`Doing Business in Japan': Very informative for non-Japanese

Doing Business in Japan: An Insider's Guide The Canadian Chamber of Commerce in Japan General Editor, Jane Withney Prentice Hall, 1994, 304 pages

JAKARTA (JP): After the Plaze Accord (1985) and entering the dawn of the twenty-first century, Japan is establishing itself as the leading economic force in the Asia-Pacific region. Japanese business investments in this region have fostered the region's economic development and simultaneously brought the Japanese into closer contact with very different cultures.

Doing Business in Japan: An Insider's Guide takes the reader into the subtleties of doing business in Japan. In short, the process for non-Japanese in their relation with the Japanese in Japan is a challenge. But is it really that simple?

The 13 contributors to this book are Canadians who have lived and worked as business executives and academicians in Japan for years. They try to provide insight into what the Japanese business executive is thinking and seeking, and what his words and actions really mean.

There are three main themes. The first answers the question if it is wise for Western companies to enter Japan looking at economic forecasts and profiles of Japan's imports. The second part describes the nature of the Japanese market in societal terms, market trends, consumer values as well as corporate behavior. The last part offers practical, specific advice on how to successfully penetrate the market. Although this book is directed at Western businesses, it covers a wide range of issues, including: trends in the Japanese market, Japanese business etiquette, setting up strategic alliance and joint ventures, marketing and distributing products in Japan, the imports Japan needs, and finally the advantages in using science and technology to get into the market.

In the foreword, David Culver, retired CEO of the Alcan Aluminum Limited and a strong advocate of Canadian interests in Japan, mentions that interactions with a variety of ethnic groups has prepared him in his business dealings almost everywhere - except Japan. His statement reflects an honest admittance of a weakness which should be improved. Most of the contributors mention that from a Western perspective, to sharpen enterprises in the global market and succeed in Asia, one must go after the Japanese market. Once established there, the rest of Asia will come.

Dynamic market

While doing business in Japan, one soon becomes aware of the vast opportunities which exist in this dynamic market. For the non-Japanese it becomes apparent that they need to know more about the subtle and practical realities of the Japanese way of life and of doing business.

During my stay in Japan with the Institute of Developing Economies, I happened to meet Gregory Clark, chancellor of the Institute of Developing Economies Advanced School, one of the contributors. He believes that for a non-Japanese, particularly one who has only studied about Japan from a Western perspective, the main problem in explaining the Japanese is that almost anything said about Japan can easily be contradicted.

For example, it is often said that the essence of good Japanese management is supposed to be its egalitarianism. Many see the Japanese as highly disciplined people, yet the Japanese see themselves as highly emotional people given to excessive mutual dependence (amae) in their relationships. Some see the Japanese as a highly progressive people, yet it is easy to find examples of extreme conservatism. The Japanese can be extremely polite at times, but are reluctant to admit, let alone apologize for sensitive issues. If they do, it is for the sake of contacts.

Gregory Clark states that our non-Japanese mind scape prefers a rationalistic approach considered to be the natural result of the desire for progress.

Simply hiring Japanese with the ability to speak and get along with foreigners is a mistake. These people may be suited to the work, but may lack the qualities necessary to get on in Japanese society. Like their Japanese equivalents, foreign employers must feel that they are establishing a collective, an unmae kyodotai, or a "community bound by the same destiny" that will work together over the long term, sharing both the failures and the success of the enterprise.

Kevin K. Jones in Routes into Japan describes one of the first decisions for a company considering entering the Japanese market, the point of entry. The possible routes, start up operations, joint ventures and acquisitions, do not differ greatly from those in other countries, but the characteristics of the Japanese market work to influence the final decision. The intricate marketing channels are such that chances of making a mistake in building a business in Japan, even for experienced foreign companies, is high.

Agent of change

The last chapter is very interesting because we are presently moving toward the age of science and technology. In Technology and Business: Foreign Relationship with Japan for the Twenty- first Century, Geraldine Kenny-Wallace states that the field of science and technology may determine a company's opportunity in Japan for two reasons: First, it offers a valuable avenue for entry into the Japanese market in terms of partnership with Japanese companies to develop new technology. The second is with the growing importance of value-added products in the mix of Japanese imports, science and technology enables foreign companies to upgrade their offerings to the Japanese market.

Science and technology has long been accepted by the Japanese society as a powerful agent of change. In turn, traditional culture has played a profound role in the way science and technology projects and business ventures are carried out in Japan. Generally, Japanese industry has proven that complacency is a mistake, even for successful businesses. One must have a constant flow of improvements, or someone else will imitate your product. This implies a continuous update of the information base shared with one's partner.

For Japanese industry entering the twenty-first century a sustainable competitive advantage will come from "new process technologies" rather than "new product technologies". And in this era of globalization, non-Japanese businesses entering Japan should understand intellectual property rights (IPR) as a part of business competitiveness and its implications.

This raises the following questions: Are the Japanese playing the same game but doing it better, working harder, saving more, and being smarter than everyone else from the Western world, or does their success spring from having organized a different system, playing the game differently? Is Japan just better, or is it exceptional?

It is not that exceptional if one really understands the intricacy and subtlety of the Japanese society and its way of doing business.

As a guidebook, Doing Business in Japan is very informative and provides the non-Japanese with the practical knowledge one needs to successfully do business in the Japanese market.

Doing business with the Japanese is a challenge and meeting it successfully is a process which is very satisfying.

Bob Widyahartono, dean of the School of Economics, University of Indonusa Esa Unggul.