Business Etiquette in Japanese Negotiations.

University Degree Business and Administrative studies

Helms,

Business Etiquette in Japanese Negotiations

The world economy is dependent on trade between countries. As globalization of the world’s economy increases, companies depend on international negotiations to build strong relationships and extend their services to a larger market. Since World War II, Japan and the United States have become dependent on one another’s markets to fuel their economy. Japan is the second largest supplier to the U.S. and the United States is the largest supplier of imports to Japan. As a result, companies strive to teach Japanese business etiquette to their international negotiators.

International negotiators encounter many cultural differences when they are conducting business in Japan. In addition to language differences, there are different values, opinions and sentiments. There is a strong sense of hierarchy in Japan accompanied with many rules for etiquette in a business environment. Americans who wish to strike a deal with Japanese partners should understand and appreciate the hierarchical system that is in place. Though foreigners are not expected to be aware of the exact behavior in every situation, the Japanese appreciate it when a foreign business associate exhibits a general understanding of Japanese ways.

The biggest concept for Westerners to grasp is that Japanese view negotiations as the beginning of a long relationship, where the formal agreement is a mere testament to that association. Americans, on the other hand, tend to view negotiations as a competitive way to sign a binding contract between two parties assigning specific rights and obligations to each party. Relationships are not of high importance in western culture. Trust, however, is a huge ingredient necessary to conduct business in Japan. It is viewed as the building block to all long term relationships. Before beginning negotiations, foreigners need to alter their thinking to build trust with their Japanese contacts.

Setting up a business meeting in Japan takes more effort than a mere phone call to a secretary. Traditionally, Japanese will not do business with people whom they do not know well. It comes down to an issue of trust. In order to avoid having to go through introductions level by level through the organization, it is very helpful to use a third party or Shôkai-Sha. A Shôkai-Sha is a person who will contact the Japanese company and act on your behalf. When selecting a third party intermediary, it is important that he is well respected by the organization with which you wish to do business. The Japanese will associate your firm with the Shôkai-Sha; hence it is much easier for them to enter into negotiations. In addition, one should hire an interpreter independent of the company with who you are dealing with. Interpreters can be a valuable tool in both the business and social gatherings that will occur.

The last obstacle to prepare for when conducting business in Japan is women are still at a disadvantage. The role of women is to take care of the home. In recent years, Japanese women have advanced somewhat in the business world but they are not accepted as much as in the west. If a women executive is a member of the team, there are certain things to be aware of. Foreign female business partners may experience some adversity and prejudice from older conservative Japanese men. They may be viewed as incompetent and unworthy of their position. It is important that women establish their credibility from the beginning. She should act like a professional and not be afraid to assert her intelligence in a modest way. It is also helpful if male colleagues look to her for an opinion. In social settings, women should be aware that their behavior will always be under scrutiny. Women will be prohibited from participating in some social gatherings, but dinner and bar hopping are acceptable.

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Once a meeting has been established, a negotiator needs to prepare for the trip so that he is ready to be accepted by the Japanese culture. A company should research the organization with whom they are dealing with. They should be ready to exhibit that they have fully prepared for their discussions. Presentations should be well organized and offered in both oral and written formats. The language barrier makes it difficult for the Japanese to comprehend everything at one time. Presenting them with written information gives them the opportunity to review what was said so they fully understand your proposal. ...

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Next, business in Japan is often conducted in organized groups. The Japanese are uncomfortable working with single individuals and consider the size of your group a reflection of how important the business meeting is. In addition, it is recommended that you keep the same groups throughout the business deal because again, the Japanese want to build long term relationships with their associates. They will not be accepting of new comers.

The Japanese will place a lot of emphasis on how you are dressed and what gifts you bring. When deciding what to pack for the business trip, negotiators should keep in mind that the American business casual style is not acceptable in Japan. Both men and women should dress conservatively avoiding bright colors and fancy accessories. Gaudiness is looked down upon in Japan. Women should not wear pants in a business situation. Japanese men tend to find it offensive. Recreational activities such as golf are a typical occurrence in the business world. Therefore, bringing golf clubs or tennis rackets may be a wise choice. The Shôkai-Sha can be helpful in telling you what clothes and equipment to bring. Another important thing to plan to bring are gifts. It is a custom in Japan to bring gifts to convey respect and gratitude for being able to conduct business with one another. As with everything else, Japan’s customs are different than in the U.S. so it is important to understand the guidelines for gift giving.

Gifts should be plain and thoughtful rather than expensive. Do not bring a gift made in Japan. The Japanese would prefer a small token representing your hometown more so than an expensive luxury gift. Items such as scissors or knives should be avoided because they represent separation. Just as “thirteen” is considered an unlucky number in the United States, the Japanese have superstitions about certain numbers also. Giving gifts in quantities of “four” or “nine” are taboo for they signify “death” and “choking”. Presents should be wrapped simply in business colors such as beige or grey while avoiding bows which are considered too gaudy. It is common for the hosts to give you something from their country. If the gift is wrapped it should not be opened until after the meeting. If it is not, however, one should express a great amount of thanks and appreciation for the item. The Japanese will entertain questions about the gift and take it to show that you are interested in the gift and its origins.

The last and one of the most important things that an international negotiator should remember to pack are business cards, meishi. Exchanging business cards are a necessity in both business and social settings. One should plan on bringing a large amount of business cards because they will be giving many away during their stay. If possible, business cards should be double sided with one side written in English and the other in Japanese. They show potential partners that you respect their culture and are sincere in your efforts to form a long term relationship. Meishi should be carried in a hard case designed for cards of that size. Business cards are very important to the Japanese and should be taken care of appropriately. Like most customs in Japan, there are proper techniques for handling and distributing business cards.

Business cards are handed out at the beginning of the meeting. It is very important to have enough in hand to give to each member of the group. One should distribute the cards individually to each person handing them out according to rank. It is respectful to stand when handing a business card to someone of high importance. All cards should be given and received with two hands. The words should be facing toward the recipient so that he can read the card, Japanese side up. When you receive meishi, read and pronounce the name carefully showing interest and a valid effort to use the correct pronunciation. After receiving a card, never put a card in your back pocket or throw it into a brief case. This act will insult the Japanese and they will feel like you are not taking the business union seriously. Business cards should be laid out on the table in a hierarchical order. At the conclusion of the meeting, it is imperative to pick up all the business cards that you were given. It is very rude to forget one. You should store them in your hard case, after which the case should be put away in either a front pocket or a purse to signify their usefulness.

At the meeting, many rules of Japanese business etiquette revolve around a hierarchical system. It is a good idea to send a manager of the same rank to meet with a Japanese colleague. Customs based on rank are deeply rooted in the Japanese culture thus it is very important for Americans to understand this concept and use it when applicable. For starters, when the two groups are entering a room, the leader of the group should enter first. The same goes for ascending or descending a flight of stairs. The host is in charge of introductions and the senior is always introduced first. Upon entering the room, wait to be seated. The seats are arranged very deliberately. Typically, the host with the highest status will sit at the head of the table, furthest from the door. The others, starting from the head, are to sit in the seats according to their ranks as well. The higher ranking partners sit closer to the head host. Do not be sit down until the head of the table tells you to do so. Similarly, when the meeting has come to a close, wait until he stands to stand up. At the end, it is acceptable to shake hands with the host and than nod at the other members. Wait for the senior ranking partner to leave the room before you make your exit.

Once the meeting begins, Americans need to be aware that doing business in the western world is not the same as in Japan. It is a much longer process. Rushing negotiations or rejecting one of their customs accidentally will make it very difficult to strike deal. Typically, Japanese conduct business in four stages. The first meetings are not what westerners would consider business negotiations. In the west, very little time is devoted to getting acquainted with their partners, whereas the entire first meeting in Japan will be spent gathering information and getting to know their counterparts. It will be to your benefit to act interested in their questions and to offer information to them. This stage is all part of building the relationship. Discussions are saved for when the foundations of trust are in place.

Once the Japanese feel comfortable, negotiations will move further into what is know as the information stage. At this point the Japanese will try to gather facts by asking questions. A negotiator should be able to answer the questions and provide enough technical detail so that they understand your seriousness. This process can take longer than normal so Americans need to be patient and open. The third stage is the negotiating phase. At this point the Japanese are coming close to making a decision. While westerners would like to push their points and negotiate on a specific bottom line, it is highly recommended that you take a slower more congenial approach to negotiating. The Japanese will take offense to a hard approach in which strict deadlines and explicit duties and obligations are set forth. They are not concerned with the short run. If you have insulted them in some way, do not hesitate to apologize for your actions. Apologies are acceptable and are viewed as a caring gesture. If you notice that the size of the Japanese negotiating team is diminishing, the deal is not going well. You will need to rethink your approach and attempt to save your position.

The final stage is known as the Concession and Agreement phase. Typically the best strategy has been when Americans present their position and concessions first. Once again patience is necessary in this final phase. The Japanese try to think things through and find a position in which both parties can save face. Harmony is an important concept and they dislike confrontation and arguments. Despite disagreements, they always try to “save face.” It is wise not to bring a lawyer into the making of the contract. Whereas westerners view a contract to be the final product of negotiations in which the contract contains a precise agreement, a Japanese contract is less strict. It reflects the establishment of a long term bond. “Its primary intent is to establish that the other party agrees to become part of the "corporate family" and that both parties agree to cooperate with each other.” Specific details will be able to be agreed upon when they arise. Choosing to sign a Japanese contract has both positives and negatives. In some cases, it would be beneficial to sign both. One should keep in mind, however, that the Japanese are looking for an agreement that will make both companies better off. Do not attempt to force any concessions on them.

After meetings, it is common that the host invites you to join them in a social gathering. This is considered to be part of the negotiations so one should make all attempts to be able to attend. The Japanese learn a lot by how a business associate acts when in a social environment. If offered a drink, do not say no. Social drinking builds trust and allows friendships to grow. If alcohol is served from a bottle, do not drink from it. In addition, one is not supposed to pour their own drink, but it is necessary to pour your companion’s. Toasts are common and frequent throughout the night. Each toast is followed up with a toast. Be prepared to give cheers at dinner. When eating in a restaurant with your host, make sure to sample each dish. One does not have to eat everything but tasting each dish shows your acceptance of their cuisine. When the bill comes, one should offer to pay. The Japanese will not accept your offer but it is polite to do so.

Business in Japan is not difficult because they are very lenient when a foreigner is oblivious to a custom. The Japanese do, however, expect that a foreign business partner has taken the time to look into the rules of etiquette in their country. As a result an international negotiator should be aware the basic profound differences between the two cultures. In addition, one should be aware of some minor actions that are offensive to the Japanese. Punctuality in a formal business setting is mandatory, but in an informal gathering, time is not important. Shoes should be removed when entering a house or a room with a floor covered by tatami mats. When greeting someone, a handshake is acceptable, but a small bow is more appropriate. Certain gestures such as pointing finger at someone or sitting with one ankle resting on a knee are considered rude. One should never blow their nose or display money in public. There is no gratuity in Japan. Understanding the bigger concepts and avoiding simple business faux pas can prevent a business deal from going down the drain.

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