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Japanese national culture as a basis for understanding Japanese business practices

by John B. Ford, Earl D. Honeycutt, Jr.


There is no shortage of articles that attempt to present keys to understanding the actions of Japanese businesses and their executives. Clearly missing from this wealth of "expert" treatises is the influence of Japanese national culture on business practices and strategic decision making. Strategists must possess a knowledge of Japanese cultural heritage to understand Japanese competitors. Culture is an important variable for comprehending the actions of any population, and this is particularly true when analyzing the Japanese, with their fierce pride of customs and heritage. With a proper knowledge of Japanese national culture and its many facets--language, education, social organization, religion, law, politics, values and attitudes, aesthetics, technology, and material culture--one can gain greater insight into the business decisions of the Japanese as well as a better understanding of the basic differences between American business people and their Japanese counterparts. Business practices are an offshoot of national culture. To understand Japanese business, it is necessary to understand the culture. There is an important difference between localized corporate culture and the broader and more informative national culture that affects business decision making. One must be careful not to theorize from corporate cultural examples to the more generalized Japanese business practices and procedures. In this article we will (1) examine the literature dealing with Japanese business practices; (2) discuss the relationship between national culture and business practices; (3) posit several basic national cultural differences between the United States and Japan; (4) examine Japanese business practices in light of these basic national cultural differences; and (5) provide prescriptive implications for American managers seeking to better understand the actions of their Japanese counterparts. The process involved here should produce greater insight into very complex issues. JAPANESE BUSINESS PRACTICES AND CULTURE Many articles attempting to provide answers to the enigma of Japanese business practices have appeared in business literature during the 1980s. These will almost certainly continue into the 1990s as Japan expands its global economic power base. Most of the articles have attempted to examine Japanese corporate policies and procedures to determine which ones lead to success. These articles then advocate the use of these successful practices by American firms. In the hopes of providing a "quick fix" for declining American businesses, these prescriptions have avoided the underlying massive national cultural differences.

By investigating corporate culture, many authors have attempted to explain the basic differences between Japanese and American business practices. It is important to state that corporate culture is, by nature, very company-specific, and any attempt at generalization from company-specific observations could be misleading. Heiko (1989) examines Japanese culture to explain the success of just-in-time production, but the major focus of the article is on corporate culture. This design was also used by Burton (1989) in a comparison of corporate characteristics; by Ebrahimpour (1985) in an examination of the possibilities of adoption of Total Quality Control (TQC) by American firms; and by Tokuyama (1987) in a comparative analysis of management techniques. The approach is also apparent in the works of Kolchin (1987), who advocates the adoption of Japanese participative management techniques by U.S. firms without a thorough understanding of basic national cultural differences, and Park (1982), who provides prescriptions for American management based almost completely on Japanese corporate culture. A few perceptive articles have stressed the need for a deeper understanding of Japanese culture. Lazer et al. (1985), for instance, advocated a need for cultural understanding when analyzing Japanese marketing practices: It is exceptionally difficult for a gaijin, a foreigner or outsider, to understand what is really going on in Japanese marketing because of a lack of understanding of the culture, language, and historical perspective of Japanese business developments. Without it, it is impossible to dig beneath the surface and penetrate the veneer. One can argue that this statement applies equally to all areas of business, not just to marketing. However, only a handful of articles have taken such a broad view of Japanese national culture. Lecht (1987) proposed that, by examining the Japanese language, one gains a better understanding of their management styles. This proposal is a step in the right direction, but language is only one of the basic building blocks of culture. Bolwijn and Brinkman (1987), Alston (1983), and McAbee (1983) all warned against blanket adoption of Japanese business practices by Western companies because of fundamental cultural differences. Pierce (1986) also urged a deeper understanding of cultural variables to understand the Japanese approach to direct-mail advertising. But this study was limited to culture as it applies to consumer response to direct mail promotions. In an earlier study, Pascale (1978) stated that understanding Zen would enhance comprehension of Japanese management practices. Again, this was a good beginning that focused on an important underlying element of Japanese national culture, but a broader cultural approach would seem to have increased merit. BUSINESS AS AN OFFSHOOT OF NATIONAL CULTURE If one goes back to the work of Hoebel (1960), one finds culture defined as "the integrated sum total of learned behavioral traits that are manifest and shared by members of a society." An investigation

conducted by Kroeber and Kluckhohn (1963) examined more than 160 different definitions of culture, concluding that culture can be defined as (1) communicable knowledge, (2) all that separates humans from non-humans, or (3) all of the historical accomplishments produced by human social life. One area of intellectual dispute involves whether culture is inherited or earned. The majority view is summed up by Terpstra (1983): "Any given culture or way of life is learned behavior which depends upon the environment and not on heredity." The connection to business practices is that culture includes everything that is thought, said, done, or made by a group. Cundiff and Hilger (1988) state the following: Cultural influence also directly affects the climate for business in general and international business in particular. National ideology determines how members of a culture view the role of business and how strong the culture's identity is. These factors in turn determine attitudes toward foreigners, foreign products and foreign ideas. They also set the stage for nationalism, a collection of attitudes or policies designed to protect the group's cultural identity and independence. National differences can have the single greatest impact upon cultural orientation and represent the highest level of cultural aggregation. As Czinkota and Ronkainen (1988) explain, "Every person is encultured into a particular culture, learning the 'right way' of doing things." Japan, as a nation, is proud of and strives to protect its cultural heritage. This resistance to cultural change can be seen, for example, in the reluctance of the Japanese to accept women in the business world. As a Japanese friend, Muneo Yoshikawa (a professor of Japanese culture and language at the University of Hawaii), expalins, "In Japan, the woman is air; she is an absolute necessity of life, but the Japanese man hardly knows she exists."

Beneath the aggregate Japanese national culture lies both intracultural and interpersonal cultural levels. On a micro level, one would expect to find the most deviation from the national norm. Japan, however, is inherently proud of its uniqueness, and the extent of both intracultural and interpersonal differences is small when compared with cultural deviations found in polyglot countries such as the United States. Whereas many large subcultures exist in the U.S., Japan's are fewer with smaller populations. This only strengthens our argument that a deeper knowledge of Japanese national culture is imperative to better understanding Japanese business people. There are enough variations in Japanese corporate culture, even if fewer than in the United States, to illustrate that need. BASIC NATIONAL CULTURAL DIFFERENCES After years of studying and observing Japan and its people, we have compiled the following list of cultural differences. However abbreviated, it provides a solid basis for understanding essential differences between Japanese and American business practices and procedures. Each of the comparative elements is examined in greater detail, first from a basic national cultural level and then from a business perspective. Process (Appearance) versus Result (Bottom Line) In Japan, the actual process often becomes more important than the end result. A good example is a ritualistic tea ceremony that many foreigners observe and participate in when visting Japan. The ceremony itself is a complex process in which the participant receives the tea bowl in the proper manner, turns it appropriately in the hands, drinks the tea slowly and deliberately, and turns the bowl back to its original position in an acceptable manner. Then, after a period of careful observation, an appreciation of the fine craftsmanship of the tea bowl follows. Foreigners can learn a great deal from this very traditional ceremony. It is the process itself that is most important. The tea, which is made from heavy green tea powder and is quite strong, is considered quite bitter by most foreigners. Many Americans react to the experience by asking whether bitter tea is worth the wait. Thus, they miss the significance of the ritual. This attention to detail is also seen in Japanese food preparation, flower arranging, and applied music pedagogy. The Japanese have many thousands of years of cultural traditions of which they are very proud and determined to maintain. If foreigners allow themselves to participate in the process, these rich Japanese traditions will become more clearly understood. In Japan, many corporations require that executives, after spending a particular number of years with a corporation, participate in national cultural awareness and appreciation

Japanese companies expect managers to remain in touch with their own cultural roots even though the business work place is becoming more globally oriented. This demand for attention to tradition is essential to Japanese corporate life, permeating every aspect of Japanese business decision making. Professor Isamu Kurita of the Fujitsu Institute of Management states the following in his book Japanese Identity (1987), which is made available to all Fujitsu executives: The tea ceremony and other disciplines--flower arranging, calligraphy, and so on--are referred to in Japanese using words including the suffix do, literally meaning "path" and often translated as "the way": sado, "the way of tea," kado, "the way of flowers," shodo, "the way of calligraphy," etc. . . . In all cases, do is more than a path; it is an absolute truth. . . . Each of these aspects of Japanese culture . . . is in fact not confined to the scope of its particular artistic genre but is part of a comprehensive legacy that passes from generation to generation as a way of life. Process (or ritual) becomes readily apparent to American managers entering contractual relationships with their Japanese counterparts. Before conducting business, the parties must engage in "alcohol-related revelries." Japanese executives are expected to participate routinely in after-work drinking sessions with colleagues. This socializing is believed to be best for the overall health, well-being, and fostering of a "family" relationship expected of one working for a Japanese company.

The attention to business practice process is also observed in the ritual exchanging of business cards. The business card (or meishi) takes the place of a mutual third-party friend to individuals who are being introduced for the first time. The exchange is performed very precisely with the proper decorum. This practice also permeates Japanese society, for even grade-school children exchange meishi. As American managers sensitize themselves to the processes (or rituals) involved, they become more tolerant of the steps and time requirements involved. These processes allow them to learn a great deal about not only the Japanese people, but also their national cultural heritage. Most important, this sensitivity increases the probability of achieving success in business negotiations. Community (Conformity) versus Self (Entrepreneurialism) At the root of Japanese national culture is a concern for the protection and perseverance of the society as a whole. Certainly the genetic makeup of the Japanese people is a matter of pride. When comparisons are made between Japanese and American societies, one of the first differences uncovered is the Japanese pride of bloodline. Americans are proud that their society promises equal opportunity. It is a melting pot of many different races, cultures, and traditions. This is not the case in Japan. The outsider (or gaijin) is exactly that--a non-Japanese who is not really welcome. Japanese are proud of their uniqueness, which would be diminished if outsiders were allowed access to their culture. One example of this, which strikes the visitor to Japan, is the appearance of blond-haired, blue-eyed gaijin on Japanese television game shows speaking perfect Japanese. In many cases these are the children of missionaries who grew up in Japan. They speak and write Japanese fluently, but they are Western in appearance; therefore, they become a real oddity to the Japanese. Whenever these "contestants" speak, laughter emanates from the Japanese audiences. They may learn to speak the language and understand the ways of the people, but it is clear they can never actually become Japanese. Expatriate Westerners who have tried to become Japanese have experienced a loss of status. When people give up their Western citizenship, they lose what makes them appealing to the Japanese, and they may face scorn and prejudice because they do not "fit in." Taylor (1983) describes this problem in Shadows of the Rising Sun: Citizenship is no guarantee of final acceptance. No matter how well adapted he is, a Caucasian Japanese, even with his Japanese name (a requirement for citizenship), will be a freak his entire life. . . . Lafcadio Hearn (1850-1904), the great British admirer of Japan, took his wife's name, Koizumi, and became a Japanese. . . . One of the first things that happened to him was logical but unexpected: his university salary was sharply reduced from that of a visiting foreign professor to a Japanese. Koizumi later realized that as a foreigner he had always been treated as a guest. As a Japanese he was a misfit, a perpetual outcast. This basic cultural element is clearly seen in the Japanese characters (kanji) for the words "public" and "private." The character for "public" evolved from a pictogram of many people eating from a common rice bowl. "Public" carries with it the connotation of community well-being. The character for "private" evolved from a pictogram of a single individual eating from a rice bowl. "Private" or "self" has a negative connotation in Japan. This can also be seen in the Japanese corporation. In Japan,

The concern for the welfare of the whole is seen in the business practice of consensus decision making (ringi: the formal mechanism; nemawashi: the informal process). The decisions made by the group are better than a decision made by a single person. The basis for this perspective is that "two heads are better than one." If everyone agrees to a decision, then there is unity of thought. This unity reflects the importance of harmony in Japanese religious training. A divergent opinion disturbs the harmony of the group. Hasegawa (1986) describes this as follows: This decision-making process stems in part from the fact that Japanese society is highly homogeneous. Not only do the 120 million Japanese all speak the same language, but information circulates much faster in Japan than in other countries. This is linked to a high standard of education and a literacy rate of virtually 100 percent. These factors, and the deeply rooted historical emphasis on harmony ... facilitate a consensus when an issue is presented. This also relates to the Confucian aspect of "face," which deals with the reputation of the individual. If something is done that brings disgrace upon an individual in Japan, there is not only disgrace for him, but also for his family. Kang (1990) points out that "doing something according to one's own style is called jikoryu, a term that carries negative connotations." The nature of the Japanese CEO also demonstrates this orientation. The leader of a Japanese corporation must embody the spirit of the organization so that he can represent the company accurately. The maverick free-spirit entrepreneur found in the United States is rarely seen in Japan; there are few Donald Trumps or Harold Geneens in Japan. The closest Japanese equivalents of these business leaders are Akio Morita of Sony and Ryazaburo Kaku of Canon. These leaders make it clear, however, that they have the very best interests of their companies in mind when they make decisions, even though they claim to be atypical Japanese leaders. The American manager must keep this community orientation in mind when dealing with the Japanese. This is especially pertinent during the negotiation process, when it is often not possible for the Japanese executive to make a final decision without input from other corporate executives. The Western manager should not prematurely press for a decision, because patience will often be rewarded. It is also important to remember that confrontation disturbs the harmony of the situation. Pushing a Japanese executive to "sign on the dotted line" will bring about a negative reaction. Hierarchy (Structure) versus Disarray (Free Form) Few, if any, societies are more structured than Japan. Taylor (1983) observes: For the Japanese, rank is so finely determined that equality is rare--everyone and everything are at least slightly above or below the nearest apparent equal. Family members, workmates, schools, companies, even nations and races all have their places. Hierarchy is inseparable from orderliness; a group is not properly organized unless its members are ranked. This hierarchical structuring of society goes back to the fifth century, when Confucianism was imported to Japan from China. Confucius taught the need for submission to elders and

those of superior position in the group. This was a moral requirement, and it certainly had an impact upon societal structuring during Japan's feudal period. The hierarchical structuring in society is also evident in the different "levels" of language that are used. One must never speak to a superior in a familiar form, and must show proper respect at all times. In the event that he is not sure about the status of another person, he must err on the side of conservatism and assume that the other person is his superior. Bowing also reflects status in society. The more inferior one is to another individual, the lower one must bow to him. These behaviors are known as cultural imperatives (Terpstra 1983), which means that certain actions (such as removing one's shoes in a Japanese home to show proper respect for the hosts) must always be conducted to avoid offending someone. The family and its importance are demonstrated in Japan by the individual who is responsible for taking care of elderly parents and grandparents. This respect for the elderly is clearly seen in the responsibility for one's extended family. It is a serious responsibility that must never be taken lightly. Another aspect is the Japanese concern for law and order. It is clear what behaviors are and are not appropriate in society. Societal laws are clear and harsh. As an interesting example, in a recent visit to the city of Kitakyushu, two taxicab drivers were parked outside the bars in the evening. One was there to drive a businessman home, while the other was there to drive his car home. This service vehicle was motivated by the stiff penalties meted out in Japan for being arrested for driving while intoxicated. In the United States one might expect a very stiff fine for the offense, but in Japan one's career is in jeopardy.

Concern for hierarchical structuring is also evident in the Japanese corporation (kaisha). Each person has a place in the hierarchy, and rarely is there any confusion regarding one's position within that corporate structure. Status, order, and harmony are all intertwined. Promotion is based upon seniority. Ohmae (1982) states that "there is no fast track for brilliant performers. No one reaches a senior management post before the mid-fifties, and chief executives are typically over 60." This order and structure also result in the grouping of firms within the major trading company (zaibatsu). Each firm occupies a particular position within the hierarchical structure. Harmony is all-important and must be maintained within all group entities in Japan. American managers should recognize the need for status and structure that exists within Japanese companies. The chain of command must be understood and adhered to religiously. During negotiations, if the appropriate individuals are not formally contacted, potential negotiations will be suspect. American managers must be very careful not to offend their Japanese counterparts by neglecting the cultural aspect of hierarchy. Commitment (Long-Term) versus Wariness (Short-Term) Commitment to survival is a national concern for the Japanese born of the limitations of their island nation. It is important to remember that Japan has few natural resources and must support more than 120 million people who live in an area the size of California. In fact, only about 10 percent of the entire landmass is arable because of its mountain ranges. Children are taught from the time they enter school that they must always strive to ensure the survival of the nation. When combined with the devastating situation in which Japan found itself at the end of World War II, these teachings have undoubtedly bred a level of commitment and concern for longterm survival that may seem "predatory" to other nations (Ford, French, and Heil 1988). Japan never again wants to find itself in a position of weakness and dependency, and this determination brings a level of commitment to all activities pursued by its people. Such commitment is readily apparent in the methods employed by Japanese companies to compete aggressively in world markets. Most Japanese firms use mass production to realize tremendous cost efficiencies, thus gaining high profit margins that ensure not merely market survival, but market dominance (Schonberger 1982). This has resulted in charges of predatory pricing and dumping practices being levied against Japanese firms in most foreign markets. This aggressive behavior also applies to Japanese firms competing in domestic markets. The level of competition within the Japanese home market has been characterized as "brutal" and bordering on "unfettered" (Vogel 1979). It would logically follow that if Japanese firms face this kind of intense competition at home, they would continue in the same vein outside their home markets. An example of this commitment is the reaction of Japanese businesses to the Chinese crackdown in June 1989. While U.S. businesses pulled back from China, Japanese businesses entered to fill potential gaps. This separation of economics and politics appears to be based on survival rather than ideological in nature. Another aspect of commitment for Japanese business is the long-term orientation of strategic planning. Some Japanese firms are willing to lose money for a period of time to establish a market presence. This was the Nissan strategy for the Infiniti automobile in the American market. It was also demonstrated in Toyota's commitment to the Lexus in the U.S., even though the initial sales results were very unfavorable. Japanese long-term commitment sharply contrasts with the American "bottom-line" orientation (Ford, Tanner, and French 1989). Other practical examples of Japanese firms building for the future are evident in efforts to develop commercial contacts with the European Community prior to unification (for example, Mitsubishi entering into joint ventures with Volvo and Daimler Benz). American managers must realize that Japanese businesses are committed to survival. Therefore, the

actions of Japanese competitors should be analyzed in a cultural context. Emotions that are not culturally based should not be attributed to Japanese businesses. To understand Japanese competitors, Western managers must closely examine the basic national culture of Japan. When this is accomplished, actions of Japanese competitors become clearer, and the appropriate responses to these actions become more evident.

Specific recommendations for American managers, which emanate from the four basic cultural elements, are as follows: 1. Process is often more important to the Japanese than the end result. Attempt to view the process from the Japanese standpoint. Be tolerant and patient of the process. 2. The Japanese organization is more important than the individual. Don't push for a decision before appropriate time has been allowed for the group to reach one. Don't expect one person to be able to speak for the company. Harmony must be preserved. 3. Structure, status, and harmony are all extremely important. In Japan there is a well-defined chain of command. Don't offend by dealing with inappropriate individuals. Always adhere to the proper channels. 4. Japanese firms are committed for the long term. Managers must understand that survival is an overriding concern. When a strategic decision has been made, the Japanese firm will be totally committed. To have a chance for success, the American firm should approach competition from the same level of commitment. References Jon P. Alston, "Three Principles of Japanese Management," Personnel Journal, 62, 9 (1983): 758-763. P.T. Bolwijn and S. Brinkman, "Japanese Manufacturing: Strategy and Practice," Long Range Planning, 20, 1 (1987): 25-34. Gene Burton, "Japan vs. USA: A Comparison of Corporate Environments and Characteristics," Human Systems Management, 8, 2 (1989): 167-173. Edward Cundiff and Mary Tharp Hilger, Marketing in the International Environment, 2nd ed. (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1988). Michael R. Czinkota and Ilkka A. Ronkainen, International Marketing (Chicago: The Dryden Press, 1988). Maling Ebrahimpour, "An Examination of Quality Management in Japan: Implications for Management in the United States," Journal of Operations Management, 5, 4 (1985): 419-431. John B. Ford, Warren A. French, and Patricia Heil, "A Cultural Approach to Market Conflicts: Japanese Variations," in Marketing: A Return to the Broader Dimensions--Proceedings of the 1988 American Marketing Association's Winter Educators' Conference, pp. 67-70. John B. Ford, John F. Tanner, and Warren A. French, "Responding to Japanese Competitive Moves," in Marketing Theory and Practice--Proceedings of the 1989 American Marketing Association's Winter Educators' Conference, pp. 294-298. Keitaro Hasegawa, Japanese Management: An Insider's Analysis (Tokyo: Kodansha International Ltd., 1986). Lance Heiko, "Some Relationships Between Japanese Culture and Just-In-Time," Academy of Management Executive, 3, 4 (1989): 319-321. Adamson Hoebel, Man, Culture and Society (New York: Oxford University Press, 1960). Ellen F. Jacofsky, John W. Slocum, Jr., and Sara J. McQuaid, "Cultural Values and the CEO: Alluring Companions," Academy of Management Executive, 2, 1 (1988): 39-49.

T.W. Kang, Gaishi: The Foreign Company in Japan (New York: Basic Books, 1990). L. Robert Kohls, Survival Kit for Overseas Living (Chicago: Intercultural Press, 1979). Michael G. Kolchin, "Borrowing Back from the Japanese," Advanced Management Journal, 52, 2 (1987): 26-35. Philip Kotler and Liam Fahey, "The World's Greatest Marketers: The Japanese," Journal of Business Strategy, 3, 1 (1982): 3-13. Alfred L. Kroeber and Clyde Kluckhohn, Culture: A Critical Review of Concepts and Definitions (New York: Vintage Books, 1963). Isamu Kurita, Japanese Identity (Tokyo: Fujitsu Institute of Management Press, 1987). William Lazer, Shoji Murata, and Hiroshi Kosaka, "Japanese Marketing: Towards a Better Understanding," Journal of Marketing, Spring 1985, pp. 69-81. Charles P. Lecht, "Management Styles: Japan vs. the U.S.," Computerworld, October 26, 1987, pp. 2122. Michael McAbee, "Can Japanese 'Magic' Work Here?" Industry Week, August 8, 1983, pp. 46-48. Kenichi Ohmae, The Mind of the Strategist (Middlesex, England: Penguin Books Ltd., 1982). Jae C. Park, "A Need for Managerial Changes in U.S. Corporations," Managerial Planning, May-June 1982, pp. 26-30. Richard Tanner Pascale, "Zen and the Art of Management," Harvard Business Review, March-April 1978, pp. 153-162. Milton Pierce, "Direct Response in Japan," Direct Marketing, 49, 7 (1986): 160, 163. Richard J. Schonberger, Japanese Manufacturing Techniques (New York: William Morrow and Co., 1982). Jared Taylor, Shadows of the Rising Sun (New York: Quill Books, 1983). Vern Terpstra, International Marketing (Chicago: The Dryden Press, 1983). Jiro Tokuyama, "Strengths and Weaknesses of Japanese Management," New Management, 5, 2 (1987): 27-31.