrate the tendencies.
illustration not visible in this excerpt
Figure 5: Japan in Hofstede’s Framework
Source:The Hofstede Centre
The first dimension Power Distanc e measures the acceptance of hierarchies and inequalities in society. High PDI levels suggest a culture of high inequalities in wealth and distribution of power while countries with lower ratings in PDI tend to be more equal and democratic(Hole 2006).
Japan’s medium score of 52 in PDI indicates that while Japanese in general are aware and conscious of their position in society and work and act according to it, they do less so than in other Asian countries. While foreigners usually expect the Japanese society to be extremely hierarchical, they are eventually surprised to find out that Japanese people consider everybody to be equal in society. This believe is deeply rooted in the culture(The Hofstede Centre).
Still, compared to Western societies, the Japanese score in PDI is relatively high. The USA, to give an example, has a score of 40, Germany of 35 and Austria of only 11(The Hofstede Centre), suggesting that on average Western organizations have a more flat hierarchy with people being less conscious of their position and more likely to question superiors.
The second dimension measures Individuality or Collectivism in a society. It shows the importance of an individual versus the importance of the group. Countries with low scores in IDV are more invested in group harmony and prefer unanimous decisions while countries with high scores tend to have a more self-interested population(Hole 2006, Neghina et al. 2009).
Japan has a rather low score of 46 in IDV suggesting that, similar to their score in PDI, they are in general a collectivist society, but less so than other Asian nations. While Japanese people do put a high value on group harmony and integration of everybody, they tend to have less extended family than in more collectivist Asian countries. The Japanese tend to be loyal to their companies but they choose the company on their own, leading to the assumption that Japanese are collectivist in a group they chose individually(The Hofstede Centre).
Compared to Western countries with scores in IDV of for example 91 in the United States and 90 in Australia,(The Hofstede Centre), the Japanese scores are low, making Japan collectivist by Western and individualist by Asian standards. This also leads to Western companies being less loyal business partners and on average less interested in harmony, resulting in a source for misunderstandings.
The dimension of Masculinity against Femininity measures the gender differentiation in a country. Countries with high scores in MAS tend to favour traditional gender roles and emphasizing “masculine” values like success and wealth whereas the counties with low scores in MAS tend to have more women in business and more equal gender roles with a value on “feminine” values like quality of life and free time(Hole 2006, Frost 2013).
In MAS, Japan has a high score of 95, making it one of the most masculine societies in the world. The Japanese population is highly competitive towards other companies and groups. This competitiveness is fostered early on in school, but there is less rivalry between individuals. This tendency is already present in the Japanese IDV score. The high MAS score also suggests that Japanese in business are driven by a desire for material wealth and that it is still hard for women to succeed in business(The Hofstede Centre).
All examined Western countries have lower scores in MAS, although the scores differ immensely between the countries. To give an example, Austria has the highest score of the Western countries with 79 while Sweden has the lowest score of only 5. These results suggest that Western countries are on average less focused on competition and success but their prioritizing of values like quality of life, work-life-balance and others is very different(The Hofstede Centre).
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