The Journal The Authority on Global Business in Japan


February 2014
Thinking Long Term in 2014

By John Ghanotakis, Amir Khan, and Timothy Trahan

Although the buzz of the new year is over, the hectic month of greetings reminded us of the importance of long-term business ties in Japan.

As young professionals, we are often expected to initiate or continue long-term relationships, as per how business is done in Japan. Indeed, the sounds and sights of the season are greetings and fancy custom-printed calendars.

Making the rounds of clients, or even stakeholders within a Japanese organization, is an incredibly time-consuming process. However, we appreciate it as part of the cost of doing business in Japan: a country and culture that promise great opportunity.

January is the time when we discuss business changes and expectations for the coming year.

In Japan introductions and networks are very important as the country has a high-context culture. Edward Hall, a leading cultural researcher, defines high context and low context to describe a set of cultural differences.

According to Hall, in high-context cultures, people take time to develop relationships and get to know one another before doing business. People prefer to do business with those whom they know, and getting to meet new people is easiest through introduction by those people.

Compare this with low-context cultures, where business is conducted based on the merits of the proposition at hand rather than through relationships. Businesspeople are comfortable meeting others directly, as individuals.

The United States is an example of a relatively low-context culture, whereas Japan’s high-context culture means social ties in personal networks are essential.

One explanation for the high-quality customer service here goes back to the idea of developing a trusted relationship with clients. It could also be suggested that this is the reason for the relative economic stagnation in Japan, as many major decisions made in society are based on creating a state of harmony and minimizing disruptions among these relationships.

Japan’s culture has created the top five longest continually running businesses in the world, the oldest of which was founded in the year 578. Kongo Gumi Co., Ltd. has been in business for over 1,400 years, and for most of its history has specialized in building Buddhist temples. The company has been maintaining relationships for over 40 generations.

While continuing and growing a relationship in Japan seems to preclude any initiatives for change, this is not always the case. When speaking with Japanese business partners, there are often reasons for them to make adjustments and offer improvements.

According to cultural researchers, changes are agreed on after meetings, and these discussions have a common theme or storyline.

Many meetings begin by rehashing the background behind the gathering and the relationships of those involved to reinforce the idea of harmony and reputations among all sides. This also gives both parties a chance to discuss what they are thinking and feeling.

Talks often go on to recount critical events. Only in the last part of such meetings, often with pathos and expressions of sorrow, would a request or proposal be brought forward.

This is the format for meetings that seem to promote long-term relationships in Japan.

The beginning of the year is a great time to get back in touch and revisit those you’ve previously met, as well as check in about prospects and potential mutual goals for the year. This kind of activity is essential to continuing long-term relationships.

In addition, now is a good opportunity to meet up with friends at networking events such as those sponsored by the ACCJ.

John-GhanotakisDividerAmirDividerTimothyDividerJohn Ghanotakis (chair), Amir Khan, and Timothy Trahan (vice chairs) are members of the ACCJ Young Professionals Group Subcommittee.