Cross Cultural Business Negotiations (United States and

Japan)

Abstract Understanding Cultures and acquiring skills necessary to make a cross cultural business
negotiation a successful and pleasant experience for both parties involved requires much more than
just the overview of the culture and it becomes hard because of the complexity of the culture to grab
the entire core of a foreign culture without investing enough time and effort into it, however initial
understanding of the concepts can be a good start. General perception is that American business
men or managers at times feel out of their comfort zone when negotiating with their Japanese
counterpart because of the behaviours demonstrated by Japanese which are, just like any other
culture, are simply based on their assumptions , beliefs, norms and customs which are unfamiliar to
other party. Understanding the cross cultural aspects are highly beneficial for either of the parties
involved and can highly facilitate communication by decreasing the chance of any possible
misunderstanding.

Either Americans or Japanese both have tendency to bring their own cultural background with them
while negotiating which of course affects the behaviours and ultimately the end result. American and
Japanese cultures hardly have any similarities so clashes caused by cultural differences are
inevitable for example what may be considered acceptable by the standards of one party might not be
acceptable by the standards of other. This makes understanding the cultural issues and behaviours in
depth more important especially for Americans if they plan to negotiate with Japanese because
Japanese might not give any direct clue about where the negotiation is heading as Americans expect
from other American managers during business negotiations. In this paper many cross cultural areas
based on different models are discussed which helped us to identify the similarities and differences
between these cultures, understanding of these similarities and differences can help managers to
formulate right strategies to achieve maximum output from the negotiation process and make cross
cultural interactions and negotiations a pleasant experience for both parties involved.

Cross Cultural Business Negotiations (United States and Japan) In today’s global world, businesses
are continuously expanding all over the world. For the business world, there are no boundaries or
borders. Companies are always moving to new places and finding new business opportunities, new
business partners. And in this search, they are often expanding their business across countries.
Although, companies are adopting an international approach and partnering with other companies
across borders, in this process they have to cope with the cultural differences of different countries.
Talking about American and Japanese business culture, there are huge differences between the two.
If an American businessman decides to do with business with any Japanese company, he will have to
plan and prepare for his meeting extensively. First, let’s talk about the differences in American and
Japanese culture.

GLOBE Study was able to establish nine cultural dimensions which allowed capturing the differences
and similarities between different societies and cultures in the basic nature of it, which consists of
behaviours and artefacts, different beliefs and values a particular society have, interpreting patterns
and assumptions. It allowed GLOBE to create country clusters. Now According to GLOBE’s country
clusters U.S.A is in Anglo cluster whereas Japan is in Confucian cluster and differences become
greater as the distance between clusters increase. Anglo and Confucian cultures are almost on the
opposite sides. This means they hardly share similarities in context of dimensions given by Hofstede.

Power distance is first and recent trends suggest that Japan has just now started making its place
near the world average in power distance for example victory of the democratic party of Japan in the
elections of 2009 as they vowed to diminish the power of bureaucrats which makes it evident that
they are becoming less tolerant of the power distance but still they have a long way to go. Americans
on the other hand always had a low power distance as the Anglo cluster ranks high in participative
approach but Confucian is at the bottom before Middle East. In Case of individualism Japan is at the
collective end of the individualism/collectivism. Recent trend suggests that the relationships between
employee and employer in Japan are becoming strained but collectivism is still more dominant. In
context of this dimension Americans have one of the highest scores in individualism. The hierarchal
structures of American organizations are designed for convenience and to make superiors accessible.
Managers have high dependency on individual employees for their expertise.

Next dimension is of Masculinity/Femininity and Japan has one of the most masculine society around
the globe. According to Hofstede’s original sample Japan ranked highest among all the countries in
this dimension. Like many other dimensions trend in this dimension has also started shifting in Japan
for example the equal employment opportunity legislation which happened in mid 80’s helped
removing many barriers for the women but still according to studies more than 60% of working
women quite their jobs after their first child. High ranking of Japan in masculinity also indicates that
the Japanese society is driven by competition and achievement. Low score on masculinity or being
placed on or close to femininity end means that the dominant values in particular society are caring
for others and being more concerned about quality of life.

Americans ranked just slightly above the middle on masculinity which means that distance between
these two cultures in context of this dimension is considerable. Next dimension is uncertainty
avoidance. Talking about Japanese, generally they have tendency to avoid uncertainty but as in past
years some manufacturers left Japan and this trend affected the tolerance for uncertainty in work
environment. If trend continues it can significantly reduce the number of people who are loyal to the
employer and can flourish the entrepreneurial trends which are commonly seen in United States as it
will affect the number of job opportunities available domestically. Students after graduation will face
immense competition and will probably have one shot at employment or they will be frozen out of the
job market. United States is more risk taking society but currently it had also started to lean toward
uncertainty avoidance because of some different trends, for example decline of the stock market and
recent recession period of 2007-2009 plus the housing bubble bust.

All these factors made people to seek for security and less risky investment opportunities. Another
factor which might have effected is the treat they have from other emerging nations which are
economically becoming more powerful and it can cause Americans to take more defensive stance
and to look for more stable grounds rather than being risk taking society. One other dimension called
pragmatism which deals with the behavioural trend of people about having the explanation of the
things. If we talk about normative societies most of the people require of have a strong desire to have
an explanation but in pragmatic societies, people might not require explanation for everything
because they consider it almost impossible that a person can fully understand the phenomena around
them because of the complexity of life. Americans have tendency to check and analyse the
information they receive for validity. This trend in culture makes us consider most of the Americans as
non-pragmatic but the fact that they are very practical should not be confused. Japanese culture is
more of a high context culture.

In Japanese business culture, they have more sense of belonging i.e. insider vs. outsider. They are
more focused towards building long term relationships. Japanese are more relationship oriented
rather than task oriented. They are more focused on communicated understanding rather than formal
information. On the other hand, American culture is kind of a low context culture. It is more oriented
towards rules and tasks. Tasks are given more importance than relationships. Relationships are
usually short-term dependant on the tasks. Now as we have established the base and have the
general understanding about the differences and similarities among both cultures we can move
forward to the negotiation process between American and Japanese Managers. When an American
manager plans on doing business and negotiating with a Japanese manager, the American manager
of course has to be more prepared compared to the Japanese. Although both managers will have to
be prepared for the meeting and negotiation on their behalves, still in case where American is
approaching the Japanese, he will have to fully understand the culture and cultural differences, and
then plan accordingly for meeting and negotiation.

High context cultures are always harder to enter due to the fact that you cannot instantly create close
relationships which are a trait of a high context culture. Americans need enough time to understand
and gather information about the culture, and plan extensively before they are prepared enough for
the meeting with such huge cultural differences. They will have to work continuously to build
relationship that Japanese can trust and consider an insider. Although tasks are important to
Japanese, still they are more focused on feelings rather than opinions and facts. As discussed before
American culture promotes individualism while Japanese culture is more towards collectivism. It is
due to these and many other differences that the Japanese culture is looked at as a big obstacle in
the way of doing business with Japanese companies or in Japan but once they have enough
understanding and have enough preparation the simple differences and ways of Japanese culture are
not that hard to start building relationship and earning the opportunity to become a part of Japanese
business.

For example, if an American manager wants to do business with a Japanese manager, and he is
looking forward to a great start and getting a positive response, the first step in the meeting will be the
greeting. Greeting is an important part of Japanese culture. Japanese people are always too polite.
The bow is an integral part of Japanese greeting, to show gratitude. Although, westerners are not
expected to bow, they are greeted with handshake combined with a slight bow from their Japanese
counterpart. The next step is the exchange of business cards. In Japanese culture, followed by
greetings, all the professionals present in the meeting are expected to exchange their business cards.
It can be seen as a way of introducing yourself and your organization. An American manager should
collect enough information and work on clarifying meanings of different aspects before getting into a
meeting with any Japanese manager, as in Japanese culture, it is considered impolite to directly say
something or directly refuse.

Disagreement is usually expressed nonverbally. Even if the Japanese are not interested to do
business with you, they will not communicate it verbally or directly, in fact they will wait for you to lose
interest. Even if talking about employees, in Japanese culture, non performers don’t get fired. They
could be transferred to another department or any other organization but are not fired. So the
American manager has to be prepared for understanding this type of situation where he could
anticipate the response of his counterpart. When talking about meetings, American manager must
understand that to Japanese, meetings usually mean the opportunity to exchange information.
Decisions are not usually made in meetings. In Japanese culture, meeting could be attended by
subordinates but no one is expected to give any response at that time. It might seem to the foreigner
in this situation that no one is taking interest but he should not be disheartened. This is how Japanese
usually do business. They don’t discuss with outsiders.

What American managers can do is they can take along an interpreter to help better understand the
Japanese counterpart and the meaning of their behaviour. Japanese people also take time to develop
trust and a better relationship. So it is not expected to get on the spot response from them. Japanese
managers want to develop good and long lasting relationships before moving ahead in the business.
In Japanese business culture, the core pillar of the culture is the company. The company shapes the
image of the person. So much importance is given to the company that even in their usual matters of
life; decisions like marriage or renting out property are based on the company one works in. If
someone wants to rent an apartment, the landlord will want to know in detail about the company that
person works in. Even if that person changes the job, he will be obliged to let the landlord know.

Then the landlord will take decision about continuing to let that person live there or not based on the
reliability of the new company. Japanese people are socially ranked based on the company they work
for. Japanese people are not expected to change jobs. The careers are developed within the
company compared to careers developed within the market in American culture. In Japanese culture,
people are expected to work for the same company throughout their life until they retire. This is
helpful for both the company and the employee. Company saves the cost of new hiring and training
while employees choose to be on a safe path and they have a sense of security in their careers. The
same thing can be connected to business partners. Japanese managers will not move forward until
they get to build a trustworthy relationship with an American manager. But once the relationship is
developed, it will go a long way and the Japanese would like to keep on doing business as they look
for consistency.

This Japanese sense of loyalty could be very beneficial for the foreign company. Another part of
Japanese culture is punctuality. So when planning for a meeting, the American manager should take
note of being on time. They have exact specified start times and end times. Even deadlines are
strictly followed. So being on time also shows your interest and helps develop some of the trust.
Another aspect of Japanese business culture is that they don’t talk about money specifically. If money
is discussed right away, it is taken as if the only concern is money here and that is all the reason
negotiations are taking place. Japanese managers like to refer to money by expressions that are
associated with it like payments, profits, wages, salaries etc and they only discuss it what they
consider to be the right moment for it. Still their major concern is always about building relationships.

If any manager starts away by talking about money he will be considered greedy and ill mannered.
One reason of not talking about money is that they consider counterparts to be outsiders unless they
are able to develop enough trust. Also in cases where Japanese managers think that they are
comparatively in weak position, they avoid using negative words while talking about their
organizations. It is expected that the other company will not be interested to do business with them if
they are in a weak position. So in such cases, they attract the interest of the other company by using
words such as profits and success. Japanese managers try to develop interest in their company by
taking confidence in their company and showing satisfaction in their performance. At first, Japanese
managers like to gather as much detail as possible about their counterpart and about the organization
they are representing. It is then followed by a careful decision of whether they are ready to do
business with them or not.

So American managers should not get in any hurry and should not be expecting on the spot
response. The first step for the Japanese managers is to determine the value of whatever is being
offered. Even the foreign manager should not jump to talking about money as this is considered as an
ill manner when one talks about money before them making a decision whether or not they want the
service or business partnership. So any manager should wait for them to start talking about money as
for Japanese, money or price is the second step in any negotiation although for Americans, this is
considered to be an important part of any negotiation. Before entering into negotiation, American
manager should study or understand the importance of nonverbal communication in Japanese
culture. As we know that Japanese managers or businessmen are not that much straightforward, so
their response is often portrayed by non verbal expressions or their body language.

Non verbal communication could include facial expressions, eye contact and other body language.
But it could prove to be hard to detect as Japanese people are very subtle compared to Americans.
Another strong part of Japanese culture during any business meeting is the exchange of gifts.
Japanese always present their counterparts with gifts or exchange gifts as this is considered to be a
demonstration of appreciation and courteous feelings. They consider it to be the part of their manners
to give or receive gifts by standing up and using two hands. If these manners are not followed,
Japanese feel hurt and take it as no value was given to their gift. A gift also serves the purpose of
showing that they want to have some kind of relationship built with each other.

The intention of building a relationship is made clear. Exchange of gifts is considered to be a part of
Japanese greetings. As for Americans, gift giving is usually associated with asking for any favour or
getting a return out of it. But for Japanese it is a mere custom and a way to praise. Contrary to
American business culture, a delay in making any decision is not considered to be someone’s
inefficiency. They rather take it as a difference in decision making process. But once they take the
responsibility of completing a job, one can easily put their faith on them even if it is out of reach of
their capabilities and they have a way of coming out with exceptional results.

Conclusion Compared to other business cultures in the world, the Japanese business culture is
unique in its own way. And it may seem like an obstacle, but once one get to understand the basics of
culture, it also provides security to their business by building life time relationships. Some of the traits
of Japanese culture are their loyalty, consistency, collectivism, their way of giving respect. If American
managers do their research before meeting Japanese managers for negotiations, and take care of
little details while complimenting them in accordance with their culture, Japanese will be very pleased
and any negotiation can be expected to result in favour of both the parties. Japanese are pleased by
foreign managers who are acquainted with their customs and they will in return make the American
managers feel more comfortable and relaxed. And at the same time it will be beneficial by enhancing
the communication among both parties. In short, awareness of cross culture is the key to better
communication between two so distant cultures.

References: Brislin, R. (1970). Back-translation for cross cultural research. Journal of Cross Cultural
Psychology, 1, 185–216.
 Arizona Republic, September 14, 1986, "Meishi: Card of status," p. F-1 and F-8.

Wall Street Journal, "Aunt Helen: Japan's Answer to Dear Abby," March 26, 1987, p. 36.

Barnett, A. & Kincaid, D. (1983). A mathematical theory of cultural convergence. In William B.

GudyKunst. ed., Intercultural Communication Theory: Current Perspectives. (pp. 171-179). Beverly
Hills. CA: Sage.

Economist. (2010). Into the unknown: A special report on Japan. Nov. 20, 1–16.

Hofstede, G. (2001). Culture’s Consequences: Comparing Values, Behaviors, Institutions, and

Organizations Across Nations (2nd ed). Thousand Oaks, CA: Sage Publications.

World Economic and Social Survey. (2007). New York, NY: United Nations.

Wu, M. (2006). Hofstede’s cultural dimensions 30 years later: A study of Taiwan and the United
States. Intercultural Communication Studies, 15, 33–42.

House, R., Javidan, M., Hanges, P. & Dorfman, P. (2002). Understanding cultures and implicit
leadership theories across the globe: An introduction to project GLOBE. Journal of World Business,
37, 3–10.

Don't know where to start with your assignment?

HIRE VERIFIED EXPERT
Let our experts help you