Understanding Japan’s Business Culture with Itani from Taurus Financial

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What basic cultural norms do you think foreigners should know about working with people in Japan?

In Japan, businesses, especially the big companies tend to behave conservatively and bureaucratically. This causes a barrier to entry for new companies as it’s very difficult to start a business without the transaction these big companies have.

It’s much easier if foreigners have connections with medium to big sized companies in Japan. This can be overcome if you find an appropriate business partner, and it will make life easier with regards to doing business here.

What is the common opinion of foreign entrepreneurs, coming to Japan to set up a business?

Most of the foreign companies, especially for regulated businesses such as infrastructure or financial services, feel uncomfortable because of the very complicated regulation and wide administrative discretion involved.

In addition, as I mentioned Q1, Japanese companies and consumers are very conservative in general. This means it often takes a long time to set up the business.

But this doesn’t mean administrative corruption or business nepotism. It is fact that the process takes a long time and regulation is complicated, however, the Japanese government are compatibly fair and clean compared to other Asian nations in the region.

How can a foreigner become a part of the business community in Japan?

Foreigner’s have a disadvantage in some aspects of business in Japan due to the network effect. But on the other hand, Japanese businesses don’t expect foreigners to fully understand Japanese business culture.

Japanese people accept foreigners even if one doesn’t understand Japanese mannerisms. As long as you respect and know the basic business ethics and style of the Japanese, foreigners are given a margin of freedom. To understand this further, I recommend you work along side some staff or a partner to understand Japanese business culture on a deeper level.

What is a good way to meet people and make connections?

There are lots of international accounting and law firms in Japan. These firms may have branches in your own country and maybe can help you setup a business in Japan including introduction of their Tokyo branch.

In addition, the Japanese government has an organization called the JETRO which promotes international trade and investment. This organization sometimes holds business meeting between Japanese companies and foreign companies.

What books or websites would you recommend a foreign entrepreneur read to better understand the Japanese business culture?

JETRO web site.
Book: Introduction to Japanese Business Law & Practice
Anderson Mōri & Tomotsune

What’s the business mindset of people in Japan?

As long as you make close connections with the Japanese people, they will provide you with kind-hearted treatment. But please note Japanese companies behave quite conservatively and they sometimes become ruthless to avoid their responsibility. In addition, Japanese people don’t respect connections compared to other Asian nations.

Are there any particular business dealings that foreigners should not get involved in?

There are some restrictions on foreign investment. Some require prior permission, others are regulated, for example Aircraft manufacturing, weapons, nuclear, space, energy, telecommunications, broadcasting and transportation.

How important is hierarchy in business in Japan?

In Japan, age hierarchy is very important. Elders opinion is expected to be taken seriously. This is sometimes more important than the hierarchy between a boss and his staff. If you want to start business with aged Japanese people, you need to show respect for one’s experience.

What are the primary signals of respect with regards to doing business in Japan?

To show respect, people make a polite bow from the waist. The bow angle sometimes determines the degree of respect.

What advantages do foreigners have (versus locals) when doing business in Japan?

Regarding the business trend, Japan is comparably closed market because

People don’t use English in their daily business activities in Japan, and as a result we are fairly closed off. Because of this, when you implement foreign business ideas and provide excellent service in Japan, this can achieve great success. This strategy is called the “time machine business” in Japan.

What advantages do local people have (versus foreigners) when doing business in Japan?

Locals have a huge advantage due to the language, connections and cultural understanding.

In addition, all of the law and regulations is written in Japanese text. So the language barrier is quite high in Japan. In this situation, the fact one can speak Japanese is a big advantage.

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