BU 240 International Business - Fall 2018

To: Prof. Marshall

From: Dylan Stephenson

Date: 10-2-18

Re: Executive Brief # 2 – Cultural comparison of Japan and U.S

Introduction
The purpose of the following Executive Brief is to examine the political economy of Japan, as
well as compare and contrast the cultures of the United States and Japan in order get a better
understanding of the potential market for automobiles in Japan. The brief will begin by
informing about the political economy of Japan, then look into the cultures of both Japan and the
U.S by identifying the similarities and differences, and finally it will use Hofstede’s cultural
dimension scale to compare and contrast the two countries based on multiple categories.

I. Political Economy
The political economy of any country can be simply broken down by describing the
political, economic and legal systems of a country. The political system is system of government
the nation uses. The economic system is how a country controls the economy by having either a
market, command, or mixed economy. The legal system is “system of rules that regulate
behavior and the processes by which laws of a country are enforced and through which redress of
grievances is obtained” (Hill, Hult, Richardson, & McKaig, 2018).

A. Political System
The political systems of the U.S and Japan can first be contrasted by Japan’s collectivism
views and the U. S’s individualism views. “Individualism refers the idea that an individual
should have freedom in his or her economic and political pursuit” (Hill, Hult, Richardson, &
McKaig, 2018), while collectivism means that the country is more focused on group goals rather
than individual. While they differ in that way, they both have an elected government or a
democratic government. The U.S elects a president and Japan elects a Prime minister, which are
voted for by the people.
B. Economic System
The economic system of a country can be decided by placing it into one of three
categories, market, command, or mixed economy. A market economy is when a country has little
interaction in the economy and lets the supply and demand decide the quantity of goods and
services that are produced. A command economy on the other hand is basically when the
government controls the goods and services provided and at the quantity they will be provided.
Mixed economies incorporate the previous two types in a combination of both. Japan and the
U.S both have mixed economies. Each country uses some government interference in order to
keep the economy stable, but let the supply and demand control the economy.

C. Legal System
The legal systems of the U.S and Japan differ, Japan has a civil law system based on
German model and U.S has a common law system based on English common law (The World
Factbook, 2018). The common law that the U.S uses, means they use tradition, precedent, and
custom for laws. This give the courts/ judges the chance to interpret the laws in regards the
characteristics (Hill, Hult, Richardson, & McKaig, 2018). The biggest difference for the civil law
that Japan uses is that they use very detailed law codes. A civil law system follows their laws
strictly, which does not let judges or courts interpret laws with flexibility, but rather just apply
the laws in a court.

II. Cultural Differences/Similarities and Dimensions

A. Culture
Culture is defined as by Hill, Hult, Richardson, and McKaig (2018) as “a system of
values and norms that are shared among a group of people and that when taken together
constitute a design for living” (p. 89). The main cultural determinants that this brief will compare
and contrast are language, social structure, and education.
a) The culture of the United States: The U. S’s official language is English, which is followed by
Spanish as the second most spoken language in the country. English is the most used language in
business terms. As for non-verbal language, it is normal to have around 2 feet in-between
someone when speaking. Eye contact is normal and kept for most of the conversations. Shaking
hands is how you formally greet another person.
Social structure is the basic social organization of a society. One of the main categories of
this is the individual vs. the group. The U.S is an individual society as stated earlier. The social
strata of the U.S is not strict and very mobile. This means that although you could be born into a
poor family, you could work up into a higher class. This also means that an individual’s social
strata is not as significance.
Education in the United States is free for secondary school, and the average school life
expectancy is 17. College is expensive, limiting the number of skilled workers.

b) The culture of Japan: The Japanese language is one of the most complex languages. The
language can be very subtle but can still be communicated well to one another. Speaking
distance is a further away than the North American standards. Prolonged eye contact is not
normal. Bowing is the normal way to greet someone.
The Japanese have a group-oriented society as stated earlier. Being a part of a group is a
big deal, and it is one of central value of Japanese culture. Japan has good social mobility, people
can move up and down the classes easily. In Japan, most of the population perceives itself to be a
part of the middle class (Hill, Hult, Richardson, & McKaig, 2018).
Japanese education is among the best in the world. The literacy rate is almost 100%. The
Japanese students have to complete difficult test in order to pass in school. This makes Japan
have a massive pool of skilled workers.

B. Cultural Differences/Similarities
Even though the official languages of the two countries are different, a common ground
is met when communicating in English. Japanese students begin English classes at the age of 12,
and although they do not fully master verbal communication, they do know how to read English.
They differ in the ways they greet one another, in Japan they bow, in the U.S they shake hands. It
should be noted that in Japan they are aware of western ways and will shake hands if they are
greeting you. Japanese and American gestures may not correlate to one another, such as winking
or shrugging shoulders will mean nothing to the Japanese.
 The U.S and Japan are similar since they both have high social mobility. Where they
differ is when it comes to the individual society of the U.S and the group society of Japan.
Japan’s group focus may differ from how the U.S operates, but they have been proven to be just
as innovative and effective. Differences may lie within loyalty from an employee, U.S
employees may leave a job, whereas a Japanese worker will stick to the same employer for a
long period of time.
Japan and the U.S both have relatively high education standards, making interactions
between the two countries generally intellectual. Japan actually has a much higher yield per
capita of skilled workers than the U.S, and sometimes more skilled as well. For example, A
Japanese high school graduate knows as much math as a U.S college graduate (Hill, Hult,
Richardson, & McKaig, 2018). Having a highly educated pool of workers shows an indication of
how complex a product or material made should be.

III. Cultural Dimensions

Geert Hofstede is a Dutch social psychologist who developed a way to compare the
dimensions of culture for multiple countries. He worker for IBM and collected data on the
attitudes of over 116,00 individuals in order to find out the correlation between the culture and
the values in the workplace.
He created five different dimensions that are rated on a scale 1-100, in order to judge a
country on. This brief will compare and contrast the United States and Japan in These categories.
The first is power distance, which can be described by how a society deals with the fact they are
unequal in both intellectual and physical capabilities (Hill, Hult, Richardson, & McKaig, 2018).
Next is Individualism, which is determining whether a society is dependent on a group, or
themselves. The third category is masculinity versus femininity. “The fundamental issue here is
what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).”
(Country comparison, 2018). The fourth section is uncertainty avoidance, which is simply how a
society reacts to not knowing what is going to happen in the future. The last category which was
actually added on in a later time, is long-term versus short-term orientation. This is the difference
between holding on to traditional values and wanting to be modern in all aspects.

A. Power Distance:
 Japan scored a 54 on the power distance, the U.S scored 40. The U.S ignores the
inequalities of society for the most part, making room to challenge people in positions of power,
in order to grow as a society. As for Japan, they also believe in a social mobility, letting people
overcome inequalities rather than just live with them. The biggest difference is that Japan
appears to use a hierarchy system that enables final decisions for upper level management.
B. Individualism versus Collectivism
Japan scored a 46 on the individualism versus collectivism category, the U.S scored high
with a 91. The U.S is an individualistic country, in which they work for themselves, and are
focused on their own goals. As for Japan, they are more of a collective country, they work for
groups rather than themselves.
C. Masculinity versus Femininity
Japan scored a high 95, and the U.S scored a 62. Both countries have high scores,
although Japans score is one of the highest in the world. They constantly stress the importance of
working hard to be the best, whether that be with a producing a product or service, or even
education. As for the U.S, they also have views of working to be the best, but to a lesser degree.
They can incorporate not always needing to be the best to succeed.
D. Uncertainty Avoidance
Japan scored a 92 on uncertainty avoidance and the U.S scored a 46. The impact of
having a low uncertainty avoidance score is that America has a high innovation rate and are not
afraid to try new ideas taking risks. Japan has a very high score because they are cautious of their
lives. The fragility of their lives with so many extreme natural disasters makes Japan a careful
nation. This impacts how long they take to make decisions and implement change.
E. Long-term versus Short-term Orientation
Japan scored 88 and the U.S score a 26 in the long-term versus short-term orientation
section. The impact of a high score in Japan is that they serve their lives with a purpose of long-
term impact and growth for the next generation. They want a steady growth for the future rather
than immediate results. The U.S on the other hand maintains links to its past and still follows
them today. They more importantly look at results in a much shorter time period, such as
quarterly reports. This is differing from Japans outlook of long-term results.
Conclusion
This Executive Brief provided a comparison between the potential market candidate of
Japan and the host country, the United States. It provided detailed insight on the political
economy, cultural aspects, and cultural dimensions of Japan, specifically in comparison to the
United States. Japan although thousands of miles away, shares many cultural similarities, and
where it differs, it still meets the criteria needed for manufacturing automobiles.
 References

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