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All you need to know to do Business in Japan

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Japan Japan Maria Daniella Marin September 8, 2013 Japan-Overview
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Page 1: All you need to know to do Business in Japan

JapanJapan

Maria Daniella MarinSeptember 8, 2013

Japan-Overview

Page 2: All you need to know to do Business in Japan

Japan - HistoryJapan - History PREHISTORY:

◦ Japan first appears in the historical records of China in about 300 BC. In those records the inhabitants of Japan were known as the “Wa.”

EARLY KINGDOMS AND CLASSICAL AGE:

◦ Tomb Period, population centers had grown up in several parts of the islands and the roots of city culture had taken place.

◦ Age of Reform Influences from China and other mainland civilizations. first written government constitution, the 17 –Article Constitution.

◦ 794 AD a new capital was founded at Heian, the site of the present city of Kyoto. The Heian period would prove to be the height of classical culture in ancient Japan.

FEUDAL ERA IN JAPAN:

◦ Kamakura Period AD 1185-1333. ruling Japan through a centralized Imperial Chinese model,

◦ Ashikaga Period AD 1336-1573: state of turmoil and incessant fighting between local warlords.

TOKUGAWA (EDO) PERIOD AD 1600-1867:

◦ Within a decade after the battle of Sekigahara, Tokugawa Ieyasu had established complete control over Japan. He established his shogunate in Edo, now modern Tokyo, though the emperor continued to reside in Kyoto.

◦ The innovations that the new shogun put in place would eventually create the conditions for Japan’s swift entrance into the modern world in the mid-19th century

Morton W, Olenik J. Japan : It's History And Culture [e-book]. New York: McGraw-Hill; 2005. Available from: eBook Collection (EBSCOhost), Ipswich, MA. Accessed September 8, 2013."Japan - 日本 ." Japan. N.p., n.d. Web. 08 Sept. 2013. <http://www.nationsonline.org/oneworld/japan.htm>."Japanese History: Edo Period." Japanese History: Edo Period. N.p., n.d. Web. 08 Sept. 2013. <http://www.japan-guide.com/e/e2128.html>."Japanese History." Ohio State University. N.p., n.d. Web. 08 Sept. 2013. <http://people.cohums.ohio-state.edu/bender4/eall131/EAHReadings/module02/m02japanese.html>.

Page 3: All you need to know to do Business in Japan

Modern to present JapanModern to present Japan 1854: Japan signed treaties with the United States of America, and a host of other countries

including Great Britain, France, Holland, and Russia soon after.

1868: new reign called Meiji.

1877: Satsuma Rebellion in attempt to save the faltering status of the samurai class

1895: Japan had defeated China in a series of land and sea battles around the Korean peninsula known as the Sino-Japanese War.

1905: Japanese won a major war against imperial Russia on the Liaodong Peninsula, fought over a new railroad, timber, and seaports in Manchuria—a very strategic corner of East Asia.

1940s: Japan to secures most of the former European colonies in East Asia, Southeast Asia, and the Pacific Islands.

1941: Japan launched a surprise naval and aerial attack on the United States territory at Pearl Harbor, Hawaii. The attack was triggered in response to US embargos over oil and the materials that fueled Japan’s war machine.

1945: US and the Soviet Union competed to accept the Japanese surrender in northeast East Asia. Ended by atomic bomb on the cities of Nagasaki and Hiroshima, with massive civilian casualties.

1945-1952: Post-War Japan was occupied by Allied Forces. New democratic constitution, business re-oriented to peacetime objectives

Through hard work and determination, Japan re-invented itself in the latter-half of the twentieth century as a consumer-oriented producer.

"Japanese History." Ohio State University. N.p., n.d. Web. 08 Sept. 2013. <http://people.cohums.ohio-state.edu/bender4/eall131/EAHReadings/module02/m02japanese.html>.

Page 4: All you need to know to do Business in Japan

Japan - MapJapan - Map

Maria Daniella Marin

"Town." Japan Information Network. N.p., n.d. Web. 08 Sept. 2013. <http://nippon-jin.com/town.html>.

Page 5: All you need to know to do Business in Japan

Japan – Business CultureJapan – Business Culture Religion:

◦ Most Japanese are either Buddhist or Shintoist, or both, but actual practice is rather limited to holidays, and it's mostly just for show.

◦ New religious interests: Christianity, Islam, Bahai, and other faiths growing.

Greetings:

◦ Business cards are exchanged using both hands. Spend a lot of time reading a person’s business card when they hand it to you.

◦ Dress conservatively, in a dark business suit.

◦ Women should stick with a formal outfit with not too much jewelry or makeup.

◦ If you receive a compliment you should suggest you don't deserve it. It's a modest response of denial and not showing off.

◦ To start a conversation you could start talking about the success of the Japanese baseball players (Suzuki, Matsui, Matsuzaka) in the US, or asking about the status of sumo stars.

◦ It is the general norm to add '-san' to the end of the last name for all people you meet. First names are rarely used except when people become very good friends.

Meetings:

◦ Normal business hours might be 9-5, but most people don't follow this, and meetings can frequently go later.

◦ Today, making appointments through email or phone is the most common practice. Most morning meetings will start at 10 a.m or later, and afternoons usually begin at 1:30 p.m or sometime later. Lunchtime is generally 12 a.m-1 a.m.

◦ At business meetings, it's not uncommon for each of us to present each other with a company gift or something that represents our culture.

Smith, Jacquelyn. "Your Basic Guide To Business Travel Abroad." Forbes. Forbes Magazine, 27 Aug. 2012. Web. 08 Sept. 2013. <http://www.forbes.com/sites/jacquelynsmith/2012/08/27/your-basic-guide-to-business-travel-abroad/>."Japan: Culture." GlobalEDGE: Your Source for Global Business Knowledge. N.p., n.d. Web. 08 Sept. 2013. <http://globaledge.msu.edu/countries/japan/culture>.

Page 6: All you need to know to do Business in Japan

Japan – Business CultureJapan – Business CultureHofstedeHofstede

Japan is extremely hierarchical slow decision making process: all the decisions must be confirmed by each hierarchical layer and finally by the top management in Tokyo.

Japanese are experienced as collectivistic by Western standards and experienced as individualistic by Asian standards. They are more private and reserved than most other Asians.

Japan is one of the most masculine societies in the world. It is still hard for women to climb up the corporate ladders in Japan with their masculine norm of hard and long working hours.

Japan is one of the most uncertainty avoiding countries on earth. Is constantly threatened by natural disasters from earthquakes and tsunamis learned to prepare themselves for any uncertain situation.

Japan is a long term oriented societies. Japanese see their life as a very short moment in a long history of mankind.

People live their lives guided by virtues and practical good examples. In corporate Japan, you see long term orientation in the constantly high rate of

investment in R&D even in economically difficult times, higher own capital rate, priority to steady growth of market share rather than to a quarterly profit, and so on.

The idea behind it is that the companies are not here to make money every quarter for the share holders, but to serve the stake holders and society at large for many generations to come

"Japan Culture." THE HOFSTEDE CENTRE. N.p., n.d. Web. 08 Sept. 2013. <http://geert-hofstede.com/japan.html>.

Page 7: All you need to know to do Business in Japan

Japan – Political SystemJapan – Political System Japan is a developed market with one of the largest, most

industrialized economies. Their economic systems are well developed, they are

politically stable and the rule of law is well entrenched. Japan is considered the safest investment destinations. The Japanese government has some influence in press and

media. The Japanese press relies on a system of press

organizations, known as kisha clubs, "which only reporters from the largest mainstream news organization are allowed to join," she says. "Most reporting is done from the press clubs of different organizations - including governmental organizations... Political reporters often develop close relationships with the politicians they cover.""Evaluating Country Risk For International Investing." Evaluating Country Risk For International Investing. N.p., n.d.

Web. 08 Sept. 2013. <http://www.investopedia.com/articles/stocks/08/country-risk-for-international-investing.asp>."Are Japanese News Media Asking Tough Questions About Nuclear Crisis?" About.com Journalism. N.p., n.d. Web. 08 Sept. 2013. <http://journalism.about.com/od/trends/a/Are-Japanese-News-Media-Asking-Government-Tough-Questions-About-Nuclear-Crisis.htm>.

Page 8: All you need to know to do Business in Japan

Japan – Political SystemJapan – Political System Japan has a stable political system. Japan was militarily occupied by the United States in 1945 and its military

dictatorship was overthrown. A parliamentary democracy was established that remains in place to this day

In December 2012, Shinzo Abe, a member of the Liberal Democratic Party, was re-appointed by the Diet (legislature) as Japan's 96th prime minister.  

The Japanese government, a constitutional monarchy, is based on a parliamentary cabinet system. 

Executive power is vested in the cabinet, which consists of the prime minister and not more than 17 ministers of state that collectively are responsible to the Diet.  The prime minister, who must be a member of the Diet, is designated by the Diet. Japan's constitution became effective on May 3, 1947, and consists of 103 articles.

There are several political parties, the most important ones are:

◦ Democratic Party of Japan (DPJ)

◦ Liberal Democratic Party (LDP)

◦ New Komeito"The World’s Most Politically Stable Countries and Most Politically Unstable Countries." Expat Investing RSS. N.p., n.d. Web. 08 Sept. 2013. <http://www.expatinvesting.org/the-worlds-most-politically-stable-countries-and-most-politically-unstable-countries/>."Japan FAQ." Consulate-General of Japan in San Francisco. N.p., n.d. Web. 08 Sept. 2013. <http://www.sf.us.emb-japan.go.jp/en/e_m08_01_08.htm>.

Page 9: All you need to know to do Business in Japan

"Japan FAQ." Consulate-General of Japan in San Francisco. N.p., n.d. Web. 08 Sept. 2013. <http://www.sf.us.emb-japan.go.jp/en/e_m08_01_08.htm>.

Page 10: All you need to know to do Business in Japan

Japan – Legal SystemJapan – Legal System Japan’s is a civil law nation. Japan’s legal system is defined by statues, with little regard for judicial precedents. Background

◦ In 1868, following the feudal regime, the modernization of Japan (Meiji Restoration) started. 

◦ The Meiji reformers were strongly influenced by legal theories that had evolved in Prussia. 

◦ The first modern constitution and basic codes were enacted following Prussian and French models. The Japanese legal system is based on the civil law system. 

◦ After World War II, the Constitution was replaced, and many other laws were newly enacted or amended.  These new laws were heavily influenced by United States through the Allied Occupation. 

◦ The principle of judicial review was introduced to Japan from the United States.  Legislation

◦ The National Diet is the sole law-making organ of the State. However, it does not mean the Diet members draft bills.

◦ Draft bills come from government agencies, then are submitted to the Diet through the Cabinet. When a member wants to submit a bill to the Diet, he cannot do so by himself. Certain number of co-sponsors is required to submit a bill.

Courts

◦ The whole judicial power is vested in the Supreme Court and lower courts..

◦ Independence of judiciary is guaranteed by the Constitution. Most judges are virtually life-time employees of a national governmental bureaucracy: the judiciary.

"Legal Research Guide: Japan." Library of Congress Home. N.p., n.d. Web. 08 Sept. 2013. <http://www.loc.gov/law/help/japan.php>."Japanese Firms Expanding into Southeast Asia." Asia Legal Blog. N.p., n.d. Web. 08 Sept. 2013. <http://www.asialegalblog.com/?p=5595>.

Page 11: All you need to know to do Business in Japan

Japan – Economic SystemJapan – Economic System Japan is a capitalist nation and the world’s third largest economy by

nominal GDP. Japan is the world's 3rd largest automobile manufacturing country, has the

largest electronics goods industry, and is often ranked among the world's most innovative countries leading several measures of global patent filings

Even though Japan has seen some growth in the past, it has been stuck in stagnation and deflation for two decades.

Japan is facing a demographic tsunami, with the world's fastest aging population and one of the globe's lowest birth rates.

National debt issue: Japan's parliament is struggling to cap its GDP-to-debt ratio, which is nearing 200% -- the world's highest among developed nations.

Japan, is currently facing its worst crises since World War II. In addition to unprecedented challenges brought by the 2011 Great East

Japan Earthquake, including reconstruction efforts, the nuclear power plant accident and energy shortages, the nation also has to deal with what has been termed the "lost two decades".

"Global Agenda Council on Japan 2013 | World Economic Forum - Global Agenda Council on Japan 2013." Global Agenda Council on Japan 2013. N.p., n.d. Web. 08 Sept. 2013. <http://www.weforum.org/content/global-agenda-council-japan-2013>.http://edition.cnn.com/2011/BUSINESS/02/13/japan.economy.third/index.htmlhttp://www.wipo.int/ipstats/en/statistics/patents/

Page 12: All you need to know to do Business in Japan

Economic systemEconomic system Japan plays a crucial role in the global and regional

economy. Its relations with its neighbors have a direct impact on the stability and welfare of the whole region.

Japan promotes foreign investment: ◦ The Japan External Trade Organization (JETRO) is a

government-related organization promoting mutual trade and investment between Japan and the rest of the world. They offer foreign investors with abundant information on all aspects of doing business in Japan, by providing expert consultation and offering free temporary office space in major business areas across the country.

"About Us." Japan External Trade Organization. N.p., n.d. Web. 08 Sept. 2013. <http://www.jetro.go.jp/en/jetro/>.

Page 13: All you need to know to do Business in Japan

"Foreign Exchange Rates and Currency Exchange Rate Calculator." CNNMoney. Cable News Network, 30 Aug. 2004. Web. 08 Sept. 2013. <http://money.cnn.com/data/currencies/>.

Page 14: All you need to know to do Business in Japan

QuestionsQuestionsWhat are the major challenges one should

expect when doing business in Japan?Besides the cultural and economic differences,

which other aspects have you encountered to be necessary to consider when doing business in Japan?

Based on your personal experience, what kind of industries have the best opportunities for foreign investment in Japan?

What recommendations would you give a recent graduate that is currently looking to relocate to Japan?

Maria Daniella Marin

Page 15: All you need to know to do Business in Japan

VideoVideo How to do business in Japan:

◦ http://www.youtube.com/watch?v=aLwnLZdznVA Conducting Yourself in a Japanese Business Meeting:

◦ http://www.youtube.com/watch?v=j2nU9KoB8hM Seven Tips for doing business with Japanese:

◦ http://www.youtube.com/watch?v=yBxfWYFON00

Japanese Culture in regards to Hofstede:◦ http://www.youtube.com/watch?v=GtPdmfRw1Y0

Maria Daniella Marin


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