Since young, I have always been intrigued by the Japanese culture. As I grew up watching “Japan Hour” on TV, I remembered admiring their serene way of life, picking salmons in their back yard and cooking it fresh, always to the delight of the guests squealing “Oishi!” at the first bite. Nothing beats the scenery of their natural environment, and having seen the vast size and beauty of Japan in television, I told myself that one day, I would like to explore as many cities as I can over there. Looking into my household, I remembered how Japan made products are always favoured by my father as compared to China or even some US made products because of the attention to quality found in the Japanese workmanship.

Growing up, I used to find their conservativeness & strict attitude highly admirable, and now at this stage of life, I’ve come to learn that beyond their personal life, their distinctive cultural characteristics also encompasses the way they lead their businesses and nation.

Cultural analysis of Japan

The Japanese population of 128 million people in Japan are mostly found in the coastal areas and urban regions due to the mountainous nature of the country. There are three main metropolitan areas – Tokyo, Osaka and Nagoya, with Tokyo having a population of 30 million. Tokyo is the largest city in the world.

Every country has its own unique culture. There is no sense in saying that one country is more unique than the other. Except when it comes to Japan. In many ways Japan resembles Europe or even US, but it also has many things in common with Asia. I have always been captivated by their “Kawaii” culture, and for a start, Japan hasn’t always been cute. The obsession with Kawaii culture first began in the 70s, at the climax of Japan’s economic growth. It was then that Japanese advertising agencies perfected the fine art of mass marketing. They try to get into their customers minds, hearts and eventually wallets with the creation of lovable characters. People even choose their bank based on which cartoon character they like over the other. I find that Japan’s ‘kawaii-ness’ stands out as a unique culture of its own.

Another unique cultural component is the value of team spirit of the people of Japan. The old saying in Japan is that the nail that sticks out gets hammered down. This is because, Japanese people value their ties to community over individuality. In Japan, teamwork is paramount. At work, when one member of a team has to work late, it's common for the entire team to stay (even when half the team isn't directly involved with the task). There is also an unwritten rule in Japan – Never go home before the boss. Workers who have finished their days work may wait for the boss to leave before going home. The opposite is also true, if there is a task required to be completed before the weekend, it’s common for the entire team to show up, including the management.

It is important to the Japanese to work together and help the fellow man. Each person must learn how to rely on each other and support others (Japan, 2003). The Japanese believe in equality between humans, they respect those who contribute significantly to help benefit the company as a whole. That may also be the reason why Japan has the best service industry in the world. They are almost always diligent, polite and fast. The best thing is, the staff aren’t motivated by tips. To the Japanese, team spirit and great service is a purpose onto its own.

Most notably unique is how Japanese culture controls communication. Communication is not as simple as trying to understand what is being said. To the Japanese culture, spoken words may have several meanings and they look at a person’s body language to try and decode any words that are unsaid. Context is secondary in understanding what has been said. This is because, there can be many interpretation of words by mouth, but the smallest expression can make a difference to the meaning of what is being said. While someone is speaking, frowning, for instance, can be interpreted as disagreement or dislike. To the Japanese, laughter, smiling and giggling can be confusing. These forms of expression may indirectly convey embarrassment, shock, confusion or even being upset. The Japanese rely on facial expression, tone of voice and posture to tell them what someone feels.

This affects the way the Japanese think, act and the criteria by which they judge others. It is also their culture that the Japanese do not openly insult, criticize or put down others on the spot. To them, saving face is crucial, and is also a mark of personal dignity. They have a difficult time saying 'no', so you must be vigilant at observing their non-verbal communication. Silence to them is a mark of maturity, and information can be conveyed indirectly to a person.

The business culture of Japan

Knowledge of basic characteristics and attitudes of the Japanese people is important before conducting business. The ancient religion of Shinto and Buddhism greatly influence the way Japanese conduct business. Daily business transactions is common to be heard in Japanese language. To them, integration of values, attitudes, customs and religion goes hand in hand. The Japanese business etiquette finds politeness, sincerity and good manners as important values in a person. Workers who work hard for the benefit of the company are deemed as respected to the Japanese. It is widely believed that by working diligently, the Japanese individual can connect with the larger pool of work force and therefore adhere to the ethical culture of Japan. Japanese workers are expected to work under their companies, and their companies in turn, a subordinate to the nation. The Japanese are very formal in the way they conduct business, the formality starts from the first meeting at the moment they present their business cards. It is an unsaid rule to treat the business card with respect and never scribbled on.

Punctuality is important in Japan. You are expected to arrive on time for meetings and you can expect your Japanese colleagues to do the same. If you’re running late, you are expected to inform at least one hour in advance. Social classes is evident in Japanese business. Usually, upper middle class and nobility make up for the members of large companies and directors. Lower middle class are usually the salary men or white collar workers. Japanese people always know their position within a group. Japanese businesses are always expected to work for the beneficial transaction for the country.

The business culture of Japan and Singapore in comparison

Based on Forbes ‘2010 Best Countries for Business’ list, Singapore is shown as the fifth best country in the world as a business destination while Japan is 27th best. Singapore’s high ranking is due to its high degree of trade freedom, with Singapore being number 1 which is most encouraging, while Japan ranked in 63rd place. Singapore’s high degree of investor protection ranked in number 2, while Japan takes its place at the 16th spot. Lack of corruption is also a point to note with Singapore at number 3, and Japan at number 17.

In Singapore, there is a high degree of business friendliness. Singapore ranked #1 in the World Bank’s ‘2011 Ease of Doing Business’. Japan’s 18th position shows that its regulatory environment is less conducive to start and operate a local firm. Singapore company registration can be accomplished in a record time of 24 hours whereas incorporating a company in Japan can take up to 8 procedures and 23 days’ time. There is also a stark difference in communication between the Singaporean and Japanese.

For example, it is crucial for the Japanese to develop relationships with potential business partners from early on to determine the truth of what is spoken and unsaid. In contrast, Singaporeans may ask a lot of questions in order to ensure clear understanding before making any decisions. This might cause difficulties during the negotiation process. While the Japanese are keeping in mind the social relationship goals during the negotiation process, Singaporeans are more concerned about the immediate answer, and this does not necessarily mean long term business. However, with patience and understanding, a strong business relationship can still be formed.

The most significant difference on the business culture between Singapore and Japan is related to workforce. Singapore’s social classes can be made up of the upper class, upper middle class, lower middle and lower class. The lower class refers to the poor, while the upper class the rich. Unlike Japan, there’s no nobility or royalty in Singapore. CEOs are usually in the upper class, while the bigger proportion of executives and workers can be found in the middle class. Singapore encourages the realization of a childhood dream, where they can move upward through the social ladder by working hard and getting a good education.

This is where the Japanese and Singaporean will find contrast. It will be challenging for Singapore women to work in Japan. This is because, Japanese women do not usually hold high ranking positions. They usually take the lower grade task roles and are expected to leave once they get married or have children. At the same time, the annual income of a Japanese women is about 50% less than a male co-worker. However, in Singapore since 1997, the overall participation rate of working females in Singapore has risen from 49.5% to 54.3%. The Singapore government encourages women to be productive employees while still retaining their traditional roles in the family. Growing together with the nation, women now are able to receive higher education and contribute more to the country’s economic development. For example, female accounting and finance professionals in Singapore today are seeing strong aspirations to move up the corporate ladder by 2022. For the Singapore women, work-life balance is the top priority.

Japan’s cultural impact on international business

There are a few implications of the Japanese culture which may affect international business; for example, in a business negotiating process, 100% of the Japanese respondents claimed that they approached negotiations as a win-win process, but only 33% of Spanish executives took that view. Win–win negotiators see deal making as a collaborative, problem-solving process; win-lose negotiators view it as confrontational. For the Japanese, they deem themselves as win-win party and as this is their culture, it will be hard for them to take ‘No’ for an answer. The indirect ways Japanese negotiators express disapproval might lead foreign business executives to believe that their proposals were still under consideration when in fact the Japanese side had rejected them.

Another one of the cultural difference which may potentially affect international business is the Japanese’s insensitivity to time. Americans for example, may try to reduce formalities to a minimum and get down to business quickly. With the Japanese, whose goal is to create a relationship rather than simply sign a contract, they need to invest time in the negotiating process so that the parties can get to know one another well and determine whether they wish to embark on a long-term relationship. They may consider aggressive attempts to shorten the negotiating time as efforts to hide something. At the first meeting for the American, calling someone by the first name is an act of friendship and therefore a good thing. For the Japanese, the use of the first name at a first meeting is an act of disrespect and not favourable. You may lose potential business dealings just by a negative first impression or bad image with the Japanese.

The implications for companies that wish to conduct business in Japan

One way to understand the difference in culture between Singapore and Japan is by using Geert Hofstede’s Cultural Dimension. The dimensions that he included were the Individualism/Collectivism, Power Distance, Masculinity, Uncertainty avoidance and Long Term Orientation.

In Japanese organizations, distance to power is simultaneously high as there is always the absolute authority of the hierarchy even with cooperation between staff and management. For Singapore, the attitude is formal, power is centralized and there is an emphasis on mutual obligation. Singapore companies intending to set up a business in Japan has to realise that if they employ a Japanese local staff, they do not necessarily prefer a close relationship with one just leader.

The dimension of individualism reflects the extent to which individuals prefer to focus on their development, namely in an organization, groups or other community. Japan scores 46 on the Individualism dimension. Japan shows many characteristics of a collectivistic society; such as emphasizing harmony of the group above the expression of individual opinions and the Japanese have a strong sense of shame for losing face. Individualism occurs when people are defined as individuals. Singapore, with a score of 20 makes her a collectivistic society. This means that a collective “We” decision is important, people who belong to in-groups look after each other.

With a score of 95, Japan is one of the most masculine societies in the world. Japan tends to have high masculinity values where success is all that matter, money and material goods are also important. This stresses on competition, dominance and monetary gain or social recognition. However, in combination with their mild collectivism, you do not see assertive and competitive individual behaviours which we often associate with masculine culture. As is the case for Singapore, despite the masculinity evident in the culture, they are also less competitive and do not follow at the cost of it all to gain promotion.

The dimension of uncertainty avoidance depicts the degree to which people in a society feel threatened by ambiguous situations and the degree that they try to avoid those situations. The dimension of Japan shows a strong need for security, they are ever watchful and careful to avoid creating competition between employees and management. In Singapore, it is due to high Power Distance that resulted in a low score of 8 for uncertainty avoidance, not because they have a need for structure. With this, a Singapore company can plan for long term business strategy as neither the Japanese nor Singaporean would want to cause a threat against the management or authority. In Japan, there is the value of long term investment cultivated by the Japanese people. They invest highly in R&D despite economically difficult times and they vie for a steady growth of market share rather than quarterly profit. The idea behind it is that the companies are not there to make money for the shareholders in the short term, but to serve the society at large for many generations to come. Similarly for Singapore, thrift and efforts in modern education is a way to prepare for the future.

Positive outlook for a business set up in Japan

Even with the implications listed above, here are a few reasons why it may still be a good idea to set up a company in Japan;

Japan is the centre of creativity and new trends. Many businesses around the world are partnering with Japanese companies and hence, international companies may find it a good testing ground for new products and services.

Japanese consumers are always on the cutting edge when it comes to new technologies. The market seems promising for new gadgets and for as long as the consumers are adaptable to it, the product will sell. Partnerships with SMEs in Japan that possess unique technology could be beneficial and may open up new sales channel.

Japan is home to many top companies and hence it can be a gateway to enter a global market through a regional headquarter.

Japan’s prominent R&D industry encourages cooperation between foreign companies, universities and organizations.

Conclusion

The rich and vibrant culture of Japan provides a promising market for international businesses to be conducted. The culture between Japan and Singapore might be complex due to the customary and communication difference. However, Singapore can learn a lot from Japan. For instance, the Japanese have always been successful when it comes to globalization and they manage to avoid economic crisis due to their creative marketing strategy and careful planning. Most importantly, Japanese companies does a better job at establishing a long term business relationship than most country does. It is not just money that motivates them. Even with the challenges presented and the drastic difference of Japan from other cultures, international companies and Singapore companies can be successful in doing business in Japan. A lot of research, adaptation, understanding and preparation has to be done, but the payoff can be great.