hello everyone welcome to business school 101 with the third largest nominal gdp japan is one of

the largest and most developed economies in the world japan is also the home of many global
fortune 500 companies which include toyota honda nissan mitsubishi panasonic sony hitachi
toshiba and many more.
so what is japan's
1) General Business Environment
2) Japan’s Hofstede Scores
3) Organizational cultures
4) Business etiquettes

1.General Business Environment

General business environment japan's economy was the world's second largest from 1968 until
2010 when it was overtaken by china according to the world bank japan's
nominal GDP in 2019 was estimated to be 5.06 trillion us dollars( 3rd)

its gdp per capita is around forty thousand one hundred u s dollars this is slightly less than two
thirds of america's gdp per capita but is almost equivalent to the united kingdom and france in
addition the japanese yen is the world's third largest reserve currency after the us dollar in the
euro on the corruption perception index 2020 japan ranks 19th out of 180 countries receiving a
score of 74 on a scale from zero to one hundred this suggests that the country's public sector is
relatively free from corruption in terms of education japan's populace is well educated and its
society places high value on education as a platform both for socioeconomic mobility and for
gaining employment in the country's high-tech economy english is a compulsory subject in
junior high and high schools there are also elementary schools that introduce english education
within intermediate grade classes according to the 2020 data japan has a population of 125.7
million and has the second longest overall life expectancy at birth of any country in the world
sitting at 84 years it is also worth noting that the japanese population is rapidly aging as a result
of a post-world war ii baby boom followed by a decrease in birth rates.

2. Japan’s Hofstede Scores

Psychologist Dr. Geert Hofstede published his cultural dimensions model at the
end of the 1970s, based on a decade of research. Since then, it's become an
internationally recognized standard for understanding cultural differences.
Hofstede studied people who worked for IBM in more than 50 countries.
 Japan's hosted scores as we covered in a previous video hofstede's cultural framework is one of
the most widely used tools to analyze a country's culture therefore let's check japan's scores in
hofstede six dimension cultural framework please keep in mind that the hosted score on each
dimension ranges on a scale from zero to one hundred dimension one power distance power
distance refers to how openly a society or culture either accepts or rejects differences between
people for instance hierarchies in the workplace in politics and so on at an intermediate score of
54 japan holds a borderline hierarchical society it is true that japanese people are always
conscious of their hierarchical position in any social setting and act accordingly however it is not
as hierarchical as most of the other Asian cultures some foreigners experiences with japan have
been extremely hierarchical because of their business experience of painstakingly slow decision-
making processes for example in a big company all the decisions must be confirmed by each
hierarchical layer and finally by the top management in Tokyo paradoxically the exact example
of their slow decision making process shows that in japanese society there is no one top guy
who can make the decision compared to a more hierarchical society another example of not so
high power distance is that japan has always been a meritocratic society there is a strong notion
in the japanese education system that everybody is born equal and anyone can get ahead and
become anything if
they work hard enough dimension 2 individualism the individualism versus collectivism
dimension considers the degree to which societies are integrated into groups as well as their
perceived obligations and dependence on groups it can also refer to people's tendency to take
care of themselves and their immediate circle of family and friends perhaps at the expense of the
overall
society japan scores 46 on the individualism dimension certainly japanese society shows many of
the characteristics of a collectivistic society such as putting the harmony of groups above the
expression of individual opinions this causes people to have a strong sense of shame for losing
face however it is not as collectivistic as most other Asian neighbors the most popular
explanation
for this is that the japanese society does not have extended family system which forms a base of
more collectivistic societies such as china and korea japan has been a paternalistic society and
the family name and asset was inherited from father to the eldest son the younger siblings had to
leave home and make their own living with their core families therefore Japanese are
experienced as collectivistic by western standards and experienced as individualist by asian
standards they
are more private and reserved than most other asian societies dimension three masculinity the
masculinity versus femininity dimension is also referred to as tough versus tender and it
considers the preference of society for achievement behavior attitude towards gender equality
and more at 95 japan is one of the most masculine societies in the world however in
combination with their mild collectivism you do not see assertive and competitive individual
behaviors that we often
associate with masculine culture what you see is rather a severe competition between groups
compared to competition of individuals from a very young age of kindergarten children learn to
compete on sports day for their groups in corporate japan you see that employees are most
motivated when they are fighting in a winning team against their competitors what you also see
is
an expression of masculinity in japan is the drive for excellence and perfection in their material
production for example jit production in material services such as services in hotels and
restaurants
and in presentation like gift wrapping and food presentation in every aspect of life notorious
japanese workaholism is another expression of their masculinity it is still hard for women to
climb up the corporate ladders in japan with their masculine norm of hard and long working
hours dimension 4 uncertainty avoidance the uncertainty avoidance dimension considers the
extent to which uncertainty and ambiguity are tolerated this dimension also considers how
unknown situations and unexpected events are dealt with at 92 japan is one of the most
uncertainty avoiding countries on earth this is often attributed to the fact that japan is constantly
threatened by natural disasters from earthquakes tsunamis typhoons to volcano eruptions under
these circumstances japanese learn to prepare themselves for any uncertain situation in corporate
japan a lot of time and effort is put into feasibility studies and making sure all the risk factors
must be worked out before any project can start managers ask for all the detailed facts and
figures before making any decision this high need for uncertainty avoidance is one of the reasons
why changes are so difficult to realize in japan dimension 5 long-term orientation the long-term
orientation versus short-term
orientation dimension considers the extent to which society views its time horizon long-term
orientation emphasizes perseverance and growth in contrast short-term orientation focuses on the
near future by delivering short-term success and emphasizing the present at 88 japan scores as
one of the most long-term oriented societies in the world in corporate japan you see long-term
orientation in the consistently high rate of investment in r and d even in economically difficult
times the idea behind it is that the companies are not here to make money every quarter for the
shareholders but to serve the stakeholders in society at large for many generations to come
dimension 6 indulgence indulgence indicates that a society allows relatively free gratification
related to having fun in life conversely restraint indicates that a society suppresses gratification
of needs and regulates it through social norms japan with a low score of 42 is shown to have a
culture of restraint societies with a low score in this dimension have a tendency to cynicism and
pessimism
also in contrast to indulgent societies restrained societies do not put much emphasis on leisure
time and are controlling of the gratification of their desires people with disorientation have the
perception that their actions are restrained by social norms and feel that indulging themselves is
somewhat wrong.
3. Organizational cultures
generally the japanese organizational cultures have four features consensus hierarchy loyalty and
relationship oriented let us discuss them
individually
first consensus in larger japanese businesses as well as in other institutions and services such as
the government consensus is stressed as the primary way to arrive at decisions decisions are
understood as the sum of all contributions because of this the role of a manager or leader is often
to facilitate building consensus the primary role of a leader is seen as maintaining harmony
rather than a source of authority or to be head decision maker the process of consensus requires
the leader to prepare the foundations for the proposed change your project by talking to others
gathering information and feedback and so forth though a time-consuming process it is seen as a
necessary way to promote both group and individual interests moreover once a decision is made
implementation is usually relatively smooth since most stakeholders have already been involved
and feasibility has already been established
second hierarchy hierarchy plays an important role in the consensus building process the leader
is expected to have one-on-one discussions with each member of the decision-making group
consultation and feedback from
higher rank members is particularly important higher rank members in a company or institution
expect to be informed and consulted of a decision prior to the formal announcement at a meeting
failing to do so may mean a rejection of the proposal the importance of consensus building and
hierarchy is reiterated through problem-solving processes in Japanese business culture
employees are generally not expected to attempt to solve a problem themselves when a problem
occurs
employees are expected to first report the problem to their superior who then updates their boss
to find a solution finally the boss is again consulted once the problem is resolved
third group identity and loyalty collectivist characteristics found in the japanese society extend
into their business culture individuals tend to regard themselves as a representative of the group
or company employees are often loyal to their organizations and companies in part due to the
nature of
their lifetime employment in corporate or professional organizations individuals are usually
recruited directly out of a university and only leave once they reach the mandatory retirement
age attaining a corporate job in large companies is highly competitive and is largely based on the
individual's academic ability as well as the reputation of the university companies will also
provide training therefore there is a preference for younger employees who can be trained to
fulfill the exact needs of the company employees are expected to be dedicated work hard and
demonstrate loyalty in exchange for job security and other benefits such as bonuses and housing
subsidies the hierarchical and uniform nature of employment in these organizations means that
career progression is often highly predictable regulated and automatic people usually gain
promotions based on ability and seniority
fourth relationship oriented building and maintaining relationships
is a fundamental part of Japanese business culture people generally expect and desire long-
lasting partnerships as a part of this long-term approach japanese people tend to want to know a
great deal about their partners your japanese counterpart may ask questions or ask for details that
seem irrelevant or unrelated engage in small talk and exchange business cards though these
processes may seem cumbersome they are an important part of establishing the relationship and
building the trust and loyalty needed to support future business as a way to establish rapport
there also tends to be socializing outside of the office especially within activities such as
evening drinks or dinners people also generally aim to build strong relationships with colleagues
and staff internal relationships are very important due to the decision-making process of building
consensus for example if someone takes time off work to travel it is common for people to bring
back a souvenir to their co-workers to demonstrate thoughtfulness failing to do so may be seen as
rude or inconsiderate importantly people generally maintain a distinction between business
relationships and personal relationships nepotism or favoritism are not commonly found in
Japanese businesses and it is usually rare for employees to receive special privileges based on
their relationships.

4. Business etiquettes

when handling business with japanese you should pay attention to the following issues
one punctuality is highly valued in japan everyone is expected to be on time
for meetings and appointments aim to arrive sometime before or exactly on the designated time
if you expect delay politely and apologetically inform your japanese counterpart
two the most common form of greeting in japan is a bow which varies depending on the context
and social relationship between the two parties however when meeting with foreigners in a
business
context japanese may choose to shake hands in these situations it is better to follow the lead of
your Japanese counterpart and greet in the same manner three when meeting a business partner
for the first time it is polite to use formal titles in japan people are often referred to by their
surname and titles or honorifics are added as a suffix four it is respectful to greet everyone in the
room individually regardless of the size of the group five when offering a business card the card
itself should be in good condition present the card with both hands and the slight bow do not pass
business cards around like playing cards as this may be interpreted as rude six when receiving a
business card use both hands with a slight bow to take the card place the card in front of you on
the table until everyone is seated do not fold the card or place it in the back pocket of your pants
similarly do not write on the business card unless directed to do so seven allow for some small
talk before mentioning business matters eight it is common for hosts to indicate to guests where
to sit the higher the ranking of the person the closer they will sit to the leader often these guests
will be offered to sit close to the leader which is usually farthest away from the entrance if your
japanese
counterpart does not indicate where to sit the most appropriate choice is to sit closest to the
entrance to demonstrate humility in large meetings common practice is to have people from
the same company sit on the same side of the table with the highest ranking farthest away from
the door nine team may be offered during the meeting wait until your Japanese counterpart
begins drinking before you begin try not to ignore the tea as it may be interpreted as a sign of
disrespect
10 it is rude to answer or use mobile phones during a business meeting ensure your phone is on
silent to avoid interruptions eleven it is common for there to be periods of silence during the
meeting avoid the urge to fill the silence as it may be viewed as impatient twelve try not to
interrupt someone or talk over someone if possible it is also important to speak slowly pause
between
points and provide your Japanese counterpart the opportunity to respond you can show your
attentiveness to the speaker by using interjections or nodding your head 13 consensus is
foundational in Japanese business culture this means that meetings and negotiations may take
quite
some time as consensus is built among the relevant parties patience is critical during negotiations
fourteen as indirect communicators japanese people often avoid direct refusals or negative
responses and instead may provide an ambiguous response indirect responses are often a
way to maintain harmony prevent a loss of face or to respond out of politeness for example
someone may respond to a request with i will consider it pay attention to the tone and body
language of your japanese counterpart and aim to avoid giving direct or blunt responses
to questions 15. consider using physical aids for your presentation such as handouts or
writing on a whiteboard these are preferred over powerpoints or overly technical presentations
all right that is all for today's topic so
what do you think about Japanese business culture do you have any related experience or story
you are willing to share please leave your thoughts in a
comment below
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