With a population of more than 127 million people, Japan is currently ranked as the third largest global economy and according to the Department of Foreign Affairs and Trade, was "Australia's second-largest trading partner, second-largest export market, and second-largest source of foreign direct investment" in 2016-2017.
Given these figures, there is no doubt, that Australian businesses are exposed to many negotiation opportunities with their Japanese counterparts. It is therefore prudent to understand and take into consideration the cultural nuances which may influence the cross-cultural negotiation process.
Today we give some insight into those cultural nuances which are present in the Japanese business culture. As a precursor to the following guidelines, we need to say that these are general observations from our experience, but cultural diversity within every country - just as there exists in Australia - will mean that there will be exceptions to our observations.
JAPANESE NEGOTIATION CULTURE
- There is great emphasis on being polite. Showing respect and acknowledging social rank are also important facets of the business relationship. Being forward or direct by launching into business talk at the start of a meeting is considered rude. Instead, bide your time and make small talk to begin with.
- Addressing the members of your counterparty correctly according their status (superior, inferior or equal) is a significant first step in the process. Therefore, it is important that proper introductions take place prior to any attempt to shake hands etc. Senior negotiators in your party will receive a very high amount of respect, and in turn you should show the same level of respect to their senior negotiators.
- When arriving for a business meeting or negotiation, it is custom to exchange business cards. Accept the card with both hands and afford it the same respect as that of the person who the card belongs to. It is considered disrespectful to just put the card straight in your wallet, compendium or obscure it with documents on the table.
- When deciding upon seating arrangements at the negotiation table, be aware that usually the host will seat themselves closest to the door, whilst the most important or highest 'ranked' person should be given the spot furthest from the door.
- Be aware that English is not widely spoken in the business environment, and an interpreter may be required. When conducting a meeting in English, enunciate your words clearly and refrain from using colloquialisms, idioms and slang.
- It is also not uncommon for a negotiation intermediary (middleman) to be utilised who is trusted by both sides, to maintain a harmonious negotiation environment.
- Negotiation is team based. They will almost always negotiate in a team, and each meeting may bring about new faces as they wish for more people within the company to meet you and get to know you. You need to win over the whole team to get the deal across the line. Part of this is that, if the decision proves to be the wrong one – the whole team is accountable rather than an individual.
- Decisions are not usually made within initial meetings, with the negotiation team often needing to divert authority back to head office.
- Information will often be summarised numerous times, which can be very frustrating for Westerners. However, this is done for clarification purposes to avoid misunderstandings in later stages of the negotiation.
- Once a decision has been made and a deal reached, it is expected that the deliverables will then be actioned quickly. If this is not the case, the other party may face heavy criticism.
- The Japanese don't like confrontation, and as such will seek to avoid arguments – you may instead be greeted with silence or receive an ambiguous answer as they wish to avoid saying no. Notarising meeting minutes can prove invaluable in these instances when pushing for an answer or agreement. Be aware though, that losing face is a big deal.
- Socialising in between meetings is acceptable and you may find that information is more forthcoming on these occasions.
The basic negotiation framework remains the same - regardless of country or language. However, having an awareness of cultural business and negotiation norms can prevent misunderstanding, frustration and confusion, and allow for a positive, smooth negotiation process for both parties.