“Difference is a concept you must own, deepen and further put into practice.”
(H. Lefèbvre)
In export business, success depends, among others, on the ability of managers to understand and manage differences of culture and society. Understand means, above all, to be able to put oneself in someone else’s place and to be tolerant. In Asia, in Japan, time (long-term relationships) and family (group spirit) are perceived differently. Insecurity comes from the fact that all the facts are not known to the manager, hence the need for export specialists.
In Japan, the obstacles to the conclusion of a business are mainly of two types:
1) the dynamism and sophistication of a highly competitive market, explaining the need to offer a range of quality products, adapted to consumer needs (difficult customers), innovative and competitive in price;
2) socio-cultural barriers, present at the negotiation stage. We will develop hereunder this aspect of the problem.
Broadly speaking, an international negotiation has four characteristics:
1) its duration: in Japan, decision making is slow, but its execution is fast, the company wishing to know in depth the potential partner;
2) its fragility: the interpretation of an agreement may be different depending on the socio-cultural value system or the partner may simply not be in good faith;
3) the complexity of the issues dealt with;
4) the risks, many elements not being known or controllable.
In the particular case of Japan, it should also be emphasized the importance of the initial investment, not only in terms of capital, but especially in terms of continuous efforts.
The country of the Rising Sun is a country with strong cultural context: the Japanese retain a wealth of information on people and maintain, through an extensive network of friends, colleagues, customers, suppliers, close personal relationships. The ideal communication is indirect (subtle hints), non-verbal (else, suspicion) and emotional (frequent in commercials).
The four pillars of Japanese culture might be:
1) collectivism: the “karaoke” is a good demonstration of team spirit;
2) a strong hierarchy, often based on seniority, synonymous of experience and wisdom;
3) an accurate control of the uncertainty, in order to create a sense of security in the society;
4) a strong division of roles between genders: although the situation has been changing, part-time roles and OL “office lady” jobs for women remain widespread.
Moreover, Japan is a country of monochronic culture, individuals generally doing only one thing at a time. Therefore, pursuing an objective will always be done in stages (“junban” in Japanese) and Japanese will usually not be allowed to leapfrog.
During a mission in Japan, the export manager will be hosted by a group of negotiators, often prepared and well organized. Group work will be done according to several principles:
1) identify the problem rather than who to blame, the objective is not to punish, but to solve together all the problems and overcome obstacles.
2) not rest on one’s laurels: constantly question oneself (“kaizen” or continuous improvement process) and progress step by step carrying out slight changes; markets changing quickly, the Japanese have learned to continuously improve their product lines.
3) take collective decisions, involving and committing all team members. Fully briefed, members will be more able to enforce the decision later. With the aim of a good collaboration, the Japanese have also at heart to integrate all members in their group, in order to bring order and serenity.
4) remain specialized: gradually improve what is on going, rather than doing several things at a time (monochronic culture). Decisions on diversification will therefore be slow. It is also a way to avoid the unknown.
Japan being a country with strong cultural context, personal relationships must be developed and maintained. To do so, one should:
1) learn about each other by sharing some free time (during a mission, for example) so as to build mutual trust. This need to socialize (“karaoke” evenings, golf, restaurants) exists once there is adherence to a group, as soon as a business flow is created.
2) visit clients, as often as possible, in order to strengthen ties, which also helps to understand, listen to and anticipate customer needs: this is also part of the service!
The Japanese system has peculiar characteristics at three levels:
1) the Japanese society: it is characterized by a high degree of competition, either between individuals (witnessed by the ruthless entrance exams to high schools and universities) or between firms (in order to satisfy demanding customers); in addition, work relationships (and others) are established in the long term, justifying therefore high levels of investment;
2) the Japanese company: the hierarchy of power is undisputed, but the leader’s role is to maintain group cohesion, rather than a decision-making role; therefore, decisions are usually made by consensus, but the leader may occasionally have to guide a (less experienced) member and then to take decisions for him.
3) the Japanese negotiator: generally dislikes arguments; very sensitive, he strives to avoid conflicts for the sake of harmony; in western eyes, the Japanese (unlike the Chinese) is not a “great negotiator”: his strength is in the group cohesion and he prefers a balanced agreement that lasts in the long-term; finally in Japan, the concept of silence has another meaning: it is either a sign of consideration / reflection, either the expression of discomfort (with a smile) or even of a disagreement (gloomy faces).
Negotiating a contract, in Japan, usually takes a long time (unless there is a pressing need) and requires extensive travel. The steps are the following: product presentation, sample dispatching, first test order, evaluation by the customer (delivery time & product quality), the actual order if all goes well. Everything looks like a ritual until the signature of the contract, decision making being rather formal: there will be automatically agreement, when there are no more objections/questions left (consensus).
The principles of intercultural communication can be illustrated by an analogy to Sumo wrestling:
1) the wrestler comes in and throws a handful of salt in order to purify the ring: no negotiation can start without a proper exchange of business cards (“meishi”). Indeed, the purpose of these cards is to tell the other side your hierarchical status (your rank in the company or the organization). The Japanese will try to remember and pronounce your name correctly, and if he speaks to you in Japanese, he will use the “polite expressions” suitable to your rank. The inclination of the bows will be another sign.
2) the referee acts as an intermediary as well to obtain a contact (the practice of being introduced by a third party is widespread and is one of the rules of etiquette in Japan) as to unlock that negotiation at a later stage (the use of a third party allows to contain clashes caused by a disagreement). The Japanese beware of strangers and like to gather information (this is not only curiousity) in order to reduce uncertainty.
3) wrestlers face each other with their fists on the ground and focus in order to better understand the enemy: nothing concrete will come out of the first meetings during which you will be screened and analyzed. Great listeners, the Japanese record as much information as possible and are willing to take the time (time has another dimension than in Europe) to prepare a file. Decision making is slow, but its implementation can be very quick. Commitments are long term and are considered as final.
4) the winner is the one who has knocked down his opponent. In fact, if the deal is fair, there is no clear winner: the Japanese always prefer a good compromise, well balanced for both sides and focused on the long term. Moreover, in a problematic situation, they try not to lose face themselves (this is also the case in everyday life), nor to let their opponents (which they respect usually) lose face.
5) the Japanese give greater value to harmony than to truth: they are reluctant to engage in an argument that can conduct to create unrest within a group or between two parties.
6) the feeling of obligation to a person who has served them well (gratitude and loyalty are important values) can be a powerful drive in their behavior. Every act is rarely disinterested in Japan.
7) before and during the negotiation, there are no friends: there is a business to be made in the best conditions. Like a baseball tournament, the team is braced in one single direction: the goal.
Practically: how to negotiate a contract?
The establishment of initial contacts is the first phase. The company will participate in trade fairs and missions sponsored by the relevant authorities. Through the Embassy, the economic and commercial attachés, official agencies and other intermediaries, introductions following the right protocol can take place. Under these optimal conditions, the Japanese will feel compelled to receive you (otherwise courtesy visits) and will, perhaps, put a valid interlocutor at your disposal.
Never show impatience, sign of weakness in their eyes. Indeed, the Japanese need time to learn about their potential partner. They will ask for references. You should use this time in order to perform your own investigations. Collect as much data as you can.
The first interview will be rather an observation round. After the exchange of “meishi”, each side will listen to the presentation of the other, without interrupting. The Japanese have a great ability to listen, they often double check facts (indirect communication). They are also finding out if they can trust you. The challenge is to ensure a balanced exchange of information: the Japanese will only give you the information you deserve.
It is best to ask yourself many questions. As non-verbal communication, eyes, gestures, facial expressions can say more than words (the Japanese have often the ability to better hide their emotions) and are, as such, revealing. At this stage, it is better to present only an outline of your proposals. Do not progress without getting something in return.
Comes then the active phase of the negotiation. Trust having been established, the decoding of the positions of the parties remain difficult: the Japanese avoid key issues from the start and therefore avoid a frontal attack on the potential disagreements (only mention pricing towards the end). Be sure to earn the trust (and approval) of the whole group and not of the leader only (group decision).
As technicians & engineers usually tend to agree with each other more easily, constructive dialogue must begin between them. Make sure the first concessions are made simultaneously, in order to avoid being considered as the weaker partner. In fact, you must convince them of your ability to meet the needs and requirements of their business.
Remain focused. It is always better to repeat several times, so that the message is correctly understood. It is useless to bargain or to put them under pressure. The Japanese have no gift for haggling and may lose confidence & trust.
Japanese businessmen often use an interpreter:
- either to give themselves some reflection time;
- either to understand the entire message (desire to master every detail of the discussion).
They like to have a clear picture of their interlocutors, that is, to be able to classify them with certainty (based on the “corporate image”), hence the interest to continue the meeting outside (in bars).
Finally, in Japan, the practice of exchanging gifts is everywhere: by doing this, the Japanese show their commitment to an already established relationship (notion of “Relational Maintenance”). Carry out a constant follow up. The negotiation will be long: it is your resistance and consistency which will be tested.
Of course, you always need a bit of luck in business. Poor communication will lead, without mistake, to failure. The road is long and bumpy (copyright issues, exclusivity, abnormally low level of sales). It will lead, hopefully, to a letter of intent between both parties.
It is above all a question of trust between people. Imagine that you have to go to Japan in order to ask the father of your girlfriend (Japanese) for the hand of his only daughter. You will need to persuade and please. Better bring gifts and have good references. Especially be patient at all times and keep smiling.